The industry, labor, environmental, and state representatives of the National Enhanced Oil Recovery Initiative (NEORI) urge President Obama and Congressional leaders to support efforts to provide financial incentives to capture carbon dioxide from power plants and industrial facilities for use and safe storage through enhanced oil recovery (CO2-EOR).

Following the introduction of legislation adopting its consensus recommendations in the prior Congress, NEORI encourages renewed leadership by Members of Congress to advance legislation to meet domestic energy security and environmental needs, create jobs and economic opportunity, and deploy innovative technologies through the capture of power plant and industrial CO2 for use in EOR.

CO2-EOR presents a rare opportunity for bipartisan agreement among traditional energy and environmental interests in our currently polarized political environment. 

On the one hand, federal incentives and other support for deployment of CO2 capture can be justified solely on energy security, economic, and fiscal grounds:  the increased capture of power plant and industrial CO2 will enable the production of billions of barrels of additional American oil through CO2-EOR that our nation will otherwise import.

At the same time, measures to expand power plant and industrial CO2 capture and safe storage through EOR represent an essential and neglected environmental strategy, if the United States is to meet the Administration’s recently-announced emissions reduction targets.

NEORI stands ready to work on a bipartisan basis with all interested Members of Congress to move quickly on opportunities to advance CO2-EOR. NEORI urges the President and Congressional leaders to use the beginning of the 114th to address a critical lack of incentives and financial support for the deployment of CO2 capture technologies that will deliver economic, fiscal, energy and environmental benefits to our nation.

Legislative Efforts in the Prior Congress

On November 20, 2014, Sen. Heidi Heitkamp co-sponsored the Expanding Carbon Capture through Enhanced Oil Recovery Act of 2014 (S. 2288) to put CO2 captured from a wide range of power plants and industrial facilities to productive use in CO2-EOR, yielding additional oil from existing wells, while safely storing that CO2 underground.

Introduced earlier in 2014 by Sen. Jay Rockefeller, S. 2288 adopteds NEORI’s consensus recommendations to expand and reform an existing federal tax incentive to deploy capture technology to supply CO2 for use in CO2-EOR. According to NEORI analysis, the incentive would lead to production of an additional 8 billion barrels of American oil and store 4 billion tons of CO2 over the next 40 years. In addition, the tax credit would more than pay for itself over time due to federal revenues generated from increased domestic oil production.

NEORI recognizes additional efforts to improve federal level incentives for advancing CO2-EOR with man-made CO2. Earlier in 2014, Sen. Heitkamp introduced the Advanced Clean Coal Technology Investment in Our Nation Act of 2014 (S. 2152), which would provide a competitively-awarded incentive for capturing CO2 from coal-based projects for utilization in CO2-EOR.

Additional legislative proposals introduced or discussed in the prior Congress would provide similar support for projects capturing CO2 for CO2-EOR:

  • NEORI has endorsed bipartisan legislation in the U.S. Senate and House that would have enabled carbon capture projects to form master limited partnerships, a business structure that has long helped other types of natural resource extraction projects to receive private sector investment. The Master Limited Partnerships Parity Act (S.795, H.R.1696) was introduced by Sen. Chris Coons in the Senate and by Rep. Ted Poe in the House.
  • NEORI has submitted comments showing how its consensus recommendations could be harmonized with a proposal by then-Senate Finance Committee Chairman Ron Wyden for a technology-neutral tax incentive for sources of clean energy, including carbon capture technologies, which would simplify the tax code and replace existing energy incentives as part of comprehensive tax reform.

Background on CO2-EOR

CO2-EOR is a fully proven commercial practice in which tens of millions of tons of CO2 are injected annually into already developed oil fields to coax additional production, where injected CO2 ultimately remains safely stored in well-managed and properly-closed reservoirs. Most CO2 currently used in EOR comes from naturally-occurring geologic reservoirs, instead of from man-made sources where CO2 is otherwise currently released to the atmosphere. Future expansion of CO2-EOR depends on capturing more CO2 from these power plant and industrial sources of emissions. Today, numerous commercial-scale carbon capture projects sell CO2 for use in enhanced oil recovery projects in 11 U.S. states.

Benefits of Expanded Incentives for CO2-EOR

According to NEORI’s analysis, a federal tax incentive for CO2-EOR can:

  • Boost domestic oil production. Estimates of CO2-EOR potential suggest that tens of billions of barrels of oil can be recovered from existing wells in the United States, provided that a sufficient supply of CO2 becomes available. Increased domestic production will increase energy security and save the country billions in spending on imported oil.
  • Generate net federal revenue. Federal incentives for capturing CO2 from man-made sources lead to new oil production, which generates federal revenue that can cover and exceed the cost of incentives over time.
  • Encourage new CO2 capture technology. CO2 capture and storage through CO2-EOR is a proven commercial technology in a number of industries, but the cost of CO2 capture remains high in many industry sectors. By expanding CO2 capture project deployment, incentives for CO2 capture and pipeline transport will spur technology innovation and lower costs.
  • Safely store carbon dioxide underground. Expanded EOR that uses and safely stores captured CO2 would prevent billions of tons of man-made CO2 from being released into the atmosphere.

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NEORI Hosts Capitol Hill Briefing: An Energy, Economic, and Environmental Solution for Our Nation

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On June 26th, 2014, the National Enhanced Oil Recovery Initiative (NEORI) hosted a briefing on Capitol Hill entitled An Energy, Economic, and Environmental Solution for Our Nation: Using Captured Carbon Dioxide for Enhanced Oil Recovery. NEORI brings together industry, labor and environmental advocates, and state officials to foster increased domestic oil production through the capture, use and storage of […]

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Press Release: NEORI Welcomes Bipartisan Legislation to Encourage American Oil Production Using Carbon Dioxide

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