Proposed government–provided incentives to promote the capture and use of CO2 for EOR: Options for incentivising large–scale CCS/CCUS projects in budget constrained times
It is widely recognised that additional large–scale early mover projects are needed to advance CCS/CCUS. These projects will reduce CCS cost through ‘learning by doing’ and by serving as platforms to demonstrate emerging lower-cost technologies. They will also increase public confidence in the safety and efficacy of CCS. However, high capture costs and lack of incentives are discouraging new large–scale projects from entering the planning pipeline and making it difficult for existing projects to reach a financial investment decision.
The National Enhanced Oil Recovery Initiative (NEORI) and the Coal Utilization Research Council (CURC) have each developed concepts for incentivising large–scale projects through a tax credit tied to the use of captured CO2 for enhanced oil recovery. Both organisations estimate that the government would recover its credit investment within 10 years from tax and royalty revenue received on additional oil production, and that the investment would become revenue positive for the government thereafter.
A Global CCS Institute webinar was held on Wednesday 26th June where Patrick Falwell, Solutions Fellow for the Centre for Climate and Energy Solutions (C2ES), on behalf of Judi Greenwald, Vice President for Technology and Innovation at the Center for Climate and Energy Solutions (C2ES), discussed the NEORI concept. Patrick was joined by Ben Yamagata, Executive Director of CURC, who discussed the CURC concept.
A recording of the webinar and a browsable version of the slides used in the presentation are available as an insight.