Today, as part of its deliberations over the energy bill, the Senate is expected to debate a modified version of the tax title that passed the House last week. Among other things, the modified tax title: (1) amends the section 48A/48B credits to provide for recapture of the credit unless CCS is conducted; and (2) provides favorable depreciation treatment for CO2 pipelines, provided that "secure geological storage" is used. With respect to the latter, the bill goes on to define "secure geological storage" that is sure to cause confusion at the IOGCC and EPA, both of which are working on their own definitions. (We also note that the federal CO2 pipeline provision conflicts with the CO2-EOR/CCS tax incentives which Texas enacted last summer in that the latter includes a permanence standard in lieu of using the term "secure geological storage.")
While the positive attention being showered upon CCS is wonderful, our best guess is that, by early 2009, Congress and the States -- through a mix of climate and energy policies -- will have codified a multitude of confusing and conflicting definitions related to CCS. The next months should be interesting to watch as all of this unfolds.