US representatives from California, Arizona, and Illinois have introduced legislation that would prevent carbon capture tax credits being used for enhanced oil recovery (EOR).
Ro Khanna, Chair of the House Oversight Subcommittee on the Environment, Raul Grijalva, Chair of the House Natural Resources Committee and Mike Quigley, member of the House Committee on Appropriations, together introduced the End Polluter Welfare for Enhanced Oil Recovery Act on Monday.
The proposed legislation was a response to an ongoing debate about a proposed increase in the 45Q tax credit from the current $50 per tonne of carbon dioxide captured to $85 per tonne.
The politicians hope to prevent the captured CO2 from being used to actually increase oil production.
But oil and gas leaders who would use CO2 for EOR believe there needs to be more incentives for the technology.
Bronwyn Eyre, Minister of Energy for Saskatchewan, said Canada is working on its own version of the US’s 45Q, but stressed it would need to support carbon capture for use in EOR.
In the US, about 95% of all carbon captured is used for EOR, which is said to reduce the CO2 emissions for oil production and can permanently store CO2 underground.
The representatives supporting this proposal, however, are concerned the tax credits will be used to continue to boost oil production, rather than decrease the role of fossil fuels in our energy mix.
“Using carbon capture as an excuse to continue drilling for oil is not a climate-change solution,” Khanna said. “It’s our responsibility here in Congress to expose the fossil-fuel subsidies in our tax code and work to end them.”
“Unlike when they were first created, these subsidies no longer create jobs. Instead, they undermine efforts to tackle the climate crisis. I’m proud to introduce this bill to end one of the biggest fossil-fuel subsidies and set us on the path to a clean-energy economy,” Khanna added.