The University of North Dakota's Energy and Environmental Research Center will lead the 14-month study that also will look at cleaner technology to make electricity from the state's lignite coal. It also will study whether carbon dioxide could be used to boost oil output in some fields.
State money approved Tuesday from the commission headed by Gov. Doug Burgum comes from North Dakota's lignite research fund, which is financed by a tax on the abundant but low-grade coal.
The federal government is expected to provide most of the money for the $12.7 million study, with the industry contributing about $1 million.
Carbon dioxide is a heat-trapping gas that contributes to climate change.