President Trump, at the urging of several Republican senators, directed White House staff to push the Treasury Department to complete pending rules for implementing carbon capture tax credits, according to a Republican senator.
Sen. John Barrasso of Wyoming, a strong supporter of carbon capture who is chairman of the Senate Environment and Public Works Committee, said during a hearing Wednesday that carbon capture was discussed during Republican senators’ meeting with Trump on Tuesday.
“Chairman Barrasso and Sen. [John] Hoeven encouraged President Trump to have the Department of Treasury complete its review of proposed rules for the 45Q carbon capture tax credit,” Mike Danylak, a spokesman for Barrasso, told the Washington Examiner. “The president directed his staff at the meeting to push for completion.”
Barasso and Hoeven, a North Dakota Republican, also pressured Trump’s nominee for the Energy Department’s No. 2 spot, Mark Menezes, about the tax credit guidance during a Wednesday confirmation hearing before the Senate Energy and Natural Resources Committee.
“It’s our understanding it’s forthcoming, and we are looking forward to that release,” Menezes told the senators, though he didn’t provide any more specifics.
Carbon capture developers have been waiting for more than two years for guidelines from the Treasury Department and the Internal Revenue Service on how the agencies intend to oversee the tax credit program. The Energy Department’s top fossil fuel office official said earlier this year the delayed rules have kept “billions of dollars” of potential carbon capture projects on the sidelines.
The IRS in February published the first pieces of the guidance, but it left critical questions unanswered. Those include tougher-to-resolve issues such as how companies must demonstrate they are securely storing carbon dioxide underground, in what situations the government can reclaim the tax incentive if projects fall short of requirements, and how to account for emissions reductions from carbon stored in products.
In recent weeks, Republicans and Democrats have ramped up pressure on the Trump administration to complete the rules, especially as carbon capture developers have suffered setbacks amid the pandemic. Members of both parties are also asking the Treasury to extend certain deadlines under the tax credit program to account for coronavirus-related delays.
Barrasso and Hoeven signed onto a bipartisan letter sent Monday pressing Treasury Secretary Steven Mnuchin on the issue.
If the Treasury intends to grant a one-year extension to “safe harbor” deadlines for wind and solar tax credits, it should provide similar relief to carbon capture developers, the group of seven senators wrote.
“In light of the wide-ranging impacts COVID-19 continues to have on the American economy, combined with the over two-year delay in final 45Q guidance, it makes sense to provide as much administrative flexibility as possible,” read the letter, led by North Dakota Republican Sen. Kevin Cramer and Rhode Island Democrat Sen. Sheldon Whitehouse.
Barrasso, during the Wednesday hearing, called on EPA Administrator Andrew Wheeler to prioritize rule-makings that support carbon capture development. The senator praised an April proposal from the EPA to grant Wyoming primary authority to permit and enforce so-called Class VI wells, which store carbon dioxide underground.
Wheeler, in response, said he supported Wyoming’s leadership on carbon capture. “We encourage other states actually to follow their example to implement and enforce this important program under the Safe Drinking Water Act,” he said.
Josh Siegel contributed to reporting.
