US President Donald Trump has signed a fiscal 2018 federal budget bill into law on Feb. 9 following months of debate and negotiations in both houses of the 115th Congress. H.R. 1892’s provisions included sales of 100 million bbl of crude oil from the Strategic Petroleum Reserve (SPR) starting in 2022 and expansion of the Section 45Q tax credit for carbon capture and storage (CCS) including enhanced oil recovery (EOR).
The new law calls for drawdowns and sales of 100 million bbl of crude from the SPR between fiscal years 2022 and 2027, starting with 30 million bbl from 2022 through 2025, and continuing with 35 million bbl in 2026 and 35 million bbl in 2027. Proceeds will be deposited in the US Treasury’s General Fund.
In changes it makes to the federal tax code’s Section 45Q CCS tax credit, the new law specifically addresses EOR with a $20/tonne for carbon dioxide used in EOR for 12 years following a reinjection system’s being put into service in a qualified tertiary reinjection before being disposed of in secure geologic storage.
It also added “natural gas” to the existing “crude oil” category of qualified reinjection projects.
The CCS provisions originally were part of a separate bill, S. 1535, which US Sen. Heidi Heitkamp introduced on July 12, 2017, with 17 Democratic and 6 Democratic cosponsors as well as Angus S. King (I-Me.).
Contact Nick Snow at [email protected].
