US Sens. Kent Conrad (D-ND), Mike Enzi (R-Wyo.), and Jay Rockefeller (D-W.Va.) introduced a bill on Sept. 20 designed to expand the use of carbon dioxide for enhanced oil recovery. S. 3581 would modify a federal carbon capture and storage tax incentive that provides a $10/tonne credit for CO2 used in EOR and $20/tonne for CO2 placed directly into secure geological storage.
“I am confident many of my colleagues will recognize the incredible potential of taking carbon dioxide that would otherwise be released into the atmosphere and sending it underground to produce far more oil than we otherwise could,” Conrad said.
The bill would adopt the National Enhanced Oil Recovery Initiative’s (NEORI) February recommendations to modestly improve the federal tax code’s Section 45Q CO2 sequestration provision, which is authorized to provide credits for up to 75 million tonnes of CO2.
The change would make modest, functional improvements in the tax code provision at little or no additional cost, according to NEORI, which the Great Plains Institute in Minneapolis and the Center for Climate & Energy Solutions (C2ES) in Arlington, Va., organized to help realize CO2-EOR’s energy, economic, and environmental potential.
The recommendations also would help several significant CO2-EOR projects secure private financing and operate commercially, NEORI said. CO2-EOR accounts for 6% of US crude oil production, it noted.
“This legislation will help innovative companies attract the private investment they need to get key carbon capture technology projects across the finish line,” suggested Brad Crabtree, the Great Plains Institute’s policy director and NEORI’s codirector.
C2ES Pres. Eileen Claussen called the bill an important step toward expanding captured CO2’s use in EOR to boost US oil production, create jobs, spur economic growth, and reduce carbon emissions.
Contact Nick Snow at [email protected].
