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How The Outgoing Republican Congress Quietly Slid Some Climate Protection For Its Friends Past Trump

Category: Energy & Environment,Finance

Congressional Republicans have supported Department of Energy research that can keep the fossil-fuel industry alive in a warmer world, like this plant in Gaylord, Michigan that uses captured CO2 to enhance oil recovery.DOE

Apparently they believe in climate change when it threatens fossil fuels. Even as they questioned the human role in climate change, the Republicans who controlled Congress the last two years quietly supported climate action to save the fossil fuel industry in a warmer world—and they slipped the results past Trump.

Republicans may have acted because the industry has realized it must. American oil giants including Exxon-Mobil, Chevron and Occidental Petroleum have pledged to support the Paris Agreement. Denying climate change leaves no room to develop carbon capture, the primary technology that can keep the fossil-fuel industry alive.

The Republican Congress supported carbon capture with a ground-breaking tax break, known as the 45Q tax credit, buried in the 2018 omnibus budget bill. The credit was spearheaded by senators from fossil-fuel states—Heidi Heitkamp (D-ND), John Barrasso (R-WY), Shelley Moore Caputo (R-WV)—and a senator who cares about climate change, Sheldon Whitehouse (D-RI). As soon as Trump signed it, that budget act greatly expanded a meager tax credit that already existed, suddenly making carbon-capture technology look feasible.

"If you have a big-ass power plant in Minnesota or in Montana and your big power plant emits 10 million tons of CO2 a year, if you capture that and store it, you can get paid $500 million a year for 12 years, which is $6 billion," said S. Julio Friedman, a Columbia University expert on carbon capture. "That makes this all interesting. That did not exist 12 months ago but it exists now. And not surprisingly a lot of people are out there looking for projects, looking for financing, looking for ways to take advantage of this market that is emergent."

Among other things, 45Q directly contradicts Trump Administration efforts to undermine the social cost of carbon. Trump has argued the social impact of carbon pollution is between $1 and $7 per ton, but 45Q effectively sets the cost at $50, about what the Obama Administration calculated.

"That’s interesting actually. Among other things that’s essentially now a social cost of carbon calculus," Friedman said at Stanford University. "This Congress has said the cost of emitting is $50 a ton."

Congress passed the Bipartisan Budget Act of 2018, after a night of debate, at 5:30 a.m., and Trump signed it a little over eight hours into a government shutdown. It also rebuffed Trump's efforts to scuttle Department of Energy grant and loan programs that support clean energy innovation, including the kinds of innovations that can capture the carbon emitted when fossil fuels are burned.

Not only was the Office of Energy Efficiency and Renewable Energy saved, but it got an extra $300 million. The Office of Fossil Energy enjoyed an extra $70 million. And the DOE Loan Program Office, a political football kicked often by Republicans, got an extra $2 billion of loan authorities for rural power generators, who often rely heavily on coal.

"Among other things, federal R&D programs now have unprecedented levels of funding to get this work done," Friedman said.

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Congressional Republicans have supported Department of Energy research that can keep the fossil-fuel industry alive in a warmer world, like this plant in Gaylord, Michigan that uses captured CO2 to enhance oil recovery.DOE

Apparently they believe in climate change when it threatens fossil fuels. Even as they questioned the human role in climate change, the Republicans who controlled Congress the last two years quietly supported climate action to save the fossil fuel industry in a warmer world—and they slipped the results past Trump.

Republicans may have acted because the industry has realized it must. American oil giants including Exxon-Mobil, Chevron and Occidental Petroleum have pledged to support the Paris Agreement. Denying climate change leaves no room to develop carbon capture, the primary technology that can keep the fossil-fuel industry alive.

The Republican Congress supported carbon capture with a ground-breaking tax break, known as the 45Q tax credit, buried in the 2018 omnibus budget bill. The credit was spearheaded by senators from fossil-fuel states—Heidi Heitkamp (D-ND), John Barrasso (R-WY), Shelley Moore Caputo (R-WV)—and a senator who cares about climate change, Sheldon Whitehouse (D-RI). As soon as Trump signed it, that budget act greatly expanded a meager tax credit that already existed, suddenly making carbon-capture technology look feasible.

"If you have a big-ass power plant in Minnesota or in Montana and your big power plant emits 10 million tons of CO2 a year, if you capture that and store it, you can get paid $500 million a year for 12 years, which is $6 billion," said S. Julio Friedman, a Columbia University expert on carbon capture. "That makes this all interesting. That did not exist 12 months ago but it exists now. And not surprisingly a lot of people are out there looking for projects, looking for financing, looking for ways to take advantage of this market that is emergent."

Among other things, 45Q directly contradicts Trump Administration efforts to undermine the social cost of carbon. Trump has argued the social impact of carbon pollution is between $1 and $7 per ton, but 45Q effectively sets the cost at $50, about what the Obama Administration calculated.

"That’s interesting actually. Among other things that’s essentially now a social cost of carbon calculus," Friedman said at Stanford University. "This Congress has said the cost of emitting is $50 a ton."

Congress passed the Bipartisan Budget Act of 2018, after a night of debate, at 5:30 a.m., and Trump signed it a little over eight hours into a government shutdown. It also rebuffed Trump's efforts to scuttle Department of Energy grant and loan programs that support clean energy innovation, including the kinds of innovations that can capture the carbon emitted when fossil fuels are burned.

Not only was the Office of Energy Efficiency and Renewable Energy saved, but it got an extra $300 million. The Office of Fossil Energy enjoyed an extra $70 million. And the DOE Loan Program Office, a political football kicked often by Republicans, got an extra $2 billion of loan authorities for rural power generators, who often rely heavily on coal.

"Among other things, federal R&D programs now have unprecedented levels of funding to get this work done," Friedman said.


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