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carbon capture
Exclusive: Khanna Proposes End to 'Unconscionable' Taxpayer Subsidies for Big Oil
"The fossil fuel industry receives over $20.5 billion in taxpayer dollars every year while fleecing American consumers and driving a global climate crisis," said the California Democrat.
Sep 26, 2024
As fossil fuel giants continue to rake in billions of dollars in profits, U.S. Rep. Ro Khanna on Thursday is reintroducing legislation to end giving billions in taxpayer dollars to companies that inject captured carbon dioxide into wells to extract more climate-wrecking oil.
"The fossil fuel industry receives over $20.5 billion in taxpayer dollars every year while fleecing American consumers and driving a global climate crisis," Khanna (D-Calif.) told Common Dreams. "The End Polluter Welfare for Enhanced Oil Recovery Act will eliminate the subsidy for captured carbon used for enhanced oil recovery, which only leads to more fossil fuel extraction and does nothing to mitigate climate change."
While advocates of carbon capture utilization and storage claim that it's necessary to address the fossil fuel-driven climate emergency, most CO2 captured in the United States is used to extract more planet-heating oil and gas, leading many scientists and green groups to argue that it is a "false climate solution."
"Oil drilling is the real story behind the fossil fuel industry's carbon capture obsession," said Jim Walsh, policy director at Food & Water Watch, which has endorsed Khanna's bill. "These corporate polluters are raiding public coffers from what could easily be hundreds of billions of dollars while greenwashing the further degradation of our climate."
Walsh also highlighted the impact on people who live near fossil fuel infrastructure, telling Common Dreams that "communities across the country are facing the potential for thousands of harmful industrial projects and tens of thousands of miles of dangerous pipelines that will do little more than put money in the pocket of the fossil fuel industry."
Despite such warnings, Congress has actually boosted Section 45Q tax giveaways for companies using captured CO2 for enhanced oil recovery (EOR) since Khanna first introduced the legislation in December 2021. The Inflation Reduction Act of 2022 was heralded as a "landmark" climate package for its investments in cleaner energy, but a little-noticed provision in the law increased the relevant credit for CO2 injection from $35 to $60 per metric ton.
"Taxpayers shouldn't be left footing the bill to help Big Oil boost its profits at the expense of our health and economy."
This year, 15 other House members are backing Khanna's bill, as are over a dozen organizations. Among them is Evergreen Action, which has spent years calling for reforms, including a June memo denouncing 45Q subsidies that encourage more fossil fuel production.
"It's unconscionable that American taxpayers are still subsidizing oil and gas companies to extract even more fossil fuels through so-called 'enhanced oil recovery,'" said Evergreen Action senior energy transition policy lead Mattea Mrkusic. "By eliminating these wasteful tax giveaways, Rep. Ro Khanna's bill takes a crucial step toward ending one of many federal fossil fuel handouts that drive climate pollution."
"Climate change is no longer a distant threat—it's happening right now, fueling more frequent and severe weather events, disproportionately impacting marginalized communities, and costing the American people billions every year," Mrkusic told Common Dreams. "Taxpayers shouldn't be left footing the bill to help Big Oil boost its profits at the expense of our health and economy. It's a perfect time to fully invest in our clean energy future instead."
Khanna's reintroduction of the End Polluter Welfare for EOR Act follows the hottest year in human history—a record that 2024 is expected to beat, with historic summer heat that led global scientists to demand urgent action to shift away from fossil fuels.
It also comes less than six weeks away from the U.S. general election, in which Americans are set to determine the makeup of Congress and the next occupant of the Oval Office. While Democratic Vice President Kamala Harris has the support of nearly every major climate group, former Republican President Donald Trump, who has pledged to swiftly gut federal climate policies if Big Oil puts $1 billion toward his campaign, has been dubbed an existential threat to progress on the climate crisis.
Regardless of who wins in November, there's also a looming Capitol Hill battle over taxation, given that policies Trump signed into law in 2017 are set to expire at the end of next year. As Common Dreamsreported in June, the climate movement sees that debate as an opportunity to end tax giveaways for the fossil fuel industry.
"Fossil fuel companies have raked in astronomical profits at the expense of communities while Big Oil and Gas lobbyists actively work to keep us hooked on their polluting products that perpetuate the climate crisis," said Mahyar Sorour, Sierra Club's director of beyond fossil fuels policy. "It is absurd that taxpayers should then also provide a blank check through subsidies, corporate giveaways, and sweetheart deals."
Sierra Club is supporting Khanna's bill, as are 350.org, Alliance for Affordable Energy, Center for Biological Diversity, Center for International Environmental Law, Climate Justice Alliance, Environment America, Friends of the Earth, Greenpeace USA, Oil Change International, Our Revolution, Oxfam America, Progressive Democrats of America, U.S. PIRG, and Zero Hour.
"We must end the billions of dollars in wasteful taxpayer subsidies to the fossil fuel industry," Sorour stressed. "Congress continues to say they are concerned about the country's deficit. Ending handouts to billion-dollar corporations that price gouge consumers and pollute our environment is a great way to reduce spending."
"We are grateful to Rep. Khanna for leading this legislation and look forward to supporting this and other types of similar legislation that hold Big Oil and Gas companies accountable," Sorour told Common Dreams.
Earlier this year, U.S. Sen. Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.) reintroduced the broader End Polluter Welfare Act, of which Khanna is a co-lead. Its sponsors say that by closing tax loopholes and ending corporate handouts to the fossil fuel industry, that bill "would save American taxpayers up to $170 billion over the next 10 years."
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Leak at First CO2 Injection Site in US Exposes Dangerous Folly of Carbon Capture
"This incident puts an exclamation point on concerns communities across the country have been raising for years about the dangers the CCS industry poses to public safety and drinking water," said one climate group.
Sep 13, 2024
Environmental groups said Friday that a newly reported leak at the first CO2 injection site in the United States highlights the threat—and false promise—of carbon capture and storage efforts, which climate advocates have long criticized as a ploy by the fossil fuel industry to preserve its extractive business model.
E&E Newsreported Friday that the Environmental Protection Agency (EPA) has "issued a violation notice to the operator of the country's first carbon dioxide injection wells for permanent storage, alleging that the company hasn't complied with its federal permit."
The facility operator is Archer Daniels Midland (ADM), an agribusiness giant that has received hundreds of millions of dollars in federal funding for carbon capture and storage (CCS) efforts—with underwhelming results.
E&E News published a three-page notice that the EPA sent to Archer Daniels Midland, alerting the company to a violation of the Safe Drinking Water Act at its CCS injection well in Decatur, Illinois.
The EPA said the company allowed "injection and formation fluids" to move into "unauthorized zones."
A spokesperson for ADM told E&E News that the company in March "detected some corrosion in a section of one of two deep monitoring wells at approximately 5,000 feet and below." According to E&E News, "that corrosion allowed CO2 and formation fluid to migrate into a formation where those liquids weren't permitted to go."
"There are significant risks at every step of the CCS process, and it's not a matter of if carbon sequestration facilities leak, but rather when."
Jim Walsh, policy director for Food & Water Watch, criticized the EPA for its "lack of transparency" surrounding the leak, adding that
"carbon dioxide injection wells are a dangerous endeavor, even if EPA does not capitulate to industry demands to rush permitting."
"This incident puts an exclamation point on concerns communities across the country have been raising for years about the dangers the CCS industry poses to public safety and drinking water," said Walsh. "The reality is this: CCS is a technologically unsound and economically unviable scheme, perpetuated by the fossil fuel industry to allow oil and gas companies to keep on drilling, keep on fracking, and keep on polluting our planet."
The Illinois Clean Jobs Coalition said in a statement Friday that the incident underscores that "there are significant risks at every step of the CCS process, and it's not a matter of if carbon sequestration facilities leak, but rather when."
"This incident demonstrates how important strict CCS regulations are to protect our communities and environment, and is exactly why we passed the CCS Protections Act in Illinois this year," the group said. "There are real concerns from many legislators, community partners, and Illinoisans who rely on public drinking water about the need for even stronger protections, and this incident shows that these concerns need to be taken seriously to ensure Illinoisians are protected to the fullest extent possible."
Concerns about leaks and other harms associated with CCS projects are expected to grow as the U.S. continues promoting them with taxpayer dollars.
"Federal and state regulators are reviewing 69 projects or permits to store CO2 underground, with 24 of those in Louisiana. Nine projects have already been approved while one more, in California, is pending," Inside Climate Newsreported earlier this year. "Companies plan to inject carbon dioxide into porous rock formations that are usually filled with brine containing not only extremely high salt levels but often heavy metals, hydrocarbons, and radioactive elements. Brine leaks, therefore, can be even more worrying than the escape of CO2."
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'Colossal Waste': US Leads Way in Public Spending on False Climate Solutions
"The fossil fuel industry delays climate action, distracts from real solutions that would end the fossil fuel era, and does everything in its power to squeeze the last drops of profit from a dying industry, at the expense of all of us."
Aug 29, 2024
Among the world's wealthiest countries, the U.S. leads the way in spending public money on so-called climate "solutions" that have been proven to "consistently fail, overspend, or underperform," according to an analysis released Thursday by the research and advocacy group Oil Change International.
The group's report, titled Funding Failure, focuses on international spending on carbon capture and fossil-based hydrogen subsidies, which continues despite ample data showing that the technological fixes have "failed to make a dent in carbon emissions" after 50 years of research and development.
The report details how five countries account for 95% of all carbon capture spending, with the U.S. investing the most taxpayer money in the technology, at $12 billion in subsidies over the last 40 years.
Norway comes in second with $6 billion going to carbon capture and storage, while Canada has spent $3.8 billion, the European Union has spent $3.6 billion, and the Netherlands has poured $2.6 billion into the technology, with which carbon dioxide emissions are compressed and utilized or stored underground.
"It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it."
Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, toldThe Guardian that the subsidies amount to a "colossal waste of money."
"It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it," said Singh.
While proponents claim carbon capture and storage reduces planet-heating carbon emissions, OCI notes, it was originally developed in the 1970s "to enhance oil production, and this remains its primary use," with the technology "barely" reducing emissions.
High-profile carbon capture failures in the U.S. include the Petra Nova project in Houston, Texas, which cost nearly $200 million in taxpayer funds and whose captured emissions were later used for crude oil production, and the FutureGen project, "which swallowed $200 million and never materialized."
"Investing in carbon capture delays the transition to renewable energy," reads OCI's report. "Instead of wasting time and money on technologies that do not work, governments must commit to justly and urgently phasing out fossil fuels before it's too late."
Despite the lack of data supporting the use of carbon capture, the group said, countries including the U.S. are "preparing to waste hundreds of billions of taxpayer dollars on these ineffective technologies, further benefiting the fossil fuel industry."
OCI highlighted how the U.S. and Canada, while ostensibly fighting the climate crisis, have spent a combined $4 billion in public money to explicitly "pay oil companies to produce more oil," with the subsidies going to carbon capture for "enhanced oil recovery."
The report also found that in addition to the $12 billion in taxpayer funds the U.S. has spent on carbon capture and fossil hydrogen—a leak-prone gas produced through energy-intensive processes that cause their own emissions—the government has spent an estimated $1.3 billion on the 45Q tax credit, which allows companies to write off tax for every ton of carbon dioxide they store underground.
The Inflation Reduction Act (IRA) increased the amount given to companies in 45Q tax credits from $35 to $60 per ton, meaning that the subsidy could grow to over $100 billion in the next 10 years.
OCI's Policy Tracker shows that overall public spending on carbon capture and hydrogen could grow by between $115 billion and $240 billion in the coming decades.
"We need real climate action, not fossil fuel bailouts!" said OCI in a post on social media.
The group's report also highlights that fossil fuel giants such as ExxonMobil have shifted from carbon capture skeptics to outspoken proponents of the technology—with the company bragging to investors that carbon capture and hydrogen would help its Low Carbon Business Unit make "hundreds of billions of dollars" and grow to be "larger than ExxonMobil's base business."
Exxon didn't launch its carbon capture efforts until 2018, having spent several years and hundreds of millions of dollars on another "climate solution" that ultimately failed: the use of algae to make biofuels.
Since then, Exxon has "pushed for direct government funding for carbon capture, particularly at the U.S. Department of Energy (DOE)," successfully lobbying for $12 billion allocated in the Bipartisan Infrastructure Bill in 2021 for "carbon management research, development, and demonstration."
Exxon also lobbied for the increased rate of the 45Q tax credit in the IRA and "played a 'central role' in drafting a 2019 DOE-sponsored report on carbon capture that determined Congress would need to create an incentive of around $90 to $110 per ton to support carbon capture deployment," according to OCI.
The Guardian on Thursday reported that Exxon still "chases billions in U.S. subsidies for a 'climate solution' that helps drill more oil," describing how the oil giant hosted an event at the Democratic National Convention earlier this month where senior climate strategy and technology director Vijay Swarup praised the IRA for helping Exxon pursue carbon capture and said: "We need new technology and we need policy to support that technology. We need governments working with private industry."
Exxon's enthusiasm for carbon capture, said OCI, is an example of how "the fossil fuel industry delays climate action, distracts from real solutions that would end the fossil fuel era, and does everything in its power to squeeze the last drops of profit from a dying industry, at the expense of all of us."
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