Bill from House Agriculture Chairman Mike Conaway Would Extend an Existing Program – Section 45Q – to Boost Carbon Capture in the U.S.

For Immediate Release, Contact: Ben Finzel, 202-277-6286, ben@renewpr.com

September 14, 2017 – Continued deployment of carbon capture technologies received additional momentum today with the introduction of bipartisan legislation in the U.S. House to extend and reform an existing tax credit for carbon capture projects. The Carbon Capture Act will promote commercial deployment of technologies to capture carbon dioxide (CO2) emissions from power plants and industrial facilities for use in enhanced oil recovery (CO2-EOR) with geologic storage.

House Agriculture Chairman Mike Conaway (R-TX) introduced the legislation along with a bipartisan group of 29 cosponsors. Introduction of the House bill follows the July introduction of the FUTURE Act in the U.S. Senate by Senators Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), John Barrasso (R-WY), Tim Kaine (D-VA), Lindsey Graham (R-SC) and 19 other original cosponsors.

“This jobs, infrastructure, economic development and emissions reduction legislation is smart, bipartisan energy policy that should be enacted quickly,” said Brad Crabtree, Vice President for Fossil Energy at the Great Plains Institute and co-director of the National Enhanced Oil Recovery Initiative (NEORI), the leading national coalition in support of carbon capture. “Chairman Conaway is to be commended for his leadership in promoting a fiscally responsible, performance-based policy that will drive private investment in technology that supports American energy production and job creation, while reducing emissions.”

The Carbon Capture Act provides a performance-based incentive to capture CO2, put it to productive use, and store it safely and permanently underground. It would provide financial certainty for private investors and stimulate commercial deployment of carbon capture projects by extending the current federal Section 45Q tax credit incentive and increasing its value for each ton of CO2 that is captured from power plants and industrial facilities for storage through EOR or other methods. Only projects that successfully capture and store CO2 can claim the credit. The legislation also expands eligibility for the credit, so that more industries and facilities in more states can participate, and it extends CO2 capture and use to new beneficial commercial applications beyond oil recovery.

“There is an opportunity here to make the most of bipartisan support for carbon capture technology on power plants and industrial sources. When both sides of the aisle come together, we can find solutions that work for the environment and our economy,” said Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES), which co-convenes NEORI. “Here is an area of consensus where we can reduce emissions and invest in energy infrastructure at the same time.”

Carbon capture legislation has received strong support again in the 115th Session of Congress. In addition to the FUTURE Act introduced in the U.S. Senate in July, bipartisan sponsors in the House and Senate earlier this year introduced the Carbon Capture Improvement Act, legislation that authorizes states to use tax-exempt private activity bonds to help finance the purchase and installation of carbon capture equipment.

For nearly a half century, the U.S. independent oil and gas industry has led the world in using CO2 for oil production, and CO2-EOR currently provides nearly four percent of domestic oil production and utilizes roughly 65 million tons of CO2 annually. According to a recent U.S. Department of Energy study, an increased supply of COcould enable the EOR industry to produce an additional 21-63 billion barrels of domestic oil with today’s technology and store 10-20 billion tons of CO2, or up to four years’ worth of national emissions. Additionally, the International Energy Agency has highlighted the critical role that carbon capture must play to meet global mid-century goals for mitigating carbon emissions from electric power generation and a wide range of industrial activities, including natural gas processing, fertilizer and hydrogen production, refining, and the manufacture of cement, steel and chemicals.

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NEORI brings together coal, oil and gas, electric power, ethanol, chemical and energy technology companies, labor unions, and national environmental and energy policy organizations dedicated to expanding deployment of carbon capture as an energy, economic and environmental solution for our nation. NEORI is convened by the Center for Energy and Climate Solutions (C2ES) and Great Plains Institute (GPI).

Quotes of Support for 45Q Legislation

“I applaud Representative Conway and the other co-sponsors for their leadership on this important legislation that will create jobs, decrease our dependence on foreign oil, and provide unique environmental benefits by encouraging the capture of more CO2 from power plants and other industrial sources. Occidental uses CO2 in its enhanced oil recovery operations to increase the production of US oil reserves.  This legislation is vital to boosting enhanced oil recovery’s ability to capture COavailable from power plants and industrial sources. With the current tax credit system reaching its limit, it is imperative that Congress comes together to pass this bipartisan legislation.” –Vicki Hollub, President and CEO, Occidental Petroleum Corporation

“U.S. leadership is needed to advance carbon capture to commercial scale, which is essential to the world’s environmental goals. This legislation has broad support from both sides of the aisle and is a positive step toward creating policy parity for use of carbon capture over time in the energy and industrial sectors.” – Michael Flannigan, Senior Vice President for Global Government Affairs, Peabody Energy

“NRG Energy welcomes the efforts of a broad bipartisan team to advance carbon capture and enhanced oil recovery. Capturing and utilizing carbon dioxide from power plants is an opportunity to boost domestic energy production, while advancing emissions-reducing innovative technology.” – Raymond Long, Vice President, Government Affairs, NRG Energy

“The UWUA applauds the bi-partisan step taken today by the House of Representatives to support the increased deployment of carbon capture technology through strengthening the 45Q tax credit.  By taking the simple step of passing this legislation, our country can tackle a significant energy challenge, one supported by a broad cross-section of the political spectrum.  The health and well-being of middle-class families and their communities across the nation can only benefit from this type of forward-thinking approach to energy policy.” – Mike Langford, President of the Utility Workers Union of America.

“Carbon capture on coal and gas-fired power plants provide an important option for zero carbon electricity, and it may be the most important option for reducing carbon emissions from industrial sources. Congress should pass this bill that will that will give carbon capture an important boost to its use nation-wide, and ultimately around the world.” – Kurt Waltzer, Managing Director, Clean Air Task Force

“We appreciate Congressman Conaway’s commitment to energy innovation, which is essential to maintaining a balanced electric generation portfolio. America’s electric cooperatives are taking aggressive steps to reduce our carbon footprint while protecting the diverse portfolio that’s needed to preserve the reliability and affordability of the co-op power supply. This legislation will help co-ops achieve this crucial goal.” – Jim Matheson, Chief Executive Officer, National Rural Electric Cooperative Association 

“Congressman Conaway’s Carbon Capture Act is a critical legislative component to ensure the country’s continued energy security and independence. This legislation will help ensure continued economic growth and prosperity while addressing CO2 emissions concerns by incentivizing the development and deployment of carbon capture, utilization, and storage. In also promoting enhanced oil recovery, the legislation not only helps ensure low cost reliable electricity, it is a key tool for boosting American oil production.” – Colin Marshall, CEO Cloud Peak Energy

“This bipartisan bill is now an important part of a bicameral effort to give the U.S. a global edge in technologies that responsibly grow coal and natural gas generation, while also magnifying the potential for enhanced oil recovery and other economic benefits.” – ClearPath Action Executive Director Rich Powell

“Lake Charles Methanol applauds the bi-partisan leadership of Congressman Conaway and other members of Congress in introducing legislation to extend and improve the Section 45Q tax credit, which would incentivize projects for carbon capture.  The Lake Charles project, once constructed, will be the largest industrial carbon capture project in the country and the world.  Projects such as Lake Charles require huge capital investment in a rapidly changing marketplace.  These incentives will make it easier to construct and build such projects by providing a long term incentive to capture CO2 on a large scale.  We applaud the leadership of Congressman Conaway and many other members of Congress and Senators in pursuing this legislation.” – Hunter Johnston, Counsel, Lake Charles Methanol, LLC

“As long-time advocates of robust investments in the development of Carbon Capture, Usage & Storage technologies, the International Brotherhood of Boilermakers commends Chairman Conaway on his continued leadership in this effort. The improved Section 45Q tax credit proposed by Representative Conaway is a much-needed step toward making carbon capture affordable and deployable. Creating high-paying, high-skilled American jobs while responsibly reducing carbon emissions is a win-win.” – Cecile M. Conroy, Government Affairs Director, International Brotherhood of Boilermakers

“Building on America’s legacy of global technological leadership, the Carbon Capture Act would leverage American energy abundance to fuel our economy as we protect the environment and transition to a 21st century clean energy economy. By expanding eligibility for the Section 45Q tax credit and implementing performance-based incentives, this bipartisan legislation would encourage businesses to develop the technologies that effectively capture and make productive use of carbon emissions. The economic and environmental benefits of developing these innovative technologies are substantial and essential for continued American energy leadership.” – Tracy Terry, Director, Energy Project, Bipartisan Policy Center 

“Many power plants in North Dakota (and elsewhere) are close to oil fields that could use carbon dioxide for enhanced oil recovery. Appropriate incentives could facilitate CO2 recovery from power plants, which would provide an environmental benefit to the electric power sector and would encourage more thorough recovery of the oil resource.” – Rick Lancaster, Vice President and Chief Generation Officer, Great River Energy

“The Center for Carbon Removal commends Representative Conway and co-sponsors for reintroducing their 45Q bill with key improvements, which complements the FUTURE Act introduced in the Senate.  The legislation will help catalyze innovations in carbon dioxide utilization technologies that can have positive impacts for both the climate and the economy by incentivizing the capture of carbon dioxide from more sources and its profitable reuse into oil production and other products.” – Noah Deich, Executive Director, Center for Carbon Removal 

“Successfully developing CCUS is key for America’s energy security and key to protecting the jobs of workers in the energy industry. On behalf of America’s railroad workers, we thank Rep. Conaway for introducing this bill and pledge to work with him in seeing that this important legislation becomes law.” – John Risch, National Legislative Director, SMART-TD (UTU)

“This very bipartisan bill is an essential portion of an integrated effort to build on the advantages of CO2 injection technologies that the U.S. has pioneered. It also offers a platform to inform other countries of the value in growing clean coal and natural gas generation while taking advantage of oil production and optimizing recovery from existing fields which leads to multi-sector job growth and economic benefits.” – Steve Melzer, CO2 Conference Director and Consulting Engineer, Midland, Texas

“There is an opportunity here to make the most of bipartisan support for carbon capture technology on power plants and industrial sources. When both sides of the aisle come together, we can find solutions that work for the environment and our economy. Here is an area of consensus where we can reduce emissions and invest in energy infrastructure at the same time.” – Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES)

“This jobs, infrastructure, economic development and emissions reduction legislation is smart, bipartisan energy policy that should be enacted quickly. Chairman Conaway is to be commended for his leadership in promoting a fiscally responsible, performance-based policy that will drive private investment in technology that supports American energy production and job creation, while reducing emissions.” – Brad Crabtree, Vice President for Fossil Energy at the Great Plains Institute and co-director of the National Enhanced Oil Recovery Initiative (NEORI), a national industry, labor and environmental coalition that supports carbon capture.

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