IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v146y2020ics0301421520304973.html
   My bibliography  Save this article

Could congressionally mandated incentives lead to deployment of large-scale CO2 capture, facilities for enhanced oil recovery CO2 markets and geologic CO2 storage?

Author

Listed:
  • Edmonds, James
  • Nichols, Christopher
  • Adamantiades, Misha
  • Bistline, John
  • Huster, Jonathan
  • Iyer, Gokul
  • Johnson, Nils
  • Patel, Pralit
  • Showalter, Sharon
  • Victor, Nadja
  • Waldhoff, Stephanie
  • Wise, Marshall
  • Wood, Frances

Abstract

In passing the Bipartisan Budget Act of 2018, Congress reformed and strengthened a section of the tax code, 45Q, which provides tax credits of up to $35/ton CO2 for the capture and utilization of CO2 in qualifying applications such as enhanced oil recovery (EOR) and up to $50/ton CO2 for CO2 that is captured and permanently stored in a geologic repository. Earlier versions of the tax credit with lower credit values generated limited interest. This change to the tax code could potentially alter U.S. energy systems. This paper examines the effect of the increased 45Q credits on CO2 capture, utilization and storage (CCUS) deployment in the United States and on petroleum and power production. A range of potential outcomes is explored using five modeling tools. The paper goes on to explore the potential impact of possible modifications of the current tax credit including extension of its availability in time, the period over which 45Q tax credits can be utilized for any given asset and increases in the value of the credit as well as interactions with technology availability and carbon taxation. The paper concludes that 45Q tax credits could stimulate additional CCUS beyond that which is already underway.

Suggested Citation

  • Edmonds, James & Nichols, Christopher & Adamantiades, Misha & Bistline, John & Huster, Jonathan & Iyer, Gokul & Johnson, Nils & Patel, Pralit & Showalter, Sharon & Victor, Nadja & Waldhoff, Stephanie , 2020. "Could congressionally mandated incentives lead to deployment of large-scale CO2 capture, facilities for enhanced oil recovery CO2 markets and geologic CO2 storage?," Energy Policy, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:enepol:v:146:y:2020:i:c:s0301421520304973
    DOI: 10.1016/j.enpol.2020.111775
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421520304973
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2020.111775?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bistline, John & Santen, Nidhi & Young, David, 2019. "The economic geography of variable renewable energy and impacts of trade formulations for renewable mandates," Renewable and Sustainable Energy Reviews, Elsevier, vol. 106(C), pages 79-96.
    2. Clarke, John F. & Edmonds, J. A., 1993. "Modelling energy technologies in a competitive market," Energy Economics, Elsevier, vol. 15(2), pages 123-129, April.
    3. Bistline, John E. & Hodson, Elke & Rossmann, Charles G. & Creason, Jared & Murray, Brian & Barron, Alexander R., 2018. "Electric sector policy, technological change, and U.S. emissions reductions goals: Results from the EMF 32 model intercomparison project," Energy Economics, Elsevier, vol. 73(C), pages 307-325.
    4. Geoffrey J. Blanford & James H. Merrick & John E.T. Bistline & David T. Young, 2018. "Simulating Annual Variation in Load, Wind, and Solar by Representative Hour Selection," The Energy Journal, , vol. 39(3), pages 189-212, May.
    5. Muratori, Matteo & Ledna, Catherine & McJeon, Haewon & Kyle, Page & Patel, Pralit & Kim, Son H. & Wise, Marshall & Kheshgi, Haroon S. & Clarke, Leon E. & Edmonds, Jae, 2017. "Cost of power or power of cost: A U.S. modeling perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 861-874.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiao, Ting & Chen, Ting & Ma, Zhiwei & Tian, Hailong & Meguerdijian, Saro & Chen, Bailian & Pawar, Rajesh & Huang, Lianjie & Xu, Tianfu & Cather, Martha & McPherson, Brian, 2024. "A review of risk and uncertainty assessment for geologic carbon storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).
    2. Fan, Wei & Ju, Liwei & Tan, Zhongfu & Li, Xiangguang & Zhang, Amin & Li, Xudong & Wang, Yueping, 2023. "Two-stage distributionally robust optimization model of integrated energy system group considering energy sharing and carbon transfer," Applied Energy, Elsevier, vol. 331(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bistline, John E.T. & Young, David T., 2020. "Emissions impacts of future battery storage deployment on regional power systems," Applied Energy, Elsevier, vol. 264(C).
    2. Bistline, John & Blanford, Geoffrey & Mai, Trieu & Merrick, James, 2021. "Modeling variable renewable energy and storage in the power sector," Energy Policy, Elsevier, vol. 156(C).
    3. Bistline, John E.T. & Brown, Maxwell & Siddiqui, Sauleh A. & Vaillancourt, Kathleen, 2020. "Electric sector impacts of renewable policy coordination: A multi-model study of the North American energy system," Energy Policy, Elsevier, vol. 145(C).
    4. Ou, Yang & Shi, Wenjing & Smith, Steven J. & Ledna, Catherine M. & West, J. Jason & Nolte, Christopher G. & Loughlin, Daniel H., 2018. "Estimating environmental co-benefits of U.S. low-carbon pathways using an integrated assessment model with state-level resolution," Applied Energy, Elsevier, vol. 216(C), pages 482-493.
    5. Bistline, John E.T. & Blanford, Geoffrey J., 2020. "Value of technology in the U.S. electric power sector: Impacts of full portfolios and technological change on the costs of meeting decarbonization goals," Energy Economics, Elsevier, vol. 86(C).
    6. Bistline, John E.T. & Merrick, James H., 2020. "Parameterizing open-source energy models: Statistical learning to estimate unknown power plant attributes," Applied Energy, Elsevier, vol. 269(C).
    7. Yu, Sha & Yarlagadda, Brinda & Siegel, Jonas Elliott & Zhou, Sheng & Kim, Sonny, 2020. "The role of nuclear in China's energy future: Insights from integrated assessment," Energy Policy, Elsevier, vol. 139(C).
    8. Mai, Trieu & Bistline, John & Sun, Yinong & Cole, Wesley & Marcy, Cara & Namovicz, Chris & Young, David, 2018. "The role of input assumptions and model structures in projections of variable renewable energy: A multi-model perspective of the U.S. electricity system," Energy Economics, Elsevier, vol. 76(C), pages 313-324.
    9. John E. T. Bistline & David T. Young, 2022. "The role of natural gas in reaching net-zero emissions in the electric sector," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    10. Sampedro, Jon & Kyle, Page & Ramig, Christopher W. & Tanner, Daniel & Huster, Jonathan E. & Wise, Marshall A., 2021. "Dynamic linking of upstream energy and freight demands for bio and fossil energy pathways in the Global Change Analysis Model," Applied Energy, Elsevier, vol. 302(C).
    11. Ruben Bibas & C. Cassen & Renaud Crassous & Céline Guivarch & Meriem Hamdi-Cherif & Jean Charles Hourcade & Florian Leblanc & Aurélie Méjean & Eoin Ó Broin & Julie Rozenberg & Olivier Sassi & Adrien V, 2022. "IMpact Assessment of CLIMate policies with IMACLIM-R 1.1. Model documentation version 1.1," Working Papers hal-03702627, HAL.
    12. Merrick, James H. & Bistline, John E.T. & Blanford, Geoffrey J., 2024. "On representation of energy storage in electricity planning models," Energy Economics, Elsevier, vol. 136(C).
    13. Yu, Sha & Eom, Jiyong & Evans, Meredydd & Clarke, Leon, 2014. "A long-term, integrated impact assessment of alternative building energy code scenarios in China," Energy Policy, Elsevier, vol. 67(C), pages 626-639.
    14. Turner, Sean W.D. & Hejazi, Mohamad & Kim, Son H. & Clarke, Leon & Edmonds, Jae, 2017. "Climate impacts on hydropower and consequences for global electricity supply investment needs," Energy, Elsevier, vol. 141(C), pages 2081-2090.
    15. Briera, Thibault & Lefèvre, Julien, 2024. "Reducing the cost of capital through international climate finance to accelerate the renewable energy transition in developing countries," Energy Policy, Elsevier, vol. 188(C).
    16. Fragkos, Panagiotis & Kouvaritakis, Nikos, 2018. "Model-based analysis of Intended Nationally Determined Contributions and 2 °C pathways for major economies," Energy, Elsevier, vol. 160(C), pages 965-978.
    17. Shao, Tianming & Pan, Xunzhang & Li, Xiang & Zhou, Sheng & Zhang, Shu & Chen, Wenying, 2022. "China's industrial decarbonization in the context of carbon neutrality: A sub-sectoral analysis based on integrated modelling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 170(C).
    18. Zhou, Yuyu & Clarke, Leon & Eom, Jiyong & Kyle, Page & Patel, Pralit & Kim, Son H. & Dirks, James & Jensen, Erik & Liu, Ying & Rice, Jennie & Schmidt, Laurel & Seiple, Timothy, 2014. "Modeling the effect of climate change on U.S. state-level buildings energy demands in an integrated assessment framework," Applied Energy, Elsevier, vol. 113(C), pages 1077-1088.
    19. Fujimori, Shinichiro & Masui, Toshihiko & Matsuoka, Yuzuru, 2015. "Gains from emission trading under multiple stabilization targets and technological constraints," Energy Economics, Elsevier, vol. 48(C), pages 306-315.
    20. Dranka, Géremi Gilson & Ferreira, Paula & Vaz, A. Ismael F., 2021. "A review of co-optimization approaches for operational and planning problems in the energy sector," Applied Energy, Elsevier, vol. 304(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:146:y:2020:i:c:s0301421520304973. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.