S.425 - Enhancing Energy Recovery Act (119th Congress)
Summary
S.425, the Enhancing Energy Recovery Act, aims to amend the Internal Revenue Code of 1986, specifically Section 45Q, to modify the carbon oxide sequestration credit. The bill seeks to ensure parity for different uses and utilizations of qualified carbon oxide, including secure geological storage, tertiary injectant in enhanced oil or natural gas recovery, and other utilizations. The proposed changes also adjust the applicable dollar amounts for the credit, increasing it for taxable years after 2024.
Expected Effects
The bill's passage would likely incentivize carbon capture and sequestration projects by providing more consistent and potentially higher tax credits. This could lead to increased investment in carbon capture technologies and enhanced oil and gas recovery projects. The changes aim to create a level playing field for various carbon utilization methods.
Potential Benefits
- Incentivizes carbon capture and sequestration, potentially reducing carbon emissions.
- Supports enhanced oil and natural gas recovery projects, potentially increasing domestic energy production.
- Could stimulate investment and innovation in carbon capture technologies.
- May create jobs in the energy and technology sectors.
- Provides clarity and parity in tax credits for different carbon utilization methods.
Potential Disadvantages
- May incentivize continued reliance on fossil fuels through enhanced oil recovery.
- Potential environmental risks associated with carbon storage and enhanced oil recovery.
- The cost of tax credits could increase the national debt.
- May disproportionately benefit the fossil fuel industry.
- Possible unintended consequences from altering the existing carbon sequestration credit structure.
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the US Constitution. It also relates to the general welfare clause, as it aims to promote energy security and environmental protection. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).