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Energy Groups Request Permanent Carbon Sequestration Credit

FEB. 3, 2016

Energy Groups Request Permanent Carbon Sequestration Credit

DATED FEB. 3, 2016
DOCUMENT ATTRIBUTES
  • Authors
    Chazen, Stephen I.
    Perciasepe, Bob
    Angielski, Shannon
    Crabtree, Brad
    Flannigan, Michael
    Slone, Deck
    Golston, David
    Calmes, Mark
    Mackler, Sasha
    Waltzer, Kurt
    Markell, Brad
    Langford, D. Michael
    Reavey, Richard
    Lancaster, Richard R.
    Gales, Don
    Freed, Josh
    Willis, Tom
    Mannes, Robert G.
    Rase, Bill
    Johnston, Hunter
  • Institutional Authors
    Occidental Petroleum Corporation
    National Enhanced Oil Recovery Initiative
    Coal Utilization Research Council
    Peabody Energy
    Arch Coal
    Summit Power Group LLC
    Clean Air Task Force
    National Resources Defense Council
    Archer Daniels Midland Company
    AFL-CIO Industrial Union Council
    Cloud Peak Energy
    Utility Workers of America, AFL-CIO
    Great River Energy
    White Energy
    Third Way
    Conestoga Energy Partners LLC
    Core Energy LLC
    Lake Charles Methanol LLC
    Port of Lake Charles, Louisiana
  • Code Sections
  • Subject Area/Tax Topics
  • Industry Groups
    Energy
    Mining and extraction
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2016-7302
  • Tax Analysts Electronic Citation
    2016 TNT 67-41

 

February 3, 2016

 

 

The Honorable Kevin Brady

 

The Honorable Sander Levin

 

U.S. House Committee on Ways and Means

 

Washington, DC 20515

 

 

Dear Chairman Brady and Ranking Member Levin:

On behalf of the undersigned member companies and organizations, we request that Congress include a permanent extension of the Section 45Q Tax Credit for Carbon Dioxide Sequestration in a technical corrections act or other appropriate legislation. Section 45Q provides a per ton tax credit for the storage of carbon dioxide (CO2) through the use of enhanced oil recovery (EOR) and is the most important benefit in the tax code for incentivizing carbon capture utilization and storage (CCUS) at power plants and industrial facilities.

As you know, the Omnibus Appropriations Act of 2016 provided an extension of expiring tax benefits for the wind and solar industries. Inadvertently, some other energy credits, such as geothermal and fuel cell technologies, were not provided with a similar extension and are scheduled for expiration in the near future. Similarly, Section 45Q, will expire the year in which the currently authorized 75 million tons of CO2 are stored, and roughly half those credits had already been claimed as of 2014. Due to long lead times for construction of such projects, the Section 45Q credit has, for practical purposes, already expired because the lack of financial certainty regarding future availability of credits deters private investment in new commercial CO2 capture projects.

Capturing and utilizing power plant and industrial CO2 through EOR yields additional American oil from existing wells that would otherwise not be accessed, thereby expanding domestic reserves and reducing imports. The U.S. independent oil and gas industry is the world leader in CO2-EOR and could produce billions of barrels of additional American oil from existing fields, while safely and permanently storing billions of tons of CO2. Realizing our full oil production and carbon storage potential will require that more CO2 becomes available for the industry to purchase and put to productive use. Fortunately, four decades of commercial experience show that many industries -- coal gasification, natural gas processing, chemicals, fertilizer, refining, ethanol and others -- can become valued partners in supplying that additional CO2.

CCUS also represents an essential component of our nation's strategy for achieving greenhouse gas emissions reductions. Without widespread deployment of carbon capture technologies, we will simply fail to meet global mid-century goals for mitigating carbon emissions from electric power generation and a wide range of industrial activities.

Congressman Mike Conaway is preparing to introduce legislation to provide a sensible solution for ensuring the financial certainty and effectiveness of Section 45Q in driving private sector innovation and investment in commercial deployment of carbon capture projects. His proposal would provide for a necessary per ton increase in the value of the tax credit and make it permanent.

Congressman Conaway's forthcoming legislation would achieve a genuine win-win for our nation's economy and environment, as evidenced by the remarkable breadth of our coalition, which is virtually unprecedented in our politically polarized national energy policy arena. Therefore, we respectfully urge your inclusion of this measure in a technical corrections act or other legislative vehicle suitable for addressing energy tax provisions.

Sincerely,

 

 

Stephen I. Chazen

 

Chief Executive Officer Occidental

 

Petroleum Corporation

 

 

Bob Perciasepe

 

President

 

Center for Climate and Energy

 

Solutions

 

National Enhanced Oil Recovery

 

Initiative

 

 

Shannon Angielski

 

Executive Director

 

Coal Utilization Research Council

 

 

Brad Crabtree

 

Vice President for Fossil Energy

 

Great Plains Institute

 

National Enhanced Oil Recovery

 

Initiative

 

 

Michael Flannigan

 

Senior Vice President, Global

 

Government Affairs

 

Peabody Energy

 

 

Deck Slone Senior

 

Vice President, Strategy and Public

 

Policy

 

Arch Coal

 

 

David Goldston

 

Director, Government Affairs

 

Natural Resources Defense Council

 

 

Mark Calmes

 

Vice President, Environmental

 

Archer Daniels Midland Company

 

 

Sasha Mackler

 

Vice President, Summit Carbon

 

Capture

 

Summit Power Group, LLC

 

 

Kurt Waltzer

 

Managing Director

 

Clean Air Task Force

 

 

Brad Markell

 

Executive Director

 

AFL-CIO Industrial Union Council

 

 

D. Michael Langford

 

National President

 

Utility Workers Union of America,

 

AFL-CIO

 

 

Richard Reavey

 

Vice President Public Affairs

 

Cloud Peak Energy

 

 

Richard R. Lancaster

 

Vice President and Chief Generation

 

Officer

 

Great River Energy

 

 

Don Gales

 

White Energy

 

Chief Executive Officer & President

 

 

Josh Freed

 

Vice President for Clean Energy

 

Third Way

 

 

Tom Willis

 

Chief Executive Office

 

Conestoga Energy Partners, LLC

 

 

Robert G. Mannes

 

President & C.E.O.

 

Core Energy, LLC

 

 

Bill Rase

 

Executive Director

 

Port of Lake Charles, Louisiana

 

 

Hunter Johnston

 

Counsel

 

Lake Charles Methanol, LLC

 

NEORI Participants

AFL-CIO | AIR PRODUCTS, INC. | ALSTOM, INC. | ARCH COAL, INC. | ARCHER DANIELS MIDLAND CO. | C12 ENERGY | CLEAN AIR TASK FORCE | CLOUD PEAK ENERGY, INC. | ENERGY INNOVATION REFORM PROJECT | GE OIL & GAS | GREAT RIVER ENERGY | JUPITER OXYGEN CORPORATION | KENTUCKY DEPT. FOR ENERGY DEVELOPMENT AND INDEPENDENCE | LAKE CHARLES METHANOL | LINDE LLC. | LI-COR BIOSCIENCES | MARYLAND DEPARTMENT OF NATURAL RESOURCES | MICHIGAN GEOLOGICAL SURVEY | NATURAL RESOURCES DEFENSE COUNCIL | NEW MEXICO ENERGY, MINERALS & NATURAL RESOURCES DEPARTMENT | NRG ENERGY | PEABODY ENERGY | PRAXAIR, INC. | SMART TRANSPORTATION DIVISION | SUMMIT POWER GROUP, LLC | TENASKA ENERGY | UTILITY WORKERS UNION OF AMERICA | WYOMING ENHANCED OIL RECOVERY INSTITUTE | WYOMING OUTDOOR COUNCIL

NEORI Observers

CHAPARRAL ENERGY LLC | CORE ENERGY, LLC | INTERSTATE OIL AND GAS COMPACT COMMISSION | TELLUS OPERATING GROUP, LLC.

DOCUMENT ATTRIBUTES
  • Authors
    Chazen, Stephen I.
    Perciasepe, Bob
    Angielski, Shannon
    Crabtree, Brad
    Flannigan, Michael
    Slone, Deck
    Golston, David
    Calmes, Mark
    Mackler, Sasha
    Waltzer, Kurt
    Markell, Brad
    Langford, D. Michael
    Reavey, Richard
    Lancaster, Richard R.
    Gales, Don
    Freed, Josh
    Willis, Tom
    Mannes, Robert G.
    Rase, Bill
    Johnston, Hunter
  • Institutional Authors
    Occidental Petroleum Corporation
    National Enhanced Oil Recovery Initiative
    Coal Utilization Research Council
    Peabody Energy
    Arch Coal
    Summit Power Group LLC
    Clean Air Task Force
    National Resources Defense Council
    Archer Daniels Midland Company
    AFL-CIO Industrial Union Council
    Cloud Peak Energy
    Utility Workers of America, AFL-CIO
    Great River Energy
    White Energy
    Third Way
    Conestoga Energy Partners LLC
    Core Energy LLC
    Lake Charles Methanol LLC
    Port of Lake Charles, Louisiana
  • Code Sections
  • Subject Area/Tax Topics
  • Industry Groups
    Energy
    Mining and extraction
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2016-7302
  • Tax Analysts Electronic Citation
    2016 TNT 67-41
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