A coalition of businesses and nongovernmental organizations on Wednesday urged Congress to sustain the 45Q tax credit for carbon dioxide sequestration.
In a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.), 28 signatories called for extending and enhancing the tax credit “in any year-end legislative vehicle for tax provisions.”
The 45Q tax credit is worth $20 per ton of CO2 captured for geologic storage and $10 per ton for CO2 captured and used in enhanced oil recovery. The program currently is due to expire once 75 million tons of credits have been used; half of the credits have already been claimed, and the program is anticipated to wind down around 2019.
Captured carbon dioxide from power plants and industrial sites could be used to recover billions of barrels of additional domestic oil that might otherwise remain out of reach, the letter says. “Realizing our full oil production and carbon storage potential requires more C02 available for the industry to purchase and put to productive use,” according to the signatories.
“CCUS also represents a critical component of our nation’s strategy for achieving greenhouse gas emissions reductions,” they added. “Widespread deployment of carbon capture technologies will help meet global mid-century goals for mitigating carbon emissions from electric power generation and a wide range of industrial activities.”
Signatories include Vicki Hollub, president and CEO of the Occidental Petroleum Corp.; Bryan Anderson, senior vice president for government relations at Southern Co.; David Goldstein, director of government affairs at the Natural Resources Defense Council; Kurt Waltzer, managing director of the Clean Air Task Force; Brad Markell, executive director of the AFL-CIO Industrial Union Council; Josh Freed, vice president for clean energy at Third Way; and Bill Rase, executive director of the Port of Lake Charles, La.
Legislation to extend and augment the 45Q credit has been introduced in both chambers of Congress. The bills’ future remains unclear in the post-election lame duck session.
A bill from Sens. Heidi Heitkamp (R-N.D.) and Sheldon Whitehouse (D-R.I.) would boost the credit up to $35 per ton of carbon captured for use and $50 per ton captured using permanent geologic carbon storage. Credits under the bill would be available to industrial sources of CO2, not just the electric sector as has been the case to date.
A corresponding House bill from Rep. Mike Conaway (R-Texas) would extend the tax credit beyond the current 75 million-ton cap written into the tax code.
The House and Senate bills have co-sponsors from both parties, according to the letter, which was issued the same week that Friends of the Earth and Taxpayers for Common Sense issued a report calling for an end to the 45Q credit.
