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On March 29 the US House of Representatives adopted by voice vote an amendment offered by Reps. Dan Crenshaw (R-TX) and August Pfluger (R-TX) to speed up Environmental Protection Agency (EPA) review of state applications for primacy to run the Class VI Underground Injection Control (UIC) program. The amendment was included in H.R. 1, the Lower Energy Costs Act, the high-profile energy and permitting reform bill the House approved on March 30.

The UIC program is designed to prevent endangerment of underground sources of drinking water from subsurface injections. The Class VI program specifically regulates the geologic sequestration of carbon dioxide, which is considered to be essential for the world to meet international emission reduction targets. …

Continue Reading House of Representatives Approves Class VI Primacy Amendment

Last Friday, March 24, the White House Council on Environmental Quality (CEQ) announced the rosters for two task forces charged with providing input for the development of Carbon Capture, Utilization, and Sequestration (CCUS) programs. The task forces are a requirement of the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act, passed in 2020…

While the election results are not yet final, this article will proceed from the assumption that former Vice President Biden will become President in January and that Republicans will win at least one of the two U.S. Senate seats in Georgia to be decided by runoff, and thus will have a majority in the U.S. Senate.
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Continue Reading Energy and Environmental Legislation in the 117th Congress

The Department of Treasury and Internal Revenue Service have released Notice 2019-32 seeking comment on key issues to be interpreted in the Section 45Q carbon oxide sequestration tax credit. Congress significantly enhanced the Section 45Q tax credit in the Bipartisan Budget Act of 2018, increasing the credit from $10/ton for CO2 used as a tertiary injectant (i.e., to produce oil or gas) to $35/ton; and increasing the credit for CO2 geologically stored but not used as a tertiary injectant from $20/ton to $50/ton. See our previous blog post here for additional details on the applicable credit amounts for projects before and after enactment of the Bipartisan Budget Act and other credit amount details.
Continue Reading IRS to Seek Comment on Key Issues to be Interpreted in Section 45Q Tax Credit

In an article published in Law360, two Hunton Andrews Kurth LLP Partners discuss the passage of the Bipartisan Budget Act of 2018 and its implications for Section 45Q of the Internal Revenue Code. Carbon capture and sequestration supporters expect this to significantly boost deployment of carbon capture and storage (CCS) across the US.

Readers…

There are 7.6 billion people on the planet today. By 2050, there are projected to be 9.7 billion—or put another way, in just thirty years we will add the equivalent population of seven United States. The world’s most credible energy forecasting entities predict a global increase over that time not only in demand for energy, but demand for fossil energy. Even with steady increases in energy efficiency and a massive increase in renewables, consumption of fossil fuels will grow. That means carbon dioxide emissions won’t be reduced significantly without some technology to do so.
Continue Reading More Energy From Carbon, Lower Emissions

As part of the Bipartisan Budget Act of 2018, Congress significantly increased and extended the Section 45Q tax credit for sequestration of carbon oxides. This has been a top priority of carbon capture and sequestration (CCS) supporters for several years.

CCS is considered to be essential to global efforts to reduce CO2 emissions. The world’s most respected analysis organizations all estimate that fossil fuel use will increase in the coming decades, even with energy efficiency improvements and vast increases in renewable energy. …
Continue Reading Section 45Q Tax Credit Enhancements Could Boost CCS