US Senator John Hoeven engaged with The Crude Life after the North Dakota Industrial Commission (NDIC) approved the Class VI permit for the geologic storage of CO2 from Project Tundra. This carbon capture, utilization and storage (CCUS) project is able to advance due to the 45Q tax credit, which helps make efforts like this commercially-viable by providing up to $50 per ton of CO2 stored. Hoeven previously worked to pass legislation to reform and expand the 45Q tax credit, and secured final 45Q regulations last year.
Further, today’s approval was made using authority that Hoeven worked to put in place. His efforts include:
- As governor, implementing a regulatory framework for carbon storage in the state when he established the North Dakota CO2 Storage Workgroup in 2008 and advanced a bill through the legislature to grant this authority to the NDIC.
- The state also enacted legislation that granted ownership of the pore space to the owner of the overlying surface estate.
- As U.S. Senator, securing approval of the state’s application for regulatory primacy over the use of Class VI wells for geologic storage of CO2.
- North Dakota is one of only two states to have this regulatory authority.
“Through Project Tundra and similar efforts, North Dakota is leading the way in developing and implementing CCUS technologies, which will allow us to produce more energy from all of our abundant resources while reducing emissions,” said Hoeven. “We’ve worked since 2008 to lay the groundwork for CCUS in our state, and I appreciate the NDIC for making good use of the authority we’ve secured to help move Project Tundra forward. Now, we continue working to enhance the 45Q tax credit and make it more accessible to project developers, which is key to bringing these technologies to market.”
Securing the 45Q Tax Credit
The 45Q tax credit provides an important new revenue stream for CCUS projects of up to $50 per ton for CO2 permanently stored, or up to $35 per ton for CO2 stored and used for enhanced oil recovery. After helping pass legislation to reform and expand the 45Q tax credit, Hoeven worked to advance its implementation. His efforts included:
- Working closely with the Trump administration to move the final 45Q regulations
- Passing legislation providing a two-year extension on the construction deadline for the 45Q tax credit.
Cracking the Code on CCUS
Moving forward, Hoeven is advancing the following priorities to crack the code on CCUS, which will enable the nation to continue making use of its abundant energy resources, while reducing emissions:
- Front end investmentin technology development, including bolstering the partnership between the U.S. Department of Energy (DOE) and the University of North Dakota’s Energy & Environmental Research Center (EERC).
- Hoeven has secured $43 million in federal funding for Project Tundra to date.
- Loan guaranteesat DOE and the Rural Utilities Service (RUS) to help project developers secure financing to build the equipment and infrastructure needed to capture and store CO2.
- Enhancements for the 45Q and 48A Advanced Coal tax creditsto provide important revenue streams to project developers and encourage adoption of CCUS:
- Sponsored legislation to modernizethe 48A tax credit for CO2 capture retrofit projects.
- Helped introduce a bipartisan bill to provide a direct paymentoption for the 45Q and 48A CCUS tax incentives.
- Joined legislationto increase the value of the 45Q tax credit and make it more accessible to CCUS projects of all sizes.
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