BATON ROUGE – U.S. Senators Bill Cassidy, M.D. (R-LA), John Barrasso (R-WY), and James Lankford (R-OK) introduced legislation to enhance carbon capture incentives and energy production.
The Enhanced Energy Recovery Act would create parity under the Section 45Q carbon capture tax credit by giving across-the-board, equal treatment for carbon captured for increased energy production, utilization, and sequestration.
“Building the infrastructure to capture carbon in Louisiana will create tens of thousands of jobs and there will be tens of billions of dollars of investment,” said Dr. Cassidy. “This will help Louisiana continue to lead as an energy and manufacturing state.”
“For years, Wyoming has proudly led the way on carbon capture projects,” said Senator Barrasso. “We’ve successfully used this technology to take carbon out of the air and find productive uses for it. One of those uses includes enhanced oil and natural gas recovery – a technique that significantly increases energy production while reducing carbon emissions. Recent changes to Section 45Q have made it harder for American energy producers and manufacturers to use this credit. The Enhanced Energy Recovery Act fixes this policy by ensuring equal treatment for energy production, utilization, and sequestration. This will bolster our nation’s energy security, support Wyoming’s energy workers, and help lower costs for American families.”
Background:
The Enhanced Energy Recovery Act increases the effective value of the 45Q tax credit for captured carbon used in enhanced oil recovery and utilization to match that of sequestration.
Currently, the full tax credit incentive for carbon used in enhanced oil recovery (EOR) and utilization is $60/metric ton, while the value for sequestration is $85/metric ton. This bill sets all three values at $85/metric ton for EOR, utilization, and sequestration.
Additionally, the bill creates equal treatment for carbon captured through Direct Air Capture (DAC). It increases the value of DAC-captured carbon used for EOR and utilization by increasing the incentive from $130/metric ton, up to $180/ton, consistent with the current value of captured carbon used in sequestration.
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