Capturing carbon dioxide and permanently storing it below ground is expected to be a critically important tool in the global effort to reduce greenhouse gas (GHG) emissions. The oil and gas industry has been a leader in showing how CO2 –– albeit mostly CO2 that is produced from underground reservoirs, not captured from industrial facilities or power plants — can be used and sequestered via enhanced oil recovery (EOR). The catch is that capturing CO2 and using it for EOR or injecting it into deep wells for eternal storage doesn’t come cheap and so government incentives are required to justify investment in carbon-capture projects. Enter the 45Q tax credit. First made available for U.S. carbon-capture projects in 2008, it has been expanded considerably since then and could soon be expanded further, although its results to date are a mixed bag at best. In today’s RBN blog, we discuss key aspects of the tax credit, how it has changed over time, and what may be coming down the pipeline.
Carbon-capture projects have been a frequent topic in the RBN blogosphere due to its appeal to the energy industry, as described in Bullet the Blue Sky, and the attention it has received in Canada, which we detailed in our Forever And For Always series. We took a deep dive into carbon sequestration in Part 1 of this series. Sequestration is the permanent storage of CO2 in the ground with the aim of keeping that important GHG permanently out of the atmosphere. If CO2 is captured and stored, and that’s all, the process is called carbon capture and sequestration (CCS). If the CO2 is used for some other process (such as EOR) before it’s stored, it’s called carbon capture, use, and sequestration (CCUS). We also talked quite a bit about how CO2 is transported and the U.S. pipeline networks that exist to move it from place to place.
We turned our focus in Part 2 to the CO2 value chain, tracing CO2 from its initial sources of supply (either manmade or naturally occurring) through EOR and onto a wide variety of end uses, from industrial processes like fertilizer production to use in the food and beverage industries.
Now that we’ve covered the basics of upstream and downstream CO2 markets, we’ll turn our attention to an economic incentive that aims to promote major investments across the energy landscape — the Internal Revenue Code’s carbon oxide sequestration credit, better known as 45Q. The measure has drawn a lot of attention in recent months, both from those who see it as a tool to aid in the energy transition and the push for cleaner energy, as well as those who see the potential for the credit to help support low-carbon project economics. We’ll also mention a couple of highly touted projects that ultimately failed, but defer our judgment of the policy’s current and future effectiveness for another blog in this series.
RBN’s U.S. Gulf Coast Hydrogen Infrastructure Map lays out the pipelines and merchant hydrogen plants that make up the gulf coast market, providing an unprecedented snapshot of the region’s hydrogen infrastructure network.
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About the song
“Way Down in the Hole” was written by Tom Waits and appears as the second song on side two of Waits' 10th studio album, Franks Wild Years. The song was used as the theme song for the HBO crime drama series, The Wire. The series ran for five seasons from 2002-08. In addition to Waits’ version, a different recording of “Way Down in the Hole” was used for each season, including versions by The Blind Boys of Alabama, The Neville Brothers, DoMaJe, and Steve Earle. Personnel on the Waits record were: Tom Waits (vocals, pump organ), Marc Ribot (guitar), Greg Cohen (bass), Michael Blair (drums, percussion), Ralph Carney (sax), and Angela Brown, Leslie Holland, and Lynne Jordan (backing vocals).
Franks Wild Years was recorded during 1987 at Universal Recording in Chicago, and The Sound Factory and Sunset Sound in Hollywood. The album contains songs written for a play of the same name. Several songs from the album have appeared in television shows, movies, and stage productions. Produced by Waits, the album was released in August 1987 and went to #115 on the Billboard Top 200 Albums chart.
Tom Waits is an American songwriter, singer, musician, and actor. He began his professional career performing on the San Diego folk circuit as a teen in the late 1960s. He moved to Los Angeles in 1972, where he worked as a songwriter before securing his first record deal with Asylum Records. He has released 17 studio albums, three live albums, seven compilation albums, two soundtrack albums, and 24 singles. His songs have been covered by many artists from different genres. Waits has appeared in over two dozen motion pictures. He was inducted into the Rock and Roll Hall of Fame in 2011. His last tour was in 2008 and his last LP, Bad as Me, was released the same year. He has a featured role in the movie Licorice Pizza, which was released in the U.S. in November 2021 and received an Oscar nomination for Best Picture.
