From: The Honorable K. Michael Conaway
Sent By: email@example.com
SUPPORT CARBON CAPTURE AND ENHANCED OIL RECOVERY
February 8, 2016
Please join me as an original cosponsor of the Carbon Capture and Enhanced Oil Recovery Act, which modifies the existing 45Q tax credit to further incentivize the development of carbon capture and storage (CCS) projects.
These projects will play an intricate and important role in America’s future energy portfolio. In order to ensure financial certainty and promote private sector innovation and investment for CCS projects, the Carbon Capture and Enhanced Oil Recovery Act will allow sensible updates to the current 45Q tax credit.
Specifically, the bill:
· Eliminates 75 million ton limit – As of June 2015, nearly 35 million tons of the 75 million ton limit have been claimed. In order to get private sector financing, projects need certainty that 45Q will be available for them when they are operational.
· Raises the value of the credit for certain projects – Since CO2 capture remains a costly technology for most industries, the current level of the tax credit is insufficient to cover the gap between the cost of CO2 capture and revenue from selling CO2 for use in Enhanced Oil Recovery. The bill increases the value of the credit to $30 for all new qualified CCUS projects.
· Lowers the capture capacity threshold – The bill lowers the threshold for project eligibility from 500,000 to 150,000 tons of CO2 per year. The current threshold serves only as a barrier to capturing CO2 from smaller, though often, less expensive sources. Now many more small facilities will be able to qualify.
· Allows assignability – Finally, certain entities (like electric co-ops and others) may not actually be able to use tax credits. This bill allows eligible recipients to assign it to another entity involved in managing the CO2.
Currently, CCS technologies are capable of capturing up to 90% of carbon dioxide emissions from industrial sources or fossil fuel electrical generation and prevent the CO2. The captured emissions can then be used for enhance oil recovery (EOR) that, in addition to permanently storing CO2 underground, would boost domestic oil production.
If you have any questions or would like to become a cosponsor, please contact Michael Horder in my office by email atMichael.firstname.lastname@example.org or by phone at 202-225-3605.
K. Michael Conaway
Member of Congress