The MonDak’s Republican lawmakers want to make it easier for certain types of oil and gas recovery projects to claim carbon sequestration tax credits.
Republican Sens. Steve Daines of Montana and John Hoeven of North Dakota have introduced a bill to align IRS guidelines with the relevant EPA regulations on carbon sequestration, making the credit easier for enhanced oil and gas recovery projects to claim.
A companion bill has been introduced by U.S. Rep. Kevin Cramer, R-N.D., in the U.S. House of Representatives. Other sponsors listed on the bill include Republican Sens. John Barrasso of Wyoming and Thad Cochran and Roger Wicker, both of Mississippi.
Enhanced oil and gas recovery has helped drive innovative, economically feasible carbon sequestration technology, but certain limitations have made progress difficult for some companies.
In North Dakota, the Energy and Environmental Research Center taken the lead on studies using carbon dioxide to enhance oil and gas recovery that they say can lock away more carbon dioxide than the recovered oil and gas would release.
“Our nation’s energy industry continues developing and commercializing new technologies that deliver affordable, reliable energy with better environmental stewardship,” Hoeven said. “Our legislation supports a path forward for clean coal technology. Improving this tax credit will help make carbon dioxide sequestration a more commercially viable technology. That’s good for jobs, consumers and the country’s energy security.”
Daines hopes economically feasible carbon capture projects can help places like Colstrip.
“This bill will help ensure carbon captured from places like Colstrip can be used in a responsible, innovative and economical way to unlock made-in-Montana energy,” he said. “We need commonsense innovative solutions to save Montana’s coal jobs and produce more American energy.”
The Lignite Energy Council and Basin Electric have both sent out releases saying they support the legislation and appreciate the lawmakers’ efforts.
“Thanks to their support for our industry’s R&D efforts, we continue to pursue technological solutions for the capture, utilization and sequestration of carbon dioxide from coal-based facilities,” said Jason Bohrer, president and CEO of the Lignite Energy Council.
Dale Niezwaag, vice president of Government Relations at Basin Electric Power Cooperative, said the measure would help alleviate uncertainty related to large-scale carbon capture technology.
“For the foreseeable future, the use of carbon dioxide in enhanced oil recovery will be a primary driver in this technology,” he said. “Unfortunately, the credit has not quite lived up to its initial promise due to conflicting rules regarding how carbon dioxide designated for enhanced oil recovery will be sequestered. Section 45Q needs to be updated to reflect the realities of carbon dioxide capture and sequestration so the technology can improve and expand.”
Niezwaag also expressed support for legislation developed by Sen. Heidi Heitkamp, D-N.D., that seeks to revamp and expand the carbon sequestration tax credit and make it more broadly based. In the last legislative session, that bill drew widespread bipartisan support, including from Senate Republican Majority Leader Mitch McConnell, R-Ky. and his polar opposite on climate issues, Senator Sheldon Whitehouse (D-R.I.), who were both listed as cosponsors of the bill.
Forty-five environmental, energy and coal-focused groups had signed letters of support for Heitkamp’s legislation last year. Heitkamp has reintroduced her bill as well.
“These are complementary measures,” Niezwaag said. “They approach the issues from different avenues. We support both efforts. They take a different approach, but they are both valuable.”
