Momentum for Carbon Capture Grows with Introduction of Bipartisan Tax Incentive Legislation Co-Sponsored by One-Fourth of the U.S. Senate

by NEORI on July 12, 2017

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

July 12, 2017 – A diverse coalition of energy, industrial and technology companies, labor unions, and environmental and energy policy organizations hailed bipartisan carbon capture legislation introduced today with support from one-fourth of the U.S. Senate.  The Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions (FUTURE) Act will accelerate commercial deployment of technologies to capture carbon dioxide (CO2) emissions from power plants and industrial facilities for use in enhanced oil recovery (CO2-EOR).  The FUTURE Act was introduced 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. The National Enhanced Oil Recovery Initiative (NEORI) praised the lead Senate sponsors and co-sponsors for their leadership in introducing this jobs, infrastructure, economic development and emissions reduction legislation.

“This commonsense bipartisan legislation will support good-paying jobs, boost development of American energy infrastructure, increase U.S. oil production and reduce emissions,” said Brad Crabtree, Vice President for Fossil Energy at the Great Plains Institute and co-director of NEORI. “Technology innovation is bipartisan: Americans want smart energy solutions such as carbon capture, which is why this legislation enjoys unusually broad support.”

The legislation 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 commercial applications beyond oil recovery.

“Bipartisan support is growing to accelerate carbon capture deployment on power plants and industrial sources. We have the technology. We just need help deploying more of it,” said Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES), which co-convenes NEORI. “There’s no cost-effective scenario for achieving the emission cuts we need globally without carbon capture. The U.S. could be a leader in this globally important market.”

Introduction of the FUTURE Act provides the latest evidence of growing political momentum for policies that boost carbon capture technologies. The bill improves on Senate bill 3179 introduced in the last session of Congress that also drew broad, bipartisan support in the U.S. Senate. It is also similar to legislation expected to be introduced in the U.S. House by Congressman Mike Conaway (R-TX), a version of which garnered 50 House co-sponsors last year. And it follows introduction of the Carbon Capture Improvement Act in the U.S. Senate and U.S. House, 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 4 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 CO2 could 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

“I applaud Senators Heitkamp, Capito, and Whitehouse 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. Oxy uses CO2 to enhance oil recovery to increase the recovery and production of US oil reserves. This legislation is vital to making more CO2 available from power plants and industrial sources. With the current tax credit system reaching its limit, it is imperative that Congress follows the lead of Senators Heitkamp, Capito, and Whitehouse and passes this legislation.” – Vicki Hollub, President and CEO, Occidental Petroleum Corporation

“We appreciate Sen. Heitkamp’s leadership in investing in skilled, high-paying jobs.  The Section 45Q tax credit helps create a future for coal-fired power technology and the American workers who depend on this industry.” – Brad Markell, Executive Director AFL-CIO Industrial Union Council

“Carbon capture and storage technology can play an important role in curbing dangerous carbon pollution from power plants and industrial sources, and develop American technology for markets here and abroad. As a complement to using energy more efficiently and shifting to renewable energy sources, carbon capture technology can contribute to the nation’s efforts to reduce damaging climate change. This commendable bill would help make financing carbon capture plants easier, and increase the availability and use of this technology.” – David Hawkins, Director of Climate Programs at the Natural Resources Defense Council

“This legislation is critical to creating the programs, incentives, and tools necessary to ensure the development and deployment of technology vital to the future of coal in a society where there are serious concerns about CO2 and climate. The broad bi-partisan support for legislation on this issue is significant and Cloud Peak Energy strongly supports this important initiative.” – Colin Marshall, CEO, Cloud Peak Energy

“This bipartisan bill is the main part of a multi-pronged 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,” – Rich Powell, Executive Director, ClearPath Action

“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 UWUA supports the expanded deployment of carbon capture technology through strengthening the 45Q tax credit as such incentives can take this technology to the scale necessary for use by power plants across the country, plants essential to securing middle-class jobs and the health of local economies in so many communities around the nation.” – Mike Langford, President of the Utility Workers Union of America.

“The Center for Carbon Removal commends Senators Heitkamp and Whitehouse for reintroducing their 45Q bill and making some targeted improvements. This bill recognizes that captured carbon dioxide can be utilized economically in many different applications – such as concrete, plastics, graphite, carbon fiber, and chemicals – and extends the tax incentive to drive commercial deployment. It also expands the tax credit to include cutting-edge direct air capture projects, which extract carbon dioxide directly from the ambient air. Both of these technologies have the potential to achieve climate and economic benefits simultaneously.” – Noah Deich, Executive Director, Center for Carbon Removal

“The passage of the proposed amendment to 45Q could assist in transitioning carbon dioxide from a national liability, to an asset.” – Eric Mork, Principal, EBR Development LLC

“Fossil fuels – coal, gas, and oil – account today for more than 80% of global energy supply, and they will remain essential sources of energy, at home and abroad, for decades to come.  If we are to be serious about meeting the energy, environmental, and economic challenges before us, we must get serious about carbon capture, and make the same public commitment to it that we have to other low-carbon fuels and technologies.  We can delay no longer.  Senator Heitkamp and all those who are cosponsors of the FUTURE Act are to be commended for their leadership in supporting the further development and accelerated deployment of this critical technology.” – Zack Space, former Member of Congress (D-OH), Chair, CoalBlue Project

“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

“Successfully developing CCUS is key for America’s energy security and key to protecting the jobs of workers in the energy industry. Sen. Heitkamp is a champion in finding solutions that are effective and produce results. On behalf of America’s railroad workers we thank her for introducing this bill and pledge to work with her in seeing that this important legislation becomes law.” – John Risch, National Legislative Director, SMART-TD (UTU)

“Bipartisan support is growing to accelerate carbon capture deployment on power plants and industrial sources. We have the technology. We just need help deploying more of it. There’s no cost-effective scenario for achieving the emission cuts we need globally without carbon capture. The U.S. could be a leader in this globally important market.” – Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES), which co-convenes NEORI

“This commonsense bipartisan legislation will support good-paying jobs, boost development of American energy infrastructure, increase U.S. oil production and reduce emissions. Technology innovation is bipartisan: Americans want smart energy solutions such as carbon capture, which is why this legislation enjoys unusually broad support.” – Brad Crabtree, Vice President for Fossil Energy at the Great Plains Institute and co-director of NEORI.

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