During a trip to western North Dakota last month to visit my family, I met with a long-time friend, Dick, who holds subsurface mineral rights and surface rights in the Bakken area. Over coffee, German sausage, and kuchen, our conversation naturally turned to the leasing of pore space. Dick has lately been approached by landmen with what they describe as “great deals” for purchasing the underlying pore space associated with his surface rights. They hesitate to provide specific offers. Instead, he described the initial interactions as “like making a deal for a new car or tractor.” The landmen reply, “I’ll need to go back to the client [my boss or manager] with your questions.” Sound familiar? Like most US states, pore space ownership correlates with surface ownership in North Dakota. In August 2022, the North Dakota Supreme Court clarified the rights of surface owners and the need for compensation for pore space use. It also created uncertainty for oil and gas operators who previously had more latitude in using pore space without compensation. Dick knows his way around the dealmaking involved in oil and gas rights leasing, having been involved in many landmen inquiries in the days of the Bakken boom and subsequent wheeling and dealing. However, pore space leasing is relatively nascent and faces similar unknowns like the early days of Bakken pitches. During his research, he came up against the same walls I have over the years while writing about pore space leasing for carbon sequestration. Becoming more apparent as deals gain momentum is the lack of specifics for comparable deals. As when purchasing a home, identifying “comps” for similar properties is a necessary part of the process. But the amounts paid for pore space are closely held, generally not publicly available. It’s impossible to determine if a deal is good or bad. Is the compensation fair? And individual surface owners and landowners rights associations (and/or their attorneys) are aware of the 45Q tax credit of $85/tonne of CO2 captured and stored available to the project developer/operator under the 2022 US Inflation Reduction Act. How should this be factored into the determination of fair compensation? For example, the Ohio River Valley Institute (ORVI), a think tank focused on the Appalachian region, in March described a proposal by Tenaska Inc. to lease underground pore space across seven counties (approximately 80,000 acres) in Ohio, Pennsylvania, and West Virginia for the sequestering of 150 million tons of CO2. In a document proposing terms for the acquisition of nearly 1,400 acres of pore space in county parklands in Washington County, Pennsylvania, Tenaska offered about $4 million for the county’s 2.6-million-metric-ton share of the CO2 between 2027 and 2056, or about $1.50 per metric ton. The ORVI called the deal “ridiculous and borderline insulting.” It supports this declaration by highlighting a comp available from August 2023. Mountaineer GigaSystem LLC offered the state of West Virginia a royalty of $3.35 per metric ton to sequester CO2 on public land in Mason County—more than two times what Tenaska is offering Washington County. It also made the point that the ultimate cost of capturing and sequestering the CO2 will not be borne by Tenaska or its customers. The 45Q tax credit will provide Tenaska $423 million annually for sequestering 5 million tons of CO2 annually. The region’s lease revenue will be $7.5 million. To align with the available comp, ORVI said Tenaska’s offer should at least match Mountaineer’s $3.35 instead of the proposed $1.50 per metric ton. In the western US, ExxonMobil is seeking to pay the US Bureau of Land Management (BLM) to inject 150 million tons of CO2 over the course of 20 years into 100,000 subsurface acres of pore space on federal lands. The proposed Snowy River CO2 project in Carter County, Montana, is still in the environmental assessment and public comment phase, and the BLM’s compensation for the use of the land is not yet publicly disclosed or finalized. Our takeaway after finishing the sausage and kuchen? As pore space leasing evolves, landowners like Dick face a complex landscape of uncertain deals and opaque compensation. With legal clarifications and potential tax credits in play, navigating these new frontiers requires keen insight and vigilance to ensure fair and beneficial agreements for all involved.