Senators introduce bill to spur CCS development, investment

U.S. Senators Heidi Heitkamp, D-N.D., and Sheldon Whitehouse, D-R.I., on July 13 introduced a bill to incentivize the development and use of carbon capture, utilization and storage technologies and processes.

The legislation would support a path forward for existing sources of energy like coal, while spurring adoption of low-carbon technologies that can transform carbon pollution into useable products, the senators noted. The bill would promote carbon capture technologies by extending the 45Q tax credit, which encourages investment in carbon capture, utilization, and sequestration. Using that tax credit as a starting point, the bill also provides a more expansive credit system to encourage innovation. The credits also encourage the use of CO2 in enhanced oil recovery and beyond.

The EPA’s Clean Power Plan, which is stayed pending appeals court review, imposes new standards for existing power plants, while a companion rule would essentially require CCS for new coal-fired power plants.

“When utilities, coal companies, and environmental groups come together to support your bill, you know you’re onto something that could work,” said Heitkamp. “North Dakota and the country need a strong, affordable, and diverse energy mix, and that includes coal. Our bill would help secure a future for this reliable source of power by spurring investment in new technologies that help lower emissions.”

“Preventing the worst of climate change will mean deploying a broad range of technologies to reduce carbon emissions,” said Whitehouse, a member of the Senate Environment and Public Works Committee. “This bill would provide a boost for entrepreneurs in Rhode Island and across the country who turn harmful carbon pollution into useful products. That incentive will spur economic growth and help protect our environment and public health.”

A broad group of Democratic senators – as well as a diverse coalition of utilities and environmental and labor groups – support the bill. Senators currently cosponsoring the bill include Jon Tester, D-Montana, Brian Schatz, D-Hawaii, Cory Booker, D-N.J., and Tim Kaine, D-Va.

The bill would extend the 45Q tax credit to provide certainty to utilities and other industrial sources, and would incentivize the build-out of industrial carbon capture projects that plan to use CO2 for enhanced oil recovery and carbon utilization—the conversion of carbon dioxide into useable products. Carbon capture cannot take off unless there is federal support to encourage investment and implementation of the technology through tax credits and other mechanisms, which this bill would provide.

In addition to extending 45Q, the bill makes support for carbon capture technologies more robust by increasing the “commence construction” window for carbon capture projects from five to seven years and by increasing the number of years to claim the credits from 10 to 12 years.

In April, a broad coalition of industry, environmental, and labor groups wrote a letter to the leaders of the U.S. Senate Committee on Finance in support of extending the 45Q tax credit.

Heitkamp’s work to find a realistic path forward for coal builds on her more than a decade of experience on the board of directors of Dakota Gasification, the one-of-a-kind synfuels plant in Beulah, N.D. During her service as North Dakota’s Tax Commissioner, on the North Dakota Industrial Commission, and as the state’s Attorney General, Heitkamp was able to work on viable solutions to make sure coal remains a strong part of the North Dakota’s energy mix.

Since joining the Senate, Heitkamp has been working in this area by:

  • Securing a commitment in September 2015 from Janet McCabe, assistant administrator of the EPA, for her agency to send technical staff to North Dakota to work with utilities on the challenges in meeting EPA’s emissions reduction targets.
  • Introducing major legislation in 2013 and again in 2015 to put coal on a viable path forward. Heitkamp’s bill  would incentivize companies to invest in technologies that reduce the carbon footprint of coal-fired power. This is done through federal funding programs, federal support for private investment, and recommendations to Congress that provide insight on how best to support future CCS projects in the U.S. Then in May 2015, Heitkamp and Sen. Joe Manchin, D-W. Va., introduced a series of bills to make sure coal remains a key part of America’s energy mix, which incorporated Heitkamp’s initial legislation.
  • Heitkamp has made it clear to the Obama Administration and EPA that she disagrees with the agency’s policies regarding coal-fired power. After pressing EPA Administrator Gina McCarthy, Heitkamp brought McCarthy to North Dakota in February 2014 so she could hear about the impacts of EPA regulations directly from North Dakotans. Heitkamp has also brought U.S. Energy Secretary Ernest Moniz to North Dakota in August 2014 to push the U.S. Department of Energy for more investment in clean coal technology.
  • Heitkamp has met with numerous top officials from DOE about the need to find a path forward for coal, including Energy Secretary Moniz and Julio Friedmann, the Deputy Assistant Secretary for Clean Coal at the DOE. They both participated in clean coal symposiums at Heitkamp’s request, and she will continue to press both of them on the issue.
  • Heitkamp co-hosted aCoal Technology Symposium on Capitol Hill in 2014 that brought together industry, lawmakers, experts and academics – including the Energy and Environmental Research Center from Grand Forks – to discuss the importance of finding a viable path forward for coal.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.