Two more states are leading the way in realizing the benefits of carbon capture and sequestration (CCS) technology. Montana Governor Steve Bullock and Wyoming Governor Matt Mead recently released a report on CCS and possible state policies to encourage its use. One specific application cited by Governor Bullock is the capturing the carbon emissions from power plants for enhanced oil recovery. The use of tax credits and tax exempt bonding available to states is one proposed method to make CCS projects economical. For the full report, click here.
One possible mechanism discussed to encourage CCS projects are loan guarantees through the Department of Energy. Congress under the last administration increased funding for DOE’s fossil fuel programs some of the funding was directed to carbon capture research which could lead to demonstration projects in the future.
Another potential avenue of financial support for CCS projects is increasing the current federal tax credit for CCS known as 45Q. The federal tax credit when combined with state tax credits or tax exempt bonds as discussed in the report cited above could be the economic basis for increased carbon capture projects particularly in coal states and those with coal fired power plants. A project that captures coal emissions from a power plant the NRG Energy Inc. Petra Nova plant in Texas recently came on line.
Development of successful carbon capture technology will provide energy, economic and environmental benefits to a state. the capture and reuse of carbon emission enhance oil production, the projects are significant construction projects creating jobs before and during the operation of the facility and removing carbon emissions benefits the environment.