In an otherwise dour outlook on the world's chances of recovering from climate change, the International Energy Agency director named one bright prospect that arrived this year bearing President Trump's signature.
IEA Executive Director Fatih Birol said the world is unlikely to achieve its Paris Agreement obligations without "major, huge technological breakthroughs," but the 2018 federal budget could spur a breakthrough in carbon capture and sequestration.
"There is one political move recently that I should say, I welcome this strongly," Birol said, pointing to changes to the Section 45Q tax credit for carbon sequestration.
Carbon capture and sequestration was long the object of bipartisan neglect because Democrats didn't want to extend the life of fossil fuels and Republicans didn't want to admit to anthropogenic climate change. That began to change as the effects of climate change grew more palpable, and the chances dimmed of mitigating it without capturing carbon emissions.
So a bipartisan group of senators led by Heidi Heitkamp (D-ND), John Barrasso (R-WY), Sheldon Whitehouse (D-RI) and Shelley Moore Capito (R-WV) worked to strengthen a carbon capture tax credit that already existed in U.S. law. The old credit had offered a $10 per ton credit for CO2 used for enhanced oil recovery and $20 for other permanent forms of sequestration.
The oil and gas industry backed efforts to boost the credit because drillers can pump CO2 into wells to force out oil and gas, then seal the wells, leaving the CO2 underground and benefiting from the tax credit.
The Senators' effort was incorporated in the Bipartisan Budget Act of 2018, which passed in the early morning of Feb. 9 after a nine-hour government shutdown and was signed by Trump later that day. The new law scales the tax credit as high as $35 for enhanced oil recovery and $50 for other forms of sequestration.
CCS is crucial to climate efforts, Birol said, because fossil fuels are not going away. Even though renewables have become cheaper and are being deployed at increasing rates, the percentage of energy that comes from fossil fuels is about the same as it was 30 years ago, he said: 81 percent.
"There is one technology that can bring this fact together with the climate cause, and that is CCS," Birol said. Investment into carbon capture has so far languished, representing only 0.1 percent of clean-energy investments.
"This is the reason I think this new tax credit in the U.S. may be the driver for it."
Date: Jul 9, 2018