Hoeven, Daines Introduce Legislation to Encourage Carbon Sequestration
WASHINGTON – Senators John Hoeven (R-N.D) and Steve Daines (R-Mont.) today announced that they have introduced legislation to encourage carbon sequestration. The CO2 Regulatory Certainty Act of 2016 aligns tax guidelines with existing federal regulations to ensure taxpayers are better able to utilize the Section 45Q carbon sequestration tax credit. By accelerating work on carbon sequestration projects, this bill is helping to provide one of the energy technologies needed to utilize America’s abundant coal resources.
Currently, project developers can claim credit for CO2 sequestration, however, Internal Revenue Service (IRS) guidance does not reflect differences between the two existing sequestration methods, permanent or geological storage and enhanced oil and gas recovery. The IRS guidelines subject enhanced oil and gas recovery applications to regulations meant for geological storage, making it difficult to access the tax credit.
The Hoeven-Daines bill clarifies and aligns IRS guidelines with current Environmental Protection Agency (EPA) regulations that already reflect operational and legal differences between enhanced oil and gas recovery and geological storage under the Clean Air Act and the Safe Drinking Water Act.
“Our legislation is a straightforward fix that will encourage more companies to use enhanced oil and gas recovery methods,” said Hoeven. “Clarifying the 45Q tax credit is a simple way to encourage more CO2 sequestration. This legislation is good for taxpayers and good for the environment.”
“This bill will help ensure carbon captured from places like Colstrip using a Section 45Q tax credit can be used in a responsible, innovative, and economical way to unlock made-in-Montana energy,” Daines stated. "I am proud to join Senator Hoeven and Representative Zinke in stopping yet another misguided, and backward policy guidance from the Obama administration that obstructs commonsense innovative solutions to save Montana’s coal jobs and produce more American energy.”
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