Carbon Sequestration Legislation in the 116th Congress

Updated February 21, 2020

Carbon Sequestration Legislation in the 116th Congress

Utilizing permanent underground storage of carbon dioxide

(CO2), also known as geological sequestration, as a

potential strategy to reduce net greenhouse gas (GHG)

emissions is receiving increasing congressional attention.

Proponents of geological sequestration of CO2 view the

process as a promising method of reducing GHG emissions

from stationary sources, such as coal-fired power plants,

while continuing to use fossil fuels as a source of

electricity. Several bills introduced in the 116th Congress

would address geological sequestration policy issues,

focusing on federal research and development (R&D) and

federal tax credits for storing carbon.

Carbon Sequestration

Geological sequestration of CO2, a type of carbon storage,

is the process of storing CO2 by injecting it into an

underground geological formation. Geological

sequestration is the final step in a carbon capture and

storage (CCS) system—sometimes referred to more

expansively as CCUS (carbon capture, utilization, and

storage). Geological sequestration is intended to trap CO2

emitted from anthropogenic sources permanently

underground and reduce net emissions of this GHG into the

atmosphere. CO2 can also be stored underground when

injected as part of oil and gas production (called enhanced

oil recovery, or EOR).

In a CCS system, CO2 is captured from a stationary source,

compressed into a fluid to allow for transportation by

pipeline, and then injected through specially designed wells

into geological formations typically a half a mile or more

below the Earth’s surface. An emerging technology to

capture CO2 directly from the atmosphere—“direct air

capture” (DAC)—could also serve as a source of CO2 for

geological sequestration. Subsurface geological formations

across the United States could be suitable for large-scale

sequestration of CO2. These include, for example, deep

saline reservoirs (underground basins containing salty

fluids) and oil and gas reservoirs no longer in production.

CO2 may also be sequestered offshore in deep ocean waters

or under the seabed. When injected deep enough

underground, high pressures combined with impermeable

rocks above the target formation are expected to keep the

CO2 from migrating upward into shallower groundwater or

into other geological formations. For additional information

on the technical aspects of CCS, see CRS Report R44902,

Carbon Capture and Sequestration (CCS) in the United

States, by Peter Folger.

Beyond Research and Development

Over the last decade, the focus of federal R&D efforts for

geological sequestration has shifted from small

demonstration projects to exploring the use of sequestration

as a technically and commercially viable method for storing

large volumes of captured CO2. The U.S. Department of

Energy (DOE) leads the federal government’s R&D efforts

in geological sequestration of CO2 as part of the agency’s

fossil fuel programs. DOE’s work includes conducting

fundamental laboratory research on wells, storage design,

geological settings, and monitoring and assessment of the

injected CO2. DOE also sponsors numerous geological

sequestration testing and validation projects through

partnerships with the petroleum and chemical industries and

public and private research institutions. To date in the

United States, nine R&D projects have injected CO2 into

underground formations in large-scale field tests of

permanent geological sequestration and storage associated

with EOR. Four of these projects are currently injecting

and/or storing CO2.

CCS Legislation in the 116th Congress

Some Members of Congress have introduced legislation

intended to support geological sequestration R&D. (See

Table 1 for a list of legislation introduced in the 116th

Congress.) Several bills—S. 383/H.R. 1166, S. 1201, and

H.R. 3607—would enhance DOE’s work in supporting

geological sequestration through continuation and/or

expansion of its CCS programs, including carbon storage

programs. These bills would amend current statutes to

direct DOE to develop and implement R&D programs

related to geological sequestration methods, storage siting,

and assessment of potential impacts. S. 1201 and H.R. 3607

would also direct DOE to continue its partnership programs

for large-scale sequestration demonstration projects. S.

383/H.R. 1166 and S. 1201 would require reports to

Congress, such as a report from DOE on saline reservoir

storage and a report from the Council on Environmental

Quality on ways to facilitate development of CCS projects.

Legislation addressing federal tax credits for carbon storage

is receiving significant industry attention. Two bills in the

116th Congress—H.R. 5883 and S. 2263—would address

these tax credits (see Table 1). H.R. 5883 would increase

the tax credit for DAC facilities, remove the deadline for

beginning construction of a qualified facility, and reduce

the amount of carbon oxide required to be captured by

qualifying DAC facilities. S. 2263 would amend the federal

tax code, Section 45Q, by changing what is considered

“secure geological storage” of carbon oxide (a more general

term covering CO2 and other oxides) and set out eligibility

requirements for tax credits for carbon oxide storage

associated with EOR.

https://crsreports.congress.gov

Carbon Sequestration Legislation in the 116th Congress

Table 1. Carbon Sequestration Legislation Introduced in the 116th Congress

Bill

Number

Short Title

Status

Short Summary of Major Carbon Sequestration

Provisions

H.R. 1166

USE IT Act

Referred to House

Subcommittees on the

Environment;

Environment and Climate

Change; Highways and

Transit, Energy and

Mineral Resources; and

Water, Oceans, and

Wildlife

Would amend the Clean Air Act by directing the U.S.

Environmental Protection Agency (EPA) to conduct certain

carbon capture research activities. Would require the U.S.

Department of Energy (DOE) to submit a report to Congress on

the potential risks and benefits to project developers associated

with increased storage of carbon dioxide (CO2) in deep saline

formations and recommendations for federal policy changes to

mitigate identified risks. Would direct the Council on

Environmental Quality (CEQ) to prepare a report and issue

guidance on development of carbon dioxide pipelines and storage

projects.

H.R. 3607

Fossil Energy

Research and

Development

Act of 2019

House Science, Space, and

Technology Committee

voted favorably for bill to

be reported

Would amend the Energy Policy Act of 2005 to direct DOE to

carry out a program of research, development, and

demonstration for carbon capture and storage (CCS) and conduct

large-scale carbon sequestration partnerships through the

Regional Carbon Sequestration Partnerships.

H.R. 5883

[No bill title]

Referred to the House

Committee on Ways and

Mean

Would amend the Internal Revenue Code Section 45Q to

increase the tax credit for direct air capture (DAC) facilities,

remove the deadline for beginning construction of a qualified

facility, and reduce the amount of carbon oxide required to be

captured by qualifying DAC facilities.

S. 383

USE IT Act

Written report from the

Committee on

Environment and Public

Works filed in Senatea

Would amend the Clean Air Act by directing EPA to conduct

certain carbon capture research activities. Would require DOE to

submit a report to Congress on the potential risks and benefits to

project developers associated with increased storage of CO2 in

deep saline formations and recommendations for federal policy

changes to mitigate identified risks. Would direct the CEQ to

prepare a report and issue guidance on development of carbon

dioxide pipelines and storage projects.

S. 1201

EFFECT Act

Placed on Senate

Legislative Calendar

Would amend the Energy Policy Act of 2005 (P.L. 109-58) to

direct DOE to carry out CCS research and development

programs. Would require DOE to submit a report to Congress

on CCS activities. Would establish an optional program to

transition large-scale carbon sequestration demonstration

projects into integrated commercial storage complexes.

S. 2263

CO2 Regulatory

Certainty Act

Referred to Committee

on Finance

Would amend the Internal Revenue Code, Section 45Q, to revise

the requirements for the secure geological storage of carbon

oxide for the purpose of the tax credits for permanent

sequestration and enhanced oil recovery. Would require the

Treasury Department to establish regulations setting out these

requirements, including compliance with federal environmental

statutes and regulations.

Source: Congress.gov and CRS analysis.

Notes: This In Focus outlines carbon storage through sequestration. These bills (and others) also encompass provisions that cover carbon

capture and/or utilization.

a.

A version of S. 383 was incorporated into S. 1790, the National Defense Authorization Act for Fiscal Year 2020, which became law on

December 20, 2019 (P.L. 116-92), and S. 2302, America’s Transportation Infrastructure Act, which was reported in the Senate on January

8, 2020.

IF11345

Angela C. Jones, Analyst in Environmental Policy

https://crsreports.congress.gov

Carbon Sequestration Legislation in the 116th Congress

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