Montana Legislature

A Messy Start for Carbon Sequestration Bill

By Dan Testa, 1-17-07

	Greg Lind, D-Missoula, introduced a bill in the Legislature Wednesday that would give tax breaks to carbon sequestration equipment. File photo by Brian McDermott.

While the governor was in the rotunda giving the Republican House Speaker the gift of a bolo tie, on the fourth floor of the capitol representatives from the oil, coal and power industry were lining up to support a bill that could combat global warming.

Yeah, it was kind of a surreal day.

Sponsored by Greg Lind, D-Missoula, Senate Bill 105 would create a tax break for new equipment used to sequester carbon. Carbon sequestration, loosely defined, is the process by which carbon is removed or separated during the energy-production process and stored underground.

Speaking in support of the bill, David Hoffman of PPL Montana called it, “perhaps the most important climate-changing bill that this legislature will consider.”

Widely considered a major cause of global-warming, CO2 is a byproduct of the coal-gasification process and any other coal-fired power generation. As such, incentives to promote sequestration technology are integral to coal development in eastern Montana.

Introducing the bill, Lind noted that amendments he hadn’t yet added would considerably alter the legislation’s scope. The changes he plans to introduce could change who supports and opposes the bill.

That vagueness frustrated Sen. Gary Perry, R-Manhattan.

“Exactly what equipment are we talking about?” Perry asked Lind after testimony.

“The short answer is, it’s not clear,” Lind answered.

In its current form, the bill fails to distinguish between geologic and terrestrial sequestration. Geologic sequestration, Lind said, takes CO2 and pumps it into “a stable, non-leaking reservoir” underground. Terrestrial sequestration, however, is a looser definition that could encompass plants, which store some CO2 underground or farming equipment that tills some carbon in the soil underground.

The distinction is crucial, Lind said, because under a loose definition of terrestrial sequestration, almost any business equipment could be construed as sequestering carbon if it deals with wood or agricultural products.

You could even include the boiler at a pulverized coal plant because “you need to produce carbon dioxide before you can sequester it,” Lind said.

Lind’s amendments would specify that the tax break applies to new equipment used for geologic sequestration.

Also testifying in support of the bill were representatives from Rio Tinto Energy, which has a mine in Decker, Northwestern Energy, Great Northern Power Development, the Montana Petroleum Association and Coal Council, and the Western Environmental Trade Association.

Throughout the hearing, Perry looked frustrated, shaking his head at points. Part of his frustration, he told Lind, stemmed from the fact that the debate concerned amendments that had not yet been distributed to the committee. The legislative aide then took out a file folder and passed out the amendments before the question-and-answer segment.

Speaking to Todd O’Hair of Rio Tinto, Perry questioned the effectiveness of carbon sequestration.

“Why sequester carbon dioxide?” Perry asked.

“To prevent what has been recognized as a leading contributor to global warming,” O’Hair said.

“Do I assume that you and others have acceded that global warming is, in fact, caused by carbon emissions?” Perry asked.

“They contribute to global warming,” O’Hair said. “Anything that we can do to lessen our emissions of carbon dioxide or sequester those emissions is beneficial.”

After the hearing, Perry declined to get into the specifics of the exchange.

The sole opposition came from Jeff Barber of the Montana Environmental Information Center.

The cost of capturing carbon dioxide needs to ultimately be reflected in the cost of fossil fuel-generated power, Barber said. If the true costs of fossil fuel-generated power were reflected in the rates, he added, it would bring those rates in line with alternative energy sources like wind and solar. As a result, the MEIC couldn’t support a bill that gives tax breaks to sequestration equipment.

Bud Clinch, executive director of the Montana Coal Council, said the amendments could narrow the bill’s scope too much. Processes like enhanced oil recovery, which pumps CO2 into the ground to bring oil up out of a reserve, re-use carbon in a beneficial way but don’t meet Lind’s definition of geologic sequestration, Clinch said.

“That’s something that has some benefits as well and should benefit from tax breaks,” Clinch said. “I think we ought to provide incentives to anything that will help us take the first step.”

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