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State utility regulators call for more CCS-EOR projects

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, July 22 -- US state utility regulators called on more states and groups of states to develop financial and other policies encourage the capture of carbon dioxide from electric power plants for enhanced oil recovery as the National Association of Regulatory Utility Commissioners concluded its 2011 summer meeting in Los Angeles on July 20.

NARUC members approved a resolution that also urges the 112th Congress and the Obama administration “to restore and increase funding as soon as possible, and eliminate regulatory impediments including, but not limited to, 100% grants to qualified applicants at power plants with a sufficient number of demonstration projects at commercial scale to yield economical use by the oil and gas industry.”

The resolution also called for tax incentives for capturing and using anthropogenic CO2 to accelerate the deployment of carbon capture technology, and to accelerate the production of oil via CO2-EOR. “NARUC strongly urges Congress and the administration to strongly and rapidly act on this resolution to increase the security of our nation so states are less dependent on foreign oil sources, and to create high-quality jobs,” it said.

NARUC members passed the resolution after North Dakota’s two US senators, Kent Conrad (D) and John Hoeven (R), launched a national EOR initiative on July 12 at a press conference with oil industry executives, state officials, and technical experts. They said the more than 30-member group will develop recommendations for federal and state policymakers by early 2012.

US Sen. Richard G. Lugar (R-Ind.) welcomed Conrad and Hoeven’s action, noting that his own energy proposal would increase US oil production by 1.8 million b/d “by enabling a truly national infrastructure to connect oil resources with the CO2 necessary to harvest [them], including from sources in Indiana, and generate substantial taxpayer returns.”

The US Department of Energy has an active carbon capture and storage research program in its Fossil Fuels Office. Its web site notes that the US is the world’s EOR technology leader, using about 32 million tons/year of CO2 for this purpose. “From the perspective of the sequestration program, [EOR] represents an opportunity to sequester carbon at low net cost, due to the revenues from recovered oil and gas,” it says, adding that this application is economically limited now to CO2 emissions sources near an oil or gas reservoir.

NARUC members also passed a resolution commending the Task Force on Ensuring Stable Natural Gas Markets for its report and urging state regulators to serious consider the report’s recommendations. The Bipartisan Policy Center and American Clean Skies Foundation issued the report in March.

Contact Nick Snow at nicks@pennwell.com.


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