Posted on April 4, 2011 by David Wagner

Proposed Federal Legislation Would Incentivize Carbon Capture and Storage

This post was written by David Wagner.

On March 31, 2011, a bill (S. 699) was introduced in the U.S. Senate that would authorize the U.S. Department of Energy (DOE) to enter into cooperative agreements to provide financial and technical assistance to as many as 10 large-scale (1 million tons of injected carbon dioxide or more) carbon capture and storage (CCS) demonstration projects at industrial sources. Along with three co-sponsors, Sen. Jeff Bingaman (D-NM) introduced the bi-partisan bill and it was referred to the Senate Committee on Energy and Natural Resources. This is the first step in the legislative process and it’s likely that the next step will be a public hearing on the proposal.

The proposed bill provides liability protection and federal indemnification for the CCS demonstration projects. Under the bill, DOE is authorized to indemnify projects up to $10 billion for personal, property and environmental damages that might be above what is covered by insurance or other financial assurance measures. Upon receiving the closure certificate for the injection site, the site may be turned over to the federal government for long-term site management and ownership. The proposed bill also outlines criteria for site closure certification and includes provisions for siting the demonstration projects on public land. In addition, it would establish and fund a CCS training program for state regulators.

By the way, this new proposed legislation (S. 699) is extremely similar to a 2009 bill (S. 1013) that was reported out of the Senate Committee on Energy and Natural Resources but died on the Senate floor as part of a larger energy legislative package that same year.

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Posted on May 14, 2010 by David Wagner

New Climate Bill Introduced in U.S. Senate

This post was written by Ariel Nieland.

After much anticipation, Senators Joe Lieberman (I-Conn.) and John Kerry (D-Mass.) finally unveiled their comprehensive energy and climate bill, known as the American Power Act, in a press conference yesterday afternoon. The bill's release was delayed by several weeks after prior co-sponsor Senator Lindsey Graham (R-SC) withdrew his support following a dispute over unrelated immigration reform legislation. Below are some of the bill's key features:

  • Aims to reduce greenhouse gas emissions by 17% from 2005 levels by 2020 and 83% by 2050, targeting heavy industry, power plants and transportation infrastructure.
  • Removes disincentives for natural gas generation at merchant plants in order to level the power sector playing field, and plans to help guide state regulators by requiring public disclosure of chemicals used in natural gas production.
  • Places a cap on carbon emissions for producers of more than 25,000 tons of carbon pollution annually, which includes approximately 7,500 U.S. companies. Producers with a mandatory cap may trade carbon credits in the primary market, while the secondary market will be open to all participants. Carbon credits would start at $12 per ton.
  • Provides financial incentives for a variety of energy producers, including regulatory risk insurance and loan guarantees for a dozen new nuclear plants; $2 billion a year for coal technologies that can capture and store greenhouse gas emissions, such as carbon capture and storage; and $7 billion a year for improvements to transportation infrastructure and efficiency.
  • Encourages offshore oil drilling while providing states with veto power over drilling in neighboring states along with the ability to opt out of any drilling within 75 miles of the state's own shoreline. States that oppose drilling could pass laws blocking the activity, while states that choose to drill may retain 37% of federal royalties raised.
  • Preempts any state-operated cap-and-trade programs already in existence, and compensates states for any revenue lost as a result.
     
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