Brad Crabtree, Great Plains Institute: FUTURE Act marks big win for carbon capture, Northern Plains
MINNEAPOLIS — Something extraordinary happened in Washington in February. Republicans and Democrats — from the most conservative to most liberal members of Congress from across the country — came together to support landmark energy and environmental legislation.
The budget bill passed by Congress includes the FUTURE Act to extend and reform the federal Section 45Q tax credit for capturing and storing carbon dioxide from power plants and industrial facilities.
The act is of vital importance to the future of the Northern Plains’ energy economy and the industries, companies, workers and communities that depend on it.
The FUTURE Act represents one of the most significant energy and environmental accomplishments by Congress in recent memory. Its passage highlights the potential for carbon capture to marshal support across the political spectrum for a policy that supports American energy production, reduces carbon emissions and protects and creates high-paying jobs.
The bill’s key sponsors are to be commended for their bipartisan leadership. Sen. Heidi Heitkamp, D-N.D., was joined by fellow Sens. Shelley Moore Capito, R-W.Va., Sheldon Whitehouse, D-R.I., and John Barrasso, R-Wyo., as well as by Rep. Mike Conaway, R-Texas, who led the effort in the House.
The Carbon Capture Coalition, an unprecedented partnership of our nation’s largest coal, oil, electric power, ethanol, industrial and technology companies, key industrial labor unions and national environmental, energy and agricultural organizations — interests often on opposing sides of energy policy — jointly supported this legislation because of its many benefits.
Importantly, the legislation extends and increases the tax incentive, providing the financial certainty and greater value needed to drive private investment in carbon capture projects.
It expands eligibility to smaller-scale industrial facilities such as ethanol and fertilizer plants, and increases flexibility for tax-exempt electric cooperatives and other entities to use the tax credit more effectively.
The legislation also is fiscally and environmentally responsible. The CO2 that’s captured and stored through enhanced oil recovery will extend domestic production from existing oil fields, displace more carbon-intensive foreign crude and generate new federal revenue, all while significantly reducing carbon emissions.
Last but not least, the incentive is performance-based. Only projects that successfully capture and safely and permanently store CO2 can claim the credit. No taxpayer dollars will flow to projects that fail to do so.
The FUTURE Act marks the culmination of more than six years’ work by the Carbon Capture Coalition and its partners to build support for the 45Q tax credit. Their effort helped garner bipartisan backing from North Dakota Gov. Doug Burgum and governors of Kansas, Montana, Oklahoma, Pennsylvania and Wyoming, all of whom signed a letter urging congressional action.
Organizations of state officials issued resolutions calling on Congress to enact 45Q legislation based on recommendations developed by the coalition and its partners. Legislators in several states, including North Dakota, also passed resolutions of support.
North Dakota and the region helped pioneer a global model for carbon capture when Dakota Gasification began capturing CO2 from lignite in 2000, transporting it by pipeline to Saskatchewan, using it for enhanced oil recovery to recover additional oil and permanently storing the CO2.
Now, our region’s companies and entrepreneurs have a powerful financial tool to continue to innovate and invest.
The revamped 45Q incentive is essential to efforts by the lignite industry, power companies and state policymakers to retrofit an existing coal-fired power plant to capture its emissions, as well as to demonstrate next-generation Allam Cycle carbon capture technology on lignite coal.
It also boosts plans by Red Trail Energy and other ethanol producers to collect and store CO2 from fermentation, further reducing the carbon footprint of their renewable fuel.
Consumers and businesses increasingly demand lower-emission technologies, processes and products. Just as federal and state incentives have reduced the cost and risk of deploying wind and solar technologies, the revamped 45Q tax credit will unleash private investment in carbon capture technology across sectors critical to the Northern Plains region, helping position our industries, companies and communities for success in a low-carbon economy.
Co-director, Carbon Capture Coalition
Vice president for fossil energy, Great Plains Institute