Barrasso introduces enhanced carbon capture incentives
By David Velazquez
Casper Star-Tribune
Via Wyoming News Exchange
CASPER — Wyoming U.S. Senator John Barrasso on Wednesday introduced a bill that seeks to give across-the-board, equal treatment for carbon captured for increased energy production, utilization and sequestration.
The bill, named the Enhanced Energy Recovery Act, increases the effective value of the 45Q tax credit so that captured carbon used in enhanced oil recovery and utilization matches the same rate of sequestration.
Carbon sequestration is the capturing and storing of carbon dioxide and it can be done through several methods: capturing CO2 from power generation or industrial activity and injecting it into the ground; capturing CO2 from the air and changing the molecule to create new compounds; or burying biomass like trees.
The current value for sequestration is $85 per metric ton while the value for carbon used in enhanced oil recovery and utilization is $60 per metric ton.
The bill would set all three values at $85 per metric ton.
It would also treat carbon captured through Direct Air Capture equal to other methods.
The tax credit value of direct air captured carbon would be increased to $180 per metric ton from the current $130 per metric ton if used for enhanced oil recovery and utilization — consistent with the current value of captured carbon used in sequestration.
“For years, Wyoming has proudly led the way on carbon capture projects,” Barrasso said. “Recent changes to Section 45Q have made it harder for American energy producers and manufacturers to use this credit. The Enhanced Energy Recovery Act fixes this policy by ensuring equal treatment for energy production, utilization, and sequestration.”
Several oil groups — local and nationwide — lauded the decision stating that Barrasso’s bill evens the playing field for all types of carbon capture.
“For over 30 years CO2 injection has not only sequestered carbon in Wyoming but also helped produce millions of barrels of oil that the United States requires to meet energy demand. Senator Barrasso’s bill recognizes that enhanced oil recovery using CO2 deserves equal treatment,” President of the Petroleum Association of Wyoming Pete Obermueller said. “We applaud Senator Barrasso and urge speedy passage of the Enhanced Energy Recovery Act.”
The Domestic Energy Producers Alliance, a collaboration of 39 coalition associations nationwide, also expressed its support for the bill.
“We are pleased to express our strong support for Senator Barrasso’s Enhanced Energy Recovery Act, which takes a critical step forward in leveling the playing field for carbon dioxide sequestration,” President and Chief Executive Officer Jerry Simmons said. “Senator Barrasso’s vision for equitable treatment of carbon management technologies aligns with the industry’s commitment to reducing emissions, enhancing energy security, and delivering economic benefits to rural communities.”
This story was published on September 27, 2024.