SCALE Act

II 117TH CONGRESS 1ST SESSION S. 799 To require the Secretary of Energy to establish programs for carbon dioxide capture, transport, utilization, and storage, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 17 (legislative day, MARCH 16), 2021 Mr. COONS (for himself, Mr. CASSIDY, Ms. SMITH, Mr. HOEVEN, Mr. WHITE- HOUSE, Mrs. CAPITO, Ms. DUCKWORTH, Mr. BRAUN, Mr. TESTER, Ms. MURKOWSKI, and Mr. MANCHIN) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Re- sources A BILL To require the Secretary of Energy to establish programs for carbon dioxide capture, transport, utilization, and storage, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Storing CO2 And Lowering Emissions Act’’ or the 5 ‘‘SCALE Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 799 IS Sec. 1. Short title; table of contents. Sec. 2. Findings. TITLE I—UTILIZATION OF CARBON OXIDES Sec. 101. Carbon utilization program. TITLE II—TRANSPORTATION OF CAPTURED CARBON Sec. 201. Carbon capture technology program. Sec. 202. Carbon dioxide transportation infrastructure finance and innovation. TITLE III—GEOLOGIC STORAGE OF CAPTURED CARBON Sec. 301. Carbon storage validation and testing. Sec. 302. Secure geologic storage permitting. SEC. 2. FINDINGS. 1 Congress finds that— 2 (1) the industrial sector is integral to the econ- 3 omy of the United States— 4 (A) providing millions of jobs and essential 5 products; and 6 (B) demonstrating global leadership in 7 manufacturing and innovation; 8 (2) carbon capture and storage technologies are 9 necessary for reducing hard-to-abate emissions from 10 the industrial sector, which emits nearly 25 percent 11 of carbon dioxide emissions in the United States; 12 (3) carbon removal and storage technologies, in- 13 cluding direct air capture, must be deployed at 14 large-scale in the coming decades to remove carbon 15 dioxide directly from the atmosphere; 16 (4) large-scale deployment of carbon capture, 17 removal, utilization, transport, and storage— 18 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 799 IS (A) is critical for achieving mid-century cli- 1 mate goals; and 2 (B) will drive regional economic develop- 3 ment, technological innovation, and high-wage 4 employment; 5 (5) carbon capture, removal, and utilization 6 technologies require a backbone system of shared 7 carbon dioxide transport and storage infrastructure 8 to enable large-scale deployment, realize economies 9 of scale, and create an interconnected carbon man- 10 agement market; 11 (6) carbon dioxide transport infrastructure and 12 permanent geological storage are proven and safe 13 technologies with existing Federal and State regu- 14 latory frameworks; 15 (7) carbon dioxide transport and storage infra- 16 structure share similar barriers to deployment pre- 17 viously faced by other types of critical national infra- 18 structure, such as high capital costs and chicken- 19 and-egg challenges, that require Federal and State 20 support, in combination with private investment, to 21 be overcome; and 22 (8) each State should take into consideration, 23 with respect to new carbon dioxide transportation in- 24 frastructure— 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 799 IS (A) qualifying the infrastructure as pollu- 1 tion control devices under applicable laws (in- 2 cluding regulations) of the State; and 3 (B) establishing a waiver of ad valorem 4 and property taxes for the infrastructure for a 5 period of not less than 10 years. 6 TITLE I—UTILIZATION OF 7 CARBON OXIDES 8 SEC. 101. CARBON UTILIZATION PROGRAM. 9 Section 969A of the Energy Policy Act of 2005 (42 10 U.S.C. 16298a) is amended— 11 (1) in subsection (a)— 12 (A) by redesignating paragraphs (3) and 13 (4) as paragraphs (4) and (5), respectively; and 14 (B) by inserting after paragraph (2) the 15 following: 16 ‘‘(3) to develop or obtain, in coordination with 17 other applicable Federal agencies and standard-set- 18 ting organizations, standards and certifications, as 19 appropriate, to facilitate the commercialization of 20 the products and technologies described in para- 21 graph (2);’’; 22 (2) in subsection (b)— 23 (A) by redesignating paragraph (2) as 24 paragraph (3); 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 799 IS (B) by inserting after paragraph (1) the 1 following: 2 ‘‘(2) GRANT PROGRAM.— 3 ‘‘(A) IN GENERAL.—Not later than 1 year 4 after the date of enactment of the Storing CO2 5 And Lowering Emissions Act, the Secretary 6 shall establish a program to provide grants to 7 eligible entities to use in accordance with sub- 8 paragraph (D). 9 ‘‘(B) ELIGIBLE ENTITIES.—To be eligible 10 to receive a grant under this paragraph, an en- 11 tity shall be— 12 ‘‘(i) a State; 13 ‘‘(ii) a unit of local government; or 14 ‘‘(iii) a public utility or agency. 15 ‘‘(C) APPLICATIONS.—Eligible entities de- 16 siring a grant under this paragraph shall sub- 17 mit to the Secretary an application at such 18 time, in such manner, and containing such in- 19 formation as the Secretary determines to be ap- 20 propriate. 21 ‘‘(D) USE OF FUNDS.—An eligible entity 22 shall use a grant received under this paragraph 23 to procure and use commercial or industrial 24 products that— 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 799 IS ‘‘(i) use or are derived from anthropo- 1 genic carbon oxides; and 2 ‘‘(ii) demonstrate significant net re- 3 ductions in lifecycle greenhouse gas emis- 4 sions compared to incumbent technologies, 5 processes, and products.’’; and 6 (C) in paragraph (3) (as so redesignated), 7 by striking ‘‘paragraph (1)’’ and inserting ‘‘this 8 subsection’’; and 9 (3) in subsection (d), by striking paragraphs 10 (1) through (5) and inserting the following: 11 ‘‘(1) $64,000,000 for fiscal year 2021; 12 ‘‘(2) $65,250,000 for fiscal year 2022; 13 ‘‘(3) $66,562,500 for fiscal year 2023; 14 ‘‘(4) $67,940,625 for fiscal year 2024; and 15 ‘‘(5) $69,387,656 for fiscal year 2025.’’. 16 TITLE II—TRANSPORTATION OF 17 CAPTURED CARBON 18 SEC. 201. CARBON CAPTURE TECHNOLOGY PROGRAM. 19 Section 962 of the Energy Policy Act of 2005 (42 20 U.S.C. 16292) is amended— 21 (1) in subsection (b)(2)— 22 (A) in subparagraph (C), by striking 23 ‘‘and’’ at the end; 24 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 799 IS (B) in subparagraph (D), by striking ‘‘pro- 1 gram.’’ and inserting ‘‘program for carbon cap- 2 ture technologies; and’’; and 3 (C) by adding at the end the following: 4 ‘‘(E) a front-end engineering and design 5 program for carbon dioxide transport infra- 6 structure necessary to enable deployment of 7 carbon capture, utilization, and storage tech- 8 nologies.’’; and 9 (2) in subsection (d)(1)— 10 (A) in subparagraph (C)(ii), by striking 11 ‘‘and’’ at the end; 12 (B) in subparagraph (D), by striking the 13 period at the end and inserting ‘‘; and’’; and 14 (C) by adding at the end the following: 15 ‘‘(E) for activities under the front-end en- 16 gineering and design program described in sub- 17 section (b)(2)(E), $20,000,000 for each of fis- 18 cal years 2022 through 2025.’’. 19 SEC. 202. CARBON DIOXIDE TRANSPORTATION INFRA- 20 STRUCTURE FINANCE AND INNOVATION. 21 (a) IN GENERAL.—Title IX of the Energy Policy Act 22 of 2005 (42 U.S.C. 16181 et seq.) is amended by adding 23 at the end the following: 24 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 799 IS ‘‘Subtitle J—Carbon Dioxide Trans- 1 portation Infrastructure Fi- 2 nance and Innovation 3 ‘‘SEC. 999A. DEFINITIONS. 4 ‘‘In this subtitle: 5 ‘‘(1) CIFIA PROGRAM.—The term ‘CIFIA pro- 6 gram’ means the carbon dioxide transportation in- 7 frastructure finance and innovation program estab- 8 lished under section 999B(a). 9 ‘‘(2) COMMON CARRIER.—The term ‘common 10 carrier’ means a transportation infrastructure oper- 11 ator or owner that— 12 ‘‘(A) publishes a publicly available tariff 13 containing the just and reasonable rates, terms, 14 and conditions of nondiscriminatory service; 15 and 16 ‘‘(B) holds itself out to provide transpor- 17 tation services to the public for a fee. 18 ‘‘(3) CONTINGENT COMMITMENT.—The term 19 ‘contingent commitment’ means a commitment to 20 obligate funds from future available budget author- 21 ity that is— 22 ‘‘(A) contingent on those funds being made 23 available in law at a future date; and 24 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 799 IS ‘‘(B) not an obligation of the Federal Gov- 1 ernment. 2 ‘‘(4) ELIGIBLE PROJECT COSTS.—The term ‘eli- 3 gible project costs’ means amounts substantially all 4 of which are paid by, or for the account of, an obli- 5 gor in connection with a project, including— 6 ‘‘(A) the cost of— 7 ‘‘(i) development-phase activities, in- 8 cluding planning, feasibility analysis, rev- 9 enue forecasting, environmental review, 10 permitting, preliminary engineering and 11 design work, and other preconstruction ac- 12 tivities; 13 ‘‘(ii) construction, reconstruction, re- 14 habilitation, replacement, and acquisition 15 of real property (including land relating to 16 the project and improvements to land), en- 17 vironmental mitigation, construction con- 18 tingencies, and acquisition and installation 19 of equipment (including labor); and 20 ‘‘(iii) capitalized interest necessary to 21 meet market requirements, reasonably re- 22 quired reserve funds, capital issuance ex- 23 penses, and other carrying costs during 24 construction; and 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 799 IS ‘‘(B) transaction costs associated with fi- 1 nancing the project, including— 2 ‘‘(i) the cost of legal counsel and tech- 3 nical consultants; and 4 ‘‘(ii) any subsidy amount paid in ac- 5 cordance with section 999B(c)(3)(B)(ii) or 6 section 999C(b)(6)(B)(ii). 7 ‘‘(5) FEDERAL CREDIT INSTRUMENT.—The 8 term ‘Federal credit instrument’ means a secured 9 loan or loan guarantee authorized to be provided 10 under the CIFIA program with respect to a project. 11 ‘‘(6) LENDER.—The term ‘lender’ means any 12 non-Federal qualified institutional buyer (as defined 13 in section 230.144A(a) of title 17, Code of Federal 14 Regulations (or a successor regulation), commonly 15 known as Rule 144A(a) of the Securities and Ex- 16 change Commission and issued under the Securities 17 Act of 1933 (15 U.S.C. 77a et seq.)), including— 18 ‘‘(A) a qualified retirement plan (as de- 19 fined in section 4974(c) of the Internal Revenue 20 Code of 1986) that is a qualified institutional 21 buyer; and 22 ‘‘(B) a governmental plan (as defined in 23 section 414(d) of the Internal Revenue Code of 24 1986) that is a qualified institutional buyer. 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 799 IS ‘‘(7) LETTER OF INTEREST.—The term ‘letter 1 of interest’ means a letter submitted by a potential 2 applicant prior to an application for credit assistance 3 in a format prescribed by the Secretary on the 4 website of the CIFIA program that— 5 ‘‘(A) describes the project and the location, 6 purpose, and cost of the project; 7 ‘‘(B) outlines the proposed financial plan, 8 including the requested credit and grant assist- 9 ance and the proposed obligor; 10 ‘‘(C) provides a status of environmental re- 11 view; and 12 ‘‘(D) provides information regarding satis- 13 faction of other eligibility requirements of the 14 CIFIA program. 15 ‘‘(8) LOAN GUARANTEE.—The term ‘loan guar- 16 antee’ means any guarantee or other pledge by the 17 Secretary to pay all or part of the principal of, and 18 interest on, a loan or other debt obligation issued by 19 an obligor and funded by a lender. 20 ‘‘(9) MASTER CREDIT AGREEMENT.—The term 21 ‘master credit agreement’ means a conditional agree- 22 ment that— 23 ‘‘(A) is for the purpose of extending credit 24 assistance for— 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 799 IS ‘‘(i) a project of high priority under 1 section 999B(c)(3)(A); or 2 ‘‘(ii) a project covered under section 3 999B(c)(3)(B); 4 ‘‘(B) does not provide for a current obliga- 5 tion of Federal funds; and 6 ‘‘(C) would— 7 ‘‘(i) make a contingent commitment of 8 a Federal credit instrument or grant at a 9 future date, subject to— 10 ‘‘(I) the availability of future 11 funds being made available to carry 12 out the CIFIA program; and 13 ‘‘(II) the satisfaction of all condi- 14 tions for the provision of credit assist- 15 ance under the CIFIA program, in- 16 cluding section 999C(b); 17 ‘‘(ii) establish the maximum amounts 18 and general terms and conditions of the 19 Federal credit instruments or grants; 20 ‘‘(iii) identify the 1 or more revenue 21 sources that will secure the repayment of 22 the Federal credit instruments; 23 ‘‘(iv) provide for the obligation of 24 funds for the Federal credit instruments or 25 VerDate Sep 11 2014 01:03 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 799 IS grants after all requirements have been 1 met for the projects subject to the agree- 2 ment, including— 3 ‘‘(I) compliance with all applica- 4 ble requirements specified under the 5 CIFIA program, including sections 6 999B(d) and 999C(b)(1); and 7 ‘‘(II) the availability of funds to 8 carry out the CIFIA program; and 9 ‘‘(v) require that contingent commit- 10 ments shall result in a financial close and 11 obligation of credit or grant assistance by 12 not later than 4 years after the [Text truncated for display. 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