The US Senator for West Virginia Jay Rockefeller has introduced a bill to encourage the use of captured carbon dioxide for enhanced oil recovery (CO2-EOR).
The also bill provides tax credits for carbon capture and sequestration (CCS), expanding and reforming the existing Section 45Q Tax Credit for Carbon Sequestration.
The CO2-EOR process involves injecting carbon dioxide into already developed oil fields to coax additional production. The majority of the carbon dioxide currently used in enhanced oil recovery comes from naturally occurring reservoirs rather than man-made sources.
The bill will also establish periodic reviews of carbon dioxide sequestration credit under Section 45Q of the federal tax code. It will provide the US Treasury Secretary authority to ensure that new tax credits would be revenue-positive to the federal government over time when taking into account the revenue produced from increased oil recovery resulting from the credit compared with tax revenue lost from credits being claimed.
The National Enhanced Oil Recovery Initiative (NEORI), which is a coalition of industry executives, environmental groups, labour representatives, and state officials, welcomed the introduction of the bill. According to the NEORI’s analysis, the expansion and reform of an existing federal tax incentive could help produce an additional 8 billion barrels of US oil over the next 40 years, while safely storing 4 billion tonnes of carbon dioxide underground.
Center for Climate and Energy Solutions president Eileen Claussen said that carbon capture and storage is a critical technology to cut carbon emissions while coal and natural gas remain part of our energy mix.
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By GlobalData"Providing incentives to capture carbon dioxide for use in enhanced oil recovery will help bring more commercial-scale projects on line, which will help advance carbon capture technology and lower costs," Claussen added.
Image: West Virginia Senator Jay Rockefeller. Photo: courtesy of US Congress.
