21st November 2016
Will the lame duck Congress act on carbon capture technology? MJ Marshall weighs it up.
Can anyone imagine a world today without technology? We have “smart” phones and “smart” watches that talk to us, keep us on schedule, tell us how far we’ve walked or run and encourage more Americans to keep fit and be more productive. Automobiles are equipped with GPS and numerous safety devices such as airbags and automatic braking systems. A growing number of homes have “smart” meters to regulate thermostats and refrigerators that tell us if our egg or milk supply is getting low. We are an energy efficient economy, relying on more technologies to measure and control our energy use. And the US election of Donald Trump as President doesn’t change the need for innovative technologies that provide clean and efficient forms of energy.
One example is carbon capture and storage technology (CSS). There are a number of such facilities in operation in North America today, and efforts are underway to increase deployment of this technology worldwide. Much of the CO2 is deployed in the oil fields to recover oil from older wells, but there are many uses beyond the injection of CO2 in oil wells for enhanced recovery of the resource. Several manufacturers and other companies are using captured carbon in their products and processes and the utilization of the CO2 is creating jobs and opening markets for new products, with the added benefit of helping the environment.
Ford Motor Company is developing new foam and plastic car components made from captured CO2. The beverage industry is working in partnership with equipment suppliers to capture carbon from the beverage bottling process in order to sustain a CO2 supply for its future carbonization needs. Paper and pulp mills are capturing their CO2 and selling it to local greenhouses to fuel plant growth and increase sales. As these processes become more commercialized, the market for CO2 is expected to grow to over $1 trillion annually.
The CCS technology is not without challenges, however, including the enormous investment required to finance and commence carbon capture operations. Bipartisan legislation has been introduced in both the House and Senate to extend and revise an existing tax credit, Section 45Q, that supports investment in and deployment of technologies to capture CO2 emissions from power plants and industrial facilities. The credit has the double benefit of being simple yet responsive to multiple challenges at once: reduced reliance on foreign sources of energy, efficient use of coal and natural gas to generate power at low cost for consumers and the reduction and use of carbon emissions in emerging industries.
Congress has the opportunity to extend and expand Section 45Q in the lame duck session this year. The benefits of doing so are enormous, while the costs of delay could put the incentive for many CCS projects in jeopardy. The tax credit has been so popular that the US Treasury estimates that more than half of the credit has already been claimed. The Senate legislation would not only lift the cap on the credit, but increase its value, providing greater investment certainty for new and existing power projects. Congress has an obligation to be “smart” about clean energy innovation and economic prosperity - and pass 45Q.
MJ Marshall is Grayling's energy policy expert, based in Washington, DC.
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