Bipartisan bill a climate savior or Big Oil handout?
The “Carbon Capture Act,” a companion to Senate legislation and introduced by Rep. Mike Conaway (R-Texas) with 29 bipartisan co-sponsors, would increase the value of an existing tax credit and make it eligible to more developers.
Bill supporters say the current benefit under Section 45Q of the tax code is not enough to bridge a financing gap for projects, especially with the program set to expire. They say there needs to be parity with wind and solar, which benefitted from a tax extension package in 2015.
“CCUS projects are an integral part of our country’s future energy strategy and embody the spirit of American innovation,” Conaway said in a letter earlier this week to House colleagues.
The bill would provide $35 per ton of carbon dioxide for qualified proposals. Currently, the credit awards $10 per ton of stored industrial carbon dioxide used in enhanced oil recovery projects and $20 per ton for CO2 stored underground in deep rock reservoirs.
The plan also would allow additional types of CCS projects — such as those directly capturing CO2 from the air — to qualify and includes smaller facilities producing 100,000 tons of CO2 annually. The credits could be used to store CO2 from a range of emitters, including coal and natural gas plants.
At a hearing this week in the Senate Environment and Public Works Committee, lawmakers and witnesses said expanded tax credits were critical in bridging a major financing gap for CCS deployment (E&E Daily, Sept. 14).
Conaway’s bill is a companion to the “Future Act” introduced in the Senate by Sens. Heidi Heitkamp (D-N.D.), Shelley Moore Capito (R-W.Va.), John Barrasso (R-Wyo.), Sheldon Whitehouse (D-R.I.) and others (E&E Daily, July 13). The legislation is supported by a coalition of climate hawks, environmentalists, and oil and coal interests.
“This bill is about bringing those who don’t always agree together toward a common goal. It’s for that reason that our strong, bipartisan legislation brings an ideologically diverse coalition together around the often divisive issue of carbon,” Heitkamp said at an event yesterday hosted by the Center for Climate and Energy Solutions. She said she has mentioned moving 45Q reforms repeatedly with administration officials in the context of broader tax reform.
“Our bill would put a price on carbon pollution and pay facilities for every ton of emissions they keep out of the atmosphere. It would also clear a path for businesses in Rhode Island and around the country that turn carbon pollution into useful products,” Whitehouse said.
Some groups opposed to CCS said yesterday that the 45Q legislation should not be used to negotiate with President Trump.
“Carbon capture and sequestration is a fiscal and an environmental disaster that cannot be used as a bargaining chip,” said Lukas Ross, a spokesman at Friends of the Earth.
Oil Change International also released a statement saying that their analysis shows the legislation would be worth up to $4.5 billion each year to the oil industry, making it the “largest single federal handout” to the fossil fuel industry.