U.S. Budget Bill Includes Landmark Carbon Capture Tax Credit to Benefit Economy, Jobs and the Environment

by NEORI on February 9, 2018

Broad bipartisan coalition of industry, labor, and environmental interests backed FUTURE Act to extend and reform a tax credit for carbon capture

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

(February 9, 2018) – The U.S. budget bill passed by Congress today and signed into law by the President included the FUTURE Act, legislation introduced last year in the U.S. Senate to extend and reform the federal Section 45Q tax credit.

This revamped 45Q credit will drive private investment in commercial deployment of technologies to capture carbon dioxide (CO2) from power plants and industrial facilities for enhanced oil recovery (CO2-EOR) and other forms of geologic storage and for beneficial uses of CO2. Passage of the FUTURE Act will transform 45Q into an effective tool for creating good-paying, highly-skilled jobs and driving growth in key energy and industrial sectors of the U.S. economy, while significantly reducing carbon dioxide emissions.

The FUTURE Act was cosponsored by one quarter of the U.S. Senate and backed by the National Enhanced Oil Recovery Initiative (NEORI), an unprecedented coalition of diverse energy, industrial and technology companies, labor unions and environmental organizations.

NEORI applauds Congress for passage of this landmark legislation, especially the leadership of lead Senate sponsors Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), and John Barrasso (R-WY), and of House sponsor Congressman Mike Conaway (R-TX) who led efforts to pass this legislation in their respective chambers.

“The FUTURE Act represents one of the most significant energy and environmental accomplishments by Congress in recent memory,” declared Brad Crabtree, vice president of fossil energy for the Great Plains Institute, which co-convenes NEORI with the Center for Climate and Energy Solutions. “Passage of this legislation highlights the potential for carbon capture to marshal support across the political spectrum for a policy that will boost American energy production, reduce carbon emissions, protect and create high-wage jobs, and increase federal and state revenue.”

Key provisions of the FUTURE Act provide needed financial certainty for private investors and developers of carbon capture projects by lifting the current cap on available 45Q credits and increasing their value for each ton of CO2 captured and safely stored or put to beneficial use. The incentive is performance-based, so only projects that successfully capture and store CO2 can claim the credit.

“As co-founders of a coalition of industry, labor unions, and environmental groups supporting carbon capture, use and storage technologies, we applaud Congress for extending and expanding the Section 45Q tax credit,” said Bob Perciasepe, president of the Center for Climate and Energy Solutions.  “Leaders from both parties have demonstrated a commitment to reducing carbon emissions while protecting and creating jobs and investing in new American industries.”

This legislation marks the culmination of more than six years’ work by NEORI’s industry, labor, and environmental participants and their coalition partners to build support for the extension and reform of the 45Q tax credit. Their effort also helped garner bipartisan backing from the governors of Kansas, Montana, North Dakota, Oklahoma, Pennsylvania, and Wyoming who co-signed a letter to Congress this week urging action on 45Q. Over the past several years, organizations such as the Western Governors Association (WGA), National Association of Regulatory Utility Commissioners (NARUC) and Southern States Energy Board (SSEB) have passed resolutions calling on Congress to enact legislation to reform and extend Section 45Q based on recommendations developed by NEORI and its coalition partners. Legislators in states including Alabama, Kentucky, North Dakota and Texas have also passed resolutions of support.

You can read more about NEORI’s work and see a list of its nearly 40 participants at www.NEORI.org.

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About NEORI: NEORI brings together coal, oil and gas, electric power, ethanol, industrial and 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).

Supportive Quotes from Industry, Labor Unions, and Environmental Groups

  • “This is a good day for the climate and a good day for American jobs. These provisions will advance the use of technologies that significantly reduce greenhouse gas emissions, and will create high-paying jobs in the energy, construction and manufacturing sectors.” -Brad Markell, Executive Director, AFL-CIO Industrial Union Council
  • “As co-founders of a coalition of industry, labor unions, and environmental groups supporting carbon capture use and storage technologies, we applaud Congress for extending and expanding the Section 45Q tax credit. Leaders from both parties have demonstrated a commitment to reducing carbon emissions while protecting and creating jobs and investing in new American industries.” -Bob Perciasepe, President, Center for Climate and Energy Solutions, which co-convenes NEORI with the Great Plains Institute
  • “We need CCS to combat climate change. This incentive is the first major step towards building up a much-needed CCS industry.” –Kurt Waltzer, Managing Director, Clean Air Task Force
  • “The FUTURE Act represents one of the most significant energy and environmental accomplishments by Congress in recent memory. Passage of this legislation highlights the potential for carbon capture to marshal support across the political spectrum for a policy that will boost American energy production, reduce carbon emissions, protect and create high-wage jobs, and increase federal and state revenue.” –Brad Crabtree, Vice President of Fossil Energy for the Great Plains Institute, which co-convenes NEORI with the Center for Climate and Energy Solutions.
  • “Thank you Senator Heitkamp for your leadership on the FUTURE Act.  Many power plants in North Dakota and around the nation are near oil fields that could use carbon dioxide for enhanced oil recovery.  The enactment of the FUTURE Act 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
  • “45Q will be a catalyst for projects like Lake Charles methanol to be financed and implemented. This incentive will create thousands of jobs and billions of dollars of investment While securing our clean energy future.  We are thankful to congress for its foresight in extending this important clean energy tax credit.” –Hunter Johnston, Counsel, Lake Charles Methanol LLC
  • “The 45Q legislation is perhaps the last opportunity to preserve the field expertise in CO2 capture and injection for the sake of the environment and energy production.  The expertise developed in the last 30 years is either retiring or migrating to the competition and excitement created by the horizontal drilling and hydrofracturing technologies.” –Steve Melzer, Melzer Consulting, Midland Texas and home to 70 CO2-EOR projects. 
  • “This legislation helps to ensure domestic energy security and, at the same time, incentivizes the reduction of U.S. carbon dioxide emissions. Companies, like Occidental, that purchase carbon dioxide for use in some of their oil production will also benefit from the additional supply of carbon dioxide, which will subsequently be sequestered, reducing emissions and resulting in a lower carbon intensity of oil.  I applaud the leadership of Representative Conaway, Senator Heitkamp and all members who supported this bipartisan legislation.” – Vicki Hollub, President and Chief Executive Officer, Occidental Petroleum Corporation
  • “We see this as a meaningful step to incentivize U.S. technology leadership in meeting environmental goals, and also believe it can have the potential to expand markets for coal use over the long term.” -Glenn Kellow, President and Chief Executive Officer, Peabody Energy
  • “Successfully developing carbon capture is key for America’s energy security and key to protecting the jobs of workers in the energy and transportation industries.  On behalf of America’s railroad workers, we thank Senators Heitkamp, Whitehouse, Capito, and Barrasso, and the many other bipartisan supporters of 45Q for their hard work in accomplishing this milestone.” – John Risch, National Legislative Director, SMART-TD (UTU)
  • “Adoption of 45Q is a major step in accelerating carbon capture and storage in power generation and industrial activities, with the potential for major environmental, economic and security benefits.” –Dan Reicher, Executive Director, Steyer-Taylor Center for Energy Policy and Finance, Stanford University
  • Carbon capture is vital to meeting climate goals and represents a big opportunity for the U.S. to lead on energy innovation. The FUTURE Act will get more carbon capture projects deployed, reduce emissions, and help build domestic clean energy infrastructure. This is a big win in the climate fight at a time when we could really use some wins.  – Josh Freed, Vice President, Third Way
  • “Today, we applaud Congress’ action in providing support for carbon capture technology, a milestone event in our nation’s progress toward a clean energy future that includes a diverse mix of generation sources. As Utility Workers, we know there is a continuing place for the energy industries that built our nation, and that bringing carbon capture systems to scale will ensure the high-quality jobs in those facilities can continue to support working families and their communities across the country for the foreseeable future.” –Mike Langford, National President, Utility Workers Union of America, AFL-CIO

 

 

 

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