As communities, businesses, and local, state, and national governments define their goals to meet an evolving energy mix, a contentious debate continues around various forms of new technology. Humans have focused on efficiencies since the time of the Stone Age man. Many things that exist today are legacy applications of these first individuals. Cooking used to consist of using enormous hearths. Now that same application is wrested in smaller stovetop and oven technology. Carts and wheelbarrows advanced into the vehicles we see today, and heating derived from an open flame on the plains or in a cave has advanced to space heaters and electric systems in our homes. Each generation of humans takes a new step to simplify and perfect existing technology to make them more efficient, faster, and with new materials. For millennia, people have decried the finite ability to continue with certain fuels and technologies. Yet as we are witnessing today, research and development combined with scientific discovery have allowed humans to create new materials and processes while utilizing and conserving older materials and processes better than we ever have before. One of those systems is enhanced oil recovery (EOR) with carbon capture utilization and storage – or CCUS technology. Enhanced oil recovery is just a fancy way of saying, “Squeeze out the last drop.” Think of a tube of toothpaste, at the beginning, it’s easy to squeeze the paste onto your toothbrush. Halfway through, you have to work the paste closer to the top, and by the final go (especially if you forgot to get it at the store the last time you went) you’re working the paste from the sidewalls and the very bottom – pushing every last bit out until the tube is finally empty. That is EOR. By the time a company gets to EOR or tertiary recovery (think, third time’s a charm!) they are essentially maximizing the existing well that’s already been drilled, to get out every last bit of oil there is so they don’t have to drill a new well. When used in conjunction with enhanced oil recovery, CCUS is essential to the process. Why? Because after all of the oil has been taken from a well, there is now space to permanently store captured CO₂. That means, through limited construction, it can be used as a storage vessel for large amounts of carbon that would otherwise be in the atmosphere. These now depleted wells are the foundation for CCUS storage. Despite advancements in CCUS, environmental organizations are concerned with three pieces associated with the process and the technology. 1. The Cost Opponents of CCUS criticize the current cost of its implementation and would like to see policymakers and leaders focused on more immediate, low-cost solutions. The problem with this thinking is it denies an existing and proven method to reduce greenhouse gas emissions. Had we thought that way about technologies that we use now, we wouldn’t have other viable technologies that are helping us meet our climate goals like wind and solar. If you remember, at the inception of solar photovoltaic cells in the 1950s (with inflation), costs were roughly $600,000. By 2010, residential units still cost $40,000. It wasn’t until 2021 that the national average price of a residential solar system was $2.94 per watt, which would mean a 5 kWh system would cost $14,700 and a 10 kWh system would cost $29,400. A 245% decrease in cost. The cost of wind was roughly $750/kW from 2000 to 2002 – now, in 2021, those costs are 1-2 cents per kilowatt-hour. We gave that space and ingenuity to wind and solar. They also received incentives to ensure they were deployed and could reach scale in a cost-efficient manner. So, if you apply that logic and time to CCUS technology, systems could greatly decrease. Why would we leave this option off the table? 2. We Need to Focus on New Cleaner Sources of Energy to Meet Our Climate Goals While we absolutely need to focus on developing new sources of energy to meet these goals, the reality is we will be using an increased amount of traditional fuels past 2050. The issue of climate change is real, and it is complex. There is no silver bullet to solving this problem. Policymakers, community leaders, and individuals need to work together to bring as many solutions to the table as possible to address the largest issue – emissions. New technology, with research, development, siting, permitting, construction, and more often need extended lead times that can be years and even decades do not help us with emissions now. CCUS in and of itself combined with the 45Q tax incentive is an effective and existing technology that can help address those emissions and give them a place to be housed. The expansion of 45Q and CCUS technology through research and development would help to greatly expand this much-needed technology and bring carbon capture to scale. Researchers, scientists, and investors are already working on a prototype for this technology that could be viable in the future called direct air capture. The bottom line is, do we want to address this technology now or in 10 years when we’re panicked and looking for new solutions to existing problems. 3. The Ongoing Use of Traditional Fuel The energy transition is upon us, yet we still need multiple sources of energy in order to live our everyday lives. As we move towards a lower-carbon future to address global warming, we’ll need every tool in the toolbox to tackle the problem. While this process takes place, there are additional means of emissions reductions that can be implemented now while we continue using traditional energy sources. CCUS is one of them. As other advanced technologies come onto the market to address climate change, CCUS is ready to actively capture carbon that would otherwise be in the atmosphere – both at the wellhead and at industrial facilities. With CCUS, we can capture the CO₂ from it and put it in storage. Remember it is called global warming, not America Warming. This is a clear win for our environment that we don’t have to wait for. Climate change is not a binary process, so we shouldn’t treat it with a binary solution. Everything we do here at home to mitigate emissions and conserve energy helps the collective human population. Net-zero is the low-hanging fruit in this case. The closer we can get to it through efficiency, conservation, and maximization of current resources – the better. Moving Forward That means opponents of the cost of CCUS technology need to take into account the total cost and complexity of the energy transition as a whole. While CCUS projects can be expensive, limiting the development and availability of CCUS would slow down and considerably increase the cost and complexity of the energy transition by increasing reliance on technologies that are currently more expensive and at earlier stages of development. Furthermore, not all CCUS projects are built the same. There are several types of CCUS projects based on source and there are still other types in development that will become more economically viable in the future. Given the current initial phase of the energy transition, CCUS technologies are among the cheapest (and sometimes only) options for reducing CO₂ emissions from heavy industry. Additionally, CCUS costs are already falling, with plenty of room for further reductions. According to the IEA, “Cost reductions have already been achieved at large-scale CCUS projects. For example, the cost of CO₂ capture in the power sector has come down by 35% through its evolution from the first to the second large-scale CCUS facility, and this trend is set to continue as the market expands.” These facts highlight the importance of the continued tax credits provided for CCUS just as they are for wind and solar generation. In fact, CCUS can support the integration of renewables in power systems as well, especially in regions where there are strong seasonal variations in renewable power generation. Just as with wind and solar, realizing the potential cost reductions in CCUS requires strong policy support in the near term so that we are able to use an all of the above approach to reach net-zero emissions. Thankfully, the Administration has made CCUS a top priority in their myriad climate goals, including a call for $75 million in funding to engineer carbon capture projects.

Policy. It is something our elected officials work on in Washington D.C. When the policies are meaningful enough or they affect people in ways we deem good or bad, the media often reports on them. Those policies are the rare few we hear about. More often than not, we don’t hear about the hundreds of policies created by Congress each year. One of those is the 45Q tax credit – a policy focused on reducing carbon emissions by building out carbon capture and sequestration technology. The 45Q tax credit for carbon capture and sequestration is an important, effective, and fast-acting government policy that can help to attack the climate crisis on a massive scale. Why? It tackles issues of climate change by slowing its effects and it’s something that we can address today. As it stands, the 45Q tax credit is effective today, but it only scratches the surface of what is possible. If Congress would enhance and extend the incentive, the scale and pace of this technology would only increase our ability to reduce greenhouse gas emissions, create thousands of well-paying jobs, maximize how we’re currently developing U.S. resources, and using industrial facilities (considered some of the largest sources of emissions), and it would help keep U.S. energy prices low. The effects would be unprecedented. What is the 45Q Tax Credit? Section 45Q of the US tax code provides a performance-based tax credit for tax-paying businesses who physically or contractually ensure the capture and secure geological storage or use of carbon dioxide (CO₂) that would otherwise be released to the atmosphere. As a performance-based tax credit, it means that the tax-paying business must prove and verify that it actually captured the CO₂ and disposed of it, or used it in a way that will prevent it from ever being released into the atmosphere. Once the CO₂ is captured and sequestered, the government will then help reduce the high cost of the project in the form of tax credits. For carbon capture projects, the tax credit can be claimed when an eligible project has:

• Securely stored the captured carbon dioxide (CO₂) in geologic formations, such as oil fields and saline formations; or
• Beneficially used captured CO₂ or its precursor carbon monoxide (CO) as a feedstock to produce fuels, chemicals, and other products in a way that results in emissions reductions as demonstrated by a life-cycle emission analysis of the product.

Why is the Section 45Q Carbon Capture Tax Credit important? At its core, the 45Q tax credit provides incentives to develop carbon capture projects that help slow the pace of climate change. Climate change is driven by the accumulation of greenhouse gases (GHG’s) in the Earth’s atmosphere. CO₂ is a major GHG and CCUS projects are designed to help drive down emissions of CO₂ here and now, to help meet our goals under the Paris Climate Agreement. Reducing those emissions is a vital piece of the puzzle to create a lower-carbon future. The 45Q helps accelerate the construction of facilities that capture, store and utilize carbon waste streams from current power plants and industrial facilities that use fossil fuels to generate electricity and produce many U.S. products including steel, cement, fertilizer, hydrogen, ethanol, and many other chemicals and materials that we use in everyday life. The more robust the 45Q tax credit is the more work we can do to enhance our ability to capture and store carbon. Why Should the 45Q Carbon Capture Tax Credit be extended and enhanced? Detailed analysis from Columbia University’s Center on Global Energy Policy shows in a report that the additional capital costs to retrofit a typical combined-cycle natural gas power plant and a coal power plant in the United States create a financing gap. Each project requires a certain amount of money to support things like research and development, operation, construction, future development, and more. If that project is short any amount of money, you have a gap. However, if projects have the ability to build in the incentive credit, project developers and investors know just how much money they need to raise to ensure a project can happen. Without that incentive, investments in CCUS technology might become unattractive to investors, thus limiting another piece of the puzzle that will help us meet our climate goals. Therefore, it is imperative to reduce investment risks and attract private capital to finance CCUS projects. AFL-CIO, Carbon Capture Coalition, Clean Air Task Force, Great Plains Institute, National Wildlife Federation, Third Way, and dozens of other institutions have written to Congress urging Senators and Members of the House to extend and enhance the 45Q tax credit to “expand and accelerate carbon capture deployment to reduce emissions, create and retain highly-skilled jobs that pay above prevailing wages and spur investment in domestic energy, industry, and manufacturing”. Whether you support energy development or you want to see new solutions for climate change, enhancing the 45Q tax credit is vital to future energy solutions.

Mike Butler, the Mid-Atlantic Director for the Consumer Energy Alliance, joined Rick Dayton to talk about 3 different factors that have impacted gas prices in PA, and across the country. Listen here – KDKA AM 1020

As consumers are paying more for life’s necessities, Consumer Energy Alliance commissioned an independent study examining the impact shutting down Line 5 would have on consumers across the Midwest which was cited as leading to higher energy costs.

A Line 5 shutdown would raise energy costs. Propane prices could rise by 10 to 14 cents per gallon, which is a 5-7% increase from residential propane prices in Michigan last March. If households in the Upper Peninsula opt to switch to electric heat, it could cost them over $25,000 initially and an additional $3,400 to $3,900 every year. And the regional economic impact would be devastating: Michigan alone could lose over $3 billion in economic activity, $1 billion in gross state product, and $58.6 million in state tax revenue, according to a report by the Consumer Energy Alliance.

Read more – Mackinac Center for Public Policy

Michael Zehr, CEA’s Federal Policy Advisor, commented on the announcement of the first offshore lease sales and their impact on American energy production.

“While we are glad that the Biden Administration has announced a resumption of offshore lease sales as it is legally obligated to do, the delay has been far too long and there are too many questions unanswered by today’s announcement,” he said. “It also creates unnecessary confusion, inconsistency and uncertainty for America’s energy producers.”

Read more – E&E News (subscription)

As local governments discuss ways to eliminate consumer choice by banning natural gas, CEA’s latest report, “The Hidden Costs of a Virginia Natural Gas Ban” was recently cited in a piece examining energy policies in Virginia.

The Consumer Energy Alliance (CEA) released a report, “The Hidden Costs of a Virginia Natural Gas Ban,” that indicates that a natural gas ban could cost every household in Virginia as much as $26,000 if the ban were forced onto families. The findings dovetail with previous research by CEA which found that the cost to replace just major gas appliances in homes nationwide would be more than $258 billion. The report also found that attempts to “electrify everything” would require a massive infrastructure buildout of over $100 billion in the state.

Read more – Institute for Energy Research

RICHMOND, VA – Consumer Energy Alliance (CEA), the leading energy and environmental advocate for families and businesses, today released a report that finds that a natural gas ban would cost every household in Virginia more than $26,000. The report, “The Hidden Costs of a Virginia Natural Gas Ban,” examines the impact of a natural gas ban if it were forced onto families and Virginians. Using open-source consumer data, CEA developed a cost calculator to provide an estimate of what a typical household in Richmond could expect to pay as a result of policies to ban natural gas service and use, depending on home configuration, appliances used and other factors. These findings dovetail with previous research performed by CEA which found that the cost to replace just major gas appliances in homes nationwide would be more than $258 billion. The report also found that attempts to “electrify everything” would require a massive infrastructure buildout of over $100 billion in the state. “With one in three Virginia households using natural gas for home heating, banning natural gas would be financially devastating to families who would have to pay upwards of $26,000 to involuntarily reconfigure their home and purchase new appliances. A ban on natural gas would also disproportionately harm the 9.9% of Virginians who live at or below the poverty level, those on fixed incomes, and businesses still recovering from the economic hardships of COVID-19; as energy bills will inevitably increase,” CEA Vice President of State Affairs Kevin Doyle said. Doyle added: “Natural gas is a critical resource for fueling Virginia’s families and businesses, but it has also been pivotal in the remarkable reductions in emissions that the state has achieved in recent years. Significant emissions reductions have occurred in Virginia while natural gas use has increased and expanded.” “Virginians want affordable, reliable, secure, and sustainable energy to power their businesses, homes, and communities. This CEA report clearly demonstrates that banning natural gas from the market as a fuel or a feedstock fails this consumer test. Clean natural gas must be part of our future,” said Brett Vassey, President and CEO of the Virginia Manufacturers Association. Doyle added: “Misguided attempts to ban energy services will only lead to undue financial burdens on Virginia’s families, seniors, small businesses and manufacturers and work against our environmental and climate goals. Consumers should retain the right to keep the energy service they want and choose appliances they wish to use – not activists with ill-considered agendas that put families last.” To view the report, click here. The Virginia Report is part of a series of CEA reports on the impact natural gas bans would have on states. For more, click here.

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About Consumer Energy Alliance Consumer Energy Alliance (CEA) is the leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future. With more than 550,000 members nationwide, we are committed to leading the nation’s dialogue around energy, its critical role in the economy, and how it supports the vital supply chains for the families and businesses that depend on them. CEA works daily to encourage communities across the nation to seek sensible, realistic, and environmentally responsible solutions to meet our nation’s energy needs. Contact: Bryson Hull (202) 657-2855 bhull@consumerenergyalliance.org

Washington, D.C. –Consumer Energy Alliance (CEA) Federal Affairs Adviser Michael Zehr today thanked CEA’s member Tom Greer for his important testimony before the House Small Business Committee Subcommittee on Innovation, Entrepreneurship, and Workforce Development at a hearing entitled “Wealth for the Working Class: The Clean Energy Economy.” As the owner-operator of Hub City Brewing Company in Belen, New Mexico, Greer shared his perspective of how everything from overregulation and supply chain issues to energy cost increases have a negative effect on America’s small businesses. “As we strive to reach our nation’s economic and environmental aspirations and expand the availability of low-emission energy production from renewables, advanced nuclear and hydro, we must also improve the efficiency and overall emissions from traditional fuels. Such a balanced approach is needed by virtually every aspect of our economy, from small businesses – like Tom Greer’s brewery – to agriculture, steel manufacturing and textiles,” Zehr said. “We thank Tom for shedding light on the many challenges our small businesses across the nation are facing. These staples of our communities are always hurt by rising energy costs, which go right to their bottom lines,” Zehr said. “It’s important to keep in mind the role lower-emitting traditional energy sources will play in our energy future, along with advanced technologies and renewables, to help ensure our communities, families and small businesses’ day-to-day economic and energy needs are met, without placing anyone at risk of financial harm.” As part of CEA’s national consumer advocacy, CEA’s Campaign for New Mexico’s Energy has recently launched a new Community Commitment initiative focused on working with New Mexicans and local businesses to build and sustain an energy future that balances environmental aspirations with economic realities. The initiative highlights how the responsible development of all of New Mexico’s energy resources, from solar to wind to natural gas, can help sustain its neighbors, restaurants and breweries, local businesses, tribal nations and families who depend on a healthy economy to put food on the table. To learn more, please visit https://consumerenergyalliance.org/campaign-for-americas-energy/new-mexico.

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About Consumer Energy Alliance Consumer Energy Alliance (CEA) is the leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future. With more than 550,000 members nationwide, we are committed to leading the nation’s dialogue around energy, its critical role in the economy, and how it supports the vital supply chains for the families and businesses that depend on them. CEA works daily to encourage communities across the nation to seek sensible, realistic, and environmentally responsible solutions to meet our nation’s energy needs. Contact: Bryson Hull (202) 657-2855 bhull@consumerenergyalliance.org