Portman, Bennet Introduce Bill to Help Finance Carbon Capture and Storage Projects
Boosts Domestic Energy Production and Reduces Overall Carbon Emissions
WASHINGTON, D.C. - U.S. Senators Rob Portman (R-OH) and Michael Bennet (D-CO) today introduced legislation to help power plants and industrial facilities finance the purchase and installation of carbon capture and storage equipment.
“This bill is a win-win for jobs and the environment, and I’m proud to continue my work on this issue with Senator Bennet,” Portman said. “Carbon capture is a common-sense solution that will allow states like Ohio to continue to utilize our natural resources while protecting our environment at the same time. This bipartisan measure is supported by business groups, energy groups, and environmental groups alike, and I urge all of my colleagues to support it.”
“This legislation removes the barrier of high upfront costs so more power plants and industrial facilities can invest in carbon capture equipment and reduce the carbon pollution emitted into the atmosphere,” Bennet said. “This effort effectively boosts our domestic energy production and reduces overall emissions to keep our air clean – actions that Coloradans value and that make our state an attractive place to live. Even in today’s political climate, this bill is proof that Democrats, Republicans, labor unions, industry, and environmentalists can come together to advance policies that will protect our planet and create good-paying jobs.”
The Carbon Capture Improvement Act would allow businesses to use private activity bonds (PABs) issued by local or state governments to finance a carbon capture project. These bonds are beneficial to consumers and businesses because they are tax-exempt and can be paid back over a longer period of time. If more than 65 percent of carbon dioxide emissions from a given facility are captured and injected underground, then 100 percent of the eligible equipment can be financed with PABs. If less than 65 percent is captured and sequestered, then tax-exempt financing is permitted on a pro-rated basis.
More specifically, the bill would:
- Make CCS projects more economically feasible: The ability to use tax-exempt PABs to retrofit power plants and industrial facilities will help decrease the costs for these types of projects.
- Boost oil production, while conserving land and reducing emissions: By conducting EOR with recycled carbon dioxide from power plants, we can increase oil production from already-drilled wells, using less new land. Additionally, carbon dioxide that would otherwise be emitted into the atmosphere is instead captured and stored.
- Provide greater energy security in the 21st century: In 2014, Enhanced Oil Recovery already accounted for 350,000 barrels a day of domestic oil production, according to the 21st Century Energy Institute at the U.S. Chamber of Commerce.
Industry leaders praised the Senators efforts on this legislation.
“Peabody believes carbon capture and storage is a key technology for reducing greenhouse gas emissions,” said Michael Flannigan, Senior Vice President of Global Government Affairs. “This legislation is a good step toward creating policy parity for use of CCS in the energy and industrial sectors.”
“The UWUA supports the Carbon Capture Improvement Act and reform of the 45Q tax credit to expand the deployment of carbon capture technology as stable, long-term financing and tax incentives are essential to securing the future for power plants that form the economic bedrock of so many communities around our nation,” said Mike Langford, President of the Utility Workers Union of America.
“Fifty years of carbon capture experience in multiple industries, combined with the recent successful commercial-scale demonstration of carbon capture at an existing coal power plant in Texas, shows that the technology works,” said Brad Crabtree, Vice President for Fossil Energy at the Great Plains Institute, which co-convenes NEORI. “Pairing tax-exempt private activity bonds with the 45Q tax credit can unleash private capital to scale up further deployment of carbon capture and bring costs down.”
“Private activity bonds are a well-developed tool that has been used for decades to cut the cost of financing a broad range of energy-related infrastructure,” said Dan Reicher, Executive Director of Stanford Steyer-Taylor Center for Energy Policy and Finance. “The time is right to apply them to accelerating carbon capture projects with major economic and environmental benefits – and little cost to taxpayers.”
“Carbon capture and storage technology can reduce harmful carbon pollution from power plants and industrial sources, create jobs at home and increase American competitiveness,” said David Hawkins, Director of Climate Programs at the Natural Resources Defense Council. “As a complement to critical actions to use energy more efficiently and to switch to renewable energy sources, carbon capture technology can make important contributions to our efforts to limit damaging climate change. This bill would help make financing carbon capture plants easier and increase the availability and use of this technology.”
“We’ve seen bipartisan support for incentivizing carbon capture infrastructure because it’s a practical way to create skilled jobs and protect the environment,” said Bob Perciasepe, President of the Center for Climate and Energy Solutions. “Leadership in carbon capture technologies also gives the United States a first-mover advantage in a globally important market.”