Based on Bennet-Portman Bill to Allow Facilities to Use Tax-Exempt Private Activity Bonds
Washington, D.C. - U.S. Senators Michael Bennet (D-CO) and Rob Portman (R-OH) today introduced an amendment to help power plants and industrial facilities finance the purchase and installation of carbon capture and storage equipment. The carbon that is captured can be used for Enhanced Oil Recovery (EOR) or stored underground.
The amendment is based on the Bennet-Portman Carbon Capture Improvement Act they introduced in November that would allow businesses to use tax-exempt private activity bonds to finance the high upfront capital costs associated with installing carbon capture equipment.
"One of the biggest impediments for power plants and large industrial facilities to installing carbon capture equipment is the high upfront costs," Bennet said. "Our bipartisan amendment helps reduce those costs in a way that is good for the economy and for the environment. Encouraging more businesses to use carbon capture equipment will boost our domestic energy production and reduce overall emissions to keep our air clean - something that Coloradans value and that makes our state an attractive place to live."
"I'm pleased to continue our efforts to promote a solution that will allow us to capture carbon, but also protect Ohio jobs," said Portman. "This is a commonsense idea that's supported by business groups, energy groups, and environmental groups alike."
The Bennet-Portman amendment allows businesses to use private activity bonds (PABs) issued by local or state governments to finance a carbon capture project. These bonds are beneficial to consumers and businesses because of their tax-exempt status and because they can be paid back over a longer period of time. If more than 65 percent of carbon dioxide emissions from a given facility are captured and injected underground, then 100 percent of the eligible equipment can be financed with PABs. If less than 65 percent is captured and sequestered, then tax-exempt financing is permitted on a pro-rated basis.
The amendment will:
- Make CCS projects more economically feasible: The ability to use tax-exempt PABs to retrofit power plants and industrial facilities will help decrease the costs for these types of projects.
- Boost oil production, while conserving land and reducing emissions: By conducting EOR with recycled carbon dioxide from power plants, we can increase oil production from already-drilled wells, using less new land. Additionally, carbon dioxide that would otherwise be emitted into the atmosphere is instead captured and stored.
- Provide greater energy security in the 21st century: The 21st Century Energy Institute at the U.S. Chamber of Commerce found in 2014 that Enhanced Oil Recovery already accounted for 350,000 barrels a day of domestic oil production.