Washington's Consensus: Capture the Carbon

Climate policy in Washington can take on the cast of a culture war, but policymakers on both sides of the aisle agree on at least one avenue to lower the US' carbon footprint: new policies and spending for carbon capture projects. On the table are multiple pieces of legislation aimed at expanding existing tax credits and fostering a nascent industry. Two stand out for having bipartisan support. The Scale Act adds funding for permitting at the state and federal level that supporters say could help ease the path for projects that rely on carbon injection. It would also authorize cost-sharing grants for commercial-scale hub projects using geological sites. That legislation could correct a "chicken and egg" problem, US Sen. Chris Coons (D-Delaware) said at an event at the Great Plains Institute this week. Currently project financers want to see expanded transport and storage infrastructure before supporting large-scale projects, but without large-scale projects, the appetite for infrastructure investments is thin. Another bill expanding carbon capture tax credits known as 45Q would extend the timeline for companies to begin construction by 10 years and increase the tax credit, adding tiers for projects that cost more. The bill would also make the credits "direct pay" so companies with lower tax bills can take advantage of them without dipping into the tax equity market. "In general, these bills have a lot of momentum," said Lee Beck at the Clean Air Task Force (CATF). Republicans that are often the biggest supporters of the oil and gas industry are backing carbon capture bills that industry says are crucial for meeting emissions reductions targets. "These technologies hold the key to significant carbon reductions while helping to keep America both energy-independent and energy-dominant," Sen. John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, said this week. Barrasso is otherwise broadly critical of US President Joe Biden's efforts to tackle climate change. Presidential Endorsement Biden's infrastructure plan endorsed both ideas, increasing the likelihood of passage, although it could still take months to sort out legislation on Capitol Hill. Taken together, the policies that the Biden administration is supporting could increase US carbon management capacity thirteenfold by the year 2035, CATF's Beck estimates. Deputy Energy Secretary David Turk this week said carbon capture is "an incredibly important tool that we need to be fully leveraging." As part of the infrastructure package, the US Department of Energy is planning a 10-facility demonstration project involving a variety of industrial emitters aimed at "showing the technology works and to keep on reducing costs." On Friday the Department of Energy released a solicitation for $75 million in funding for carbon capture engineering designs at power and industrial plants, part of the agency’s ongoing support for early-stage development. Industry's Appetite When Congress initially passed the carbon capture tax credit in a 2018 budget, it was "huge to kick-start" interest, said Occidental Petroleum CEO Vicki Hollub during the same event where Coons spoke. Including direct payment would encourage a broader swath of oil companies to get involved, she added (OD Jul.26'19). Hollub said Oxy is interested in direct air capture because "sometimes it's difficult to come to agreement with emitters to retrofit their facilities" and direct air capture "bypasses the problem." She flagged this concern in reference to the Texas Gulf coast. With the right policies in place, appetite for carbon capture could be massive for companies looking to cut emissions without abandoning their "Big Oil" business model. This week, Exxon Mobil outlined early-stage plans for a 100 million ton per year carbon capture network in the industrial area around the Houston Ship Channel (OD Apr.19'21). Emily Meredith and Bridget DiCosmo, Washington