The National Enhanced Oil Recovery Initiative (NEORI) applauds the inclusion of significant new and more workable federal tax credits for carbon capture utilization and storage (CCUS) in President Obama’s FY 2016 budget.
NEORI supports policies that would meaningfully lower the economic barriers to utilizing carbon dioxide in enhanced oil recovery (CO2-EOR), an energy, economic, and environmental opportunity and priority for our nation. Such action could greatly increase American oil production, create new jobs and economic growth, deploy innovative carbon capture technologies, and safely store CO2 underground that would otherwise be released into the atmosphere.
NEORI calls for federal and state action to bridge the gap between the cost of capturing and transporting CO2 from man-made sources and the market price that oil companies pay for that CO2. The President’s proposal would help close that gap by creating new separate investment and production tax credits available for up to 10 and 20 years, respectively. Collectively, these would cover investments in carbon capture technology at power plants and industrial facilities, as well as the infrastructure to deliver and store needed CO2 in EOR projects.
NEORI looks forward to working with the Congress and the Administration to support development of bipartisan legislative efforts that build on this and other proposals to advance CO2-EOR.