Dive Brief:
- A group of 19 lawmakers from both sides of the aisle have proposed a bill supporting deployment of carbon capture equipment at coal facilities, and in turn utilizing the carbon in enhanced oil recovery.
- Sponsored by Rep. Mike Conaway (R-Texas), the measure would make permanent the existing carbon capture and storage incentive, known as the 45Q tax credit. The current credit will expire once reaching 75 million tons of CO2, which creates uncertainty for projects under development.
- The proposal calls for gradually increasing the credit value for CO2 storage through enhanced oil recovery or other types of geologic storage, from $10 and $20/ton respectively, to $30 per ton by 2025.
Dive Insight:
Legislation to support carbon capture and enhanced oil recovery has been introduced, and the measure will likely join together an unusual and diverse coalition of supporters, including both the coal industry and environmentalists.
“By making the 45Q tax credit permanent and increasing its value, this legislation provides a critically-needed incentive for industry to invest in carbon capture technologies at power plants and industrial facilities that rely on coal, which will benefit both our nation’s energy security and the environment,” said Shannon Angielski, executive director of the Coal Utilization Resource Council.
According to the group, a U.S. Department of Energy study recently showed an increased supply of CO2 could enable the oil industry industry to produce an additional 21 to 63 billion barrels of oil, while storing 10 to 20 billion tons of CO2 – about four years’ worth of national emissions.
"Commercializing carbon capture, use and storage technology is essential for meeting the world's energy and economic goals. The Section 45Q provision is one of several policy measures that are critical to advance broad deployment of this technology," said Peabody Energy President and CEO Glenn Kellow.
Earlier this month, a diverse group sent a letter to the House of Representatives announcing broad support for the measure. That group included Peabody, Arch Coal, Natural Resources Defense Council and the Clean Air Task Force.
"Providing incentives to capture CO2 for use in EOR will help get more commercial-scale carbon capture projects under construction so that we can bring down the costs of the technology. Carbon capture has to be part of the effort to address climate change,” said Bob Perciasepe, president of the Center for Climate and Energy Solutions.
