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LETTER: Governors support enhanced oil recovery technology

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June 3, 2016

Honorable Mike Conaway
U.S. House of Representatives
2430 Rayburn House Office Building
Washington, D.C. 20515

Honorable Heidi Heitkamp
United States Senate
110 Hart Senate Building
Washington, D.C. 20510

Honorable Shelley Moore Capito
United States Senate
172 Russell Senate Building
Washington, D.C. 20510

Dear Representative and Senators:

Western Governors support the responsible use of enhanced oil recovery (EOR) using carbon dioxide (CO2). We appreciate efforts to develop federal policy aimed at spurring deployment of this technology. Language contained in the bipartisan Carbon Capture Act (H.R. 4622) introduced in the House and in the similar bipartisan Senate companion measure filed as an amendment (S.Amdt. 3645) (1) would help increase the use of EOR technology by extending and expanding the availability and increasing the value and financial certainty of the Carbon Dioxide Sequestration Credit, found in section 45Q of the Internal Revenue Code of 1986. (2)

Given the importance of EOR to western states, the Governors enacted Western Governors’ Association (WGA) Policy Resolution 2015-06, Enhanced Oil Recovery, in June of last year. This resolution reads in part:

In recognition of the environmental and economic benefits of EOR, Western Governors support policies and incentives that advance investment in EOR projects, infrastructure, technology, and research.

Further, in order to expand deployment of CO2 capture at power plants and other industrial sources, the President and Congress should enact federal incentives to increase CO2 supply available for the oil industry to purchase and use in EOR. Federal incentives have the potential to leverage private and state investment, harness the ingenuity of entrepreneurs and capitalize on billions of dollars’ worth of DOE sponsored research and development to enable new commercial carbon capture and pipeline projects.

The use of CO2 for EOR was pioneered in the United States in the 1970s and since that time this technology has proven to be a safe and effective way to increase domestic oil production while sequestering millions of tons of CO2. Many western states represented through the WGA have indicated their commitment to CO2-EOR by proactively addressing then-existing regulatory barriers, establishing tax incentives, and providing financial assistance.

Western states look forward to helping provide for the energy needs of the United States through the continued efficient and responsible development of our natural resources. Western Governors stand behind federal policies – including H.R. 4622 and S.Amdt. 3645 – that enable development of new commercial carbon capture and pipeline projects in a cost effective manner.

Sincerely,

Matthew H. Mead
Governor of Wyoming
Chairman, WGA

Steve Bullock
Governor of Montana
Vice Chair, WGA

(1) Amends the Federal Aviation Administration Reauthorization Act of 2016 (H.R. 636).
(2) 25 U.S.C. § 45Q.

cc: Chairman Kevin Brady, House Committee on Ways and Means
Ranking Member Sander M. Levin, House Committee on Ways and Means

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