U.S. Sen. Michael Bennet introduced legislation this week to help power plants and industrial facilities with the purchase of carbon capture equipment.
The bill would allow projects that capture, transport and store waste CO2 from sources like power plants and oil and gas production facilities to be financed with tax-exempt bonds. Republican Sen. Rob Portman of Ohio joined Bennet in introducing the bill.
Captured carbon dioxide, a greenhouse gas, is typically stored deep underground in geological formations, where it remains out of the atmosphere and thus does not contribute to global warming.
On his website, Bennet says the bill will accomplish three main goals: Make carbon capture more economically feasible, boost oil production while reducing emissions and provide greater energy security in the 21st century.
The senator cites positive feedback for the bill from energy policy analysts and groups such as the Utility Workers Union of America and the Center for Climate and Energy Solutions.
Calling it “proof that Democrats, Republicans, labor unions, industry, and environmentalists can come together to advance policies that will protect our planet and create good-paying jobs,” Bennet says on his website that the bill will boost Colorado’s clean energy economy and keep the air clean.
Hunter Lovins, a longtime advocate for sustainable energy and founder of the Rocky Mountain Institute, feels differently. “This is a very sweet subsidy to the oil and gas industry,” she says bluntly. She mentions a 2015 International Monetary Fund working paper, which estimates that the fossil fuel industry receives nearly $2 trillion in subsidies each year.
“Why does Exxon need my tax dollars?” Lovins asks.
Lovins’ Longmont-based nonprofit, Natural Capitalism Solutions, works to find profitable solutions to sustainability. It also took over the Colorado Carbon Fund, set up by former Gov. Bill Ritter, after Gov. John Hickenlooper removed it from state management.
Tax breaks should be given to companies working in the public interest, Lovins says. “How is helping the oil industry suck more oil out of the ground manifestly in the public interest?”
David Hawkins, director of climate programs at the National Resources Defense Council, said that carbon capture can make important contributions “as a complement to critical actions to use energy more efficiently and to switch to renewable energy sources.”
The Colorado Oil and Gas Association declined The Colorado Independent’s request for comment.
Lovins says that carbon capture is something the fossil fuel industry is going to do — and should be doing — anyway. Rather than giving them a tax break, she says, “We should be putting a tax on them, i.e. a carbon tax.”
She notes that capturing and storing CO2 from oil and gas facilities reduces emissions, but says that producers simply take the recovered CO2, reinject it to pressurized and extract even more oil. The process also has no impact on the fossil fuel’s ultimate use, such as being burned as fuel for automobiles. The transportation sector accounted for more than a quarter of U.S. greenhouse gas emissions in 2014.
She says, “If you want to subsidize something, subsidize the electric car industry.”
Photo by Corey Hutchins
It is unlikely that Sen. Bennett’s carbon capture proposal will make that technology “economically feasible”. Experts at the U.S. Department of Energy and in the fossil energy sector acknowledge that electricity from power plants equipped with the technology will cost considerably more and consume more energy and water than is the case now. As a result, carbon capture is more likely to reduce emissions by making solar power, wind power, and energy storage even more desirable, not by trapping CO2 and burying it. The bond market would be foolish to invest in this technology.
Whoa there Kelsey, you mis-quoted me. The reason I don’t like this particular subsidy is that it will pay the oil companies to do what they were already going to do: capture CO2 to use to re-inject into oil wells to extract even MORE oil, which when burned will release even more CO2. It is NOT a subsidy to help keep carbon out of the air. If that could be done cost effectively it might be worth supporting. However, experiments to date roughly double the cost of the fossil energy plant from which the carbon is being captured. Unless we pay the oil companies to do it and they then use it to extract more oil. All fossil plants are now more expensive than solar and wind. If we are going to use your and my tax dollars to pay for energy – and I would prefer NO subsidies: let ’em all compete on their real market merits – then let’s subsidize the technologies of the future, not those of the failing past. Did you know that Exxon is borrowing to pay dividends? See: http://money.cnn.com/2016/10/26/investing/exxonmobil-stock-oil-prices/ And BP released a bit last week that it may have to cut a dividend. I bet they are borrowing, to pay them, as well. It’s over. The fossil era is over. See the work of Dr. Jeremy Leggett: http://www.jeremyleggett.net/2017/01/state-of-the-transition-december-2016-as-fossil-fuel-diehards-take-over-the-white-house-the-evidence-of-a-fast-moving-global-energy-transition-has-never-been-clearer/ And those fossil subsidies we are already paying? It’s $5 trillion a year: $10 million a minute. The oil industry really does not need more, and I am disgusted with our Senator for caving into them.