S 2149 ISCommentsClose CommentsPermalink

To amend the Energy Policy Act of 1992 to establish a program to provide incentives for projects to produce synthetic gas, liquid fuels, and other products from coal and other feedstocks while simultaneously reducing greenhouse gas emissions and reliance of the United States on petroleum and natural gas, and for other purposes.CommentsClose CommentsPermalink

October 4, 2007

Mr. DORGAN introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Energy Policy Act of 1992 to establish a program to provide incentives for projects to produce synthetic gas, liquid fuels, and other products from coal and other feedstocks while simultaneously reducing greenhouse gas emissions and reliance of the United States on petroleum and natural gas, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Coal Fuels and Industrial Gasification Demonstration and Development Act of 2007'.CommentsClose CommentsPermalink

SEC. 2. COAL INNOVATION PROGRAM.

(a) In General- Title XXXI of the Energy Policy Act of 1992 (42 U.S.C. 13571 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink

`SEC. 3105. COAL INNOVATION PROGRAM.

`(a) Definitions- In this section:CommentsClose CommentsPermalink





`(1) ADMINISTRATOR- The term `Administrator' means the Administrator of the Environmental Protection Agency.CommentsClose CommentsPermalink





`(2) CARBON CAPTURE- The term `carbon capture' means the capture, separation, and compression of carbon dioxide that would otherwise be released to the atmosphere at a facility in the production of end products of a project prior to transportation of the carbon dioxide to a long-term storage site.CommentsClose CommentsPermalink





`(3) COAL-TO-LIQUID PRODUCT- The term `coal-to-liquid product' means a liquid fuel resulting from the conversion of a feedstock, as described in this section.CommentsClose CommentsPermalink





`(4) COMBUSTIBLE END PRODUCT- The term `combustible end product' means any product of a facility intended to be used as a combustible fuel.CommentsClose CommentsPermalink





`(5) CONVENTIONAL BASELINE EMISSIONS- The term `conventional baseline emissions' means--CommentsClose CommentsPermalink





`(A) the lifecycle greenhouse gas emissions of a facility that produces combustible end products, using petroleum as a feedstock, that are equivalent to combustible end products produced by a facility of comparable size through an eligible project;CommentsClose CommentsPermalink





`(B) in the case of noncombustible products produced through an eligible project, the average lifecycle greenhouse gas emissions emitted by projects that--CommentsClose CommentsPermalink





`(i) are of comparable size; andCommentsClose CommentsPermalink





`(ii) produce equivalent products using conventional feedstocks; andCommentsClose CommentsPermalink





`(C) in the case of synthesized gas intended for use as a combustible fuel in lieu of natural gas produced by an eligible project, the lifecycle greenhouse gas emissions that would result from equivalent use of natural gas.CommentsClose CommentsPermalink





`(6) CONVENTIONAL FEEDSTOCK-CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `conventional feedstock' means a traditional carbon-based feedstock that--CommentsClose CommentsPermalink





`(i) is supplied to any powerplant, oil refinery, or petrochemical production facility that is located in the United States as of the date of enactment of this section; andCommentsClose CommentsPermalink





`(ii) could be made available in large quantities under a long-term contract.CommentsClose CommentsPermalink





`(B) INCLUSIONS- The term `conventional feedstock' includes--CommentsClose CommentsPermalink





`(i) coal;CommentsClose CommentsPermalink





`(ii) natural gas; andCommentsClose CommentsPermalink





`(iii) crude oil.CommentsClose CommentsPermalink





`(C) EXCLUSIONS- The term `conventional feedstock' does not include--CommentsClose CommentsPermalink





`(i) petroleum coke; andCommentsClose CommentsPermalink





`(ii) biomass.CommentsClose CommentsPermalink





`(7) DEEP SALINE FORMATION- The term `deep saline formation' means a measurable unit of rock that contains nonpotable water that is--CommentsClose CommentsPermalink





`(A) present in a stratigraphic column located beneath any fresh potable water aquifer; andCommentsClose CommentsPermalink





`(B) of a sufficient depth to store carbon dioxide in a supercritical phase.CommentsClose CommentsPermalink





`(8) ELIGIBLE FEEDSTOCK- The term `eligible feedstock' includes--CommentsClose CommentsPermalink





`(A) coal;CommentsClose CommentsPermalink





`(B) petroleum residue;CommentsClose CommentsPermalink





`(C) renewable biomass; andCommentsClose CommentsPermalink





`(D) any other combination of materials of which coal is the predominant component with respect to energy content.CommentsClose CommentsPermalink





`(9) ELIGIBLE PROJECT- The term `eligible project' means a project--CommentsClose CommentsPermalink





`(A) that produces liquid transportation fuels, industrial chemicals, or electricity; andCommentsClose CommentsPermalink





`(B) for which--CommentsClose CommentsPermalink





`(i) with respect to a project that is selected by the Secretary during a period described in subsection (b)(2)(C)(i) or subsection (c)(3)(C)(i)--CommentsClose CommentsPermalink





`(I) the annual lifecycle greenhouse gas emissions are not greater than conventional baseline emissions;CommentsClose CommentsPermalink





`(II) at least 70 percent of the carbon dioxide that would otherwise be released to the atmosphere at the facility in the production of end products from the project is captured for long-term storage; andCommentsClose CommentsPermalink





`(III) the individual or entity carrying out the eligible project has entered into an enforceable agreement with the Secretary to implement carbon capture at the percentage that, by the end of the 5-year period after commencement of commercial operation of the eligible project achieves a reduction in carbon emissions that is not less than 70 percent;CommentsClose CommentsPermalink





`(ii) with respect to a project that is selected by the Secretary during a period described in subsection (b)(2)(C)(ii) or subsection (c)(3)(C)(ii)--CommentsClose CommentsPermalink





`(I) the annual lifecycle greenhouse gas emissions are at least 15 percent lower than conventional baseline emissions;CommentsClose CommentsPermalink





`(II) at least 80 percent of the carbon dioxide that would otherwise be released to the atmosphere at the facility in the production of end products from the project is captured for long-term storage; andCommentsClose CommentsPermalink





`(III) the individual or entity carrying out the eligible project has entered into an enforceable agreement with the Secretary to implement carbon capture at the percentage that, by the end of the 5-year period after commencement of commercial operation of the eligible project achieves a reduction in carbon emissions that is not less than 80 percent; andCommentsClose CommentsPermalink





`(iii) in the opinion of the Secretary, sufficient commitments have been secured to achieve long-term storage of captured carbon dioxide beginning as of the date of commencement of commercial operation of the project.CommentsClose CommentsPermalink





`(10) FACILITY- The term `facility' means a facility at which the conversion of feedstocks to end products takes place.CommentsClose CommentsPermalink





`(11) GASIFICATION TECHNOLOGY- The term `gasification technology' means any process that--CommentsClose CommentsPermalink





`(A) converts coal, petroleum residue, renewable biomass, or other material that is recovered for energy or feedstock value into a synthesis gas composed primarily of carbon monoxide and hydrogen for direct use or subsequent chemical or physical conversion; andCommentsClose CommentsPermalink





`(B) produces oxygen for the gasification, conditioning, or cleanup of synthetic gas to prepare the synthetic gas for downstream use.CommentsClose CommentsPermalink





`(12) GREENHOUSE GAS- The term `greenhouse gas' means any of--CommentsClose CommentsPermalink





`(A) carbon dioxide;CommentsClose CommentsPermalink





`(B) methane;CommentsClose CommentsPermalink





`(C) nitrous oxide;CommentsClose CommentsPermalink





`(D) hydrofluorocarbons;CommentsClose CommentsPermalink





`(E) perfluorocarbons; andCommentsClose CommentsPermalink





`(F) sulfur hexafluoride.CommentsClose CommentsPermalink





`(13) LIFECYCLE GREENHOUSE GAS EMISSIONS- The term `lifecycle greenhouse gas emissions' means the aggregate quantity of greenhouse gases directly attributable to the production and transportation of end products at a facility, including the production, extraction, cultivation, distribution, and transportation of feedstocks, and the subsequent distribution and use of any combustible end products, as modified by deducting, as determined by the Administrator--CommentsClose CommentsPermalink





`(A) any greenhouse gases captured at the facility and sequestered;CommentsClose CommentsPermalink





`(B) the carbon content, expressed in units of carbon dioxide equivalent, of any feedstock that is renewable biomass;CommentsClose CommentsPermalink





`(C) the carbon content, expressed in units of carbon dioxide equivalent, of any end products that do not result in the release of carbon dioxide to the atmosphere; andCommentsClose CommentsPermalink





`(D) the acreage of terrestrial sequestration that is used to grow feedstocks to be used at the facility, including soil-root carbon storage areas at which--CommentsClose CommentsPermalink





`(i) biomass is grown on carbon-depleted soils; andCommentsClose CommentsPermalink





`(ii) carbon is stored in the soil under which the biomass is grown.CommentsClose CommentsPermalink





`(14) LONG-TERM STORAGE- The term `long-term storage' means sequestration with an expected maximum rate of carbon dioxide leakage over a specified period of time that is consistent with the objective of reducing atmospheric concentrations of carbon dioxide, subject to a permit issued pursuant to law in effect as of the date of the sequestration.CommentsClose CommentsPermalink





`(15) RENEWABLE BIOMASS- The term `renewable biomass' means--CommentsClose CommentsPermalink





`(A) nonmerchantable materials or precommercial thinnings that--CommentsClose CommentsPermalink





`(i) are byproducts of preventive treatments, such as trees, wood, brush, thinnings, chips, and slash, that are removed--CommentsClose CommentsPermalink





`(I) to reduce hazardous fuels;CommentsClose CommentsPermalink





`(II) to reduce or contain disease or insect infestation; orCommentsClose CommentsPermalink





`(III) to restore forest health;CommentsClose CommentsPermalink





`(ii) would not otherwise be used for higher-value products; andCommentsClose CommentsPermalink





`(iii) are harvested from National Forest System land or public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702))--CommentsClose CommentsPermalink





`(I) where permitted by law; andCommentsClose CommentsPermalink





`(II) in accordance with--CommentsClose CommentsPermalink

`(aa) applicable land management plans; andCommentsClose CommentsPermalink

`(bb) the requirements for old-growth maintenance, restoration, and management direction of paragraphs (2), (3), and (4) of subsection (e), and the requirements for large-tree retention of subsection (f), of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); orCommentsClose CommentsPermalink

`(B) any organic matter that is available on a renewable or recurring basis from non-Federal land or from land belonging to an Indian tribe, or an Indian individual, that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including--CommentsClose CommentsPermalink





`(i) renewable plant material, including--CommentsClose CommentsPermalink





`(I) feed grains;CommentsClose CommentsPermalink





`(II) agricultural commodities (including any crop that is planted as an energy crop);CommentsClose CommentsPermalink





`(III) plants and trees; andCommentsClose CommentsPermalink





`(IV) algae; andCommentsClose CommentsPermalink





`(ii) waste material, including--CommentsClose CommentsPermalink





`(I) crop residue;CommentsClose CommentsPermalink





`(II) vegetative waste material (including wood waste and wood residues);CommentsClose CommentsPermalink





`(III) animal waste and byproducts (including fats, oils, greases, and manure); andCommentsClose CommentsPermalink





`(IV) food waste and yard waste.CommentsClose CommentsPermalink





`(16) SEQUESTRATION- The term `sequestration' means the placement of carbon dioxide in a geological formation, including--CommentsClose CommentsPermalink





`(A) an operating oil and gas field;CommentsClose CommentsPermalink





`(B) coal bed methane recovery;CommentsClose CommentsPermalink





`(C) a depleted oil and gas field;CommentsClose CommentsPermalink





`(D) an unmineable coal seam;CommentsClose CommentsPermalink





`(E) a deep saline formation; andCommentsClose CommentsPermalink





`(F) a deep geological system.CommentsClose CommentsPermalink





`(17) UNMINEABLE COAL SEAM- The term `unmineable coal seam' means a coal seam that is--CommentsClose CommentsPermalink





`(A) determined by the Secretary of the Interior to be economically unrecoverable (including by any foreseeable advance in mining technology); andCommentsClose CommentsPermalink





`(B) located at a depth at which the temperature and pressure at the coal seam are sufficient to maintain carbon dioxide in a supercritical phase.CommentsClose CommentsPermalink





`(b) Financial Assistance Cooperative Agreement Program-CommentsClose CommentsPermalink





`(1) IN GENERAL- Subject to paragraph (3), not later than 1 year after the date of the enactment of this section, the Secretary shall carry out a program to provide grants for use in obtaining or carrying out any services necessary for the planning and permitting of an eligible project.CommentsClose CommentsPermalink





`(2) SELECTION OF ELIGIBLE PROJECTS-CommentsClose CommentsPermalink





`(A) IN GENERAL- In accordance with subparagraphs (B) and (C), the Secretary shall select eligible projects to receive grants under this subsection--CommentsClose CommentsPermalink





`(i) through the conduct of a reverse auction, in which eligible projects proposed to be carried out that have the greatest percentage reduction of lifecycle greenhouse gas emissions in comparison to facilities that use conventional feedstocks and do not use carbon capture and sequestration technologies, are given priority;CommentsClose CommentsPermalink





`(ii) that, taken together, would--CommentsClose CommentsPermalink





`(I) represent a variety of geographical regions;CommentsClose CommentsPermalink





`(II) represent a variety of facilities, each of which is capable of producing a different quantity of synthetic gas, liquid fuel, or other product from coal and other feedstocks;CommentsClose CommentsPermalink





`(III) use a variety of feedstocks and types of coal; andCommentsClose CommentsPermalink





`(IV) to the extent consistent with achieving long-term storage, represent a variety of geological formations; andCommentsClose CommentsPermalink





`(iii) for which eligible projects, in the opinion of the Secretary--CommentsClose CommentsPermalink





`(I) each award recipient is financially viable without the receipt of additional Federal funding associated with the proposed project;CommentsClose CommentsPermalink





`(II) each recipient will provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is expended efficiently and effectively;CommentsClose CommentsPermalink





`(III) a market exists for the products of the proposed project, as evidenced by contracts or written statements of intent from potential customers;CommentsClose CommentsPermalink





`(IV) the project team of each recipient is competent in the construction and operation of the gasification technology proposed; andCommentsClose CommentsPermalink





`(V) each recipient has met such other criteria as may be established and published by the Secretary.CommentsClose CommentsPermalink





`(B) SPECIAL CONSIDERATION- In selecting eligible projects under subparagraph (A), the Secretary shall give special consideration to projects that--CommentsClose CommentsPermalink





`(i) include a feedstock that is comprised of a quantity of biomass that is greater than 5 percent of the total quantity of the feedstock (as measured by the weight of the feedstock); orCommentsClose CommentsPermalink





`(ii) participate in a regional carbon sequestration partnership, as described in the notice entitled `Notice of Availability of a Financial Assistance Solicitation' (67 Fed. Reg. 71540 (December 2, 2002)).CommentsClose CommentsPermalink





`(C) AUTHORIZED QUANTITY OF ELIGIBLE PROJECTS- In carrying out subparagraph (A), the Secretary shall--CommentsClose CommentsPermalink





`(i) for the 5-year period beginning on the date that is 1 year after the date of enactment of this section, select a quantity of not more than 3 eligible projects; andCommentsClose CommentsPermalink





`(ii) for the 5-year period beginning on the date that is 6 years after the date of enactment of this section, select a quantity of not more than 3 eligible projects.CommentsClose CommentsPermalink





`(3) MAXIMUM AMOUNT OF GRANTS- In carrying out this subsection, the Secretary shall provide not more than--CommentsClose CommentsPermalink





`(A) $20,000,000 in grant funds for any eligible project; andCommentsClose CommentsPermalink





`(B) $120,000,000 in grant funds, in the aggregate, for all eligible projects.CommentsClose CommentsPermalink





`(c) Direct Loan Program-CommentsClose CommentsPermalink





`(1) IN GENERAL- Not later than 1 year after the date of enactment of this section, and subject to funds being made available in advance through appropriations Acts, the Secretary shall carry out a program to provide a total of not more than $10,000,000,000 in loans to eligible individuals and entities (as determined by the Secretary) for use in carrying out eligible projects.CommentsClose CommentsPermalink





`(2) APPLICATION- To receive a loan from the Secretary under paragraph (1), an applicant shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a written assurance that--CommentsClose CommentsPermalink





`(A) all laborers and mechanics employed by contractors or subcontractors during construction, alteration, or repair that is financed, in whole or in part, by a loan under this subsection shall be paid wages at rates that are not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor in accordance with sections 3141 through 3144, 3146, and 3147 of title 40, United States Code; andCommentsClose CommentsPermalink





`(B) the Secretary of Labor shall, with respect to the labor standards described in this paragraph, have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App.) and section 3145 of title 40, United States Code.CommentsClose CommentsPermalink





`(3) SELECTION OF ELIGIBLE PROJECTS-CommentsClose CommentsPermalink





`(A) IN GENERAL- In accordance with subparagraphs (B) and (C), the Secretary shall select eligible projects to receive loans under this subsection--CommentsClose CommentsPermalink





`(i) through the conduct of a reverse auction, in which eligible projects proposed to be carried out that have the greatest percentage reduction of lifecycle greenhouse gas emissions in comparison to facilities that use conventional feedstocks and do not use carbon capture and sequestration technologies, are given priority;CommentsClose CommentsPermalink





`(ii) that, taken together, would--CommentsClose CommentsPermalink





`(I) represent a variety of geographic regions;CommentsClose CommentsPermalink





`(II) represent a variety of facilities, each of which is capable of producing a different quantity of synthetic gas, liquid fuel, or other product from coal and other feedstocks;CommentsClose CommentsPermalink





`(III) use a variety of types of feedstocks and coal; andCommentsClose CommentsPermalink





`(IV) to the extent consistent with achieving long-term storage, represent a variety of geological formations; andCommentsClose CommentsPermalink





`(iii) for which eligible projects, in the opinion of the Secretary--CommentsClose CommentsPermalink





`(I) each award recipient is financially viable without the receipt of additional Federal funding associated with the proposed project;CommentsClose CommentsPermalink





`(II) each recipient will provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is expended efficiently and effectively;CommentsClose CommentsPermalink





`(III) a market exists for the products of the proposed project, as evidenced by contracts or written statements of intent from potential customers;CommentsClose CommentsPermalink





`(IV) the project team of each recipient is competent in the construction and operation of the gasification technology proposed; andCommentsClose CommentsPermalink





`(V) each recipient has met such other criteria as may be established and published by the Secretary.CommentsClose CommentsPermalink





`(B) SPECIAL CONSIDERATION- In selecting eligible projects under subparagraph (A), the Secretary shall give special consideration to projects that--CommentsClose CommentsPermalink





`(i) include a feedstock that is comprised of a quantity of biomass that is greater than 5 percent of the total quantity of the feedstock (as measured by the weight of the feedstock); orCommentsClose CommentsPermalink





`(ii) participate in a regional carbon sequestration partnership, as described in the notice entitled `Notice of Availability of a Financial Assistance Solicitation' (67 Fed. Reg. 71540 (December 2, 2002)).CommentsClose CommentsPermalink





`(C) AUTHORIZED QUANTITY OF ELIGIBLE PROJECTS- In carrying out subparagraph (A), the Secretary shall--CommentsClose CommentsPermalink





`(i) for the 5-year period beginning on the date that is 1 year after the date of enactment of this section, select a quantity of not more than 3 eligible projects; andCommentsClose CommentsPermalink





`(ii) for the 5-year period beginning on the date that is 6 years after the date of enactment of this section, select a quantity of not more than 3 eligible projects.CommentsClose CommentsPermalink





`(4) USE OF LOAN FUNDS-CommentsClose CommentsPermalink





`(A) IN GENERAL- Subject to subparagraph (B), funds from a loan provided under this subsection may be used to pay up to 100 percent of the costs of capital associated with reducing lifecycle greenhouse gas emissions at the facility (including carbon dioxide capture, compression, and long-term storage, cogeneration, and gasification of biomass) carried out as part of an eligible project, including--CommentsClose CommentsPermalink





`(i) equipment relating to--CommentsClose CommentsPermalink





`(I) the air separation unit of the facility;CommentsClose CommentsPermalink





`(II) the separation or capture of carbon dioxide;CommentsClose CommentsPermalink





`(III) the purification or drying of carbon dioxide;CommentsClose CommentsPermalink





`(IV) the compression of carbon dioxide;CommentsClose CommentsPermalink





`(V) the long-term storage of carbon dioxide;CommentsClose CommentsPermalink





`(VI) the cogeneration of electric power;CommentsClose CommentsPermalink





`(VII) the cleanup of synthetic gas at the facility; andCommentsClose CommentsPermalink





`(VIII) the water-gas shift reactor of the facility;CommentsClose CommentsPermalink





`(ii) fuel handling equipment that is used for--CommentsClose CommentsPermalink





`(I) cofeeding coal and biomass to a gasification system; andCommentsClose CommentsPermalink





`(II) feeding biomass to a gasification system; andCommentsClose CommentsPermalink





`(iii) a gasification system that is designed--CommentsClose CommentsPermalink





`(I) to operate with equipment that is used for the cofeeding of coal and biomass in producing an acceptable syngas for the production of liquid fuels, industrial chemicals, or electronic power; andCommentsClose CommentsPermalink





`(II) to operate with biomass.CommentsClose CommentsPermalink





`(B) TOTAL PROJECT COST- Funds from a loan provided under this subsection may not be used to pay more than 50 percent of the total cost of an eligible project.CommentsClose CommentsPermalink





`(5) RATES, TERMS, AND REPAYMENT OF LOANS- A loan provided under this subsection--CommentsClose CommentsPermalink





`(A) shall have an interest rate that, as of the date on which the loan is made, is equal to the cost of funds to the Department of the Treasury for obligations of comparable maturity;CommentsClose CommentsPermalink





`(B) shall have a term equal to the lesser of--CommentsClose CommentsPermalink





`(i) the projected life, in years, of the eligible project to be carried out using funds from the loan, as determined by the Secretary; andCommentsClose CommentsPermalink





`(ii) 25 years;CommentsClose CommentsPermalink





`(C) may be subject to a deferral in repayment for not more than 5 years after the date on which the eligible project carried out using funds from the loan first begins operations, as determined by the Secretary; andCommentsClose CommentsPermalink





`(D) shall be made on the condition that the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the loan or related agreements, including, as appropriate, the authority (notwithstanding any other provision of law)--CommentsClose CommentsPermalink





`(i) to complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to the guarantee or a related agreement; orCommentsClose CommentsPermalink





`(ii) to permit the borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the project, if the Secretary determines the pursuit to be in the public interest.CommentsClose CommentsPermalink





`(d) Methodology-CommentsClose CommentsPermalink





`(1) IN GENERAL- Not later than 18 months after the date of enactment of this section, in accordance with paragraph (2), the Administrator, in consultation with the Secretary and the Secretary of Defense, shall, by regulation, establish a methodology for use in determining the lifecycle greenhouse gas emissions of coal-derived liquid transportation fuels and other products produced using--CommentsClose CommentsPermalink





`(A) coal gasification technology;CommentsClose CommentsPermalink





`(B) coal and biomass gasification technology;CommentsClose CommentsPermalink





`(C) the Fischer-Tropsch technology; andCommentsClose CommentsPermalink





`(D) any other technology that is in commercial use.CommentsClose CommentsPermalink





`(2) PARTICIPATION OF CERTAIN INDIVIDUALS AND ENTITIES- In establishing the methodology described in paragraph (1), the Administrator, in consultation with the Secretary and the Secretary of Defense, shall seek the participation of, and consider comments provided by--CommentsClose CommentsPermalink





`(A) individuals representing private sector organizations that may be affected by the methodology; andCommentsClose CommentsPermalink





`(B) any other individual or entity that represents an interested organization.CommentsClose CommentsPermalink





`(e) Reporting Requirements-CommentsClose CommentsPermalink





`(1) IN GENERAL- Not later than 180 days after the date on which an eligible project receives from the Secretary funds from a grant under subsection (b) or a loan under subsection (c), and each 90-day period thereafter, in accordance with paragraph (2), the individual or entity carrying out the eligible project shall submit to the Administrator a report that contains, for the period covered by the report--CommentsClose CommentsPermalink





`(A) a description of--CommentsClose CommentsPermalink





`(i) the quantity and type of fossil fuels and non-carbon dioxide greenhouse gases produced, refined, imported, exported, and consumed by the eligible project;CommentsClose CommentsPermalink





`(ii) the greenhouse gas emissions in metric tons of each greenhouse gas emitted and in metric tons of carbon dioxide equivalent of each greenhouse gas emitted by the eligible project, measured using monitoring systems for fuel flow or emissions that use--CommentsClose CommentsPermalink





`(I) continuous emission monitoring; orCommentsClose CommentsPermalink





`(II) an equivalent system of comparable rigor, accuracy, and quality; andCommentsClose CommentsPermalink





`(iii) the quantity and type of--CommentsClose CommentsPermalink





`(I) feedstock fossil fuel consumption of the eligible project; andCommentsClose CommentsPermalink





`(II) process emissions of the eligible project; andCommentsClose CommentsPermalink





`(B) any other data necessary for accurate accounting of greenhouse gas emissions, as determined by the Administrator.CommentsClose CommentsPermalink





`(2) ELECTRONIC SUBMISSION OF REPORT- An individual or entity carrying out an eligible project described in paragraph (1) shall electronically submit to the Administrator each report required under that paragraph in such form and in such manner as may be required by the Administrator.CommentsClose CommentsPermalink





`(3) NO EFFECT ON OTHER REQUIREMENTS- Nothing in this subsection affects any requirement in effect as of the date of enactment of this section relating to the reporting of--CommentsClose CommentsPermalink





`(A) fossil fuel production, refining, importation, exportation, or consumption data;CommentsClose CommentsPermalink





`(B) greenhouse gas emission data; orCommentsClose CommentsPermalink





`(C) other relevant data.CommentsClose CommentsPermalink





`(f) Study of Maintaining Coal-to-Liquid Products in Strategic Petroleum Reserve- Not later than 1 year after the date of enactment of this section, the Secretary and the Secretary of Defense shall--CommentsClose CommentsPermalink





`(1) conduct a study of the feasibility and suitability of maintaining coal-to-liquid products in the Strategic Petroleum Reserve; andCommentsClose CommentsPermalink





`(2) submit to the Committee on Energy and Natural Resources and the Committee on Armed Services of the Senate and the Committee on Energy and Commerce and the Committee on Armed Services of the House of Representatives a report describing the results of the study.CommentsClose CommentsPermalink





`(g) Report on Emissions of Coal-to-Liquid Products Used as Transportation Fuels-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Administrator, in cooperation with the Secretary, the Secretary of Defense, and the Administrator of the Federal Aviation Administration, shall--CommentsClose CommentsPermalink





`(A) carry out a research and demonstration program to evaluate the emissions of the use of coal-to-liquid fuel for transportation, including gasoline, diesel, marine, and jet fuel;CommentsClose CommentsPermalink





`(B) evaluate the effect of using coal-to-liquid transportation fuel on emissions of vehicles, including motor vehicles and nonroad vehicles, and aircraft (as those terms are defined in sections 216 and 234, respectively, of the Clean Air Act (42 U.S.C. 7550, 7574)); andCommentsClose CommentsPermalink





`(C) in accordance with paragraph (4), and not later than 540 days after the date of enactment of this section, submit to Congress a report on the effect on air and water quality, water scarcity, land use, and public health of using coal-to-liquid fuel in the transportation sector.CommentsClose CommentsPermalink





`(2) GUIDANCE AND TECHNICAL SUPPORT- The Administrator, in consultation with the Secretary, shall issue any guidance or technical support documents necessary to facilitate the effective use of coal-to-liquid fuel and blends under this subsection.CommentsClose CommentsPermalink





`(3) REQUIREMENTS- The program described in paragraph (1)(A) shall take into consideration--CommentsClose CommentsPermalink





`(A) the use of neat (100 percent) coal-to-liquid fuel and blends of coal-to-liquid fuels with conventional crude oil-derived fuel for heavy-duty and light-duty diesel engines, gasoline engines, marine propulsion, and the aviation sector;CommentsClose CommentsPermalink





`(B) the production costs associated with domestic production of those fuels and prices for consumers; andCommentsClose CommentsPermalink





`(C) the overall greenhouse gas effects of--CommentsClose CommentsPermalink





`(i) substituting coal-derived fuels for crude oil-derived fuels;CommentsClose CommentsPermalink





`(ii) using carbon capture and storage technologies; andCommentsClose CommentsPermalink





`(iii) including biomass as a feedstock in the production process of the fuels.CommentsClose CommentsPermalink





`(4) REPORTS- The Administrator shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives--CommentsClose CommentsPermalink





`(A) not later than 180 days after the date of enactment of this section, an interim report on actions taken to carry out this subsection; andCommentsClose CommentsPermalink





`(B) not later than 1 year after the date of enactment of this section, a final report on actions taken to carry out this subsection.CommentsClose CommentsPermalink





`(h) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.'.CommentsClose CommentsPermalink





(b) Conforming Amendment- The table of contents of the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding at the end of the items relating to title XXXI the following:CommentsClose CommentsPermalink





`Sec. 3105. Coal innovation program.'.CommentsClose CommentsPermalink

SEC. 3. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business credits) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

`SEC. 45O. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

`(a) General Rule- For purposes of section 38, the carbon dioxide sequestration credit for any taxable year is an amount equal to the sum of--CommentsClose CommentsPermalink





`(1) $20 per metric ton of qualified carbon dioxide which is--CommentsClose CommentsPermalink





`(A) captured by the taxpayer at a qualified facility, andCommentsClose CommentsPermalink





`(B) disposed of by the taxpayer in secure geological storage, andCommentsClose CommentsPermalink





`(2) $10 per metric ton of qualified carbon dioxide which is--CommentsClose CommentsPermalink





`(A) captured by the taxpayer at a qualified facility, andCommentsClose CommentsPermalink





`(B) used by the taxpayer as an injectant in a qualified enhanced oil or natural gas recovery project.CommentsClose CommentsPermalink





`(b) Qualified Carbon Dioxide- For purposes of this section--CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `qualified carbon dioxide' means carbon dioxide captured from an industrial source which--CommentsClose CommentsPermalink





`(A) would otherwise be released into the atmosphere as industrial emission of greenhouse gas, andCommentsClose CommentsPermalink





`(B) is measured at the source of capture and verified at the point of disposal or injection.CommentsClose CommentsPermalink





`(2) RECYCLED CARBON DIOXIDE- The term `qualified carbon dioxide' includes the initial deposit of captured carbon dioxide used as a tertiary injectant. Such term does not include carbon dioxide that is re-captured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process.CommentsClose CommentsPermalink





`(c) Qualified Facility- For purposes of this section, the term `qualified facility' means any industrial facility--CommentsClose CommentsPermalink





`(1) which is owned by the taxpayer,CommentsClose CommentsPermalink





`(2) at which carbon capture equipment is placed in service, andCommentsClose CommentsPermalink





`(3) which captures not less than 500,000 metric tons of carbon dioxide during the taxable year.CommentsClose CommentsPermalink





`(d) Special Rules and Other Definitions- For purposes of this section--CommentsClose CommentsPermalink





`(1) ONLY CARBON DIOXIDE CAPTURED WITHIN THE UNITED STATES TAKEN INTO ACCOUNT- The credit under this section shall apply only with respect to qualified carbon dioxide the capture of which is within--CommentsClose CommentsPermalink





`(A) the United States (within the meaning of section 638(1)), orCommentsClose CommentsPermalink





`(B) a possession of the United States (within the meaning of section 638(2)).CommentsClose CommentsPermalink





`(2) SECURE GEOLOGICAL STORAGE- The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish regulations for determining adequate security measures for the geological storage of carbon dioxide under subsection (a)(1)(B) such that the carbon dioxide does not escape into the atmosphere. Such term shall include storage at deep saline formations and unmineable coal seems under such conditions as the Secretary may determine under such regulations.CommentsClose CommentsPermalink





`(3) QUALIFIED ENHANCED OIL OR NATURAL GAS RECOVERY PROJECT- The term `qualified enhanced oil or natural gas recovery project' has the meaning given the term `qualified enhanced oil recovery project' by section 43(c)(2), by substituting `crude oil or natural gas' for `crude oil' in subparagraph (A)(i) thereof.CommentsClose CommentsPermalink





`(4) CREDIT ATTRIBUTABLE TO TAXPAYER- Any credit under this section shall be attributable to the person that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified carbon dioxide, except to the extent provided in regulations prescribed by the Secretary.CommentsClose CommentsPermalink





`(5) RECAPTURE- The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon dioxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.CommentsClose CommentsPermalink





`(6) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2008, there shall be substituted for each dollar amount contained in subsection (a) an amount equal to the product of--CommentsClose CommentsPermalink





`(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





`(B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting `2007' for `1990'.CommentsClose CommentsPermalink





`(e) Application of Section- The credit under this section shall apply with respect to qualified carbon dioxide before the end of the calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that 75,000,000 metric tons of qualified carbon dioxide have been captured and disposed of or used as a tertiary injectant.'.CommentsClose CommentsPermalink





(b) Conforming Amendment- Section 38(b) of the Internal Revenue Code of 1986 (relating to general business credit) is amended by striking `plus' at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting `, plus', and by adding at the end of following new paragraph:CommentsClose CommentsPermalink





`(32) the carbon dioxide sequestration credit determined under section 45O(a).'.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by adding at the end the following new section:CommentsClose CommentsPermalink





`Sec. 45O. Credit for carbon dioxide sequestration.'.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply carbon dioxide captured after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. SEVEN-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF QUALIFIED CARBON DIOXIDE PIPELINE PROPERTY.

(a) In General- Section 168(e)(3)(C) of the Internal Revenue Code of 1986 (defining 7-year property) is amended by striking `and' at the end of clause iv), by striking the period at the end of clause (vi)(III) and inserting `, and', and by inserting after clause (vi) the following new clause:CommentsClose CommentsPermalink





`(vii) any qualified carbon dioxide pipeline property--CommentsClose CommentsPermalink





`(I) the original use of which commences with the taxpayer after the date of the enactment of this clause,CommentsClose CommentsPermalink





`(II) the original purpose of which is to transport carbon dioxide, andCommentsClose CommentsPermalink





`(III) which is placed in service before January 1, 2014.'.CommentsClose CommentsPermalink





(b) Definition of Qualified Carbon Dioxide Pipeline Property- Section 168(e) of the Internal Revenue Code of 1986 (relating to classification of property) is amended by inserting at the end the following new paragraph:CommentsClose CommentsPermalink





`(8) QUALIFIED CARBON DIOXIDE PIPELINE PROPERTY- The term `qualified carbon dioxide pipeline property' means property which is used in the United States solely to transmit qualified carbon dioxide (as defined in section 45O(b)) from the point of capture to the point of disposal (as described in section 45O(a)(1)(B)) or the point at which such qualified carbon dioxide is used as a tertiary injectant (as described in section 45O(a)(2)(B)).'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 5. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL SOURCE CARBON DIOXIDE TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

(a) In General- Subparagraph (E) of section 7704(d)(1) of the Internal Revenue Code of 1986 (defining qualifying income) is amended by inserting `or industrial source carbon dioxide' after `timber)'.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall take effect on the date of the enactment of this Act, in taxable years ending after such date.CommentsClose CommentsPermalink

SEC. 6. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL CREDIT.

(a) Extension-CommentsClose CommentsPermalink





(1) ALTERNATIVE FUEL CREDIT- Paragraph (4) of section 6426(d) of the Internal Revenue Code of 1986 (relating to alternative fuel credit) is amended by striking `September 30, 2009' and inserting `September 30, 2019'.CommentsClose CommentsPermalink





(2) ALTERNATIVE FUEL MIXTURE CREDIT- Paragraph (3) of section 6426(e) of such Code (relating to alternative fuel mixture credit) is amended by striking `September 30, 2009' and inserting `September 30, 2019'.CommentsClose CommentsPermalink





(3) PAYMENTS- Subparagraph (C) of section 6427(e)(5) of such Code (relating to termination) is amended by striking `September 30, 2009' and inserting `September 30, 2019'.CommentsClose CommentsPermalink





(b) Modifications-CommentsClose CommentsPermalink





(1) ALTERNATIVE FUEL TO INCLUDE COMPRESSED OR LIQUIFIED BIOMASS GAS- Paragraph (2) of section 6426(d) of the Internal Revenue Code of 1986 (relating to alternative fuel credit) is amended by striking `and' at the end of subparagraph (E), by redesignating subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E) the following new subparagraph:CommentsClose CommentsPermalink





`(F) compressed or liquified biomass gas, and'.CommentsClose CommentsPermalink





(2) CREDIT ALLOWED FOR AVIATION USE OF FUEL- Paragraph (1) of section 6426(d) of such Code is amended by inserting `sold by the taxpayer for use as a fuel in aviation,' after `motorboat,'.CommentsClose CommentsPermalink





(c) Carbon Capture Requirement for Certain Fuels-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (d) of section 6426 of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:CommentsClose CommentsPermalink





`(4) CARBON CAPTURE REQUIREMENT-CommentsClose CommentsPermalink





`(A) IN GENERAL- The requirements of this paragraph are met if the fuel is certified, under such procedures as required by the Secretary, as having been produced at a facility which separates and sequesters not less than the applicable percentage of such facility's total carbon dioxide emissions.CommentsClose CommentsPermalink





`(B) APPLICABLE PERCENTAGE- For purposes of subparagraph (A), the applicable percentage is--CommentsClose CommentsPermalink





`(i) in the case of fuel produced after the date of enactment of this paragraph and before January 1, 2014, 70 percent, andCommentsClose CommentsPermalink





`(ii) in the case of fuel produced after December 31, 2013, 80 percent.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Subparagraph (E) of section 6426(d)(2) of such Code is amended by inserting `which meets the requirements of paragraph (4) and which is' after `any liquid fuel'.CommentsClose CommentsPermalink





(d) Effective Dates-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) CARBON CAPTURE REQUIREMENTS- The amendments made by subsection (c) shall apply to fuel sold or used after December 31, 2007.CommentsClose CommentsPermalink