ExxonMobil has withdrawn its application for what the Billings Gazette identified as Montana's first carbon capture project, removing the only carbon-storage facility proposal active in the state before regulators could rule on the permits.

The withdrawal eliminates a precedent case that the Montana Department of Environmental Quality and prospective storage operators had circled as a test of the state's Class VI well permitting pathway.

What was the project?

The Billings Gazette headline summary does not name the captured emitter, capture volume, injection target reservoir, or the application docket number. ExxonMobil's carbon capture footprint in the surrounding region centers on enhanced oil recovery tied to legacy oil fields in Wyoming, including the Shute Creek and Lost Cabin operations feeding one of the largest CO2 pipelines in the United States. A Montana-first designation indicates the abandoned application targeted a separate capture point or storage formation within the state.

Without the application documents reproduced in the public reporting, tonnage, geology, and lead permitting authority cannot be confirmed from the available source. The company's reason for the withdrawal was not disclosed in the published summary.

Why does withdrawal matter now?

Carbon capture filings in the United States have slowed since 2023 as developers reassess projects against revised IRS guidance on Section 45Q tax credits. The Inflation Reduction Act expanded 45Q in 2022, but Treasury's subsequent rules tightened eligibility for tax-credit monetization and required stricter monitoring protocols for stored CO2. ExxonMobil's exit from the Montana docket also pre-empts a state primacy track that officials in Helena were building toward.

A Montana-issued Class VI primacy would let the state review injection well applications locally rather than routing them through EPA's Underground Injection Control program in Washington. That track was not yet complete. Withdrawal of the ExxonMobil application removes a reference project that state staff and operators had cited in capacity-planning conversations and erases the only early applicant that companies were tracking as an indicator of the state's readiness.

What does this change at the operator level?

The withdrawal does not affect ExxonMobil's operating LaBarge CCS facility on the Wyoming side of the shared regional formation, nor does it halt the company's announced capture projects at Baytown, Texas, and other U.S. Gulf Coast sites. The Montana exit is a single permit decision, not a corporate retreat from carbon capture. ExxonMobil's own capital plans continue to fund CCS in the Baytown complex, where the company has signed offtake agreements for stored volumes with industrial customers.

Smaller developers holding Montana acreage will read the withdrawal as a signal that even well-capitalized applicants are pulling back on Mountain West storage projects until 45Q economics and Class VI timelines settle. That read could compress the queue of competing applications on the Montana docket for the next 12 months.

What milestones decide what happens next?

The next decision point is Montana's Class VI primacy submission to EPA, or a competing storage permit application from a different operator. Neither has appeared in the public docket since the ExxonMobil withdrawal.

EPA's review of any Montana primacy petition typically runs 12 to 24 months from submission, during which EPA continues reviewing Class VI applications under federal authority on a case-by-case basis. Until either path produces a draft permit, Billings, Yellowstone County, and the Powder River Basin jurisdictions will record no operating carbon storage facility tied to a state-level authorization.

The Montana Department of Environmental Quality did not respond before publication to a request for comment on whether the withdrawal triggers a formal docket closure or whether ExxonMobil retains refile rights under the current application window.