The Gulf CCUS Hub

by Matthew Choi (Politico's Morning Energy) The National Ocean Industries Association, a trade group representing the offshore energy industry, is calling on policymakers to lay the groundwork for Exxon Mobil and other companies to make the Gulf of Mexico a hub for carbon capture and storage projects. NOIA is releasing a policy paper today, shared first with Pro’s Josh Siegel, detailing legislative and regulatory changes it says should be made to promote the build-out of the non-existent offshore CCUS sector in the U.S.

Chief among its demands is for Congress to expand and increase 45Q carbon capture tax credits while giving project developers the option of “direct pay” to receive the full value of the subsidy — provisions that are included in Democrats’ stalled Build Back Better legislation. The legislation increases the value of 45Q tax credit from $50 per ton, as it stands in law now, to $85 per ton for industrial facilities and power plants that capture and permanently bury their carbon.

NOIA says Interior should promptly issue regulations that formally authorize access to specific offshore areas, while quickly completing environmental approvals of CCUS projects in the Gulf of Mexico, including leases and rights-of-way, due to the area's existing energy infrastructure and proximity to industrial centers for capturing emissions.

Exxon, working with a dozen other companies, has announced plans to capture 50 million tons of carbon dioxide every year from refineries and petrochemical plants that line the Houston Ship Channel. Exxon envisions the storage to occur tens of miles off the Gulf Coast, and it recently bid to lease a half million acres in shallow federal waters off the Texas coast, in what is likely an effort to secure space for the project.

But the company has warned its so-called carbon capture hub will need significant policy support to get off the ground, either through tax breaks to create incentives for the technology or by establishing a price on carbon. READ MORE