Thursday, November 8, 2012
CO2-EOR Tax Bill Introduced in US Senate
A new bill proposing changes to the existing CO2 sequestration tax credit has been introduced in the US Senate. As it stands currently, the US tax code offers tax credits of $20 per metric ton of CO2 sequestered for conventional CCS operations, and $10 per metric ton for CO2-EOR. S. 3581, put forward by Senators Kent Conrad (D-ND), Mike Enzi (R-WY), and Jay Rockefeller (D-WV), would convert this into a competitively awarded system managed by the Department of the Treasury. Credits would be available for 10 years, with a total cap of 75 million metric tons. This proposed modification was the key recommendation made by the National Enhanced Oil Recovery Initiative (NEORI) in a report issued earlier this year (see DAC and EOR, 4/22). NEORI argues that this revision to the carbon storage credit would be revenue-positive, would quadruple US CO2-EOR production over 40 years, and would result in the permanent sequestration of 4 billion tons of carbon dioxide.