SCALE Act

I 116TH CONGRESS 2D SESSION H. R. 8995 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 DECEMBER 16, 2020 Mr. VEASEY (for himself, Mr. MCKINLEY, Mrs. BUSTOS, and Mr. STAUBER) introduced the following bill; which was referred to the Committee on Science, Space, and Technology, and in addition to the Committees on Energy and Commerce, and Transportation and Infrastructure, for a pe- riod to be subsequently determined by the Speaker, in each case for con- sideration of such provisions as fall within the jurisdiction of the com- mittee 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 21:45 Feb 13, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 2 •HR 8995 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 and carbon-to-value infrastructure devel- opment. TITLE II—TRANSPORTATION OF CAPTURED CARBON Sec. 201. Carbon dioxide transportation infrastructure finance and innovation. TITLE III—GEOLOGIC STORAGE OF CAPTURED CARBON Sec. 301. Secure geologic storage infrastructure development program. 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, providing millions of jobs, 6 essential products, and demonstrating global leader- 7 ship in 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 one quarter 11 of the United States carbon dioxide emissions; 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 is critical 18 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 3 •HR 8995 IH for achieving mid-century climate goals and will 1 drive regional economic development, technological 2 innovation, and high-wage employment; 3 (5) carbon capture, removal, and utilization 4 technologies require a backbone system of shared 5 carbon dioxide transport and storage infrastructure 6 to enable large-scale deployment, realize economies 7 of scale, and create an interconnected carbon man- 8 agement market; 9 (6) carbon dioxide transport infrastructure and 10 permanent geological storage are proven and safe 11 technologies with existing Federal and State regu- 12 latory frameworks; 13 (7) carbon dioxide transport and storage infra- 14 structure share similar barriers to deployment pre- 15 viously faced by other types of critical national infra- 16 structure, such as high capital costs and chicken- 17 and-egg challenges, that require Federal and State 18 support, in combination with private investment, to 19 be overcome; and 20 (8) each State should take into consideration, 21 with respect to new carbon dioxide transportation in- 22 frastructure— 23 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 4 •HR 8995 IH (A) qualifying such 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 such 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 AND CARBON- 9 TO-VALUE INFRASTRUCTURE DEVELOPMENT. 10 (a) IN GENERAL.—Subtitle F of title IX of the En- 11 ergy Policy Act of 2005 (42 U.S.C. 16291 et seq.) is 12 amended by adding at the end the following: 13 ‘‘SEC. 969. CARBON UTILIZATION PROGRAM. 14 ‘‘(a) IN GENERAL.—The Secretary shall establish a 15 program of research, development, and demonstration for 16 carbon utilization— 17 ‘‘(1) to identify and assess technologies and 18 processes to produce products of commercial value, 19 including chemicals, materials, and advanced fuels, 20 that— 21 ‘‘(A) use or are derived from anthropo- 22 genic carbon oxides; and 23 ‘‘(B) will achieve significant net reductions 24 in lifecycle greenhouse gas emissions compared 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 5 •HR 8995 IH to incumbent technologies, processes, and prod- 1 ucts; 2 ‘‘(2) to develop or obtain, in coordination with 3 the heads of other applicable Federal agencies and 4 standard-setting organizations, standards and cer- 5 tifications, as appropriate, to facilitate the commer- 6 cialization of the technologies and products described 7 in paragraph (1); and 8 ‘‘(3) to assess the lifecycle greenhouse gas emis- 9 sions associated with the technologies, processes, and 10 products described in paragraph (1). 11 ‘‘(b) CARBON-TO-VALUE RESEARCH, DEVELOPMENT, 12 AND DEMONSTRATION CENTER.—Not later than 1 year 13 after the date of enactment of this section, the Secretary 14 shall establish a research, development, and demonstration 15 center to support the program established under sub- 16 section (a). 17 ‘‘(c) GRANT PROGRAM.— 18 ‘‘(1) IN GENERAL.—Not later than 1 year after 19 the date of enactment of this section, the Secretary 20 shall establish a program to provide grants to eligi- 21 ble entities to use in accordance with paragraph (4). 22 ‘‘(2) ELIGIBLE ENTITIES.—An entity eligible to 23 receive a grant under this subsection is— 24 ‘‘(A) a State; or 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 6 •HR 8995 IH ‘‘(B) a unit of local government. 1 ‘‘(3) APPLICATIONS.—To be eligible to receive a 2 grant under this subsection, an eligible entity shall 3 submit to the Secretary an application at such time, 4 in such manner, and containing such information as 5 the Secretary determines to be appropriate. 6 ‘‘(4) USE OF FUNDS.—An eligible entity shall 7 use a grant under this subsection to procure and use 8 products of commercial value, including chemicals, 9 materials, and advanced fuels, that— 10 ‘‘(A) use or are derived from anthropo- 11 genic carbon oxides; and 12 ‘‘(B) demonstrate significant net reduc- 13 tions in lifecycle greenhouse gas emissions com- 14 pared to incumbent technologies, processes, and 15 products. 16 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 17 is authorized to be appropriated to the Secretary to carry 18 out this section $40,000,000 for each of fiscal years 2021 19 through 2025.’’. 20 (b) CLERICAL AMENDMENT.—The table of contents 21 for the Energy Policy Act of 2005 (Public Law 109–58; 22 119 Stat. 600) is amended by adding at the end of the 23 items relating to subtitle F of title IX the following: 24 ‘‘Sec. 969. Carbon utilization program.’’. VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6211 E:\BILLS\H8995.IH H8995 7 •HR 8995 IH TITLE II—TRANSPORTATION OF 1 CAPTURED CARBON 2 SEC. 201. CARBON DIOXIDE TRANSPORTATION INFRA- 3 STRUCTURE FINANCE AND INNOVATION. 4 (a) IN GENERAL.—Title IX of the Energy Policy Act 5 of 2005 (42 U.S.C. 16181 et seq.) is amended by adding 6 at the end the following: 7 ‘‘Subtitle J—Carbon Dioxide Trans- 8 portation Infrastructure Fi- 9 nance and Innovation 10 ‘‘SEC. 999A. DEFINITIONS. 11 ‘‘In this subtitle: 12 ‘‘(1) CIFIA PROGRAM.—The term ‘CIFIA pro- 13 gram’ means the carbon dioxide transportation in- 14 frastructure finance and innovation program estab- 15 lished under section 999B(a). 16 ‘‘(2) COMMON CARRIER.—The term ‘common 17 carrier’ means a transportation infrastructure oper- 18 ator that— 19 ‘‘(A) publishes a publicly available tariff 20 containing the rates, terms, and conditions of 21 non-discriminatory service; and 22 ‘‘(B) holds itself out to provide transpor- 23 tation services to the public for a fee. 24 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 8 •HR 8995 IH ‘‘(3) CONTINGENT COMMITMENT.—The term 1 ‘contingent commitment’ means a commitment to 2 obligate funds from future available budget author- 3 ity that is— 4 ‘‘(A) contingent on those funds being made 5 available in law at a future date; and 6 ‘‘(B) not an obligation of the Federal Gov- 7 ernment. 8 ‘‘(4) ELIGIBLE PROJECT COSTS.—The term ‘eli- 9 gible project costs’ means amounts substantially all 10 of which are paid by, or for the account of, an obli- 11 gor in connection with a project, including the cost 12 of— 13 ‘‘(A) development-phase activities, includ- 14 ing planning, feasibility analysis, revenue fore- 15 casting, environmental review, permitting, pre- 16 liminary engineering and design work, and 17 other preconstruction activities; 18 ‘‘(B) construction, reconstruction, rehabili- 19 tation, replacement, and acquisition of real 20 property (including land relating to the project 21 and improvements to land), environmental miti- 22 gation, construction contingencies, and acquisi- 23 tion and installation of equipment (including 24 labor); and 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 9 •HR 8995 IH ‘‘(C) capitalized interest necessary to meet 1 market requirements, reasonably required re- 2 serve funds, capital issuance expenses, and 3 other carrying costs during construction. 4 ‘‘(5) FEDERAL CREDIT INSTRUMENT.—The 5 term ‘Federal credit instrument’ means a secured 6 loan or loan guarantee authorized to be made avail- 7 able under the CIFIA program with respect to a 8 project. 9 ‘‘(6) LENDER.—The term ‘lender’ means any 10 non-Federal qualified institutional buyer (as defined 11 in section 230.144A(a) of title 17, Code of Federal 12 Regulations (or a successor regulation), commonly 13 known as Rule 144A(a) of the Securities and Ex- 14 change Commission and issued under the Securities 15 Act of 1933 (15 U.S.C. 77a et seq.)), including— 16 ‘‘(A) a qualified retirement plan (as de- 17 fined in section 4974(c) of the Internal Revenue 18 Code of 1986) that is a qualified institutional 19 buyer; and 20 ‘‘(B) a governmental plan (as defined in 21 section 414(d) of the Internal Revenue Code of 22 1986) that is a qualified institutional buyer. 23 ‘‘(7) LETTER OF INTEREST.—The term ‘letter 24 of interest’ means a letter submitted by a potential 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 10 •HR 8995 IH applicant prior to an application for credit assistance 1 in a format prescribed by the Secretary on the 2 website of the CIFIA program that— 3 ‘‘(A) describes the project and the location, 4 purpose, and cost of the project; 5 ‘‘(B) outlines the proposed financial plan, 6 including the requested credit and grant assist- 7 ance and the proposed obligor; 8 ‘‘(C) provides a status of environmental re- 9 view; and 10 ‘‘(D) provides information regarding satis- 11 faction of other eligibility requirements of the 12 CIFIA program. 13 ‘‘(8) LOAN GUARANTEE.—The term ‘loan guar- 14 antee’ means any guarantee or other pledge by the 15 Secretary to pay all or part of the principal of, and 16 interest on, a loan or other debt obligation issued by 17 an obligor and funded by a lender. 18 ‘‘(9) MASTER CREDIT AGREEMENT.—The term 19 ‘master credit agreement’ means a conditional agree- 20 ment that— 21 ‘‘(A) is for the purpose of extending credit 22 assistance for— 23 ‘‘(i) a project of high priority under 24 section 999B(c)(3)(A); or 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 11 •HR 8995 IH ‘‘(ii) a project covered under section 1 999B(c)(3)(B); 2 ‘‘(B) does not provide for a current obliga- 3 tion of Federal funds; and 4 ‘‘(C) would— 5 ‘‘(i) make a contingent commitment of 6 a secured loan or other Federal credit in- 7 strument, or grant at a future date, sub- 8 ject to— 9 ‘‘(I) the availability of future 10 funds being made available to carry 11 out the CIFIA program; and 12 ‘‘(II) the satisfaction of all condi- 13 tions for the provision of credit assist- 14 ance under the CIFIA program, in- 15 cluding section 999C(b); 16 ‘‘(ii) establish the maximum amounts 17 and general terms and conditions of the se- 18 cured loans, other Federal credit instru- 19 ments, or grants; 20 ‘‘(iii) identify the one or more dedi- 21 cated revenue sources that will secure the 22 repayment of the secured loans or secured 23 Federal credit instruments; 24 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 12 •HR 8995 IH ‘‘(iv) provide for the obligation of 1 funds for the secured loans, secured Fed- 2 eral credit instruments, or grants after all 3 requirements have been met for the 4 projects subject to the master credit agree- 5 ment, including— 6 ‘‘(I) an environmental categorical 7 exclusion, a finding of no significant 8 impact, or a record of decision under 9 the National Environmental Policy 10 Act of 1969 (42 U.S.C. 4321 et seq.); 11 ‘‘(II) compliance with all applica- 12 ble requirements specified under the 13 CIFIA program, including sections 14 999B(d) and 999C(b)(1); and 15 ‘‘(III) the availability of funds to 16 carry out the CIFIA program; and 17 ‘‘(v) require that contingent commit- 18 ments shall result in a financial close and 19 obligation of credit or grant assistance by 20 not later than 3 years after the date of 21 entry into the master credit agreement or 22 release of the commitment, as applicable, 23 unless otherwise extended by the Sec- 24 retary. 25 VerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H8995.IH H8995 13 •HR 8995 IH ‘‘(10) OBLIGOR.—The term ‘obligor’ means a 1 corporation, partnership, joint venture, trust, gov- 2 ernmental entity, agency, or instrumentality, or 3 other entity that is primarily liable for payment of 4 the principal of, or interest on, a Federal credit in- 5 strument. 6 ‘‘(11) PR [Text truncated for display. 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