Democrat’s Senate Bill Proposes Federal CCS Subsidies

Sen. Heidi Heitkamp (N.D.)—one of a handful of Democrats that are critical of the Obama administration’s carbon rules for new power plants—on Monday introduced a bill that would provide federal funds, tax credits, and pricing support to private power companies investing in carbon capture and storage (CCS) technologies. 

Heitkamp’s newly unveiled bill, “Advanced Clean Coal Technology Investment in Our Nation Act (ACCTION),” seeks to bolster North Dakota’s thriving coal production sector and to sustain coal’s dominant share in the U.S. power profile. Heitkamp acknowledges that CCS technologies have been “demonstrated, but certain barriers still exist to widespread adoption.”

The bill calls for the development of large-scale carbon storage programs to support the commercial-scale application of enhanced oil recovery and geologic carbon dioxide storage.

Notably, it directs 25%—or an estimated $2 billion—of current Department of Energy (DOE) loan guarantee program funding for fossil energy to go to coal projects. It also calls for “eligible projects to receive DOE loan guarantees even if they have received another source of federal assistance,” and for a more streamlined process that will allow companies to receive federal funds for which they have qualified.

At the same time, the bill supports revamping existing research and development programs for advanced coal and CCS technologies and increasing the current tax credit for carbon sequestration from coal facilities, including polygeneration facilities, to 30%.

Under the bill, private companies that capture carbon dioxide could also get variable price support, a measure that would ensure “long-term certainty to the utilities that sell carbon dioxide for enhanced oil and gas recovery, regardless of the price of oil,” a fact sheet describing the bill says.

Also, private companies that sequester carbon dioxide or meet efficiency targets relative to the current coal fleet could also be eligible for clean energy coal bonds, the bill says.

The bill has industry backing. “Of particular importance are your proposals to expand Department of Energy support for carbon capture and storage research, development and deployment programs and to authorize a new DOE program to provide liability protection and other assistance for up to 10 large-scale geologic storage and enhanced oil recovery projects,” Edison Electric Institute’s Thomas Kuhn was quoted as saying to the senator on Monday.

After the Environmental Protection Agency’s (EPA’s) issuance of proposed New Source Pollution Standards on Sept. 20, Heitkamp said the rules that impose the first uniform national carbon limits on new power plants are a “direct attack” on coal-fired power plants and are “detrimental” to the future of coal. Heitkamp also said she would “strongly explain” to the EPA how the rules are “completely unachievable based on current technology and are cost prohibitive.”

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)