Senate Panel Gathers Info on Carbon Capture as Momentum Builds for Tax Credit

WASHINGTON (CN) – A Senate committee took a deep dive into the arcane-sounding subject of carbon sequestration on Wednesday, hoping testimony from a panel of authorities in the field will solidify bipartisan support for a proposed tax credit for the technology.

Put simply, carbon sequestration is the process of capturing carbon emissions before they are released into the atmosphere and placing them, in a liquid or solid form, into long-term, environmentally friendly storage.

Last year, Sen. Heidi Heitkamp, D-N.D., introduced a bill to expand the tax credit for carbon capture, but it failed to advance through the Senate, despite the fact it has 19 bipartisan co-sponsors, including Majority Leader Mitch McConnell, R-Ky.

Undeterred, Heitkamp reintroduced the bill in July with the support of 24 of her colleagues, from both sides of the aisle.

The latest version of the bill builds on the framework she proposed last year. It would expand the tax credit for carbon capture, allowing companies to retain incentives to invest in the expensive technology.

On Wednesday, the Senate Committee on Environment and Public Works, which is chaired by Sen. John Barrasso, R-Wy, a supporter of the technology, was told that regardless of which party is in power in Washington, carbon sequestration will be critical to balancing the nation’s energy needs with sustainability.

The problem is that the public at large either isn’t familiar or doesn’t understand what carbon sequestration is, and that makes it difficult to build support for the technology.

“Everyone knows what a wind mill is, what a solar panel is and what a nuclear turbine is,” said Dr. Julio Friedman, former clean coal program director for the Department of Energy under the Obama administration.

But he said an “educational and informational barrier” arises when the conversation turns to carbon sequestration — even among people who are vocal proponents of addressing the human effects on climate change.

Freedman said that if deployed effectively, technologies that exist today could capture up to 90 percent of carbon dioxide emissions produced from the use of fossil fuels in electricity generation and industrial processes.

Whether that potential is fulfilled is a matter of funding, said Friedman and his fellow panelists: Matthew Fry, policy advisor to Wyoming Gov. Matt Mead, and David Greeson, vice president of NRG Energy Inc., a diversified energy company dual-headquartered in New Jersey and Houston, Texas.

“Carbon capture is competitive but regardless of how it is applied, it is not possible to obtain commercial financing if it’s impossible to recoup the investment,” Friedman said. “Wind and solar, rightfully benefit. They feed in tariffs, guarantee price supports and help develop mandates.

“The U.S. and other countries closed those financing gaps and it led to growth and jobs,” he continued. “Carbon capture and storage projects have no access like this. But if they did, the size of those policies for other clean energy investment would be large enough to close the [carbon capture] gap.”

To date, only 16 commercial carbon sequestration plants have been built worldwide; six more are either in the planning and construction stage and could be operational by 2020.

Greeson oversees one of those plants, and it just happens to be the world’s largest carbon sequestration facility.

The $1 billion Petra Nova, in Houston, Texas, is a retrofitted coal-fired power plant. It now captures 5,000 tons per day of carbon dioxide, or the equivalent of removing 350,000 cars from the road.

Greeson said while his company was committed to the project, it faced a number of challenges along the way, including upfront capital costs and outmoded federal regulations.

He said confusion over those regulations added $100 million to the project’s costs, and that scared off some potential lenders.

Friedman said despite President Donald Trump deciding to pull out of the Paris Climate Accord earlier this year, the U.S. can’t walk away from a fundamental fact that emerged during the talks leading to the accord: carbon matters.

“Carbon is an issue everywhere,” Friedman said. “The U.S. is the unambiguous global leader in carbon capture and storage. If we don’t press for an innovative agenda, we’ll lose that advantage to China, Japan, Germany and Canada.”

If carbon sequestration is very much on the minds of lawmakers on Capitol Hill, it’s unclear if their interest for the technology is shared by EPA Administrator Scott Pruitt.

In an extensive interview published by the Washington Examiner on Wednesday, Pruitt didn’t mention the technology once.

Instead, he spoke of directing his agency to take a “back to basics” approach to regulation, vowing that his legacy will be an era of regulatory certainty and job growth.

“You can be about jobs and you can be about using the natural resources God has provided us with and also be an environmental steward,” he said.

Friedman also spoke of sustaining and creating jobs on Wednesday.

Carbon sequestration facilities are huge and require scores of employees well-versed in manufacturing, industrial and construction trades.

“This technology is going to support those people,” he said. “It’s going to be important union who are currently seeing their jobs go away.”

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