Clean Water Action statement: The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act should eliminate oil production subsidies, not increase them
Washington DC -- This week, a bipartisan group of US Senators introduced the “The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act” which would reform the 45Q tax credit. The bill would increase the dollar value of the credit, extend it, and provide a direct pay option for eligible projects. The bill would increase from $35 per ton to $75 per ton for carbon used for enhanced oil recovery (CO2-EOR) projects. Enhanced recovery is the only form of oil and gas production regulated at the federal level, requiring a Safe Drinking Water Act Underground Injection Control (UIC) permit prior to operation. A 2018 Clean Water Action investigation led to the finding by the Treasury Inspector General for Tax Administration that oil companies had abused the 45Q tax credit, by claiming nearly $1 billion in credits for EOR without adequately demonstrating secure geologic storage of the carbon. In the recently released “Roadmap for Reform” Clean Water outlines several steps needed to better protect water from enhanced recovery by improving and modernizing the UIC program.
Andrew Grinberg of Clean Water Action issued the following statement:
“I thought we were trying to eliminate fossil fuel subsidies not increase them! This bill takes us in the wrong direction by more than doubling the value of the 45Q tax credit for CO2-EOR, and gives oil companies access to taxpayer-funded cash advances for their projects. Secure geologic sequestration that doesn’t produce oil, and other utilization of carbon dioxide, are becoming increasingly viable. EOR is no longer a necessary stepping stone to scaling up the CCUS industry. Clean Water Action supports eliminating subsidies for fossil fuel production - especially for activities which put our water at risk, like EOR. Instead of increasing public spending on fossil fuel production, Congress should eliminate the tax credit for CO2-EOR.”
Since our founding during the campaign to pass the landmark Clean Water Act in 1972, Clean Water Action has worked to win strong health and environmental protections by bringing issue expertise, solution-oriented thinking and people power to the table.