Central Louisiana News

U.S. Senators Bill Cassidy, John Barrasso, and James Lankford have introduced the Enhanced Energy Recovery Act, a bill aimed at improving carbon capture incentives and energy production. The legislation seeks to create parity under the Section 45Q carbon capture tax credit by providing equal treatment for carbon captured for increased energy production, utilization, and sequestration.

"Building the infrastructure to capture carbon in Louisiana will create tens of thousands of jobs and there will be tens of billions of dollars of investment," said Dr. Cassidy. "This will help Louisiana continue to lead as an energy and manufacturing state."

Senator Barrasso highlighted Wyoming's leadership in carbon capture projects: "For years, Wyoming has proudly led the way on carbon capture projects. We’ve successfully used this technology to take carbon out of the air and find productive uses for it. One of those uses includes enhanced oil and natural gas recovery – a technique that significantly increases energy production while reducing carbon emissions."

Barrasso added that recent changes to Section 45Q have made it harder for American energy producers and manufacturers to use this credit. "The Enhanced Energy Recovery Act fixes this policy by ensuring equal treatment for energy production, utilization, and sequestration. This will bolster our nation’s energy security, support Wyoming’s energy workers, and help lower costs for American families."

The Enhanced Energy Recovery Act aims to increase the effective value of the 45Q tax credit for captured carbon used in enhanced oil recovery (EOR) and utilization to match that of sequestration. Currently, the full tax credit incentive for carbon used in EOR and utilization is $60 per metric ton, while the value for sequestration is $85 per metric ton. The bill proposes setting all three values at $85 per metric ton.

Additionally, the bill addresses Direct Air Capture (DAC), increasing the value of DAC-captured carbon used for EOR and utilization from $130 per metric ton up to $180 per metric ton, aligning with the current value of captured carbon used in sequestration.