[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2287 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2287

   To facilitate the development and commercial deployment of carbon 
    capture and sequestration technologies, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 5, 2014

 Mr. Rockefeller (for himself and Mr. Walsh) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To facilitate the development and commercial deployment of carbon 
    capture and sequestration technologies, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Capture and Sequestration 
Deployment Act of 2014''.

      TITLE I--CARBON CAPTURE AND SEQUESTRATION INNOVATION PROGRAM

SEC. 101. PARTNERSHIPS FOR CARBON CAPTURE AND SEQUESTRATION.

    (a) Establishment of Program.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Energy (referred to in 
        this Act as the ``Secretary'') shall establish a cooperative 
        industry-government research and development program, in 
        addition to and in cooperation with the carbon capture and 
        sequestration research and development program of the Office of 
        Fossil Energy, to demonstrate novel and innovative 
        technologies--
                    (A) to capture or prevent carbon dioxide emissions 
                from carbon-based fuels;
                    (B) to enable the beneficial use of carbon dioxide; 
                or
                    (C) to enable the long-term storage of carbon 
                dioxide.
            (2) Participation of national laboratories and 
        universities.--The program--
                    (A) shall include the participation of the National 
                Energy Technology Laboratory; and
                    (B) may include the participation of other National 
                Laboratories, institutions of higher education, and 
                other appropriate entities.
    (b) Cost Sharing.--For purposes of developing and demonstrating the 
technologies or approaches referred to in subsection (a)(1)--
            (1) the Secretary shall provide at least 80 percent of the 
        cost of the development projects; and
            (2) the industry participant shall provide not more than 20 
        percent of the cost of the development projects.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $110,000,000 for each of fiscal years 2015 through 
        2019;
            (2) $60,000,000 for each of fiscal years 2020 through 2024; 
        and
            (3) $30,000,000 for each of fiscal years 2025 through 2029.

SEC. 102. ANNUAL DEPARTMENT OF ENERGY ASSESSMENT.

    (a) In General.--
            (1) Department of energy report.--Not later than 1 year 
        after the date of enactment of this Act and annually thereafter 
        until the Secretary determines that technology preventing the 
        emission of, capturing, transporting, permanently storing or 
        sequestering, or putting to beneficial use carbon dioxide is 
        available to the commercial marketplace, the Secretary shall--
                    (A) conduct an assessment in accordance with 
                subsection (b) of the existing Federal programs 
                supporting the technology; and
                    (B) submit to the appropriate authorizing and 
                appropriating committees of Congress a report on the 
                results of the assessment.
            (2) Government accountability office review.--Not later 
        than 1 year after the first report is provided to the 
        appropriate authorizing and appropriating committees of 
        Congress under paragraph (1)(B) and subsequently as needed 
        until technology preventing the emission of, capturing, 
        transporting, permanently storing or sequestering, and putting 
        to beneficial use carbon dioxide is available to the commercial 
        marketplace, the Comptroller General of the United States shall 
        conduct a review of the report described in paragraph (1)(C) in 
        accordance with subsection (c).
    (b) Department of Energy Report Requirements.--The Secretary shall 
include in the report required under subsection (a)(1)(B)--
            (1) a detailed description of the existing programs, 
        including each major program area, that conduct or support 
        research, development, demonstration, and deployment of 
        technology--
                    (A) to prevent the emission of carbon dioxide or to 
                capture carbon dioxide from sources, including fossil 
                fuel-based power plants;
                    (B) to transport carbon dioxide;
                    (C) to store or sequester captured carbon dioxide 
                permanently; or
                    (D) to put captured carbon dioxide to beneficial 
                use;
            (2) an assessment, based on Federal Government laboratory 
        research experience, available industry research experience, 
        and such other data and information as the Secretary considers 
        useful and appropriate, to determine whether each major program 
        area and principal projects within the areas described in 
        paragraph (1) are designed to, and will advance fundamental 
        knowledge or achieve significant technical advancement and 
        materially improve the technology base to effectively address 
        the prevention of carbon dioxide emissions or capture of carbon 
        dioxide or the transport, permanent storage, or beneficial use 
        of captured carbon dioxide; and
            (3) an assessment of the estimated timeframe and costs of 
        the Secretary necessary to reasonably conclude that technology 
        will be available to the commercial marketplace.
    (c) Government Accountability Office Review Requirements.--The 
Comptroller General of the United States shall include in the review 
required under subsection (a)(2)--
            (1) an analysis of the estimated timeframes and costs of 
        the Secretary, as reported pursuant to subsection (b)(3);
            (2) any recommendations that the Comptroller General of the 
        United States considers appropriate and useful to improve the 
        likelihood of achieving technological advancements to mitigate 
        carbon dioxide emissions or to expedite the availability of 
        carbon capture and sequestration technology for the commercial 
        marketplace;
            (3) an assessment of any legal or regulatory impediment by 
        any Federal agency or department that has arisen in relation to 
        the deployment of carbon capture and storage technology, 
        including any delays in the permitting of the technology or the 
        construction or operation of any facility; and
            (4) any other analyses the Comptroller General of the 
        United States considers necessary or appropriate.
    (d) Budget Request Report.--In the budget requests for each of 
fiscal years 2016 through 2030, the President shall include in the 
budget request of the Secretary for the Fossil Energy Program a report 
that assesses--
            (1) the progress of the Secretary in implementing the 
        recommendations of the Comptroller General of the United States 
        and compares the estimated costs of completing implementation 
        of those recommendations to the requested budget levels; and
            (2) the progress made for the preceding fiscal year toward 
        achieving the goals of the program for which funding is 
        requested.

             TITLE II--CARBON DIOXIDE SEQUESTRATION CREDIT

SEC. 201. MODIFICATIONS TO CARBON DIOXIDE SEQUESTRATION CREDIT.

    (a) Allocation and Certification of Credit.--
            (1) In general.--Subsection (e) of section 45Q of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(e) Limitation.--
            ``(1) Allocation limitation.--No credit shall be allowed 
        under subsection (a) with respect to qualified carbon dioxide 
        captured by carbon capture equipment at a qualified facility 
        for the amount of qualified carbon dioxide captured by such 
        carbon capture equipment in excess of--
                    ``(A) the portion of the national limitation 
                allocated with respect to such carbon capture equipment 
                under subsection (f), over
                    ``(B) the amount of qualified carbon dioxide 
                captured by such carbon capture equipment during 
                periods before August 1, 2015, for which a credit under 
                subsection (a) was allowed.
            ``(2) National limitation.--For purposes of paragraph 
        (1)(A), the national limitation is the excess of--
                    ``(A) 75,000,000 metric tons of qualified carbon 
                dioxide, over
                    ``(B) the number of metric tons of qualified carbon 
                dioxide captured before August 1, 2015, for which a 
                credit under subsection (a) was allowed.''.
            (2) Allocation and certification.--Section 45Q of such Code 
        is amended by adding at the end the following new subsection:
    ``(f) Allocation for and Certification of Carbon Capture 
Projects.--
            ``(1) Establishment of procedures.--Not later than July 1, 
        2015, the Secretary shall establish, by regulation, processes 
        and procedures--
                    ``(A) for allocating the national limitation under 
                subsection (e)(2) to projects for placing carbon 
                capture equipment in service at qualified facilities, 
                and
                    ``(B) for certifying projects for which an 
                allocation has been made under subparagraph (A).
            ``(2) Allocations.--
                    ``(A) Application.--Each applicant for an 
                allocation under this subsection shall submit an 
                application to the Secretary under such terms and 
                conditions as are established by the Secretary in 
                regulations.
                    ``(B) Priority.--The Secretary shall rank 
                applications received under subparagraph (A) in the 
                following order:
                            ``(i) Applicants with applications received 
                        by the Secretary on an earlier date shall be 
                        given higher priority than applicants with 
                        applications received on a later date. For 
                        purposes of this clause, any application 
                        received before the date that is 30 days after 
                        the procedures and processes described in 
                        paragraph (1) are established shall be 
                        considered to have been received on such date.
                            ``(ii) In the case of applications received 
                        on the same date, those applicants concurrently 
                        applying for certification shall be given 
                        higher priority.
                            ``(iii) In the case of applications 
                        received on the same date and concurrently 
                        applying for certification, those projects with 
                        the earlier date by which construction 
                        commenced shall be given higher priority.
                    ``(C) Allocation to applicants.--Subject to 
                subparagraph (D), the Secretary shall allocate tonnage 
                to each applicant--
                            ``(i) based on the amount requested on the 
                        application, and
                            ``(ii) in order of the rank of the 
                        application under subparagraph (B),
                until the amount of tonnage available under this 
                section is exhausted. Projects for which no or a 
                partial allocation is made shall retain their ranking 
                and shall be eligible to receive an allocation of 
                tonnage previously allocated that is forfeited or 
                recaptured.
                    ``(D) Limitation.--The Secretary may not allocate 
                to any project more than the lesser of--
                            ``(i) the number of metric tons of 
                        qualified carbon dioxide projected to be 
                        captured at the qualified facility under the 
                        project during the 10-year period beginning on 
                        the date on which such project is placed in 
                        service,
                            ``(ii) the number of metric tons of 
                        qualified carbon dioxide projected to be 
                        captured at the qualified facility under the 
                        project--
                                    ``(I) which are subject to a 
                                written, binding contract for disposal 
                                in secure geological storage (whether 
                                or not used as a tertiary injectant), 
                                or
                                    ``(II) for which there is a plan 
                                for such disposal by the applicant, or
                            ``(iii) 15,000,000 metric tons of qualified 
                        carbon dioxide.
                    ``(E) Reduction for prior credits.--The amount of 
                any allocation under subparagraph (C) to any project 
                shall be reduced by the number of metric tons of carbon 
                dioxide captured by the carbon capture equipment with 
                respect to such project before August 1, 2015, for 
                which a credit was allowed under subsection (a).
            ``(3) Certification.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) with respect to any project for using 
                carbon capture equipment to capture qualified carbon 
                dioxide at a qualified facility before the date on 
                which such project is certified under this paragraph.
                    ``(B) Application for certification.--Each project 
                which is allocated a portion of the national limitation 
                shall submit an application for certification to the 
                Secretary containing such information as the Secretary 
                may require. Such application shall be submitted--
                            ``(i) not later than--
                                    ``(I) 6 months after the date on 
                                which such project receives an 
                                allocation, and
                                    ``(II) 30 days after the later of 
                                the date on which the regulations, 
                                processes, and procedures are 
                                established under paragraph (1) or the 
                                construction start date, and
                            ``(ii) not earlier than the construction 
                        start date.
                For purposes of this subparagraph, the term 
                `construction start date' means the earlier of the 
                first date on which physical work on the project of a 
                significant nature is undertaken or the date by which 5 
                percent or more of the total cost of the project has 
                been spent.
                    ``(C) Revocation of certification.--
                            ``(i) Materially inaccurate 
                        representations.--The Secretary may revoke a 
                        certification under this paragraph if the 
                        Secretary determines that an applicant has made 
                        a materially inaccurate representation with 
                        respect to the project.
                            ``(ii) Failure to timely place equipment in 
                        service.--A certification under this paragraph 
                        shall be revoked in any case in which carbon 
                        capture equipment with respect to the project 
                        is not placed in service--
                                    ``(I) before the date which is 5 
                                years after the date on which the 
                                allocation was issued, in the case of a 
                                new industrial facility, or
                                    ``(II) before the date which is 3 
                                years after the date on which the 
                                allocation was issued, in the case of a 
                                modification of an existing industrial 
                                facility.
                    ``(D) Reallocation.--In any case--
                            ``(i) in which a certification is revoked 
                        under subparagraph (C), or
                            ``(ii) in which a taxpayer to whom an 
                        allocation is made under paragraph (2) fails to 
                        obtain certification for a project under this 
                        paragraph,
                the amount of national limitation which was allocated 
                to such project under paragraph (2) shall be 
                reallocated under such rules as established by the 
                Secretary under regulations.
            ``(4) Public disclosure.--
                    ``(A) In general.--The Secretary shall, within 30 
                days of making any allocation, certification, 
                revocation, or change in the ranking of projects, 
                publicly disclose the amount of such allocation, a 
                description of the project for which such allocation, 
                certification, or revocation was made, and the change 
                in the ranking of projects, as the case may be.
                    ``(B) Annual report.--The Secretary shall issue an 
                annual report summarizing credits allocated and 
                available for allocation.''.
            (3) Conforming amendments.--
                    (A) Paragraph (2) of section 45Q(c) of such Code is 
                amended by inserting ``which is part of a project which 
                is certified under subsection (f)(3)'' after ``carbon 
                capture equipment''.
                    (B) Paragraph (3) of section 45Q(c) of such Code is 
                amended by striking ``which'' and inserting ``at which 
                such carbon capture equipment''.
    (b) 10-Year Credit Limitation.--Section 45Q(a) of the Internal 
Revenue Code of 1986 is amended--
            (1) in paragraph (1)(A), by inserting ``during the 10-year 
        period beginning on the later of the date on which the carbon 
        capture equipment described in subsection (c)(1) is placed in 
        service or the date on which the project with respect to such 
        carbon capture equipment was certified under subsection 
        (f)(3)'' after ``qualified facility'', and
            (2) in paragraph (2)(A), by inserting ``during the 10-year 
        period beginning on the later of the date on which the carbon 
        capture equipment described in subsection (c)(1) is placed in 
        service or the date on which the project with respect to such 
        carbon capture equipment was certified under subsection 
        (f)(3)'' after ``qualified facility''.
    (c) Definition of Carbon Capture Equipment.--Section 45Q(d) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(8) Carbon capture equipment.--The term `carbon capture 
        equipment' means equipment to capture and pressurize qualified 
        carbon dioxide.''.
    (d) Credit Allowed to Taxpayer Performing Carbon Capture.--
            (1) In general.--Paragraph (5) of section 45Q(d) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(5) Person to whom credit is allowable.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or in regulations prescribed by the 
                Secretary, any credit under this section shall be 
                allowed to the taxpayer who--
                            ``(i) captures the qualified carbon 
                        dioxide, and
                            ``(ii) through contract or otherwise, 
                        disposes of the qualified carbon dioxide in a 
                        manner meeting the requirements of paragraph 
                        (1)(B) or (2)(C) of subsection (a), as the case 
                        may be.
                    ``(B) Election to allow credit to person disposing 
                carbon dioxide.--If the person described in 
                subparagraph (A) makes an election under this 
                subparagraph in such manner as the Secretary may 
                prescribe by regulations, the credit under this 
                section--
                            ``(i) shall be allowable to the person that 
                        disposes of qualified carbon dioxide in a 
                        manner meeting the requirements of paragraph 
                        (1)(B) or (2)(C) of subsection (a), as the case 
                        may be, and
                            ``(ii) shall not be allowable to the person 
                        described in subparagraph (A).''.
            (2) Conforming amendments.--
                    (A) Section 45Q(a) of such Code is amended by 
                striking ``by the taxpayer'' each place it appears in 
                paragraphs (1)(B), (2)(B), and (2)(C).
                    (B) Section 45Q(c) of such Code, as amended by 
                subsection (a), is amended by striking paragraph (1) 
                and redesignating paragraphs (2) and (3) as paragraphs 
                (1) and (2), respectively.
    (e) Rules Relating To Credit Recapture.--Paragraph (6) of section 
45Q(d) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new sentence: ``Notwithstanding section 7805(b), any 
regulation issued pursuant to this paragraph shall apply only with 
respect to qualified carbon dioxide captured or disposed of after the 
date on which such regulation is filed with the Federal Register.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to carbon dioxide captured after July 31, 2015.

  TITLE III--INCENTIVES FOR CARBON CAPTURE AND SEQUESTRATION PROJECTS

SEC. 301. FEDERAL FINANCIAL INCENTIVES.

    (a) Eligible Projects.--Section 1703 of the Energy Policy Act of 
2005 (42 U.S.C. 16513) is amended--
            (1) in subsection (b)(5), by inserting ``and projects 
        described in subsection (f)'' before the period at the end; and
            (2) by adding at the end the following:
    ``(f) Carbon Capture and Sequestration Projects.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Commercial scale.--The term `commercial 
                scale' means, with respect to an electric generation 
                unit, a unit that is designed--
                            ``(i) to generate and sell electric power 
                        directly to consumers or for resale; and
                            ``(ii) with a carbon dioxide capture system 
                        having a useful life of not fewer than 15 
                        years.
                    ``(B) Eligible unit.--The term `eligible unit' has 
                the meaning given the term in section 84E of the 
                Internal Revenue Code of 1986.
                    ``(C) Permanent geologic storage site.--The term 
                `permanent geologic storage site' means a site that--
                            ``(i) the Secretary determines is capable 
                        of storing carbon dioxide; and
                            ``(ii) is located in saline formations or 
                        other deep geologic storage structures.
            ``(2) Guarantees authorized.--Notwithstanding subsection 
        (a)(2), the Secretary may make guarantees in amounts totaling 
        not more than $20,000,000,000 for the following carbon capture 
        and sequestration projects:
                    ``(A) The construction of new industrial facility 
                units or commercial scale electric generation units 
                that are eligible units utilizing carbon capture and 
                sequestration technology.
                    ``(B) The retrofit of existing industrial facility 
                units or commercial scale electric generation units 
                that are eligible units providing for carbon capture 
                and sequestration.
                    ``(C) The construction of carbon dioxide 
                transmission pipelines to transport carbon dioxide from 
                carbon capture and sequestration facilities to--
                            ``(i) sequestration sites; or
                            ``(ii) sites where the carbon dioxide will 
                        be used for hydrocarbon recovery.
            ``(3) Certification of eligible units.--A unit shall not be 
        eligible to receive a guarantee under paragraph (2) unless the 
        Secretary has certified the unit pursuant to a certification 
        process established by the Secretary by rule.''.
    (b) Additional Authorization.--Section 1704 of the Energy Policy 
Act of 2005 (42 U.S.C. 16514) is amended by adding at the end the 
following:
    ``(c) Additional Authorization.--In addition to other amounts made 
available under this section, there is authorized to be appropriated 
such sums as are necessary to cover the credit loan subsidy costs 
associated with the guarantees described in section 1703(f).''.
    (c) Tax Credits.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        inserting after section 48D the following new section:

``SEC. 48E. PIONEER CCS FACILITIES.

    ``(a) Additional Qualifying Advanced Coal Project Credit.--For 
purposes of section 46, the qualifying advanced coal project credit for 
any taxable year shall also include an additional amount equal to the 
applicable percentage (as determined under subsection (c)) of the 
incremental cost for carbon capture and sequestration systems for 
eligible units, determined as follows:
            ``(1) For an eligible unit that is a new electric 
        generation unit, the incremental costs shall be the amount by 
        which the costs incurred by the taxpayer for the unit exceed 
        the costs of construction of a comparable supercritical 
        pulverized coal unit without carbon capture and sequestration 
        technology. To establish incremental costs, the taxpayer shall 
        obtain a certified report of a qualified independent engineer 
        estimating the differential construction cost between the 
        eligible unit and a comparably sized supercritical pulverized 
        coal unit without carbon capture and sequestration. The 
        independent engineer shall utilize cost estimates for 
        supercritical pulverized coal units available from Federal 
        agencies, academia and/or the private sector, appropriately 
        adjusted for size, fuel source and location. An engineering 
        design of a hypothetical supercritical pulverized coal unit 
        shall not be required to establish the incremental costs.
            ``(2) For an eligible unit that is a new industrial unit, 
        the incremental costs shall be the amount by which the costs 
        incurred by the taxpayer for the unit exceed the costs of 
        construction of a comparable industrial unit without carbon 
        capture and sequestration.
            ``(3) For an eligible unit that retrofits a carbon capture, 
        transportation, and sequestration system on an existing 
        generation or industrial unit, the incremental cost shall be 
        the construction costs incurred by the taxpayer for the carbon 
        capture and sequestration system.
            ``(4) The Secretary of Energy shall certify the amount of 
        incremental cost for carbon capture and sequestration systems 
        for eligible units in each case, based on appropriate 
        information.
    ``(b) Eligible Unit.--For purposes of this section, the term 
`eligible unit' means an electric generation unit or industrial 
facility unit located in the United States that--
            ``(1) uses coal or petroleum coke for at least 75 percent 
        of the fuel used by the unit,
            ``(2) uses carbon capture technology to capture and 
        sequester not less than 65 percent of the total carbon dioxide 
        emissions of the unit,
            ``(3) transports such captured carbon dioxide to a 
        permanent geologic storage site in the United States or to a 
        site on the North American continent for use for hydrocarbon 
        recovery, and
            ``(4) provides for the permanent storage of such carbon 
        dioxide in such site.
    ``(c) Applicable Percentage.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable percentage shall be the amount (expressed as a 
        percentage) equal to the sum of--
                    ``(A) 15 percent, and
                    ``(B) the amount (expressed as a percentage) which 
                bears the same ratio to 15 percent as the captured 
                emissions percentage (as determined under paragraph 
                (2)) bears to 35 percent.
            ``(2) Carbon dioxide emissions captured.--For purposes of 
        paragraph (1), the captured emissions percentage shall be equal 
        to--
                    ``(A) the percentage of total carbon dioxide 
                emissions of the eligible unit that is captured and 
                sequestered, minus
                    ``(B) 65 percentage points.
    ``(d) Election.--No costs for which a credit has been provided 
under section 48A or section 48B shall be eligible for a credit under 
this section.
    ``(e) Recapture.--The Secretary shall, by regulations, provide for 
recapturing the benefit of any credit allowable under subsection (a) 
with respect to any unit that fails to attain or maintain the 
requirements under subsection (b).''.
            (2) Clerical amendment.--The table of sections for subpart 
        E of part IV of subchapter A of chapter 1 of such Code is 
        amended by inserting after the item relating to section 48D the 
        following new item:

``48E. Pioneer CCS facilities.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to--
            (1) new facilities placed in service after December 31, 
        2014, and before January 1, 2026; and
            (2) the retrofit of existing facilities that commence 
        operation with the retrofit after December 31, 2014, and before 
        January 1, 2026.
                                 <all>