1. (a) A lessee under AS 38.05.180 who wishes to engage in carbon storage not associated with enhanced oil or gas recovery must obtain a carbon storage lease under 11 AAC 84.1035 or this section for the reservoir.

2. (b) An application to the department for a carbon storage lease under AS 38.05.720(a) and this section must be submitted on a form provided by the department or a verbatim copy of the department's form and include

   1. (1) documentation necessary to establish the lessee's qualification for a carbon storage lease, including information required of an applicant for an exploration license under 11 AAC 84.1005;

   2. (2) the legal description, by aliquot part, including a map at a scale of 1:250,000 or greater, of the proposed carbon storage lease boundary, including

      1. (A) delineation of the approved AS 41.06.120 permit boundary, if applicable; and
      2. (B) legal descriptions and ownership of adjoining lands, including lands not owned by the state, and the extent of applicant's carbon storage leasehold with third parties, if any;
   3. (3) a description of the geological formation to be used for carbon storage;
   4. (4) a proposed plan of development consistent with 11 AAC 84.1065;
   5. (5) proposed commercial terms for the carbon storage lease; the department may request additional information and justification on the proposed commercial terms under 11 AAC 88.115;
   6. (6) a designation of an individual who is authorized to receive notices on behalf of the applicant; and
   7. (7) an attestation describing how the applicant meets the minimum qualifications required under 11 AAC 84.1000.
3. (c) The commissioner will set the annual rent and charge on injected volumes of carbon dioxide required for a lease authorized by AS 38.05.720 and this section. The commissioner may request additional information under 11 AAC 88.115 to determine this amount.
4. (d) A lease authorized by AS 38.05.720 and this section may only include the geologic horizon corresponding to the reservoir from which the applicant has been actively producing oil or gas under leases issued pursuant to AS 38.05.180.
5. (e) The commissioner will determine whether a disposal of state land under AS 38.05.035(e) for a lease under AS 38.05.720 is in the best interest of the state by considering the factors provided in 11 AAC 84.1015(a) before authorizing issuance of a lease under this section.
6. (f) After making a written finding in compliance with (e) of this section, the commissioner will execute the lease on behalf of the state and provide an executed copy to the applicant. The applicant will have 30 days after receipt of the lease form to execute the form, provide a copy of the executed lease to the department, and submit payment for the first year's rental payable to the department.
7. (g) The effective date of a lease issued under this section is the first day of the month following the date on which the lease is executed on behalf of the state or, upon prior written request, on the first day of the month in which it was executed on behalf of the state.
8. (h) A carbon storage lease shall include a provision requiring the lessee, on or before each anniversary date of the lease, to submit to the department all geologic data and geophysical data obtained under the lease.

(Eff. 2/16/2025, Register 253)

Authority: AS 38.05.020, AS 38.05.705, AS 41.06.120, AS 38.05.035, AS 38.05.710, AS 38.05.180, AS 38.05.720