Angela C. Jones and Ashley J. Lawson have updated (18 October 2021) this CRS report: 'Carbon Capture and Sequestration (CCS) in the United States'.
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Summary
Carbon capture and storage (or sequestration)—known as CCS—is a process that involves capturing man-made carbon dioxide (CO2) at its source and storing it permanently underground. CCS could reduce the amount of CO2—an important greenhouse gas—emitted to the atmosphere from the burning of fossil fuels at power plants and other large industrial facilities. The concept of carbon utilization has also gained interest within Congress and in the private sector as a means for capturing CO2 and converting it into potentially commercially viable products, such as chemicals, fuels, cements, and plastics, thereby reducing emissions to the atmosphere and helping offset the cost of CO2 capture (CCS is sometimes referred to as CCUS—carbon capture, utilization, and storage). Direct air capture is a related and emerging technology designed to remove atmospheric CO2 directly.
The U.S. Department of Energy (DOE) has funded research and development (R&D) in aspects of CCS since at least 1997 within its Fossil Energy and Carbon Management Research, Development, Demonstration, and Deployment program (FECM) portfolio. Since FY2010, Congress has provided $7.3 billion in appropriations for DOE CCS-related activities, including annual increases in recent years. In FY2021, Congress provided $750 million to FECM, of which $228.3 million was directed to CCUS.
Worldwide, according to the Global CCS Institute, 24 facilities capturing and injecting CO2 facilities were operational in 2020, 12 of which are in the United States. U.S. facilities capturing and injecting CO2, and projects under development, operate in five industry sectors: chemical production, hydrogen production, fertilizer production, natural gas processing, and power generation. These facilities capture and inject CO2 with the aim to sequester the CO2 in underground geologic formations or use the CO2 to increase oil production from aging oil fields, known as enhanced oil recovery (EOR). The Petra Nova project in Texas was the first and only U.S. fossil-fueled power plant generating electricity and capturing CO2 in large quantities (over 1 million tons per year) until CCS operations were suspended in 2020.
The U.S. Environmental Protection Agency (EPA), under authorities to protect underground sources of drinking water, regulates CO2 injection through its Underground Injection Control (UIC) program and associated regulations. While the agency establishes minimum standards and criteria for UIC programs, most states have the responsibility for regulating and permitting wells injecting CO2 for EOR (classified as Class II recovery wells).
Congress has incentivized development of CCS projects through creation of the Internal Revenue Code Section 45Q tax credit for carbon sequestration or its use as a tertiary injectant for EOR or other designated purposes. Recent Internal Revenue Service guidance and regulations on this tax credit are intended to provide increased certainty for industry by establishing processes and standards for “secure geologic storage of CO2,” among other requirements.
The Consolidated Appropriations Act, 2021 (P.L. 116-260) included several provisions aimed at supporting CCS project development in the United States. The act revised and expanded DOE’s ongoing CCS research, development, and demonstration activities, established expedited federal permitting eligibility for CO2 pipelines (where applicable), and extended the start-of-construction deadline for facilities eligible for the Section 45Q tax credit, among other provisions.
There is broad agreement that costs for CCS would need to decrease before the technologies could be widely deployed across the nation. In the view of many proponents, greater CCS deployment is fundamental to reduce CO2 emissions (or reduce the concentration of CO2 in the atmosphere) and to help mitigate human-induced climate change. Congress may also consider that some stakeholders do not support CCS as a mitigation option, citing concerns with continued fossil fuel combustion and the uncertainties of long-term underground CO2 storage.
Skipping to the discussion...
Discussion
In recent Congresses, proposed and enacted CCS-related legislation has addressed federal CCS RD&D activities and funding, CO2 pipelines, and the carbon sequestration tax credit. More than55 bills were introduced in the 116th Congress that contained provisions addressing CCS. Some of these bills, or provisions thereof, were enacted as part of the Consolidated Appropriations Act, 2021 (P.L. 116-260). Potential implementation and oversight issues related to these provisions might be of interest in the 117th Congress. In 2021, the Biden Administration has announced climate change mitigation goals and strategies, and new climate-focused groups and initiatives that may also be of interest when considering CCS-related oversight, appropriations, or legislation.
In the 116th Congress, as part of the Consolidated Appropriations Act, 2021 (P.L. 116-260), Congress reauthorized the DOE CCS research program. Among other provisions, the law expanded the scope of DOE’s research to noncoal applications (e.g., natural gas-fired power plants, other industrial facilities). The law also authorized a DOE carbon utilization research program and specific activities related to direct air capture (e.g., a DAC technology prize). As is also true for other DOE applied research programs, some criticize such activities as an inappropriate role for government, arguing the private sector is better suited to develop technologies that can compete in the marketplace.
Costs have been, and remain, a key challenge to CCS development in the United States. In recent years, Congress has attempted to address this challenge in two main ways—federal R&D and federal tax credits. P.L. 116-260 also extended the start of construction deadline for facilities claiming the 45Q tax credit. The tax credit is considered by some stakeholders as one of the strongest policies supporting CCS in the world. In January 2021, the IRS promulgated regulations establishing requirements for carbon storage under Section 45Q. Congress remains interested in the efficacy of the tax credit in promoting CCS development and could consider additional adjustments to it.
The issue of expanded CCS deployment is closely tied to the issue of reducing greenhouse gas emissions to mitigate human-induced climate change. In two January 2021 executive orders, President Biden outlined new federal climate policies; created new White House and Department of Justice climate offices; and established new task forces, workgroups, and advisory committees on climate change science and policy. At this early stage, the implications of these executive branch policies and actions on CCS project development and deployments are unclear.
An additional consideration in the congressional policy discussion is that not all advocates for actions to address climate change support CCS technology.83 Some argue that CCS supports continued reliance on fossil fuels, which runs counter to reducing greenhouse gas emissions and other environmental goals. They tend to prefer policies that phase out the use of fossil fuels altogether. Other CCS opponents raise concerns about the long-term safety and environmental uncertainties of injecting large volumes of CO2 underground.
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"Science touches everything, and everything touches science." - Ed Yong, in @TheAtlantic
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