Section 38.05.705 - Carbon storage exploration licensing(a) The commissioner may issue carbon storage exploration licenses on state land.(b) A carbon storage exploration license gives the licensee (1) the exclusive right to explore, for carbon storage purposes, the state land described in the license for a five-year term; and(2) the option to convert the license for all or part of the state land described in the license into a carbon storage lease after the licensee complies with the lease conversion process described in AS 38.05.715.(c) A carbon storage exploration license must (1) be conditioned on the posting of a bond or other security acceptable to the department and in favor of the state;(2) be conditioned on an obligation by the licensee to fulfill a specified work commitment as set out in the license; the work commitment must include mandatory provisions for(A) an annual fee paid by the licensee to the department in an amount that is at least $20 an acre, subject to the license; and(B) an annual report describing the licensee's exploration activities in the previous calendar year, which the licensee shall provide to the department; and(3) include proposed commercial terms that apply if the license is converted into a carbon storage lease, which must, at a minimum, provide for (A) an annual rent of at least $20 an acre; and(B) a charge on injected volumes of carbon dioxide of at least $2.50 a ton.(d) The commissioner may revoke a carbon storage exploration license before the termination of the five-year term of the license if the licensee fails to comply with the requirements of (c) of this section or applicable regulations.(e) The department may renew a carbon storage exploration license for a term sufficient to determine whether the licensee's permit application will be accepted under AS 41.06.105 - 41.06.210 if the licensee (1) before the expiration of the license, applies for a permit under AS 41.06.120;(2) is in compliance with the conditions of the license;(3) provides documentation acceptable to the department of the pending permit application; and(4) submits to the department an executed renewal form affirming the original terms of the license for the term of the renewed license.(f) A carbon storage exploration license that has been renewed under (e) of this section terminates immediately if the Alaska Oil and Gas Conservation Commission denies the licensee's permit application under AS 41.06.105 - 41.06.210.(g) The dollar amounts in (c) of this section shall increase every five years in proportion to the Consumer Price Index for urban consumers for urban Alaska, as determined by the United States Department of Labor, Bureau of Labor Statistics. The index for January 2024 is the reference base index.(h) A charge on injected volumes of carbon dioxide required under (c)(3)(B) of this section or as altered by the commissioner under AS 38.05.715(c) is a royalty for the purposes of the Alaska permanent fund under AS 37.13.010.Added by SLA 2024, ch. 23,sec. 21, eff. 10/29/2024.