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House Panel Hears Testimony on USE IT Act

On Thursday, February 6, the House Energy and Commerce Subcommittee on Environment and Climate Change held a hearing on the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act (H.R. 1166). Introduced in the House by Reps. Peters (D-CA), McKinley (R-WV), and Veasey (D-TX), the bipartisan legislation currently has 57 cosponsors.

The bill seeks to incentivize research, development, demonstration, and deployment of carbon capture, utilization, and storage (CCUS) projects. Among other key provisions, the bill:

  • Directs the U.S. Environmental Protection Agency (EPA) to support carbon capture research, including for technologies that remove carbon dioxide (CO2) from the ambient air, authorizing $35 million in prizes for “direct air capture” (DAC) projects that remove at least 10,000 tons of CO2 per year.
  • Directs the EPA to establish a new CO2 utilization R&D program and authorizes $50 million for it.
  • Amends the Fixing America’s Surface Transportation (FAST) Act to clarify that projects eligible for expedited permitting include CCUS projects, DAC projects, and CO2 pipelines.
  • Directs the Council on Environmental Quality to submit guidance, within one year, to facilitate environmental reviews associated with CCUS projects and CO2 pipelines.

The rationale for the bill, as explained in Energy and Commerce Chairman Frank Pallone’s (D-NJ) briefing memo and several testimonies, may be summarized as follows. The world is in serious trouble unless global warming is limited to well below 1.5°C. To achieve that goal, the global economy must be carbon neutral by 2050. Robust deployment of CCUS technologies and infrastructure can significantly lower the cost of mitigation, reduce emissions outside the energy and ground transportation sectors, create new businesses and jobs, promote U.S. competitiveness, and help communities dependent on fossil fuel industries transition to a carbon-neutral future.

Although the bill is bipartisan and relies on incentives, it is not a genuine compromise between Republicans’ emphasis on innovation and Democrats’ emphasis on regulation. Consider, for example, the approach outlined recently by Reps. David McKinley (R-WVA) and Kurt Schrader (D-OR) in a joint press release and USA Today op-ed.

McKinley and Schrader propose to establish a national “clean energy standard” that would take effect after a 10-year R&D program designed to make “clean energy technologies for all fuels increasingly affordable.” During the 10-year innovation phase, “the federal government will not exercise its authorities under the Clean Air Act or take other new regulatory actions to compel emissions reductions from the electric power sector.” The congressmen explain: “If we’re going to ask the coal and gas industries to eliminate their emissions, they should have every opportunity to develop the technologies that can protect their workers and consumers.”

Note, I am not endorsing the McKinley-Schrader concept, but at least their proposal aims to provide deregulatory predictability over a 10-year period. There is nothing comparable in H.R. 1166. It would simply add green industrial policy to whatever climate regulations the EPA and other agencies under future administrations may seek to impose.