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Strange Bedfellows Supporting Carbon Capture Tax Credit

A push for Congress to extend tax credits for carbon capture and sequestration has a diverse group of advocates, including some who make unlikely bedfellows.

Organizations ranging from think tanks to coal companies to environmental groups sent a letter this week to U.S. Senate Committee on Finance chairman Orrin Hatch and Ranking Member Ron Wyden, asking the senators to extend a tax credit for companies that capture and sequester the carbon dioxide from fossil fuel plants.

The groups are asking Hatch and Wyden to extend the tax credit in a bill that funds the Federal Aviation Administration. There’s already a tax credit for carbon capture, but it includes a cap of 75 million tons of carbon. The extension would eliminate the cap.

It’s not surprising that coal and energy companies support tax breaks for advanced coal technology — coal’s share of the nation’s energy mix is falling, and many think perfecting the technology to sequester greenhouse gases is the best hope for the industry.

“Commercializing carbon capture, use and storage technology is essential for meeting the world’s energy and economic goals,” said Peabody Energy CEO Glenn Kellow in a news release earlier this year.

But environmental groups have signed on, too.

“Our perspective is, we think carbon capture and storage is one of the key tools that we need in order to really decarbonize the planet,” said Kurt Waltzer of Clean Air Task Force.

Waltzer said to slow the greenhouse gases that are contributing to climate change, widespread deployment of carbon capture is necessary. And he and others see the tax credit as one way to make that happen.

Carbon capture technology itself is proven but isn’t widely used in the U.S. because it’s expensive. Marc Boom of the Natural Resources Defense Council — another group supporting the tax credit — said he can easily see the economics behind carbon capture changing.

“I think that in a future where we’re looking at a Clean Power Plan being in place or some type of carbon emissions reduction scheme in place, that the economics of this look a lot better,” Boom said. “So the tax credit is important to build in some certainty for those who are developing power plants to know that this technology could be there to help reduce those climate emissions.”

There’s currently a small-scale carbon capture project happening in Kentucky; a system is capturing gas from about 2 megawatts at Kentucky Utilities’ E.W. Brown plant.


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