SCALE Act

I 117TH CONGRESS 1ST SESSION H. R. 1992 To require the Secretary of Energy to establish programs for carbon dioxide capture, transport, utilization, and storage, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 17, 2021 Mr. VEASEY (for himself, Mr. MCKINLEY, Mrs. BUSTOS, Mr. STAUBER, Ms. SEWELL, and Ms. CHENEY) introduced the following bill; which was re- ferred to the Committee on Science, Space, and Technology, and in addi- tion to the Committees on Energy and Commerce, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1992 IH (b) TABLE OF CONTENTS.—The table of contents for 1 this Act is as follows: 2 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. 3 Congress finds that— 4 (1) the industrial sector is integral to the econ- 5 omy of the United States— 6 (A) providing millions of jobs and essential 7 products; and 8 (B) demonstrating global leadership in 9 manufacturing and innovation; 10 (2) carbon capture and storage technologies are 11 necessary for reducing hard-to-abate emissions from 12 the industrial sector, which emits nearly 25 percent 13 of carbon dioxide emissions in the United States; 14 (3) carbon removal and storage technologies, in- 15 cluding direct air capture, must be deployed at 16 large-scale in the coming decades to remove carbon 17 dioxide directly from the atmosphere; 18 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1992 IH (4) large-scale deployment of carbon capture, 1 removal, utilization, transport, and storage— 2 (A) is critical for achieving mid-century cli- 3 mate goals; and 4 (B) will drive regional economic develop- 5 ment, technological innovation, and high-wage 6 employment; 7 (5) carbon capture, removal, and utilization 8 technologies require a backbone system of shared 9 carbon dioxide transport and storage infrastructure 10 to enable large-scale deployment, realize economies 11 of scale, and create an interconnected carbon man- 12 agement market; 13 (6) carbon dioxide transport infrastructure and 14 permanent geological storage are proven and safe 15 technologies with existing Federal and State regu- 16 latory frameworks; 17 (7) carbon dioxide transport and storage infra- 18 structure share similar barriers to deployment pre- 19 viously faced by other types of critical national infra- 20 structure, such as high capital costs and chicken- 21 and-egg challenges, that require Federal and State 22 support, in combination with private investment, to 23 be overcome; and 24 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1992 IH (8) each State should take into consideration, 1 with respect to new carbon dioxide transportation in- 2 frastructure— 3 (A) qualifying the infrastructure as pollu- 4 tion control devices under applicable laws (in- 5 cluding regulations) of the State; and 6 (B) establishing a waiver of ad valorem 7 and property taxes for the infrastructure for a 8 period of not less than 10 years. 9 TITLE I—UTILIZATION OF 10 CARBON OXIDES 11 SEC. 101. CARBON UTILIZATION PROGRAM. 12 Section 969A of the Energy Policy Act of 2005 (42 13 U.S.C. 16298a) is amended— 14 (1) in subsection (a)— 15 (A) by redesignating paragraphs (3) and 16 (4) as paragraphs (4) and (5), respectively; and 17 (B) by inserting after paragraph (2) the 18 following: 19 ‘‘(3) to develop or obtain, in coordination with 20 other applicable Federal agencies and standard-set- 21 ting organizations, standards and certifications, as 22 appropriate, to facilitate the commercialization of 23 the products and technologies described in para- 24 graph (2);’’; 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 1992 IH (2) in subsection (b)— 1 (A) by redesignating paragraph (2) as 2 paragraph (3); 3 (B) by inserting after paragraph (1) the 4 following: 5 ‘‘(2) GRANT PROGRAM.— 6 ‘‘(A) IN GENERAL.—Not later than 1 year 7 after the date of enactment of the Storing CO2 8 and Lowering Emissions Act, the Secretary 9 shall establish a program to provide grants to 10 eligible entities to use in accordance with sub- 11 paragraph (D). 12 ‘‘(B) ELIGIBLE ENTITIES.—To be eligible 13 to receive a grant under this paragraph, an en- 14 tity shall be— 15 ‘‘(i) a State; 16 ‘‘(ii) a unit of local government; or 17 ‘‘(iii) a public utility or agency. 18 ‘‘(C) APPLICATIONS.—Eligible entities de- 19 siring a grant under this paragraph shall sub- 20 mit to the Secretary an application at such 21 time, in such manner, and containing such in- 22 formation as the Secretary determines to be ap- 23 propriate. 24 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 1992 IH ‘‘(D) USE OF FUNDS.—An eligible entity 1 shall use a grant received under this paragraph 2 to procure and use commercial or industrial 3 products that— 4 ‘‘(i) use or are derived from anthropo- 5 genic carbon oxides; and 6 ‘‘(ii) demonstrate significant net re- 7 ductions in lifecycle greenhouse gas emis- 8 sions compared to incumbent technologies, 9 processes, and products.’’; and 10 (C) in paragraph (3) (as so redesignated), 11 by striking ‘‘paragraph (1)’’ and inserting ‘‘this 12 subsection’’; and 13 (3) in subsection (d), by striking paragraphs 14 (1) through (5) and inserting the following: 15 ‘‘(1) $64,000,000 for fiscal year 2021; 16 ‘‘(2) $65,250,000 for fiscal year 2022; 17 ‘‘(3) $66,562,500 for fiscal year 2023; 18 ‘‘(4) $67,940,625 for fiscal year 2024; and 19 ‘‘(5) $69,387,656 for fiscal year 2025.’’. 20 TITLE II—TRANSPORTATION OF 21 CAPTURED CARBON 22 SEC. 201. CARBON CAPTURE TECHNOLOGY PROGRAM. 23 Section 962 of the Energy Policy Act of 2005 (42 24 U.S.C. 16292) is amended— 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 1992 IH (1) in subsection (b)(2)— 1 (A) in subparagraph (C), by striking 2 ‘‘and’’ at the end; 3 (B) in subparagraph (D), by striking ‘‘pro- 4 gram.’’ and inserting ‘‘program for carbon cap- 5 ture technologies; and’’; and 6 (C) by adding at the end the following: 7 ‘‘(E) a front-end engineering and design 8 program for carbon dioxide transport infra- 9 structure necessary to enable deployment of 10 carbon capture, utilization, and storage tech- 11 nologies.’’; and 12 (2) in subsection (d)(1)— 13 (A) in subparagraph (C)(ii), by striking 14 ‘‘and’’ at the end; 15 (B) in subparagraph (D), by striking the 16 period at the end and inserting ‘‘; and’’; and 17 (C) by adding at the end the following: 18 ‘‘(E) for activities under the front-end en- 19 gineering and design program described in sub- 20 section (b)(2)(E), $20,000,000 for each of fis- 21 cal years 2022 through 2025.’’. 22 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 1992 IH SEC. 202. CARBON DIOXIDE TRANSPORTATION INFRA- 1 STRUCTURE FINANCE AND INNOVATION. 2 (a) IN GENERAL.—Title IX of the Energy Policy Act 3 of 2005 (42 U.S.C. 16181 et seq.) is amended by adding 4 at the end the following: 5 ‘‘Subtitle J—Carbon Dioxide Trans- 6 portation Infrastructure Fi- 7 nance and Innovation 8 ‘‘SEC. 999A. DEFINITIONS. 9 ‘‘In this subtitle: 10 ‘‘(1) CIFIA PROGRAM.—The term ‘CIFIA pro- 11 gram’ means the carbon dioxide transportation in- 12 frastructure finance and innovation program estab- 13 lished under section 999B(a). 14 ‘‘(2) COMMON CARRIER.—The term ‘common 15 carrier’ means a transportation infrastructure oper- 16 ator or owner that— 17 ‘‘(A) publishes a publicly available tariff 18 containing the just and reasonable rates, terms, 19 and conditions of nondiscriminatory service; 20 and 21 ‘‘(B) holds itself out to provide transpor- 22 tation services to the public for a fee. 23 ‘‘(3) CONTINGENT COMMITMENT.—The term 24 ‘contingent commitment’ means a commitment to 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 1992 IH obligate funds from future available budget author- 1 ity that is— 2 ‘‘(A) contingent on those funds being made 3 available in law at a future date; and 4 ‘‘(B) not an obligation of the Federal Gov- 5 ernment. 6 ‘‘(4) ELIGIBLE PROJECT COSTS.—The term ‘eli- 7 gible project costs’ means amounts substantially all 8 of which are paid by, or for the account of, an obli- 9 gor in connection with a project, including— 10 ‘‘(A) the cost of— 11 ‘‘(i) development-phase activities, in- 12 cluding planning, feasibility analysis, rev- 13 enue forecasting, environmental review, 14 permitting, preliminary engineering and 15 design work, and other preconstruction ac- 16 tivities; 17 ‘‘(ii) construction, reconstruction, re- 18 habilitation, replacement, and acquisition 19 of real property (including land relating to 20 the project and improvements to land), en- 21 vironmental mitigation, construction con- 22 tingencies, and acquisition and installation 23 of equipment (including labor); and 24 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 1992 IH ‘‘(iii) capitalized interest necessary to 1 meet market requirements, reasonably re- 2 quired reserve funds, capital issuance ex- 3 penses, and other carrying costs during 4 construction; and 5 ‘‘(B) transaction costs associated with fi- 6 nancing the project, including— 7 ‘‘(i) the cost of legal counsel and tech- 8 nical consultants; and 9 ‘‘(ii) any subsidy amount paid in ac- 10 cordance with section 999B(c)(3)(B)(ii) or 11 section 999C(b)(6)(B)(ii). 12 ‘‘(5) FEDERAL CREDIT INSTRUMENT.—The 13 term ‘Federal credit instrument’ means a secured 14 loan or loan guarantee authorized to be provided 15 under the CIFIA program with respect to a project. 16 ‘‘(6) LENDER.—The term ‘lender’ means any 17 non-Federal qualified institutional buyer (as defined 18 in section 230.144A(a) of title 17, Code of Federal 19 Regulations (or a successor regulation), commonly 20 known as Rule 144A(a) of the Securities and Ex- 21 change Commission and issued under the Securities 22 Act of 1933 (15 U.S.C. 77a et seq.)), including— 23 ‘‘(A) a qualified retirement plan (as de- 24 fined in section 4974(c) of the Internal Revenue 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 1992 IH Code of 1986) that is a qualified institutional 1 buyer; and 2 ‘‘(B) a governmental plan (as defined in 3 section 414(d) of the Internal Revenue Code of 4 1986) that is a qualified institutional buyer. 5 ‘‘(7) LETTER OF INTEREST.—The term ‘letter 6 of interest’ means a letter submitted by a potential 7 applicant prior to an application for credit assistance 8 in a format prescribed by the Secretary on the 9 website of the CIFIA program that— 10 ‘‘(A) describes the project and the location, 11 purpose, and cost of the project; 12 ‘‘(B) outlines the proposed financial plan, 13 including the requested credit and grant assist- 14 ance and the proposed obligor; 15 ‘‘(C) provides a status of environmental re- 16 view; and 17 ‘‘(D) provides information regarding satis- 18 faction of other eligibility requirements of the 19 CIFIA program. 20 ‘‘(8) LOAN GUARANTEE.—The term ‘loan guar- 21 antee’ means any guarantee or other pledge by the 22 Secretary to pay all or part of the principal of, and 23 interest on, a loan or other debt obligation issued by 24 an obligor and funded by a lender. 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 1992 IH ‘‘(9) MASTER CREDIT AGREEMENT.—The term 1 ‘master credit agreement’ means a conditional agree- 2 ment that— 3 ‘‘(A) is for the purpose of extending credit 4 assistance for— 5 ‘‘(i) a project of high priority under 6 section 999B(c)(3)(A); or 7 ‘‘(ii) a project covered under section 8 999B(c)(3)(B); 9 ‘‘(B) does not provide for a current obliga- 10 tion of Federal funds; and 11 ‘‘(C) would— 12 ‘‘(i) make a contingent commitment of 13 a Federal credit instrument or grant at a 14 future date, subject to— 15 ‘‘(I) the availability of future 16 funds being made available to carry 17 out the CIFIA program; and 18 ‘‘(II) the satisfaction of all condi- 19 tions for the provision of credit assist- 20 ance under the CIFIA program, in- 21 cluding section 999C(b); 22 ‘‘(ii) establish the maximum amounts 23 and general terms and conditions of the 24 Federal credit instruments or grants; 25 VerDate Sep 11 2014 01:47 May 13, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1992.IH H1992 kjohnson on DSK79L0C42PROD with BILLS 13 •HR 1992 IH ‘‘(iii) identify the 1 or more revenue 1 sources that will secure the repayment of 2 the Federal credit instruments; 3 ‘‘(iv) provide for the obligation of 4 funds for the Federal credit instruments or 5 grants after all requirements have been 6 met for the projects subject to the agree- 7 ment, including— 8 ‘‘(I) compliance with all applica- 9 ble requirements specified under the 10 CIFIA program, including sections 11 999B(d) and 999C(b)(1); and 12 ‘‘(II) the a [Text truncated for display. 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