Energy and Commerce Committee Chairman John Dingell (D-MI) wrote to House Majority leader Steny Hoyer (D-MD) last week regarding concerns with the portion of the financial bailout package that provides tax credits for carbon capture and storage (CCS). The letter sent before the bill was passed, addressed Dingell’s two concerns about Section 115 of Division B of the bill. Section 115 creates tax credits for taxpayers who capture industrially-emitted carbon dioxide and dispose of it through either secure geological storage or an enhanced oil or natural gas recovery project.
Dingell was first concerned that the bill “has the Secretary of Treasury setting environmental policy.” Although the section does task the Secretary with setting security regulations for CCS, it requires that he do so in consultation with the EPA Administrator. This may alleviate Dingell’s concern that the Secretary could create conflicts with existing EPA regulations.
Dingell’s second concern was that the credit would provide no benefit to the public. He feared that it would “reward existing facilities for simply continuing to capture carbon dioxide at pre-existing rates and not spur new carbon sequestration.” Dingell’s apprehension, however, was based upon a misunderstanding of the threshold requirement for the tax credit. Under the law, the credit is available for any industrial facility capturing at least 500,000 metric tons of carbon dioxide, thus opening the opportunity to new taxpayers while continuing to provide incentives to current industrial capturers.