Fresh off a legislative victory to extend federal tax credits that would benefit carbon capture and storage, stakeholders are honing their focus on amplifying the technology's value through incentives for infrastructure build-outs.
"We will put together incentives that will make projects on power plants work," Brad Crabtree, co-director of the National Enhanced Oil Recovery Initiative, or NEORI, said at a Feb. 23 event in Washington, D.C., announcing the launch of the Carbon Capture Coalition — a nonpartisan group of labor unions, private companies, think tanks and environmental groups to advocate for carbon capture technologies.
One focus of the coalition, created after the tax credits were extended in February, involves working with governors, state policymakers, industry representatives and other stakeholders to further carbon capture infrastructure and storage projects around the country.
Gov. Matt Mead, R-Wyo., recently sent a letter to other governors asking for their support promoting broad-scale development of regional infrastructure for carbon capture, CO2 pipelines, enhanced oil recovery and forms of geologic CO2 storage.
"The 45Q tax credit has passed and Congress is considering major infrastructure legislation," he said. "Tangible regional plans and partnerships would allow our states to work together on carbon management infrastructure."
Crabtree told S&P Global Market Intelligence at the event that NEORI, a multistate group put together by Mead and Gov. Steve Bullock, D-Mont., will be forming regional initiatives to analyze potential pipeline options and identify the most important projects that would benefit from 45Q.
Roger Ballentine, an owner of NET Power LLC, said at the event that lack of infrastructure is the biggest stumbling block for carbon capture and storage, or CCS, projects.
"Once there's a business case for these things, that's why they are going to happen," he said.
Approving pipelines with larger capacity than immediately necessary in some areas would provide a specific cost benefit to encourage future projects. If a pipeline is built to store CO2 captured from an ethanol plant, for example, leaving extra capacity in the infrastructure to handle CO2 captured from future CCS retrofits on nearby power plants or industrial sources could help bring down the costs for those projects.
"It would be really valuable if those first pipelines are built with extra capacity," Crabtree said. "Then a coal plant, once it's retrofitted, can plug into existing infrastructure. We don't see these things as competitive at all; it's really about building out a system."
He said the coalition wants to make sure CO2 pipelines are part of the current discussion on national infrastructure policy and is seeking federal and state incentives that would give CCS technology the same kind of competitive edge that renewable energy enjoys.
Other federal incentives that could help CCS development include private activity bonds a form of tax-exempt bond that provides special financing benefits for projects, a spokesperson for the Center for Climate and Energy Solutions said.
Sens. Rob Portman, R-Ohio, and Michael Bennet, D-Colo., introduced a bill in April 2017 that would make CCS projects eligible for the bonds.
