Bipartisan bill aims to finance carbon capture and storage projects
November 25, 2015
Sen. Michael Bennet, D-Colo., and Republican Sen. Rob Portman, of Ohio, introduced a bill Nov. 19 that aims to create a funding avenue for carbon capture and storage projects at power plants and industrial facilities.
The bipartisan Carbon Capture Improvement Act would allow state or local governments to issue tax-exempt private activity bonds for financing such efforts.
Sam Thernstrom, executive director of Energy Innovation Reform Project, a nonprofit focused on innovation in energy technology, said carbon capture is essential to reducing overall atmospheric carbon levels, but energy companies have faced challenges funding such expensive projects.
"These are very capital intensive projects," he said. "It costs hundreds of millions of dollars, if not billions of dollars, to build a power plant with carbon capture."
According to a statement from Bennet, his bill would reduce these high upfront costs — benefiting both the economy and the environment.
"In Colorado it would enhance our diverse energy portfolio. The captured carbon dioxide can be used by oil producers to extract more oil out of current wells — improving our energy security and boosting domestic energy production," he said. "It also reduces emissions from power plants and industrial facilities to help keep our air clean – which is something that Coloradans value and makes our state an attractive place to live."
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Tri-State Generation and Transmission Association, operator of the coal-fired Craig Station, has seen some success in carbon capture researchcarbon capture research and and recently participated in a study to see if carbon dioxide could be stored underground south of Craig.recently participated in a study to see if carbon dioxide could be stored underground south of Craig.
Spokesman Lee Boughey said funding opportunities for capital projects would be useful, but for now, Tri-State's focus is on research and development.
"When the technology becomes commercial, then any program that could help us with the implementation of those technologies would be helpful," he said.
Dan Reicher, who helped draft the proposed legislation and is the executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University, said there is further research to be done but utility-scale carbon capture projects do exist.
"The challenge with those that have been installed is they're expensive," he said. "As with any new technology when it's first being installed, they tend to be expensive."
With other energy technologies having received government support in their early stages, Reicher said it wouldn't be all that unusual for it to happen with carbon capture and storage technology.
"This is a long-standing finance mechanism and it was used significantly at power plants all over the country back in the '70s and '80s," he said.
Under the proposed Bennet-Portman bill, installation of equipment that captures and stores at least 65 percent of carbon dioxide from a given facility is eligible for complete financing with bonds. If less than 65 percent, then bonds can be issued in proportion to that percent.
Both Bennet and Portman sit on the Senate Finance Committee.