Carbon Capture and Sequestration Deployment Act of 2014 - Directs the Department of Energy (DOE) to establish a cooperative industry-government research and development program to demonstrate innovative technologies to capture, prevent, or store carbon dioxide (CO2) emissions from carbon-based fuels or to enable the beneficial use of CO2.
Requires DOE to conduct an annual assessment of existing programs supporting carbon capture and sequestration (CCS) technology until that technology is available in commerce. (CCS is a three-step process: the capture, transport, and underground injection and geologic sequestration of CO2.)
Amends the Internal Revenue Code, with respect to the tax credit for CO2 sequestration, to: (1) impose limitations on the allocation of credit amounts for carbon capture projects, including a 10-year limitation on CO2 capture at a qualified facility (defined as an industrial facility which captures not less than 500,000 metric tons of CO2 in a taxable year); (2) require the Secretary of the Treasury to establish procedures for allocating the national limitation on such credit to projects for placing carbon capture equipment (i.e., equipment to capture and pressurize qualified CO2) in service at qualified facilities and for certifying projects for which an allocation has been made; and (3) identify as eligible for such credit the taxpayer who captures and disposes of the qualified CO2.
Amends the Energy Policy Act of 2005 to authorize DOE to make loan guarantees to: (1) construct or retrofit coal- or petroleum coke-fired industrial facilities or electric generation facilities to utilize CCS technology, and (2) construct pipelines for the transport of CO2 to sequestration sites or to sites where the C02 will be used for hydrocarbon recovery. Expands the qualifying advanced coal project investment tax credit to include an additional amount for the costs of constructing and retrofitting such facilities.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2287 Introduced in Senate (IS)]
113th CONGRESS
2d Session
S. 2287
To facilitate the development and commercial deployment of carbon
capture and sequestration technologies, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 5, 2014
Mr. Rockefeller (for himself and Mr. Walsh) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To facilitate the development and commercial deployment of carbon
capture and sequestration technologies, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Carbon Capture and Sequestration
Deployment Act of 2014''.
TITLE I--CARBON CAPTURE AND SEQUESTRATION INNOVATION PROGRAM
SEC. 101. PARTNERSHIPS FOR CARBON CAPTURE AND SEQUESTRATION.
(a) Establishment of Program.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Energy (referred to in
this Act as the ``Secretary'') shall establish a cooperative
industry-government research and development program, in
addition to and in cooperation with the carbon capture and
sequestration research and development program of the Office of
Fossil Energy, to demonstrate novel and innovative
technologies--
(A) to capture or prevent carbon dioxide emissions
from carbon-based fuels;
(B) to enable the beneficial use of carbon dioxide;
or
(C) to enable the long-term storage of carbon
dioxide.
(2) Participation of national laboratories and
universities.--The program--
(A) shall include the participation of the National
Energy Technology Laboratory; and
(B) may include the participation of other National
Laboratories, institutions of higher education, and
other appropriate entities.
(b) Cost Sharing.--For purposes of developing and demonstrating the
technologies or approaches referred to in subsection (a)(1)--
(1) the Secretary shall provide at least 80 percent of the
cost of the development projects; and
(2) the industry participant shall provide not more than 20
percent of the cost of the development projects.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section--
(1) $110,000,000 for each of fiscal years 2015 through
2019;
(2) $60,000,000 for each of fiscal years 2020 through 2024;
and
(3) $30,000,000 for each of fiscal years 2025 through 2029.
SEC. 102. ANNUAL DEPARTMENT OF ENERGY ASSESSMENT.
(a) In General.--
(1) Department of energy report.--Not later than 1 year
after the date of enactment of this Act and annually thereafter
until the Secretary determines that technology preventing the
emission of, capturing, transporting, permanently storing or
sequestering, or putting to beneficial use carbon dioxide is
available to the commercial marketplace, the Secretary shall--
(A) conduct an assessment in accordance with
subsection (b) of the existing Federal programs
supporting the technology; and
(B) submit to the appropriate authorizing and
appropriating committees of Congress a report on the
results of the assessment.
(2) Government accountability office review.--Not later
than 1 year after the first report is provided to the
appropriate authorizing and appropriating committees of
Congress under paragraph (1)(B) and subsequently as needed
until technology preventing the emission of, capturing,
transporting, permanently storing or sequestering, and putting
to beneficial use carbon dioxide is available to the commercial
marketplace, the Comptroller General of the United States shall
conduct a review of the report described in paragraph (1)(C) in
accordance with subsection (c).
(b) Department of Energy Report Requirements.--The Secretary shall
include in the report required under subsection (a)(1)(B)--
(1) a detailed description of the existing programs,
including each major program area, that conduct or support
research, development, demonstration, and deployment of
technology--
(A) to prevent the emission of carbon dioxide or to
capture carbon dioxide from sources, including fossil
fuel-based power plants;
(B) to transport carbon dioxide;
(C) to store or sequester captured carbon dioxide
permanently; or
(D) to put captured carbon dioxide to beneficial
use;
(2) an assessment, based on Federal Government laboratory
research experience, available industry research experience,
and such other data and information as the Secretary considers
useful and appropriate, to determine whether each major program
area and principal projects within the areas described in
paragraph (1) are designed to, and will advance fundamental
knowledge or achieve significant technical advancement and
materially improve the technology base to effectively address
the prevention of carbon dioxide emissions or capture of carbon
dioxide or the transport, permanent storage, or beneficial use
of captured carbon dioxide; and
(3) an assessment of the estimated timeframe and costs of
the Secretary necessary to reasonably conclude that technology
will be available to the commercial marketplace.
(c) Government Accountability Office Review Requirements.--The
Comptroller General of the United States shall include in the review
required under subsection (a)(2)--
(1) an analysis of the estimated timeframes and costs of
the Secretary, as reported pursuant to subsection (b)(3);
(2) any recommendations that the Comptroller General of the
United States considers appropriate and useful to improve the
likelihood of achieving technological advancements to mitigate
carbon dioxide emissions or to expedite the availability of
carbon capture and sequestration technology for the commercial
marketplace;
(3) an assessment of any legal or regulatory impediment by
any Federal agency or department that has arisen in relation to
the deployment of carbon capture and storage technology,
including any delays in the permitting of the technology or the
construction or operation of any facility; and
(4) any other analyses the Comptroller General of the
United States considers necessary or appropriate.
(d) Budget Request Report.--In the budget requests for each of
fiscal years 2016 through 2030, the President shall include in the
budget request of the Secretary for the Fossil Energy Program a report
that assesses--
(1) the progress of the Secretary in implementing the
recommendations of the Comptroller General of the United States
and compares the estimated costs of completing implementation
of those recommendations to the requested budget levels; and
(2) the progress made for the preceding fiscal year toward
achieving the goals of the program for which funding is
requested.
TITLE II--CARBON DIOXIDE SEQUESTRATION CREDIT
SEC. 201. MODIFICATIONS TO CARBON DIOXIDE SEQUESTRATION CREDIT.
(a) Allocation and Certification of Credit.--
(1) In general.--Subsection (e) of section 45Q of the
Internal Revenue Code of 1986 is amended to read as follows:
``(e) Limitation.--
``(1) Allocation limitation.--No credit shall be allowed
under subsection (a) with respect to qualified carbon dioxide
captured by carbon capture equipment at a qualified facility
for the amount of qualified carbon dioxide captured by such
carbon capture equipment in excess of--
``(A) the portion of the national limitation
allocated with respect to such carbon capture equipment
under subsection (f), over
``(B) the amount of qualified carbon dioxide
captured by such carbon capture equipment during
periods before August 1, 2015, for which a credit under
subsection (a) was allowed.
``(2) National limitation.--For purposes of paragraph
(1)(A), the national limitation is the excess of--
``(A) 75,000,000 metric tons of qualified carbon
dioxide, over
``(B) the number of metric tons of qualified carbon
dioxide captured before August 1, 2015, for which a
credit under subsection (a) was allowed.''.
(2) Allocation and certification.--Section 45Q of such Code
is amended by adding at the end the following new subsection:
``(f) Allocation for and Certification of Carbon Capture
Projects.--
``(1) Establishment of procedures.--Not later than July 1,
2015, the Secretary shall establish, by regulation, processes
and procedures--
``(A) for allocating the national limitation under
subsection (e)(2) to projects for placing carbon
capture equipment in service at qualified facilities,
and
``(B) for certifying projects for which an
allocation has been made under subparagraph (A).
``(2) Allocations.--
``(A) Application.--Each applicant for an
allocation under this subsection shall submit an
application to the Secretary under such terms and
conditions as are established by the Secretary in
regulations.
``(B) Priority.--The Secretary shall rank
applications received under subparagraph (A) in the
following order:
``(i) Applicants with applications received
by the Secretary on an earlier date shall be
given higher priority than applicants with
applications received on a later date. For
purposes of this clause, any application
received before the date that is 30 days after
the procedures and processes described in
paragraph (1) are established shall be
considered to have been received on such date.
``(ii) In the case of applications received
on the same date, those applicants concurrently
applying for certification shall be given
higher priority.
``(iii) In the case of applications
received on the same date and concurrently
applying for certification, those projects with
the earlier date by which construction
commenced shall be given higher priority.
``(C) Allocation to applicants.--Subject to
subparagraph (D), the Secretary shall allocate tonnage
to each applicant--
``(i) based on the amount requested on the
application, and
``(ii) in order of the rank of the
application under subparagraph (B),
until the amount of tonnage available under this
section is exhausted. Projects for which no or a
partial allocation is made shall retain their ranking
and shall be eligible to receive an allocation of
tonnage previously allocated that is forfeited or
recaptured.
``(D) Limitation.--The Secretary may not allocate
to any project more than the lesser of--
``(i) the number of metric tons of
qualified carbon dioxide projected to be
captured at the qualified facility under the
project during the 10-year period beginning on
the date on which such project is placed in
service,
``(ii) the number of metric tons of
qualified carbon dioxide projected to be
captured at the qualified facility under the
project--
``(I) which are subject to a
written, binding contract for disposal
in secure geological storage (whether
or not used as a tertiary injectant),
or
``(II) for which there is a plan
for such disposal by the applicant, or
``(iii) 15,000,000 metric tons of qualified
carbon dioxide.
``(E) Reduction for prior credits.--The amount of
any allocation under subparagraph (C) to any project
shall be reduced by the number of metric tons of carbon
dioxide captured by the carbon capture equipment with
respect to such project before August 1, 2015, for
which a credit was allowed under subsection (a).
``(3) Certification.--
``(A) In general.--No credit shall be allowed under
subsection (a) with respect to any project for using
carbon capture equipment to capture qualified carbon
dioxide at a qualified facility before the date on
which such project is certified under this paragraph.
``(B) Application for certification.--Each project
which is allocated a portion of the national limitation
shall submit an application for certification to the
Secretary containing such information as the Secretary
may require. Such application shall be submitted--
``(i) not later than--
``(I) 6 months after the date on
which such project receives an
allocation, and
``(II) 30 days after the later of
the date on which the regulations,
processes, and procedures are
established under paragraph (1) or the
construction start date, and
``(ii) not earlier than the construction
start date.
For purposes of this subparagraph, the term
`construction start date' means the earlier of the
first date on which physical work on the project of a
significant nature is undertaken or the date by which 5
percent or more of the total cost of the project has
been spent.
``(C) Revocation of certification.--
``(i) Materially inaccurate
representations.--The Secretary may revoke a
certification under this paragraph if the
Secretary determines that an applicant has made
a materially inaccurate representation with
respect to the project.
``(ii) Failure to timely place equipment in
service.--A certification under this paragraph
shall be revoked in any case in which carbon
capture equipment with respect to the project
is not placed in service--
``(I) before the date which is 5
years after the date on which the
allocation was issued, in the case of a
new industrial facility, or
``(II) before the date which is 3
years after the date on which the
allocation was issued, in the case of a
modification of an existing industrial
facility.
``(D) Reallocation.--In any case--
``(i) in which a certification is revoked
under subparagraph (C), or
``(ii) in which a taxpayer to whom an
allocation is made under paragraph (2) fails to
obtain certification for a project under this
paragraph,
the amount of national limitation which was allocated
to such project under paragraph (2) shall be
reallocated under such rules as established by the
Secretary under regulations.
``(4) Public disclosure.--
``(A) In general.--The Secretary shall, within 30
days of making any allocation, certification,
revocation, or change in the ranking of projects,
publicly disclose the amount of such allocation, a
description of the project for which such allocation,
certification, or revocation was made, and the change
in the ranking of projects, as the case may be.
``(B) Annual report.--The Secretary shall issue an
annual report summarizing credits allocated and
available for allocation.''.
(3) Conforming amendments.--
(A) Paragraph (2) of section 45Q(c) of such Code is
amended by inserting ``which is part of a project which
is certified under subsection (f)(3)'' after ``carbon
capture equipment''.
(B) Paragraph (3) of section 45Q(c) of such Code is
amended by striking ``which'' and inserting ``at which
such carbon capture equipment''.
(b) 10-Year Credit Limitation.--Section 45Q(a) of the Internal
Revenue Code of 1986 is amended--
(1) in paragraph (1)(A), by inserting ``during the 10-year
period beginning on the later of the date on which the carbon
capture equipment described in subsection (c)(1) is placed in
service or the date on which the project with respect to such
carbon capture equipment was certified under subsection
(f)(3)'' after ``qualified facility'', and
(2) in paragraph (2)(A), by inserting ``during the 10-year
period beginning on the later of the date on which the carbon
capture equipment described in subsection (c)(1) is placed in
service or the date on which the project with respect to such
carbon capture equipment was certified under subsection
(f)(3)'' after ``qualified facility''.
(c) Definition of Carbon Capture Equipment.--Section 45Q(d) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(8) Carbon capture equipment.--The term `carbon capture
equipment' means equipment to capture and pressurize qualified
carbon dioxide.''.
(d) Credit Allowed to Taxpayer Performing Carbon Capture.--
(1) In general.--Paragraph (5) of section 45Q(d) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(5) Person to whom credit is allowable.--
``(A) In general.--Except as provided in
subparagraph (B) or in regulations prescribed by the
Secretary, any credit under this section shall be
allowed to the taxpayer who--
``(i) captures the qualified carbon
dioxide, and
``(ii) through contract or otherwise,
disposes of the qualified carbon dioxide in a
manner meeting the requirements of paragraph
(1)(B) or (2)(C) of subsection (a), as the case
may be.
``(B) Election to allow credit to person disposing
carbon dioxide.--If the person described in
subparagraph (A) makes an election under this
subparagraph in such manner as the Secretary may
prescribe by regulations, the credit under this
section--
``(i) shall be allowable to the person that
disposes of qualified carbon dioxide in a
manner meeting the requirements of paragraph
(1)(B) or (2)(C) of subsection (a), as the case
may be, and
``(ii) shall not be allowable to the person
described in subparagraph (A).''.
(2) Conforming amendments.--
(A) Section 45Q(a) of such Code is amended by
striking ``by the taxpayer'' each place it appears in
paragraphs (1)(B), (2)(B), and (2)(C).
(B) Section 45Q(c) of such Code, as amended by
subsection (a), is amended by striking paragraph (1)
and redesignating paragraphs (2) and (3) as paragraphs
(1) and (2), respectively.
(e) Rules Relating To Credit Recapture.--Paragraph (6) of section
45Q(d) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new sentence: ``Notwithstanding section 7805(b), any
regulation issued pursuant to this paragraph shall apply only with
respect to qualified carbon dioxide captured or disposed of after the
date on which such regulation is filed with the Federal Register.''.
(f) Effective Date.--The amendments made by this section shall
apply to carbon dioxide captured after July 31, 2015.
TITLE III--INCENTIVES FOR CARBON CAPTURE AND SEQUESTRATION PROJECTS
SEC. 301. FEDERAL FINANCIAL INCENTIVES.
(a) Eligible Projects.--Section 1703 of the Energy Policy Act of
2005 (42 U.S.C. 16513) is amended--
(1) in subsection (b)(5), by inserting ``and projects
described in subsection (f)'' before the period at the end; and
(2) by adding at the end the following:
``(f) Carbon Capture and Sequestration Projects.--
``(1) Definitions.--In this subsection:
``(A) Commercial scale.--The term `commercial
scale' means, with respect to an electric generation
unit, a unit that is designed--
``(i) to generate and sell electric power
directly to consumers or for resale; and
``(ii) with a carbon dioxide capture system
having a useful life of not fewer than 15
years.
``(B) Eligible unit.--The term `eligible unit' has
the meaning given the term in section 84E of the
Internal Revenue Code of 1986.
``(C) Permanent geologic storage site.--The term
`permanent geologic storage site' means a site that--
``(i) the Secretary determines is capable
of storing carbon dioxide; and
``(ii) is located in saline formations or
other deep geologic storage structures.
``(2) Guarantees authorized.--Notwithstanding subsection
(a)(2), the Secretary may make guarantees in amounts totaling
not more than $20,000,000,000 for the following carbon capture
and sequestration projects:
``(A) The construction of new industrial facility
units or commercial scale electric generation units
that are eligible units utilizing carbon capture and
sequestration technology.
``(B) The retrofit of existing industrial facility
units or commercial scale electric generation units
that are eligible units providing for carbon capture
and sequestration.
``(C) The construction of carbon dioxide
transmission pipelines to transport carbon dioxide from
carbon capture and sequestration facilities to--
``(i) sequestration sites; or
``(ii) sites where the carbon dioxide will
be used for hydrocarbon recovery.
``(3) Certification of eligible units.--A unit shall not be
eligible to receive a guarantee under paragraph (2) unless the
Secretary has certified the unit pursuant to a certification
process established by the Secretary by rule.''.
(b) Additional Authorization.--Section 1704 of the Energy Policy
Act of 2005 (42 U.S.C. 16514) is amended by adding at the end the
following:
``(c) Additional Authorization.--In addition to other amounts made
available under this section, there is authorized to be appropriated
such sums as are necessary to cover the credit loan subsidy costs
associated with the guarantees described in section 1703(f).''.
(c) Tax Credits.--
(1) In general.--Subpart E of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 48D the following new section:
``SEC. 48E. PIONEER CCS FACILITIES.
``(a) Additional Qualifying Advanced Coal Project Credit.--For
purposes of section 46, the qualifying advanced coal project credit for
any taxable year shall also include an additional amount equal to the
applicable percentage (as determined under subsection (c)) of the
incremental cost for carbon capture and sequestration systems for
eligible units, determined as follows:
``(1) For an eligible unit that is a new electric
generation unit, the incremental costs shall be the amount by
which the costs incurred by the taxpayer for the unit exceed
the costs of construction of a comparable supercritical
pulverized coal unit without carbon capture and sequestration
technology. To establish incremental costs, the taxpayer shall
obtain a certified report of a qualified independent engineer
estimating the differential construction cost between the
eligible unit and a comparably sized supercritical pulverized
coal unit without carbon capture and sequestration. The
independent engineer shall utilize cost estimates for
supercritical pulverized coal units available from Federal
agencies, academia and/or the private sector, appropriately
adjusted for size, fuel source and location. An engineering
design of a hypothetical supercritical pulverized coal unit
shall not be required to establish the incremental costs.
``(2) For an eligible unit that is a new industrial unit,
the incremental costs shall be the amount by which the costs
incurred by the taxpayer for the unit exceed the costs of
construction of a comparable industrial unit without carbon
capture and sequestration.
``(3) For an eligible unit that retrofits a carbon capture,
transportation, and sequestration system on an existing
generation or industrial unit, the incremental cost shall be
the construction costs incurred by the taxpayer for the carbon
capture and sequestration system.
``(4) The Secretary of Energy shall certify the amount of
incremental cost for carbon capture and sequestration systems
for eligible units in each case, based on appropriate
information.
``(b) Eligible Unit.--For purposes of this section, the term
`eligible unit' means an electric generation unit or industrial
facility unit located in the United States that--
``(1) uses coal or petroleum coke for at least 75 percent
of the fuel used by the unit,
``(2) uses carbon capture technology to capture and
sequester not less than 65 percent of the total carbon dioxide
emissions of the unit,
``(3) transports such captured carbon dioxide to a
permanent geologic storage site in the United States or to a
site on the North American continent for use for hydrocarbon
recovery, and
``(4) provides for the permanent storage of such carbon
dioxide in such site.
``(c) Applicable Percentage.--
``(1) In general.--For purposes of subsection (a), the
applicable percentage shall be the amount (expressed as a
percentage) equal to the sum of--
``(A) 15 percent, and
``(B) the amount (expressed as a percentage) which
bears the same ratio to 15 percent as the captured
emissions percentage (as determined under paragraph
(2)) bears to 35 percent.
``(2) Carbon dioxide emissions captured.--For purposes of
paragraph (1), the captured emissions percentage shall be equal
to--
``(A) the percentage of total carbon dioxide
emissions of the eligible unit that is captured and
sequestered, minus
``(B) 65 percentage points.
``(d) Election.--No costs for which a credit has been provided
under section 48A or section 48B shall be eligible for a credit under
this section.
``(e) Recapture.--The Secretary shall, by regulations, provide for
recapturing the benefit of any credit allowable under subsection (a)
with respect to any unit that fails to attain or maintain the
requirements under subsection (b).''.
(2) Clerical amendment.--The table of sections for subpart
E of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 48D the
following new item:
``48E. Pioneer CCS facilities.''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to--
(1) new facilities placed in service after December 31,
2014, and before January 1, 2026; and
(2) the retrofit of existing facilities that commence
operation with the retrofit after December 31, 2014, and before
January 1, 2026.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S2648-2649)
Read twice and referred to the Committee on Finance.
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