In response to various pressures on the energy industry to reduce the environmental impact associated with excess carbon dioxide emissions, many energy companies are investigating carbon capture and sequestration projects as a means of reducing their carbon emissions. In addition to reducing carbon emissions, carbon capture and sequestration projects often qualify for valuable income tax
Carbon capture, utilization, and storage (CCUS) projects involve various legal issues. Like traditional exploration and development, CCUS projects require the operator to secure both the necessary private property rights from landowners as well as regulatory approval from the appropriate administrative agency in order to proceed. This article focuses on the latter.
Regulatory approval for CCUS…
The Infrastructure Investments and Jobs Act (the “Act”), which was passed into law on November 15, 2021, included key amendments to the Outer Continental Shelf Lands Act (“OCSLA”) that pave the way for carbon sequestration in offshore federal waters.
Prior to the Act’s passage, OCSLA (as amended by the Energy Policy Act of 2005) authorized…
Governor Edwards’ Climate Initiatives Task Force, charged with making recommendations to reduce greenhouse gas emissions originating in Louisiana, recently took another step towards that goal.
Continue Reading Renewable Energy Efforts Highlighted in Draft Plan to Reduce Greenhouse Gas Emissions in Louisiana
On July 1, 2021, the Internal Revenue Service published Revenue Ruling 2021-13, which provides guidance on three important issues related to the income tax credit for carbon oxide sequestration found in section 45Q of the Internal Revenue Code. Recall that section 45Q provides for a credit against a taxpayer’s income tax liability based on the amount of carbon oxide (a) captured using carbon capture equipment, (b) placed in service at a qualified facility and (c) disposed of, injected, or utilized in a specified manner. For more information on carbon capture and section 45Q tax credits, see here, here and here.
Continue Reading New IRS Revenue Ruling Provides Opportunities for Financing Carbon Capture Equipment
On June 9, 2021, Texas Governor Greg Abbott signed House Bill 1284 (“HB 1284”), which was introduced along with its Senate companion, SB 450, during the state’s 87th legislative session. HB 1284 grants the Texas Railroad Commission (“RRC”), the governmental agency that regulates the state’s oil and gas industry, sole jurisdiction over Class VI Injection Wells and carbon capture, use, and sequestration (“CCUS”) activities in Texas.
Continue Reading New Legislation Signals Strong Support for CCUS in Texas
2021 is already poised to offer substantial growth in the area of carbon capture and sequestration (“CCS”). On January 21, Elon Musk announced on Twitter that he will donate $100 million to the “best” carbon capture technology, chosen through a competition whose details and judging criteria are yet to be announced. Further, on February 1…