On Wednesday, January 28, the US House of Representatives passed the American Recovery and Reinvestment Act (H.R. 1), a high-profile economic stimulus package that has dominated the Presidential and Congressional agenda since the beginning of the year.  The House bill appropriates $2.4 billion for research, development, and demonstration projects addressing: 1) Fundamental science and engineering research related to carbon capture and storage (CCS); 2) Field validation testing activities (in a variety of candidate geologic settings, including operating and depleted oil and gas fields); and 3) Large-scale carbon dioxide sequestration testing. In addition, the House bill establishes an enhanced tax credit for research expenses related to carbon capture and sequestration.

With the House Bill approved, attention now shifts to the Senate where, on Tuesday, the Appropriations Committee reported out the funding portion of the Senate stimulus package, including $2 billion for one or more near-zero emissions fossil-fuel powerplants, $1 billion for the Department of Energy’s Clean Coal Power Initiative, and $1.6 billion for projects that demonstrate carbon capture from industrial sources.  The $2 billion for near-zero emissions fossil-fuel power plants is likely a nod to FutureGen, which has been a priority project for Illinois Senator and Appropriations Committee member  Dick Durbin.  That same day, the Senate Finance Committee reported out tax provisions for the Senate stimulus bill that included an “Enhanced Research Tax Credit” similar to that passed in the House and an additional “Advanced Energy Investment Credit,” establishing a new 30 percent investment tax credit for facilities engaged in the manufacture of CCS equipment and a number of other advanced energy technologies.

The dueling stimulus packages have a ways to go before CCS advocates can start counting on the new funding, but based on what we have seen from the House and Senate so far, 2009 could be a very productive year for CCS infrastructure development in the US.

For further information about this topic, please contact Akin Gump.