(1) A taxpayer who wishes to obtain a certificate of eligibility for classification of equipment used in a closed-loop enhanced oil recovery operation as class fifteen property under 15-6-158, MCA, or for abatement of property tax liability under 15-24-3111, MCA, shall file an application on a form provided by the department pursuant to ARM 17.80.201. The application must contain the following information:

(a) the name and address of the applicant;

(b) the name, address, telephone number, and e-mail address of a contact person for the applicant;

(c) a description of the equipment for which certification is sought;

(i) for a project still under construction at the end of a tax year, this would be a general description of the complete equipment, with a more detailed description of that portion for which certification is sought;

(d) a map or drawing showing the location of the equipment;

(e) the date construction of the project commenced;

(f) certification that the standard prevailing rate of wages for heavy construction were, or will be, paid during the construction phase;

(g) the location of each well in which carbon dioxide is injected, or is to be injected, as part of the closed-loop enhanced oil recovery operation;

(h) a map or drawing showing the location of each well and injection point at the time of the application;

(i) certification that each source of the carbon dioxide to be injected in the operation is, or will be, a plant or facility that produces or captures carbon dioxide, within the meaning of 15-6-158(2)(g), MCA, and is not, or will not be, a well from which the primary product is carbon dioxide;

(j) a list of all plants or facilities that produce or capture, or will produce or capture, the carbon dioxide for the operation;

(k) certification that a final UIC permit has been issued, or will be issued, by the Montana Board of Oil and Gas Conservation for each well in which carbon dioxide is injected, or is to be injected, as part of the closed-loop enhanced oil recovery operation, including specification of the American Petroleum Institute number and UIC permit number for each well. If some or all permits have not been issued at the time of the application, the taxpayer shall update the certification annually, pursuant to ARM 17.80.225(2), by providing the department with the information required under this subsection for permits issued after the date of the application;

(l) documentation of the purity level of the carbon dioxide received by the operation. For facilities that have not commenced operation of the closed-loop enhanced oil recovery equipment at the time of the application, the applicant shall submit this documentation within 60 days after commencing commercial operation; and

(m) documentation that the closed-loop enhanced oil recovery operation retains, or will retain, as much of the injected carbon dioxide as is practicable, but not less than 85% of the carbon dioxide injected each year. Demonstrations may include, but are not limited to, modeling data, monitoring data, or engineering calculations sufficient to make the demonstration;

(i) all demonstrations must be accompanied by a protocol describing how the data was obtained and describing all quality control and quality assurance procedures followed in gathering or producing the data.

(2) Upon request of the department, an applicant shall submit to the department documentation supporting any certification required under this rule.

(3) If any information required under this rule already has been submitted to another Montana state agency, in lieu of submitting the information to the department in the application, the applicant may specify the agency that has the information. If, after reasonable efforts, the department is unable to obtain the information from the other agency, the applicant shall submit the information to the department, upon its request.

(4) The equipment eligible for certification by the department under this rule includes the equipment used to inject and/or maintain carbon dioxide in a closed-loop enhanced oil recovery operation that is downstream of the pipeline meter used to measure the amount of carbon dioxide delivered to the closed-loop enhanced oil recovery operation. Pipelines eligible for certification under ARM 17.80.204 are not considered enhanced oil recovery operation equipment.

(5) In making its certification determination, the department shall use the application materials and may also use any other credible information available to the department.

(6) The department shall revoke a certification issued under this rule if:

(a) at any time after commencement of construction, the equipment no longer will be used to inject carbon dioxide for enhanced oil recovery;

(b) after construction, installation, and testing has been completed and the enhanced oil recovery process has commenced, equipment certified under this rule no longer is used for enhanced oil recovery; or

(c) the taxpayer no longer holds a valid underground injection control permit for each well served by the operation.


History: 15-24-3116, MCA; IMP, 15-6-158, 15-24-3112, MCA; NEW, 2011 MAR p. 233, Eff. 2/25/11.