In the first session of the 111^1th Congress, the Senate Energy and Natural Resources Committee reported S. 1462, a comprehensive energy bill entitled the “American Clean Energy Leadership Act” (ACELA). ACELA will be the vehicle for advancing key energy legislation through the Senate in 2010, and includes federal programs for carbon capture and sequestration (CCS) long-term liability coverage and for a clean energy deployment and financing administration.  

ACELA is a comprehensive energy bill that folds in several separate pieces of legislation. It includes six major bills with bipartisan sponsorship and five additional bills with either Republican or Democratic sponsorship that were separately introduced in the first session of this Congress. Two of these bills – S. 1013, “The Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2009” and S. 949, “The 21st Century Energy Technology and Deployment Act” –  include provisions to support the development of carbon capture and storage projects. Further details on both of these bills are provided below.      

 

On June 17, 2009, the Senate Energy & Natural Resources Committee approved S. 1462. Perhaps most important to the coal industry are provisions within the bill that facilitate carbon capture and storage (CCS) by establishing a national indemnity program through the Department of Energy (DOE) for up to 10 commercial-scale CCS projects competitively selected to demonstrate the commercial application of integrated systems for the capture, injection, monitoring, and long-term geological storage of carbon dioxide (CO₂) from industrial sources and power plants. Importantly, the bill maps out a clear framework for final closure and long-term stewardship of geological CO₂ storage sites by permitting DOE to indemnify demonstration project owners against liability for damages from carbon storage projects in excess of financial insurance required of projects, and to collect a fee from projects in order to cover expected costs associated with this indemnification. These provisions set qualifying criteria that will help to ensure that critical early-mover projects will be conducted safely while addressing the growing concerns of reducing greenhouse gas emissions.

 

Other provisions in ACELA implement a series of reforms to the existing Department of Energy loan guarantee program, including the creation of a new “Clean Energy Investment Fund” to allow collected costs to be used to support advanced technology deployment.  The legislation also creates a new entity housed in DOE – the Clean Energy Deployment Administration (CEDA) –with strong financial expertise and with a specific purpose to create an attractive investment environment for the development and deployment of clean energy technologies.

 

The Senate bill is confined at this point to energy matters and does not address climate change. It was originally expected to ultimately be joined with the Senate climate change bill, which has been passed out of the Senate Environment and Public Works Committee and is waiting for action on the Senate floor.

 

Senate Energy Committee Full Summary of ACELA

 

Senate Report 111-48, American Clean Energy Leadership Act of 2009, Report of the Senate Energy and Natural Resources Committee, to accompany S. 1462, 111th Congress, 1st Session, July 16, 2009.
 

S. 1462, American Clean Energy Leadership Act of 2009, bill as introduced and reported from the Senate Energy and Natural Resources Committee on July 16, 2009.

 
 

 
 

 

Graham 'Clean Energy Standard' Including Coal (DRAFT)
2/18/2010
Senator Lindsey Graham (R-SC) has released draft legislation (attached below) that aims to establish a clean energy standard requiring utilities to obtain a percentage of their electricity from technologies that emit little or no greenhouse gases, including the usual assortment of renewable energy technologies but also nuclear plants and coal plants with carbon capture and storage.

Qualifying clean energy resources include solar, wind, geothermal, ocean, biomass, landfill gas, qualified hydropower, marine and hydrokinetic, coal-mine methane, new nuclear, qualified waste to energy, advanced coal generation, eligible retired fossil fuel generation and “another clean energy source based on innovative technology as determined by the [Energy] secretary through rulemaking.”

Under the draft, “advanced coal generation” is defined as new or existing coal facilities that capture and store at least 65% of their CO2 emissions.

Supporting Document: VNF Summary of Graham Clean Energy Standard
 

Clean Air Amendments Act of 2010
2/5/2010
Senators Tom Carper (D-DE) and Lamar Alexander (R-TN) introduced The Clean Air Act Amendments of 2010, legislation that would cut mercury emissions by 90% from coal-fired power plants and tighten national limits on emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX).

Specifically, the bill would require utilities, through the use of emissions-control equipment (such as "scrubbers" on smokestacks) and other technologies, to:
- Cut SO2 emissions by 80 percent (from 7.6 million tons in 2008 to 1.5 million tons in 2018).
- Cut NOX emissions by 53 percent (from 3 million tons in 2008 to 1.6 million tons in 2015).
- Cut mercury emissions by at least 90 percent no later than 2015.

To ensure that regulations are cost-effective, the legislation also establishes nationwide trading systems for SO2 and NOX emissions to ensure that reductions are cost-effective.  Mercury emissions would be reduced by EPA by utilizing the maximum available control technology
 
 

Last week, Senator John Barrasso (R-Wyo.) introduced legislation (S.1856) that would amend the Energy Policy Act of 2005 to clarify policies regarding ownership of pore space. The bill would clarify that pore space below federal lands belongs to the federal government and would also provide guidance on how to convey federal pore space. In addition, the bill would declare that mineral estates are dominant when determining the priority of subsurface uses of federal pore space. S. 1856 is the first legislative proposal to address the important issue of federal pore space ownership, but it is not clear when or if any action will be taken on the bill.

Carbon Storage Stewardship Trust Fund Act of 2009
7/22/2009
On July 22, 2009 Senators Bob Casey (D-PA) and Michael Enzi (R-WY) introduced a bill that would provide for the transfer of long term liability of CO₂ storage sites to the federal government. The bill would establish a trust fund requiring CO₂ site injection operators or owners to pay a per ton of CO₂ fee during the operational phase of a project which would serve as the source of federal funding to cover (1) any liability arising out of claims from a storage facility; and (2) maintenance and long term stewardship of the closed sites. Project owners or operators would be required to obtain private liability assurances during the operational phase of the project. Unlike the program established by the Senate Energy Committee, this program is not limited to 10 CCS demonstration projects subject to DOE cooperative agreements. Rather, this program is intended to facilitate commercial CCS deployment by providing a mechanism for the transfer of long term stewardship of CO₂ injection sites to the federal government.


Responsible Coal Use Act of 2009

On May 22, 2009, Senator Robert Casey (D-PA) introduced legislation titled “The Responsible Use of Coal Act”, which promotes the responsible use of coal through accelerated carbon capture and storage and through advanced clean coal technology research, development, demonstration, and deployment programs.

 

The bill aims to encourage the exportation of CCS technologies and advanced coal power generation technologies developed by the United States to countries that rely on coal as the dominant energy source of the countries (including China and India). Additionally, the legislation supports the deployment of carbon capture and storage technologies by quantifying the technological risks and by helping to establish the most appropriate framework for managing liabilities associated with all phases of CCS technology projects, including the capture and transportation of carbon dioxide; and the siting, design, operation, closure, and long-term stewardship of carbon dioxide storage facilities.

 

Hyperlinked above is a copy of the introduced bill. Please click hereto view the Senator's Statement to the Record. 

 

 

On May 7, 2009, Senate Energy Committee Chairman Jeff Bingaman (D-NM) introduced the Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2009. This bill was later included in the final ACELA package that was reported out of the Committee in June, S. 1462. The legislation sets up a large-scale carbon storage program to provide financial and technical assistance of up to 10 carbon dioxide storage demonstration projects.

 

For a bill summary, please click here. 

 

May 14^th 2009: Full Committee Hearing: to receive testimony on S. 1013 , the Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2009.

 
 

On April 30, 2009 Senator Jeff Bingaman (D-NM) and Representative Jay Inslee (D-WA) introduced legislation entitled “The 21st Century Energy Technology Deployment Act”, which creates an independent agency within the Department of Energy called the “Clean Energy Deployment Administration (CEDA) that will provide credit in the form of loans and loan guarantees, among other things, to the private sector to invest in the deployment of innovative energy technologies. This bill was also later included in the final ACELA package that was reported out of the Committee in June, S. 1462. 

 

For a bill summary, please click here.

 

 

On March 24th, Rep. Rick Boucher (D-VA) introduced legislation intended to advance the development and deployment of carbon capture and storage (CCS) technologies. This bill, the "Carbon Capture and Storage Early Deployment Act", would establish a $1 billion annual fund, derived from fees on the generation of electricity from coal, oil and natural gas. Grants from the fund will be awarded to large-scale projects advancing the commercial availability of CCS technology.

 
 

On February 13th, the U.S. House of Representatives and United States Senate agreed to and passed a final version of H.R.1, the “American Recovery and Reinvestment Act”. Below please find a breakdown of the CCS provisions that are included in the final conference agreement to the Economic Stimulus Bill.

                                             Summary of Energy Conservation Bonds

                                             Matrix of CCS Provisions with Funding

 

 

On October 3, 2008 the Congress enacted H.R.1424, the Energy Improvement and Extension Act of 2008, andand President Bush signed the legislation into law (PL: 110-343) as one of the titles to the financial sector rescue package,. This legislation includes several important tax programs in support of advanced clean coal technology projects and CCS.

 

In total, the value of the investment tax credits for advanced clean coal projects and the newly established “carbon sequestration credits” is approximately $2.25 billion. The legislation also provides an additional $250 million in tax credits for qualifying “industrial gasification” projects. 

 

 

 

Senator Jay Rockefeller (D-WV) introduced S. 3345, the ‘Future Fuels Act of 2008’. This legislation expands incentives for the development of clean coal technologies, establishes incentives to capture highly explosive methane gas to keep coal miners safe, and creates a low-cost coal-to-liquid program to develop transportation fuels.

Supporting Documents: Press Release

                                        Rockefeller’s Floor Statement

 
 

On July 24, 2008, Senators Baucus and Reid introduced legislation to be considered on the Senate floor. Attached is the bill language for legislation S. 3335, the “Jobs, Energy, Families, and Disaster Relief Act of 2008” which includes a set of recommendations to provide tax incentives for a variety of renewable energy, energy efficiency and advanced coal technologies.

 
 

On July 11, 2008 Senator Jeff Bingaman (D-NM), Chairman of the Senate Energy & Natural Resources Committee, introduced S. 3233, the “21st Century Energy Technology Deployment Act” which would create a government corporation to encourage deployment of new energy technologies that are perceived to be too risky for needed low cost financing by commercial lenders. The primary function of the corporation is to securitize private loans and sell bonds based on their revenues in order to allow a greater amount of less-expensive lending in the private sector to deploy high risk technologies. Several technologies are considered eligible technologies for backing by the corporation, including advanced vehicle technologies, solar, wind and geothermal power generation, energy intensity reduction technologies for industry and manufacturing, CCS technologies, and low energy building technologies. One of the targets the legislation sets forth for the corporation is to deploy commercial-scale carbon capture and storage from electricity generation capturing at least 10,000,000 short tons per year by 2015. However, no other provisions are included in the bill for CCS technology deployment.
 
 

Carbon Reduction Technology Bridge Act of 2008 (S. 3208)         

Senators Kent Conrad (D-ND) and Senator Orrin Hatch (R-UT), both senior members of the Senate Finance Committee, introduced the "Carbon Reduction Technology Bridge Act of 2008." This proposal includes the principal tax incentive provisions of CURC's “Near Term Technology Deployment” program and is supported by the National Rural Electric Cooperative Association (NRECA). 

 

Supporting Documents: Senate Floor Statement by Senator Kent Conrad (D-ND)

                                             Press Statement released by Sen. Orrin Hatch (R-UT)

Sen. Rick Boucher (D-VA) introduced legislation today to accelerate the availability of carbon capture and storage (CCS) technologies.   H.R. 6258 creates a Carbon Storage Research Corporation (CRSC) to accelerate the demonstration and early deployment of carbon capture and storage systems. Funds would be competitively awarded to CCS projects and generated by assessing a fee on fossil fuel based power generation.

 
 

Senate Finance Committee Chairman Max Baucus (D-MT) introduced legislation (S. 3132) that would provide tax credits to coal-fired power plants that capture carbon dioxide emissions. Under the proposed legislation, companies that capture and sequester emissions in geological formations would be eligible to receive a tax credit of $20 per metric ton, while companies that capture emissions and use them for enhanced oil recovery (EOR) would receive a tax credit of $10 per ton.  The Baucus bill's distinction between CCS solely for carbon sequestration purposes and the injection of CO₂ for EOR purposes echoes that in the current version of the Lieberman-Warner climate change bill, which provides fewer financial incentives for EOR projects, "to reflect the lower cost of the projects when compared to sequestration into geological formations solely for purposes of disposal.” This bill was also later included in the final financial bailout rescue package that was signed into law on October 3, 2008, H.R. 1424.