Financial incentive is a common motive for changing regulatory requirements through legislation like the CO2 Regulatory Certainty Act. Three billion! You can imagine their accountant advising them do whatever is possible to reduce operating costs. Why? A quick look at their latest SEC filing shows they are roughly three billion dollars in debt. 4ĭenbury Resources is the other large oil company aggressively lobbying to deregulate the tax credit requirements. EPA estimated it could cost up to $320,000 per well versus $4000 per well for the less rigorous oversight option. This level of oversight is more costly than the alternative route available if a company did not want to qualify for taxpayer subsidized CO2. See an example of Occidental Petroleum’s MRV plan here for its operation in New Mexico. Additionally, MRV plans help quantify the amount of CO2 sequestered in geologic formations and help inform future policies. 3 These requirements are designed to prevent CO2 from migrating into underground sources of drinking water or from reaching the surface and escaping into the atmosphere. The Plan requires an in-depth analysis of the project, geologic description of the well sites, description of the CO2 injection process, baseline measurements, information on the monitoring timeframes, evaluation of potential CO2 leakage pathways, and other important oversight details.
CO2 REGULATORY CERTAINTY ACT S 2263 VERIFICATION
In order to qualify for tax credits related to injecting CO2, companies must submit a Monitoring Reporting and Verification (MRV) Plan to EPA. What does the oil industry’s most powerful player want?
CO2 REGULATORY CERTAINTY ACT S 2263 CODE
But a look at recent lobbying disclosure forms reveals a different story.Įxxon has quietly been whipping up support by discussing the bill and Section 45Q of the tax code with lawmakers. On the surface, the CO2 Regulatory Certainty Act appears to be receiving little attention with only a few Republican sponsors. This ignores the multitude of ways carbon could leak into the atmosphere after it is delivered to the site and discredits the “win-win” narrative of CO2-EOR proponents. Without these protections in place, companies would receive CO2 under subsidized prices and only report the quantity of CO2 piped to the facility. Senator Hoeven’s bill would change these monitoring requirements so companies could qualify for the tax credits without proving their operations actually permanently sequester any carbon.
This demonstration is required by statute and by the IRS and is defined by EPA under its greenhouse gas reporting rules. Right now, qualification for the coveted Section 45Q tax credit requires a demonstration that CO2 is permanently geologically sequestered and is not able to escape into the atmosphere. The CO2 Regulatory Certainty Act, introduced by Senator Hoeven and Daines, is a pure handout to the oil industry.
That is exactly what the oil industry is quietly pushing for right now in Congress.įossil fuel champions repeatedly introduce legislation to eliminate the long-term monitoring requirements for enhanced oil recovery operations that use carbon dioxide (CO2). Wouldn’t it be nice to qualify for tax credits without actually having to do any work? Read Part 1: The FUTURE Act is Stuck in the Past