BILL ANALYSIS

Senate Research Center	S.R. 712
85R27015 KSM-D	By: Seliger
	Business & Commerce
	5/17/2017
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Fossil fuels, including coal, natural gas, and oil, currently meet more than three quarters of primary global energy demand around the world and in the United States.

According to the International Energy Agency, under current energy and environmental policies, fossil fuels will continue to play a role of this magnitude for the next quarter century or more. Even assuming global adoption of policies consistent with the IEA's "climate-stabilizing" 450 Scenario, more than half of total worldwide and U.S. energy demand would still be met by fossil fuels in 2040.

The U.S. Department of Energy has reported that "carbon capture, utilization, and storage technologies provide a key pathway to address the urgent U.S. and global need for affordable, secure, resilient, and reliable sources of clean energy." Environmental advocates who recognize the value and enduring role of fossil fuels as an essential source of energy have come to support the accelerated development and broad deployment of carbon capture technologies for fossil fuels as part of a sustainable energy future. Similarly, fossil energy advocates who have recognized the role carbon capture can play in creating new opportunities support the development and deployment of carbon capture technologies for fossil fuels.

The United States and Texas have abundant supplies of fossil energy, the production and use of which provide important economic, energy, and national security benefits to our nation and our state. Texas is the nation's largest producer of natural gas, oil, lignite coal, and fossil fuels in total, and it has the nation's largest proved reserves of both natural gas and oil, as well as the ninth-largest recoverable reserves of coal. It is the nation's largest consumer of coal for electricity generation and the largest consumer of natural gas for both electricity generation and industrial use; 77 percent of the electricity generated in Texas is produced from the use of fossil fuels.

Reliable and affordable electricity is vital to economic growth and job creation and to the well-being of all citizens. According to the U.S. Department of Energy, "A diverse portfolio of energy resources is critical to U.S. energy and national policy . . . being more robust and resilient in comparison to a system that is heavily dependent on a limited set of energy resources . . . [and] helps insulate the economy from certain risks, including price volatility and risks from supply disruptions."

Texas is a leader in the research and development of technologies that provide clean, safe, and reliable power generation, and it is committed to continued research and development of carbon reduction strategies for fossil fuels, including existing and emerging CCUS technologies such as geological sequestration, mineral carbonation, and the beneficial use of captured carbon dioxide.

In Texas, many academic, private, and governmental initiatives and institutions are engaged in efforts to address the environmental, health, and economic impacts of energy production and use through collaborations on applied CO2 research, practical applications, workforce development, and public education. Among them are the Petra Nova Project at the W. A. Parish Electric Generating Station in Fort Bend County, the Texas Clean Energy Project in Ector County, the NET Power project in Harris County, the Energy and Environment Initiative at Rice University, the Texas Carbon Management Project, and the Gulf Coast Carbon Center at The University of Texas at Austin.

Legislation was introduced in the 114th U.S. Congress to enhance and extend current federal tax incentives, under Section 45Q of the Internal Revenue Code, that sustain and promote such collaborations and encourage private industry in energy generation, manufacturing, and agriculture to adopt and deploy existing and emerging technologies that increase carbon capture, utilization, and storage. environmental and energy advocates have come together in support of this legislation in a groundbreaking coalition of environmental advocacy groups, labor unions, and energy producers from the coal, oil and gas, ethanol, and algae-biomass industries. Moreover, the legislation has received strong bipartisan support in both the United States Senate and the United States House of Representatives.

Congress and the president are also currently considering a large-scale federal infrastructure initiative to strengthen our nation's transportation, public works, and energy infrastructure, which could also serve as a vehicle for advancing "jobs-ready" carbon capture projects. The U.S. Department of Energy has determined that "a combination of tax incentives and research, development, demonstration, and deployment (RDD&D) will be critical to developing transformational carbon capture technologies and to driving down the costs of capture."

The Lone Star State has long been committed to a forward-looking energy strategy that maximizes both environmental quality and economic opportunity.

RESOLVED

That the Senate of the 85th Texas Legislature hereby respectfully urge the Congress of the United States to enact legislation to expand and extend the current federal tax credit for carbon capture, utilization, and storage under Section 45Q of the Internal Revenue Code.

That the Texas Senate respectfully urge Congress to provide appropriations to the U.S. Department of Energy sufficient to achieve and sustain a robust carbon capture research, development, demonstration, and deployment program and to support the inclusion of economically and environmentally beneficial carbon capture projects in any forthcoming federal infrastructure initiative.

That the Texas Senate respectfully urge Congress to support policies to increase the operational efficiency, and thereby the environmental performance, of existing electric-generating units and to support the preservation of a fuel-diverse electric generation portfolio critical to our domestic economic, energy, and national security.

That the secretary of the senate forward official copies of this resolution to the president of the United States, to the president of the Senate and the speaker of the House of Representatives of the United States Congress, and to all the members of the Texas delegation to Congress with the request that this resolution be entered in the Congressional Record as a memorial to the Congress of the United States of America.