January 25, 2024 • 53 mins
Our guest tonight is Paul Blackburn of Pipeline Fighters’ Hub. Paul provides legal services on pipeline and renewable energy matters. He has worked on crude oil pipeline issues since 2008, and has experience in renewable energy policy and development. Paul represented nonprofit clients in the South Dakota Public Utilities Commission hearing on the Keystone XL Pipeline, and in the Minnesota Public Utilities Commission hearing on expansion of Line 67, another Enbridge pipeline. He has provided policy analysis and strategic advice on a variety of pipeline matters and authored reports on pipeline safety and oil spill response.
Paul started his legal career in Washington, DC, at the law firm of Van Ness Feldman, where he assisted clients in renewable energy and coal-fired power plant development, a variety of regulatory, legislative, and litigation matters, and Native American commercial law. After leaving private practice, he began a career in the nonprofit sector, including employment by the Sierra Club, the National Environmental Trust, and Oceana in organizing and media. He also has experience in community wind and solar energy development. Paul holds a B.A. in Biology from Macalester College and a J.D. from Boston College Law School.
In this episode we discuss topics including:
· An overview of the Q45 Carbon sequestration tax credit program
· Who benefits from the Q45 Tax Credit Program?
· How Fossil Fuel companies take advantage of the Q45 program and use it to continue to justify producing more fossil fuel
· Problems with the reporting system for 45Q to the EPA and IRS
For more information, see:
· The Pipeline Fighters Hub web site
· The Congressional Research Service’s page on the Q45 program
Visit us at climatemoneywatchdog.org!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Gregory A. Williams (00:10):
Thanks for joining us for another episode
of climate money watchdog wherewe investigate and report on how
federal dollars are being spenton mitigating climate change and
protecting the environment. Weare a private, nonpartisan
nonprofit organization that doesnot accept advertisers or
sponsors. So we can only do thiswork with your support. Please
(00:31):
visit us at climate moneywatchdog.org To learn more about
us and consider making adonation. My name is Greg
Williams and I learned toinvestigate and report on waste,
fraud and abuse in federalspending. While working at the
project on government oversight,or Pogo 30 years ago, I learned
to do independent research aswell as to work with
(00:53):
confidential informants orwhistleblowers to uncover things
like overpriced spare parts,like the infamous $435 hammers,
and expensive military weaponssystems that didn't work as
advertised. I was taught by myco host Dean eraser, who founded
Pogo in 1981, and foundedclimate money watchdog with me
(01:13):
in 2022. has spent 40 yearsinvestigating and sometimes
recovering millions of dollarswasted by the Defense Department
and other branches of governmentat Pogo, as an independent
journalist, as an author and asa professional investigator. Our
guest tonight is Paul blackbirdsof pipeline fighters hub,
(01:35):
provides legal services onpipeline and renewable energy
matters. He's worked on crudeoil pipelines since 2008, and
also has experience in renewableenergy policy and development.
Paul represented nonprofitclients in the South Dakota
Public Utilities Commissionhearing in the Keystone XL
pipeline, and in the MinnesotaPublic Utilities Commission
(01:57):
hearing on expansion of lines67. Another Enbridge pipeline is
provided policy analysis andstrategic advice on a variety of
pipeline matters, and authoredreports on pipeline safety and
oil spill response. Paul startedhis career in Washington DC at
the law firm of Vanness Feldman,where he assisted clients in
(02:18):
renewable energy and coal firedpower plant development, a
variety of regulatorylegislative and litigation
matters, and Native Americancommercial law. After leaving
private practice, he began acareer in the nonprofit sector,
including employment by theSierra Club, the National
Environment, trust, and OceaniaIn organizing, meeting in
(02:40):
organizing and mediate. He alsohas experience in community wind
and solar energy development.
And Paul holds a BA in Biologyfrom Alec Hester College and a
JD from Boston College LawSchool. Is there anything else
you'd like to share about whywe're excited to have Paul with
us tonight? Yeah, well, but
Dina Rasor (03:01):
Paul and I met about maybe six months ago and with a
group that's working andsometimes people think that
things like you know, taxcredits and things like that,
make your eyes glaze over, letsomebody else deal with that I
want to deal with theenvironment, but they don't
realize that wash it's thelifeblood interpreting the laws
(03:21):
that have been passed is thelifeblood of, of Washington, DC.
And what can happen is you canpass something with good
intentions, but then it getsusurped by bad actors. And yeah,
there are bad actors. Anytimeyou have this amount of money,
you're gonna have bad actors.
And if you don't believe that,then you're you're naive. And
(03:42):
second of all, it it it isbillions and billions of dollars
that may be misused, wasted, andtargeted correctly and will only
hurt the climate issue of carbonsequestration, or whatever, you
know, lack of having not muchcarbon because they want to the
(04:06):
the these tax credits encouragecarbon capture and pipelines and
things like that, that we havefound that just economically
doesn't make sense. But thethese new tax credits that are
under 45 Q, there's all kinds ofletters after various ones for
various parts of programs. SoPaul was written a series of
(04:29):
blogs which we will have on ourwebsite that are written for the
average person and fantasticbecause normally when you start
to read this stuff, your eyesglaze over. You can't if you
have to read it in the in itsoriginal bureaucratic accent in
really dialect you can't reallyfigure it out. So that's why I
want to pile on because I knowhow good he is at explaining
(04:51):
this stuff. And this issomething that the every climate
advocates should be concernedabout. because it's it's a it's
a highway of misspending for,and endorsed by fossil fuel. So
with that note, editorial note,I'll let, Greg. I mean, Paul,
I'm sorry, it's a long day. So Iknow tax issues are complex. But
(05:17):
if you've heard about a seriesof blogs, so let's start out by
you outline the history of thistax credit, how it affects
climate and why it's importantfor climate advocates to
understand its impact. So I'llturn it over to you all, and let
him finally talk.
Paul Blackburn (05:35):
Yeah, Dina, and Gregory, thanks for really,
thanks a lot for having metonight. And, yeah, it is a
credibly important issue. It asDina said, the, you know,
climate policy and tax policyhave lots of fine print. But
it's really the fine print wherethe, you know, sort of attorney
(05:57):
legal at the company attorneysand all the folks that scheme
for the companies to earn a lotof profit, you know, everybody
else's expense, really, reallyoperate in the dark of these
regulatory programs. And so thepoint of my blogs, which you can
find it in bold wise.org, also,you know, is to try to help
(06:18):
people understand how theseschemes work. And, you know,
they really are quite remarkableschemes and very audacious
schemes that have been developedby the fossil fuel industry in
conjunction with certain membersof Congress and, and, you know,
they're on their face, they'resupposed to help the climate.
(06:39):
But when you look at themclosely, it's really important
to understand that there'smassive potential for what I
call climate fraud. In otherwords, an effort to claim that
this is going to help, you know,mitigate climate change, but
really weld but also financialfraud, economic fraud, because
(06:59):
there's also a massive potentialfor, for not only not helping
the environment, but reallyripping off the public to a
massive extent. So we shouldreally look at both of those
issues, both climate fraud andeconomic fraud. So let's talk
(07:19):
about the 45 Q tax credit, itshistory a little bit was
originally passed in 2008. Andback then, for every tonne of
carbon dioxide that was capturedat a facility and admitted at a
polluter, the federal governmentwould pay up to 20 bucks per
tonne of carbon dioxide. So andthat would be for carbon dioxide
(07:42):
that sequestered meaning thatit's just injected underground.
But it would also pay $10 permetric ton for the carbon
dioxide to use for otherpurposes. And the most important
most significant those uses iscalled enhanced oil recovery. So
carbon dioxide is a very is whenit's made into 100. High
pressure into a liquid is a verygood solvent, it works really
(08:05):
well to dissolve oil out of rocklayers. So carbon dioxide can be
used to get more oil out of theground. And so again, the
original amount was 20 bucks forsequester carbon, just stick it
underground and dispose of it,and 10 bucks for carbon dioxide
used to enhanced oil recovery.
Well, that really wasn't enoughto make any money. Anybody
(08:25):
excited helped the oil industryon the margin. Only one project
was developed in Decatur,Illinois, a demonstration
project for sequestration, butit really didn't do much. So in
2018, Congress increased theamounts to $50 per metric ton
for sequestration and $35 permetric ton for for hassle
(08:47):
recovery. And at that level, itstarted to get folks attention,
we started seeing some bigprojects proposed the Midwest,
mostly related to the ethanolindustry. You know, because that
was enough money to make itworth it for them to do this.
And, and so that these carbonsequestration project started,
(09:11):
but then in 2022, Congresspassed the inflation Reduction
Act, and it made it did a 70%increase. So now, the tax credit
amount is $85 metric ton forsequestration is $60 per metric
ton for hassle recovery. And youknow, these numbers don't really
mean a whole lot to everydaypeople. But they mean an awful
(09:31):
lot to the industry, becauseessentially, this is how much
profit they're going to make.
And that's one of the thingsabout the 4545 IQ tax credit
that is bad. And that is thatthe cost of capturing carbon
dioxide is not uniform amongindustries, that natural gas
(09:52):
processing plants and ethanolplants, called plants is a cost
caching the carbon can be from15 to $30 metric ton, well,
they're gonna get $85 per tonfor the federal government, that
means that they're going topotentially turn, you know, 100%
(10:12):
profit or more than 100% profiton that project. On the other
hand, capturing at a coal plantmay cost $50 $60, or $70 per
metric ton. So they might stillbe able to do it, but it's not
going to be wildly profitable,they should still make a profit
in many of those plants. And theother added natural gas plants,
the cost can be 8090 $100 $210per ton. And those kinds of
(10:38):
plants is not going to work. Butthe thing is that it's a highly
variable interest cost industry.
And the 45 Q tax credit is oneprice fits all, you know, and it
just doesn't make any policysense to to have some projects,
you know, get massive windfallprofits. And then other projects
simply be on Economic, basedbased on you know, factors that
(11:03):
are that can't be altered. SoYep. Great. You have a
Gregory A. Williams (11:09):
question.
Yeah, just my understanding isthat carbon sequestration or
enhanced oil recovery, or I'veforgotten what the term is, but
pumping carbon dioxide out ofthe ground to increase the the
oil that you can drill is aprofitable undertaking in most
cases anyway. And so for the forthe people who are trying to
(11:34):
extract oil from the ground,this is icing on top of the
cake, you know that this is aprofitable business anyway,
without these, these subsidies?
Well, it's
Paul Blackburn (11:46):
not it's only profitable in certain places,
the historical recovery industryhas been the technology is
developed in the 1970s, in thefirst co2 pipelines was
developed back then to and thatthey use natural co2, in other
words, co2 that was naturallytrapped into ground and they
would drill wells down to it andpull the co2 out of the ground.
(12:07):
And, you know, the cost ofgetting out of the ground was
relatively cheap. So some, yourprojects work, but it never got
to be a huge industry fordifferent limitations. And the
two major limitations was thatthere's only a certain amount of
natural co2 in the ground. And,and so that means that they need
anthropogenic or human producedco2 in large amounts to do this.
(12:33):
And the other thing is that itwasn't really cost effective to
use anthropogenic co2 because itcosts a lot to capture this
carbon dioxide in mostfacilities. So so that means
that the two hold ups on massiverollout of enhanced oil recovery
were limited amounts of co2, andanthropogenic co2 is too
(12:55):
expensive. Well, the the 445 Qtax credit is intended to to
eliminate both of thosebarriers, it's intended to
produce large amounts ofanthropogenic co2 at federal
government taxpayer costs. Soessentially, it massively
subsidizes the oil industry, by,you know, essentially paying for
(13:19):
all their costs of producing co2and they produce co2 at for
example, an ethanol plant, thenthey can earn a lot of profit at
the capture facility plus, thenuse that co2 and enhanced oil
recovery and earn profit on theoil. And, you know, some people
might be thinking, well, gettingmore on the ground is great, but
you know, folks should have himtake a pause here and realize
(13:42):
that if the oil industry isneeding massive, federal
government subsidies to beprofitable, that's a that's a
problem. You know, you know,should we really be subsidizing
the oil industry in order to getoil out of the ground. And the
reason the oil industry wants todo this is because right now
fracking in most of the frackingfields has peaked, and is
(14:05):
starting to go into decline.
It's really just the PermianBasin, we're or fracking is
continuing to grow, but it's notgoing to be infinite there,
either. The oil industry has tolook and plan, you know, years
into advance. So they're looking1015 years down the line, and
they're looking at fracking,just simply peeking out and then
going into decline. And all theoil industry, guys, the
(14:27):
geologists, the field workers,the, you know, the consultants
and everybody else, the drillersall want their jobs to continue.
So they're looking for the nextbig thing. And for number of
physical reasons, the next bigthing is likely limited to be
going to be co2 ER or nothing.
(14:48):
But again, what does it mean ifthe oil industry needs massive
federal subsidies to do the nextbig wave and I'm talking
subsidies beyond anything that'sever happened in the past? So
you know, This is this is a seachange in the way we're talking
about oil development the UnitedStates.
Dina Rasor (15:06):
Yeah, I mean, I, you get all doubled up with carbon
capture and sequester? And isthat going to mean that they can
pump more gas out in our oilout, you know and keep doing
that keeps their industriesgoing. And when you there's a
group of people in the climatecommunity think this is the good
(15:27):
a good transitional thing likethey think nuclear is good
transitional. This is a goodtransitional. And I always go
back to what Bill McKibben ofthree bad guys started three
fifty.org He put it down verysuccinctly because everyone goes
and talks about, well, how muchcarbon can you capture? And how
much will this help than thisand that and this and that. And
(15:49):
he just wrote an Atlanticmagazine, the title was The
Earth is on fire stop burningthings. This is a very good
bumper sticker for people whotry to for people who come in
from fossil fuel or other otherWellman's meaning people who get
(16:09):
all hung up on this carbonsequester, and the building of
pipelines that are, you know,they need to build more
pipelines to do this. There areoil pipelines, and you know, how
popular popular lines are thesedays? So I'd like you to comment
on that, that how this is. Thisis kind of a fig leaf to keep
(16:30):
burning things.
Paul Blackburn (16:31):
Yeah, I mean, the oil industry is, you know,
likes to talk about enhanced oilrecovery with co2 Reduce making
low carbon oil is the terms theyuse. And the thing is that the
co2 is really the only substancethat's going to work in large
quantity for enhanced oilrecovery. Because remember,
anything, you can use otherthings for enhanced oil,
(16:52):
recovery, anything, it's a goodsolid, you can pump on the
ground, and it will get help tosoak the oil out of the rock.
But whatever you pumpunderground has got a lot of
it's going to stay there. And soyou want something you can pump
underground in large amountsthat you can just, you can just
afford to leave there, your yourpay to leave there. And co2 is
the only thing that's reallygoing to work for that. So, you
(17:14):
know, if we didn't use thisenhanced oil recovery using co2,
that oil would stay in theground. You know, that's the
point, it doesn't, you know, ifwe didn't you do this, we
wouldn't get that off theground. And typically, you're
going to see two to three timesmore carbon released from
burning oil that's produced,that is captured that is pumped
underground to get it out in thefirst place. So you know, this
(17:36):
is likely to be a huge netcarbon increase to use co2 for
enhanced oil recovery. And I'llalso say the 45 Q tax credit,
does not require that companiescommit to sequestration or
enhanced oil recovery. Theydecide themselves, you know, on
an ongoing basis, how much ofthe co2 is going to be used for
enhanced oil recovery, how muchis going to be used just go for
(17:58):
sequestration. And you know, theoil industry even says they need
both, they want to have a largeamount of co2 running through
the system. So they can use aFrance to recovery, but they
don't need it all. And they needto have the rest of the co2,
they don't need to go someplaceelse. So they're going to send
that to a sequestration. So thatall those three studies say that
sequestration is a necessarycommercial element of enhanced
(18:20):
oil recovery, you need to havethe co2 that you don't need go
someplace, and then the peoplethat capture it need to be paid.
So these are not competinginterests, they are coordinated
uses of co2, both necessary forenhanced oil recovery.
Gregory A. Williams (18:36):
And how are how reliably is that co2 That is
theoretically sequestered? Howreliably does that actually stay
sequestered?
Paul Blackburn (18:47):
That's a hard thing to say there. No, there's
there hasn't been a huge amountof knowledge about this mean
that yet the industry geologistswill say it'll stay there for
1000s of years. But the thing isthat when you put co2
Underground, it can come back upeither through fissures or, you
know, natural cracks in therock, or it can come up through
old wells. So you know, if youhave like an old oil field, like
(19:09):
there's in the Gulf Coast with10s, of 1000s of oil, wells,
pokin, all over the place. Andyou're gonna pump co2 around
underground, the industry needsto confirm that all those old
water wells are first known andidentified in second, tight and
that kind of rupture. Because ifthe co2 gets into a well that
has been improperly kept, orsimply not kept, or is old, and
(19:31):
they didn't discover it, they'regonna pop the co2 Underground
under extremely high pressure,and if there's any way for it to
leak out, it will. So you know,in some sequestration, places
where there's no other wells,there may be greater, some
greater ability to predict thatit's not going to leak out
again, but even there, therecould be earthquakes, natural
(19:53):
fissures, or other mechanismsthat are not sure about, but you
know, in places where they'regonna use it for enhanced oil
recovery Really, there's allkinds of wells, typically that's
poked all through the earth allover the place. And if any of
those wells are defective, andthey weren't kept properly, you
know, or they degrade under theco2 pressure, that co2 could
(20:14):
come bubbling up. Also, if youhave multiple operating oil
wells in an area, the co2 canmigrate from one field to
another. And that's happenedbefore where the co2 will be
injected by one company, it willgo through cracks in the ground,
they didn't anticipate, and allof a sudden hits the oil wells
or somebody else, it is notequipped to handle that much
pressure, and it blows out thetop of the there, you know, the
(20:36):
neighboring oil wells. So, youknow, they like to think they
know everything that's going tohappen and control it all. But
the truth is that there's youknow, that they make mistakes,
there's things they don'tunderstand, they don't know. And
the soil the co2 has to make tobe effective on climate change
perspective needs to stand yourground for 1000s of years, you
know, and what infrastructure wehave 1000s of years old, that's
(21:00):
not made out of stone.
Dina Rasor (21:03):
Right. Well, then, let me ask you this question.
What do you see these taxcredits helping legitimate? No,
I don't want to say that thesethis stuff is illegitimate,
because they passed it for that.
But clearly, there's a there'snot a whole lot of excitement
about subsidizing the fossilfuel to continue to do what it's
(21:26):
doing. And so it had the 45 Qtax credit, help anybody who's
actually doing true clean energyproduction?
Paul Blackburn (21:37):
Well, the whole point of the 45 Q tax credit is
to is to pay companies toconvert co2 or fossil fuels, you
know, hydrocarbons into carbondioxide. You know, it's the dead
opposite of a carbon tax. So thecarbon tax, you charge the
emitter the polluter per tonamount for how much for every
(21:58):
tonne of co2 they emit. And it'sa liability they have to pay to
pollute. Well, with a 4050 taxcredit, it's the dead opposite.
We're paying polluters toproduce co2. That has some
pretty profound effects onclimate policy in many different
ways. And you know, this, thisenhancement of the Florida who
(22:19):
tax or through inflationReduction Act, you know, it was
the language was provided to thepublic about 10 days before the
this very long, complicated billwas enacted by Congress. So we
really didn't have a chance togo through and think about the
policy implications of doingthis for effective tax credit.
But it's, you know, the taxcredit is the dead opposite of a
policy of a tax, carbon tax. Andit really wasn't discussed that
(22:44):
much, you know, but for example,if if a company wanted to do
efficiency or conservation, orother means of just reduce or
substitution of reducing theircarbon emissions, if they have,
if they have carbon capturefacility, could have installed
the facility for every tonne ofco2 that they reduce through
(23:08):
through efficiency, conservationor substitution, they will be
paid less later earn less moneyfrom the federal government. So
you know, this works if you taxcredit will discourage
conservation, discourageefficiency, and discourage
substitution for cleaner energysources. You know, if you were
literally paying the pollutersto pollute, we're turning carbon
(23:31):
dioxide into a valuablecommodity. You know, it's we're
gonna kind of then we're goingto create a national private
sewer system of pipelines totake the co2 that they're being
paid to make and put itunderground. You know, this is
(23:51):
just a radically differentpolicy and it really wasn't
discussed, but it has profoundimplications for climate change
efforts in the future. But youknow, again, carbon tax would
say we're going to charge you$50 per ton for every tonne of
carbon you get on the ground andthen for FAQ tax credit says
we'll pay you $50 for everytonne of the ground you put on
(24:11):
the ground you know there'sthey're just simply completely
incompatible with each other. Soyou know, the 14th Few tax
credit and the inflationReduction Act should be seen as
a complete you know, it justkilled the carbon tax and the
carbon tax is no longer a viablepolicy as long as the 45 new tax
credit is in place
Dina Rasor (24:34):
well then I'm then that's one of the things that I
wanted to try to to get at isthat this is like the what would
they call a Washington freighttrain hard to get started but
once it gets started almostimpossible to stop. Now that
people aren't planning andmaking this helmet how much
money is it estimated that mightbe available for this out of in
(24:59):
this will be two taken directlyout of the out of the federal
employment money. Yep.
Paul Blackburn (25:05):
Well, originally, the 45, new tax
credit had a cap on it about 750to half a one and a half billion
dollars total. But the inflationReduction Act remove the cap
altogether. So now there's nolimit on how much federal tax
credit dollars could becommitted to this program. You
know, the big projects thatwe're proposing Midwest, one of
(25:27):
which has since been cancelled,would have together per year,
pulled out about three and ahalf billion dollars in tax
credits at most. But that's justthe first three projects and
there's been dozens and dozensand dozens of them proposed, the
tax credit is only so you know,ultimately, it could be 10s of
billions of dollars, or maybeeven hundreds of billions of
dollars a year and tax creditcommitments from the federal
(25:50):
government. But you know, thetax credit, the perfect new tax
credit present only lasts for 12years from the date that of a
carbon capture facility startsoperating. But we know that if
they're going to spend billionsof dollars building these
carbon, these capture facilitiesthat those owners are not kind
of well, what held them just goout of business in 12 years. I
(26:11):
mean, nobody builds a bigindustrial facility expecting it
to last just 12 years. So weknow that you know, we for the
12 years is up if they build allthese facilities, just like you
said, you gotta be hard to stopbecause those facility owners
are going to come in and say weneed extensions of the 40 Front
View tax credit, oh, by the way,make it more generous while
you're at it. So it's going tobe you know, the gift that just
(26:32):
keeps giving to the fossil fuelindustry. And, you know, another
thing I'll just mention is that,you know, in North Dakota there
are three coal facilities thatwere planned to be retired the
Senate fuels plant, GreatPlains, foods and fuels plant
near Beulah concrete plant, coalplant, power plant near also
(26:53):
near real but and then theproject tundra, the middle and
our young coal plant, all thesecoal plants are expected to be
retired because they were nolonger economic. And
particularly the send fuelsplant was always always heavily
subsidized loans cost withsubsidizes loans were repaid by
the government, it was a veryheavily subsidized project. And
none of them were reallyeconomic anymore, because clean
(27:15):
energy was cheaper. And so whathappened was that all three of
them have, well, they allproposed carbon capture and
storage projects, the sun fuelsplants, probably an operation
and working. And, you know, thiscarbon capture for FAQ tax
credit, back to the envelopecalculation suggests that that
(27:38):
sin fuels converting coal tonatural gas than to be sold,
that's in fuels plant with morethan double its profitability,
you know, because of the new taxcredit. So basically, this was
going to be retired and now thiscoal Sun fuels plant is is is
likely to be wildly profitable.
And the same with a coal plantsthat they haven't got those
(28:01):
projects running yet. But Butessentially, what they're going
to do is use the 45 Q tax creditto justify keeping these coal
plants in operation even thoughthey were considered to be on
economic until before it's ourcue credit was expanded and
2022. So, you know, that's thekind of effort we were going to
see when you start entrustingthe fossil fuel industry, which
(28:24):
has fought climate change andclimate change for over 30
years, and you're gonna givethem 10s, if not hundreds of
billions of dollars to mitigateclimate change. I mean, what
could go wrong? You know, Imean, billions of dollars to
mitigate climate change, sothey're gonna really do a good
job at it, you know, are theyjust going to take the money and
run?
Dina Rasor (28:46):
Well, just knowing Washington DC, that there'll be
so many jobs involved, becausethe thing will have these plants
will keep going on be jobs. Andso what they'll do is that is
that tax credit gets down to thetime it will close, they'll all
come in and say oh, my gosh,then I lose, you're gonna have
to lay off all these people andthis state that state this state
(29:07):
that say that it all becomes anissue. This is what happens in
defense all the time. And theyyou know, if they if you've got
to kind of weapon they actuallyput out a chart showing where
all the subcontractors are andhow many states. And so once
this thing gets started, and theother part of it that just
drives me nuts, but it's theit's the culture of the two
(29:28):
agencies that are overseeing it.
Explain the UK, how do you getthis tax credit? Well, you
report, you self report to theEPA, on how much you're think
you're capturing. And it's alsosometimes it's not, it's not
from exact measurements.
Sometimes it's by extrapolation,which just to me is crazy. And
(29:52):
then so the EPA gets it the EPAdoesn't really know you know,
they're not thinking of taxcredits or anything else. They
just and they don't verify it.
And then they send it over tothe IRS. And the IRS says, well,
the EPA says you self reportedthis amount of tons and here's
your here's your tax credit. Howdo you know if we aren't able to
stop 4045? Q? Completely? Howwould you change the reporting
(30:17):
system? So that is not a massivefraud formula?
Paul Blackburn (30:24):
Yeah, well, let's talk about what the IRS
does. Because you know, the IRSdoesn't track physical shipments
of carbon dioxide, they dodollar things, they don't do
sciency things like having theequipment and pipelines and
stuff. You know, they just careabout the dollars. And to get
the 45 Q tax credit, theofficial form with the IRS is
(30:45):
only two pages long and makingthen some folks may only fill
out a couple of lines, two orthree lines and check a few
boxes, and then they get theirtax credits. That's the official
form. Now, they also aresupposed to do these model
certificates, which report, youknow, more detailed information,
but those models don't have tobe used. So they're going to
(31:08):
reporting information about, youknow, tax credit use on non
standardized forms. And why isthat significant? Well, for
these big, the big US carboncapture projects proposal
Midwest, you know, we knew thatsummit, for example, had over
400 investors, so each of those400, investors might have a
right to a tax credit share. Soall of a sudden, you've got 400
(31:31):
different investors plus theyhad 32 ethanol plants signed up.
So you're going to have in thecarbon capture the fuel tax
credit is is arises from thepeople that own and initially
the car, whoever owns the carboncapture equipment. So you're
going to have all theseinvestors that all these
different plants, and they'reall going to claim tax credits.
So the permutations andcombinations of who gets to
(31:54):
claim tax credits is prettybroad. So all these different
individual claimants, not thecompanies that are capturing the
co2, but the individualclaimants are going to file
claims to the IRS using thesemodel forms which are not
standardized. So they can, theycan just put in a PDF, and
however they want to report it,they can, that means the IRS
isn't going to have a premadedatabase of who's using these
(32:17):
tax credits, they'd have to goback and look at all these
customized form pick pieces ofpaper, try to enter the data
into a unified database in orderto figure out whether there's
any fraud going on. But they'renot going to do that. So, you
know, the first part of it isthat the IRS reporting is
completely inadequate. It's justlaughable. You know, and, and,
(32:40):
clearly, Congress wanted seemsto just they just wanted it to
be as easy as possible for richpeople to claim tax credit. You
know, another thing about taxcredits, we should just throw in
your on the side is that they'remost tax credits, and especially
these are inherently regressive.
You know, everyday people aren'tgoing to don't have tax bills
that require hundreds ofmillions of dollars of
investment or tax credits. Andso most of the people that are
(33:03):
almost all the people are goingto invest in these carbon
capture and storage facilitiesare accredited investors,
meaning people with over amillion dollars or more of of
investment funds, and peopleeven richer than that. So, you
know, this, these tax creditsaren't going to help everyday
people, they're going to helpthe oligarchs in our society,
and that's really the onlypeople that help. But then
(33:24):
again, you know, they could domore detailed reporting, but
they aren't. It's all just, youknow, ad hoc reporting in non
standardized ways. And, youknow, the IRS doesn't even
actually require that the EPASanlam, anything, anything, they
just say that the the reportsthat the tax claims filed by the
(33:45):
companies just simply need to beconsistent with what they're
saying to the EPA. But the EPAand the IRS don't talk to each
other about this. So you know,they're two totally different
agencies. And then the otherhand, the PAs track co2 for a
couple of reasons. One is toprotect groundwater, what the
heck does that have to do withthe IRS? Well, nothing. And the
(34:06):
other reason is, is for carbonemissions for how much you know,
Herb is going the atmosphere.
But they're not necessarilytracking where it comes from,
how it goes through pipelines,who owns it, and that ownership
can change. You know, how muchof it goes to er, how much of it
goes to sequestration. And eventhen they could pull it back out
(34:28):
of the ground for asequestration site or an ER so I
can pump it to someplace else.
It could go through multiplehubs through multiple pipelines.
So it's a very complex system.
And the EPA isn't tracking isn'tprepared to track the
complexity. So you have twoagencies that do totally
different things that don't talkto each other, and don't you
know, actually track any datathat's going to be useful to
(34:48):
enforce the fourth IQ tax forhit. So the chances of fraud
here are just, you know, almostseems like almost inevitable.
Because it'd be basically anunenforceable tax credit. It's.
Gregory A. Williams (35:01):
So I'm going to move here. And I
understand something youmentioned a couple of minutes
ago, which is you, you weredescribing all the different
parties that might be involvedin carbon sequestration, you
know, sequestering the same, thesame carbon. And if I understood
you correctly, there's reallynothing to stop all of them from
claiming the same carbon to theEPA and the IRS.
Paul Blackburn (35:27):
Well, they're not supposed to, but there's no
reporting to say that theycouldn't double dip massively.
You know, how's the IRS going tofigure out if they're double
dipping? If, if, you know, andthe other thing is that the
first the carbon credits arecreated by whoever captures the
carbon, and then they cantransfer those credits to either
anybody who owns an injectionwell, either for enhanced oil
(35:49):
recovery or for sequestration.
So you know, all those peoplethat the ethanol on carbon
capture over the ethanol plantsfor the big Midwestern projects
could then transfer their co2,carbon cut their carbon credits,
to enhanced oil recoveryoperations, or sequestration
sites. And those can all beowned by multiple partnerships,
you know, part joint ventures orcorporations, which split up the
(36:12):
tax credits. So these taxcredits are gonna get missed and
parsed, to go to whoeverwhichever rich people need them
the most. And, you know, so thatmeans that it's, it's, you know,
it's going to be virtuallyimpossible to track all that
moving from through all theseparties.
Gregory A. Williams (36:34):
That sounds like you know, if somebody
installed solar panels onsomebody else's roof, and then
that person rented that home tosomebody else. There don't seem
to be much in the way ofguardrails that would prevent
all three of those parties fromclaiming that, that tax credit.
Paul Blackburn (36:54):
Right. And although it gets even worse,
because it's sort of like, well,if you had, you know, two dozen
people on the part, some shareof the solar panels and, you
know, on the roof, and then theycould split them back and forth,
and share them and trade themaround, you know, like playing
cards, like, you know, baseballcards or something. You know,
(37:15):
that's, that's what that's thesituation, there just really
isn't any, any structure. Andthe tax credits Congress in the
flesh Reduction Act specificallymade them made up did amendments
to make these tax credits veryfungible or transferable between
parties. And in fact, fornonprofit organizations such as
(37:42):
public utilities, meaning RuralElectric Co Ops, and municipal
utilities, they can actuallyjust be paid directly for their
tax credits, rather thanclaiming, because they don't
have they don't pay any taxes.
Since they're nonprofits, thefederal government does pay them
cash for the value of those taxcredits. And other entities can
do that as well. And so youknow, then finally, I say, with
(38:05):
the tax and not finally, withwhatever the tax credits is that
because these are all claimed ontax returns, and tax returns are
by law confidential, all thesetax credit claims will be
confidential and unable, andcitizens will not be able to
know who's claiming these taxcredits. So it could be
(38:26):
corporations, it could be fossilfuel industry, it could be
private investors, it could bemembers of Congress, there's
nothing stopping members ofCongress who are millionaires or
billionaires and cashing inthese tax credits. But because
it's done via it's all claimedon tax returns, it's all secret,
it's all confidential. So youknow, it's impossible, it'll be
(38:50):
impossible for anybody but theIRS to even attempt to terminate
those fraud, and then prosecutethose who are conducting fraud.
And again, if the IRS isreporting requirements are so
weak, that, you know, they thepeople have this report in an ad
hoc way, using forms or whateverform they want, and we've got
(39:12):
10s of 1000s of people reportingthe IRS, you know, the IRS isn't
gonna be able to enforce it,that means nobody's gonna be
able to enforce it in theindustry is gonna be able to
figure out that it'sunenforceable, and even if they
got caught. They could say,well, this is also complicated
that we didn't really know whatyou will pay you back and it's
okay. You know, and they'll andthey'll just fake it and, you
know, and, and not get and getsrisk slapped, you know, by the
(39:35):
IRS. So this is just completelyset up to be to be a massive rip
off from the very wealthiest insociety of all the rest of us
who are who, who then would behave to absorb the budget
deficits that go up to pay forthis program.
Dina Rasor (39:56):
Well, now that we are all thoroughly depressed, no
England Where the billions ofclimate money may be going? And
you know, when you and your thevarious groups are banding
together to publicize this? Whatwould you suggest? You know,
what would you suggest to helpstop the bleeding? And what
(40:18):
would you suggest to stop theneed to put guardrails into the
situation? Or can you actuallystop this credit? Is it too
late?
Paul Blackburn (40:28):
Well, I think that the environmental community
first off should really take ahard look at this, I know that
there were a lot of folks whobought into the original initial
push for the inflationreduction, I thought it was the
greatest thing since slicedbread. And, and you know, those
who supported it should reallytake a second look at the 45 Q
tax credit and look at it verycarefully in terms of its actual
(40:49):
regular statutory regulatorylanguage to understand what it
is and how it operates. Becausethe potential for climate fraud
here is nificant. And it waspassed with a lot of green
environmental organizationsupport. So first off, I think
that the folks who aresupporting the IRA in carbon
capture and storage in theenvironmental community really
(41:11):
need to take a second look atthis. For everybody else, you
know, we're planning a series ofefforts to publicize these
concerns and to proposecongressional statutory fixes to
put guardrails in this program,for example, requiring the IRS
have uniform standardizedreporting that's entered into a
(41:33):
database so that they canhopefully track who gets carbon
captures carbon credits, we alsowant what's called a cradle to
grave tracking so that we knowwhere the carbon is produced,
who owns it, if it's sold tosomebody else, because it's a
commodity, who it's transferredto, and how those tax credits
(41:54):
follow the carbon dioxide to asequestration side or hassle
recovery or some other facility.
You know, there needs to becrale from where the carbon
dioxide is first produced tograve where it ends up on the
ground. And that tracking needsto be like invoices. And the
same thing is done. Similarthings are done for hazardous
waste. So you know, it has thisway to generate there's
(42:15):
generated this cradle to gravetracking, the generator has to
have paperwork, they can't haveit to a shipper that ships it to
a hazardous waste disposalfacility, they all have
paperwork has invoices, and andand manifests up manifests, and
then certifications that it'sproperly disposed of. Well, the
same kinds of cradle to gravetracking needs to happen for
(42:37):
carbon dioxide, and it needs toboth be usable by the IRS for
IRS purposes, but it also needsto be used usable by the EPA so
they can track carbon emissions.
You know, another thing aboutthe this carbon capture and
storage is that capturing thecarbon dioxide, compressing it
(42:59):
pumping it through pipelines,compressing, pumping on the
ground is very energy intensiveand resource intensive. And yet
the 45 year tax credit programdoes not have any net carbon
doesn't doesn't give benefitsbased on net carbon
sequestration. It only givesbenefits based on gross carbon
(43:19):
injected underground, either forenhanced oil recovery or or or
sequestration. So you know,there really should be a net
carbon sequestration net carbonbenefit amendment to the Ford
effect new tax credit, so thatwe aren't, you know, subsidy
subsidizing projects thatultimately ended up emitting
(43:41):
more carbon into the ground andthey are into the air of the
night supposedly underground.
There's a lot of differentguardrails that could be done
for this program. And we'regoing to be proposing those and
hope that people support that,you know, whether, you know,
whatever side of the politicalspectrum you're on, we don't
want to have massive fraud ofpublic tax dollars. And you
(44:03):
know, whether you supportcarbon, really believe climate
change is real and supportcarbon mitigation. You know, we
don't want to have this simplybe a massive fraudulent ripoff
that increases budget deficitsand makes everybody poor at, you
know, the oligarchs expense,that and the benefits the
(44:24):
oligarchs.
Dina Rasor (44:28):
Okay, well, that pretty much answers my
questioning. Greg, do you? Isthere anything that you would
like to add or, or ask about,
Gregory A. Williams (44:37):
but I just wanted to ask you so you've,
you've said we're doing on anumber of occasions, and I'm
wondering if that's the pipelinefighters hub, the anti carbon
sequestration community ingeneral, or are there other
organizations you'd like topoint our listeners to for more
information or ways to protestpaid in the fight against this
(45:01):
kind of fraud. Yeah,
Paul Blackburn (45:03):
there are a variety of different
organizations that are workingon this both at a federal level
and at a state level and projectlevel for these carbon
sequestration projects. And and,you know, rather than trying to
name them all here, because I'mgoing to forget, what I would
suggest you do is go to the, ourwebsite, pipeline fighters hub,
(45:31):
and and look at look at where wehave all the materials we have
there and just search online andGoogle, there's the science,
Environmental Health Network,the Center for Biological
Diversity is working on this.
There's Deena and Greg'sorganization. And a number of
other, you know, policy expertsthat are working on this. So we
think that there's, there needsto be a growing awareness of
(45:57):
this effort, and we are growingthat awareness, but it's going
to take time to do it. Do youhave any folks that you would
suggesting that should be thepeople could be referred to
here? No,
Dina Rasor (46:10):
I would just highly, you know, what I would suggest,
if anybody's, you know, in alather about this, which I hope
we've been able to do is onehave the, you know, pass on this
podcast, which helps because alot of people don't have time to
read a lot of tech stuff. But Ialso would say, if you really
want to get a good grounding onit, go to go ahead and go to
(46:34):
Paul sights and look at theseries we'll have, we'll have
connections to it on our on ourblog, and go to the various
blogs that he wrote upon thisand articles he wrote on this,
because he's gives you lots ofgood, solid information and
passing that along to otherpeople, is probably the most
(46:54):
important thing. And one of thereasons we do these podcasts is
that when somebody comes and youknow, you think if there's a
politician or a staffer inCongress that doesn't really
understand this, you can sendthe link to this podcast, and
they can just sit down andlisten, because I, you know, I
know that thing in WashingtonDC, if you keep adding on what
people read, it doesn't getread. But this is the kind of
(47:16):
thing that they can listen, onthe car in the car on the way
home, something like that. Sothat's why we're doing these
kinds of things, with veryhighlighting various activists.
And that's why I wanted Paul onbecause I knew that he he, he
was able to explain a veryByzantine attempt at the
(47:38):
government to do somethingthat's actually turning out to
be rather stupid.
Paul Blackburn (47:42):
Yeah, I mean, campaigns to stop this kind of
thing. You know, first, we needto do a lot of public education,
we're still in that phase.
Ultimately, we'll start todevelop political power as more
more people understand what'sgoing on. And, and then we'll
have specific actions thatpeople can take to stop this.
But remember, and this ispotentially hundreds of billions
of dollars that the fossil fuelindustry wants are up against
(48:04):
some very powerful players. Andit's gonna take a while to build
power to push back on this. Andalso, there's been a lot of I
think, misrepresentation aboutthe potential benefits of carbon
capture and storage and thepotential risks. And the more
that that the people who careabout climate change are aware
of these risks, the better.
(48:27):
Because, you know, frankly, thisis being pushed to a significant
degree by the Bidenadministration by Democrats. So
we frankly, need to startpushing back democratic
representatives and senators andalso President Biden to say,
hey, you know, there may be somerole for carbon capture and
storage, which, you know, is wasis mostly understood to be
(48:50):
industries like coal, and likethe steel industry and the
cement industry, but this taxcredit doesn't prioritize them.
But you know, there needs to beguardrails on this. Otherwise,
it's just going to be one big,huge, massive ripoff. And it's
kind of, you know, we're gonnalook back and see that the
fourth hukou tax credit, didn'tdo anything for climate change,
and instead, really hurt ourcountry's economy, you know, and
(49:12):
then built all these potentiallybuilt all these pipe dangerous
pipelines all over the UnitedStates. And we already talked
about that. Just how dangerous amajor pipe co2 plan is, if
eruptions. You know, thepotential for mass casualty
events from these pipelines isreal. You know, so there's just
a huge amount to understand andno here. But again, you know,
(49:33):
the industry hires tons and tonsof attorneys and policy people,
lobbyists, and they all schemeabout how to do this. And so
their scheme here is to pretendto be helping the climate while
ripping off the public to thetune of hundreds of billions of
dollars and continuing thefossil fuel industry
indefinitely. It's quite adevious and remarkable scheme
(49:53):
and audacious scheme, but italso has some very obvious
vulnerabilities and slaws and astime goes on, I think we're
going to see the truth about the43 new tax credit coming out
more and more.
Gregory A. Williams (50:09):
So we will do is, Dina said, Put these
links on our blog. But they willalso be included in the
description of these podcasts,as they're represented in all of
our different syndicatingpartners. So whether you consume
this on Apple podcasts, orAmazon, or any of any of the
popular podcasts indicatingplatforms, you'll get all of
(50:31):
these links. And if you pass onthe podcast, you will be passed
on all of those links as well.
Paul Blackburn (50:39):
Just add real quick, the blogs didn't were all
written before the inflationreduction that came up. So I
haven't gone back and updatedthem, I should really do that.
But they assume that the 2018bills in place. So the thing is,
this situation is the worst,it's much worse now than it was
when those blogs were written interms of the potential financial
(51:01):
liabilities faced by taxpayers,but most of the basic structure
is still there. And those blogs,I think will help folks
understand this relativelycomplex situation, in common
sense terms.
Dina Rasor (51:16):
And you do have articles to in the same place
where you list the blogs whereyou have updates in different
different publications like Thethe hill and other places where
you update the blogs. And soit's it's easy to find that
information.
Gregory A. Williams (51:30):
And so we encourage our listeners to read
from as many different sourcesas they can. But regardless of
what source you're consuming,always ask the question, you
know, where's the money goingto, you know, who is benefiting
from this? You know, it's theclassic advice to follow the
money. And if it's not clearfrom the article where the
(51:51):
money's going, then, you know, Iencourage you to question the
integrity of the source. So withthat said, Is there anything
you'd like to add as finalremarks?
Paul Blackburn (52:04):
No, I just thank you for having me on tonight.
And again, people should reallylook into this because it's a
huge issue for climate change.
It's a huge issue for our healthdepartment, financial health of
our government, is a huge issuefor equity in how we're spending
our tax dollars. So, you know,we all need to work together,
we're trying to take back ourgovernment from the people who
(52:24):
are just simply ripping all ofus off.
Dina Rasor (52:29):
And we're gonna keep following this. We're gonna keep
sorry, right? We're gonna keepfollowing this so that when you
get to the point where you'reactually starting to present it
to various members of Congressand things like that, that we'll
have another podcast on maybe ifyou and another person talking
about Okay, now we're trying todo something about it, and this
is how you can help.
Gregory A. Williams (52:48):
All right.
Well, thank you very much forjoining us tonight, Paul. Thank
you.
Thanks for joining us for another episode
of climate money watchdog wherewe investigate and report on how
federal dollars are being spenton mitigating climate change and
protecting the environment. Weare a private, nonpartisan
nonprofit organization that doesnot accept advertisers or
sponsors. So we can only do thiswork with your support. Please
(00:31):
visit us at climate moneywatchdog.org To learn more about
us and consider making adonation. My name is Greg
Williams and I learned toinvestigate and report on waste,
fraud and abuse in federalspending. While working at the
project on government oversight,or Pogo 30 years ago, I learned
to do independent research aswell as to work with
(00:53):
confidential informants orwhistleblowers to uncover things
like overpriced spare parts,like the infamous $435 hammers,
and expensive military weaponssystems that didn't work as
advertised. I was taught by myco host Dean eraser, who founded
Pogo in 1981, and foundedclimate money watchdog with me
(01:13):
in 2022. has spent 40 yearsinvestigating and sometimes
recovering millions of dollarswasted by the Defense Department
and other branches of governmentat Pogo, as an independent
journalist, as an author and asa professional investigator. Our
guest tonight is Paul blackbirdsof pipeline fighters hub,
(01:35):
provides legal services onpipeline and renewable energy
matters. He's worked on crudeoil pipelines since 2008, and
also has experience in renewableenergy policy and development.
Paul represented nonprofitclients in the South Dakota
Public Utilities Commissionhearing in the Keystone XL
pipeline, and in the MinnesotaPublic Utilities Commission
(01:57):
hearing on expansion of lines67. Another Enbridge pipeline is
provided policy analysis andstrategic advice on a variety of
pipeline matters, and authoredreports on pipeline safety and
oil spill response. Paul startedhis career in Washington DC at
the law firm of Vanness Feldman,where he assisted clients in
(02:18):
renewable energy and coal firedpower plant development, a
variety of regulatorylegislative and litigation
matters, and Native Americancommercial law. After leaving
private practice, he began acareer in the nonprofit sector,
including employment by theSierra Club, the National
Environment, trust, and OceaniaIn organizing, meeting in
(02:40):
organizing and mediate. He alsohas experience in community wind
and solar energy development.
And Paul holds a BA in Biologyfrom Alec Hester College and a
JD from Boston College LawSchool. Is there anything else
you'd like to share about whywe're excited to have Paul with
us tonight? Yeah, well, but
Dina Rasor (03:01):
Paul and I met about maybe six months ago and with a
group that's working andsometimes people think that
things like you know, taxcredits and things like that,
make your eyes glaze over, letsomebody else deal with that I
want to deal with theenvironment, but they don't
realize that wash it's thelifeblood interpreting the laws
(03:21):
that have been passed is thelifeblood of, of Washington, DC.
And what can happen is you canpass something with good
intentions, but then it getsusurped by bad actors. And yeah,
there are bad actors. Anytimeyou have this amount of money,
you're gonna have bad actors.
And if you don't believe that,then you're you're naive. And
(03:42):
second of all, it it it isbillions and billions of dollars
that may be misused, wasted, andtargeted correctly and will only
hurt the climate issue of carbonsequestration, or whatever, you
know, lack of having not muchcarbon because they want to the
(04:06):
the these tax credits encouragecarbon capture and pipelines and
things like that, that we havefound that just economically
doesn't make sense. But thethese new tax credits that are
under 45 Q, there's all kinds ofletters after various ones for
various parts of programs. SoPaul was written a series of
(04:29):
blogs which we will have on ourwebsite that are written for the
average person and fantasticbecause normally when you start
to read this stuff, your eyesglaze over. You can't if you
have to read it in the in itsoriginal bureaucratic accent in
really dialect you can't reallyfigure it out. So that's why I
want to pile on because I knowhow good he is at explaining
(04:51):
this stuff. And this issomething that the every climate
advocates should be concernedabout. because it's it's a it's
a highway of misspending for,and endorsed by fossil fuel. So
with that note, editorial note,I'll let, Greg. I mean, Paul,
I'm sorry, it's a long day. So Iknow tax issues are complex. But
(05:17):
if you've heard about a seriesof blogs, so let's start out by
you outline the history of thistax credit, how it affects
climate and why it's importantfor climate advocates to
understand its impact. So I'llturn it over to you all, and let
him finally talk.
Paul Blackburn (05:35):
Yeah, Dina, and Gregory, thanks for really,
thanks a lot for having metonight. And, yeah, it is a
credibly important issue. It asDina said, the, you know,
climate policy and tax policyhave lots of fine print. But
it's really the fine print wherethe, you know, sort of attorney
(05:57):
legal at the company attorneysand all the folks that scheme
for the companies to earn a lotof profit, you know, everybody
else's expense, really, reallyoperate in the dark of these
regulatory programs. And so thepoint of my blogs, which you can
find it in bold wise.org, also,you know, is to try to help
(06:18):
people understand how theseschemes work. And, you know,
they really are quite remarkableschemes and very audacious
schemes that have been developedby the fossil fuel industry in
conjunction with certain membersof Congress and, and, you know,
they're on their face, they'resupposed to help the climate.
(06:39):
But when you look at themclosely, it's really important
to understand that there'smassive potential for what I
call climate fraud. In otherwords, an effort to claim that
this is going to help, you know,mitigate climate change, but
really weld but also financialfraud, economic fraud, because
(06:59):
there's also a massive potentialfor, for not only not helping
the environment, but reallyripping off the public to a
massive extent. So we shouldreally look at both of those
issues, both climate fraud andeconomic fraud. So let's talk
(07:19):
about the 45 Q tax credit, itshistory a little bit was
originally passed in 2008. Andback then, for every tonne of
carbon dioxide that was capturedat a facility and admitted at a
polluter, the federal governmentwould pay up to 20 bucks per
tonne of carbon dioxide. So andthat would be for carbon dioxide
(07:42):
that sequestered meaning thatit's just injected underground.
But it would also pay $10 permetric ton for the carbon
dioxide to use for otherpurposes. And the most important
most significant those uses iscalled enhanced oil recovery. So
carbon dioxide is a very is whenit's made into 100. High
pressure into a liquid is a verygood solvent, it works really
(08:05):
well to dissolve oil out of rocklayers. So carbon dioxide can be
used to get more oil out of theground. And so again, the
original amount was 20 bucks forsequester carbon, just stick it
underground and dispose of it,and 10 bucks for carbon dioxide
used to enhanced oil recovery.
Well, that really wasn't enoughto make any money. Anybody
(08:25):
excited helped the oil industryon the margin. Only one project
was developed in Decatur,Illinois, a demonstration
project for sequestration, butit really didn't do much. So in
2018, Congress increased theamounts to $50 per metric ton
for sequestration and $35 permetric ton for for hassle
(08:47):
recovery. And at that level, itstarted to get folks attention,
we started seeing some bigprojects proposed the Midwest,
mostly related to the ethanolindustry. You know, because that
was enough money to make itworth it for them to do this.
And, and so that these carbonsequestration project started,
(09:11):
but then in 2022, Congresspassed the inflation Reduction
Act, and it made it did a 70%increase. So now, the tax credit
amount is $85 metric ton forsequestration is $60 per metric
ton for hassle recovery. And youknow, these numbers don't really
mean a whole lot to everydaypeople. But they mean an awful
(09:31):
lot to the industry, becauseessentially, this is how much
profit they're going to make.
And that's one of the thingsabout the 4545 IQ tax credit
that is bad. And that is thatthe cost of capturing carbon
dioxide is not uniform amongindustries, that natural gas
(09:52):
processing plants and ethanolplants, called plants is a cost
caching the carbon can be from15 to $30 metric ton, well,
they're gonna get $85 per tonfor the federal government, that
means that they're going topotentially turn, you know, 100%
(10:12):
profit or more than 100% profiton that project. On the other
hand, capturing at a coal plantmay cost $50 $60, or $70 per
metric ton. So they might stillbe able to do it, but it's not
going to be wildly profitable,they should still make a profit
in many of those plants. And theother added natural gas plants,
the cost can be 8090 $100 $210per ton. And those kinds of
(10:38):
plants is not going to work. Butthe thing is that it's a highly
variable interest cost industry.
And the 45 Q tax credit is oneprice fits all, you know, and it
just doesn't make any policysense to to have some projects,
you know, get massive windfallprofits. And then other projects
simply be on Economic, basedbased on you know, factors that
(11:03):
are that can't be altered. SoYep. Great. You have a
Gregory A. Williams (11:09):
question.
Yeah, just my understanding isthat carbon sequestration or
enhanced oil recovery, or I'veforgotten what the term is, but
pumping carbon dioxide out ofthe ground to increase the the
oil that you can drill is aprofitable undertaking in most
cases anyway. And so for the forthe people who are trying to
(11:34):
extract oil from the ground,this is icing on top of the
cake, you know that this is aprofitable business anyway,
without these, these subsidies?
Well, it's
Paul Blackburn (11:46):
not it's only profitable in certain places,
the historical recovery industryhas been the technology is
developed in the 1970s, in thefirst co2 pipelines was
developed back then to and thatthey use natural co2, in other
words, co2 that was naturallytrapped into ground and they
would drill wells down to it andpull the co2 out of the ground.
(12:07):
And, you know, the cost ofgetting out of the ground was
relatively cheap. So some, yourprojects work, but it never got
to be a huge industry fordifferent limitations. And the
two major limitations was thatthere's only a certain amount of
natural co2 in the ground. And,and so that means that they need
anthropogenic or human producedco2 in large amounts to do this.
(12:33):
And the other thing is that itwasn't really cost effective to
use anthropogenic co2 because itcosts a lot to capture this
carbon dioxide in mostfacilities. So so that means
that the two hold ups on massiverollout of enhanced oil recovery
were limited amounts of co2, andanthropogenic co2 is too
(12:55):
expensive. Well, the the 445 Qtax credit is intended to to
eliminate both of thosebarriers, it's intended to
produce large amounts ofanthropogenic co2 at federal
government taxpayer costs. Soessentially, it massively
subsidizes the oil industry, by,you know, essentially paying for
(13:19):
all their costs of producing co2and they produce co2 at for
example, an ethanol plant, thenthey can earn a lot of profit at
the capture facility plus, thenuse that co2 and enhanced oil
recovery and earn profit on theoil. And, you know, some people
might be thinking, well, gettingmore on the ground is great, but
you know, folks should have himtake a pause here and realize
(13:42):
that if the oil industry isneeding massive, federal
government subsidies to beprofitable, that's a that's a
problem. You know, you know,should we really be subsidizing
the oil industry in order to getoil out of the ground. And the
reason the oil industry wants todo this is because right now
fracking in most of the frackingfields has peaked, and is
(14:05):
starting to go into decline.
It's really just the PermianBasin, we're or fracking is
continuing to grow, but it's notgoing to be infinite there,
either. The oil industry has tolook and plan, you know, years
into advance. So they're looking1015 years down the line, and
they're looking at fracking,just simply peeking out and then
going into decline. And all theoil industry, guys, the
(14:27):
geologists, the field workers,the, you know, the consultants
and everybody else, the drillersall want their jobs to continue.
So they're looking for the nextbig thing. And for number of
physical reasons, the next bigthing is likely limited to be
going to be co2 ER or nothing.
(14:48):
But again, what does it mean ifthe oil industry needs massive
federal subsidies to do the nextbig wave and I'm talking
subsidies beyond anything that'sever happened in the past? So
you know, This is this is a seachange in the way we're talking
about oil development the UnitedStates.
Dina Rasor (15:06):
Yeah, I mean, I, you get all doubled up with carbon
capture and sequester? And isthat going to mean that they can
pump more gas out in our oilout, you know and keep doing
that keeps their industriesgoing. And when you there's a
group of people in the climatecommunity think this is the good
(15:27):
a good transitional thing likethey think nuclear is good
transitional. This is a goodtransitional. And I always go
back to what Bill McKibben ofthree bad guys started three
fifty.org He put it down verysuccinctly because everyone goes
and talks about, well, how muchcarbon can you capture? And how
much will this help than thisand that and this and that. And
(15:49):
he just wrote an Atlanticmagazine, the title was The
Earth is on fire stop burningthings. This is a very good
bumper sticker for people whotry to for people who come in
from fossil fuel or other otherWellman's meaning people who get
(16:09):
all hung up on this carbonsequester, and the building of
pipelines that are, you know,they need to build more
pipelines to do this. There areoil pipelines, and you know, how
popular popular lines are thesedays? So I'd like you to comment
on that, that how this is. Thisis kind of a fig leaf to keep
(16:30):
burning things.
Paul Blackburn (16:31):
Yeah, I mean, the oil industry is, you know,
likes to talk about enhanced oilrecovery with co2 Reduce making
low carbon oil is the terms theyuse. And the thing is that the
co2 is really the only substancethat's going to work in large
quantity for enhanced oilrecovery. Because remember,
anything, you can use otherthings for enhanced oil,
(16:52):
recovery, anything, it's a goodsolid, you can pump on the
ground, and it will get help tosoak the oil out of the rock.
But whatever you pumpunderground has got a lot of
it's going to stay there. And soyou want something you can pump
underground in large amountsthat you can just, you can just
afford to leave there, your yourpay to leave there. And co2 is
the only thing that's reallygoing to work for that. So, you
(17:14):
know, if we didn't use thisenhanced oil recovery using co2,
that oil would stay in theground. You know, that's the
point, it doesn't, you know, ifwe didn't you do this, we
wouldn't get that off theground. And typically, you're
going to see two to three timesmore carbon released from
burning oil that's produced,that is captured that is pumped
underground to get it out in thefirst place. So you know, this
(17:36):
is likely to be a huge netcarbon increase to use co2 for
enhanced oil recovery. And I'llalso say the 45 Q tax credit,
does not require that companiescommit to sequestration or
enhanced oil recovery. Theydecide themselves, you know, on
an ongoing basis, how much ofthe co2 is going to be used for
enhanced oil recovery, how muchis going to be used just go for
(17:58):
sequestration. And you know, theoil industry even says they need
both, they want to have a largeamount of co2 running through
the system. So they can use aFrance to recovery, but they
don't need it all. And they needto have the rest of the co2,
they don't need to go someplaceelse. So they're going to send
that to a sequestration. So thatall those three studies say that
sequestration is a necessarycommercial element of enhanced
(18:20):
oil recovery, you need to havethe co2 that you don't need go
someplace, and then the peoplethat capture it need to be paid.
So these are not competinginterests, they are coordinated
uses of co2, both necessary forenhanced oil recovery.
Gregory A. Williams (18:36):
And how are how reliably is that co2 That is
theoretically sequestered? Howreliably does that actually stay
sequestered?
Paul Blackburn (18:47):
That's a hard thing to say there. No, there's
there hasn't been a huge amountof knowledge about this mean
that yet the industry geologistswill say it'll stay there for
1000s of years. But the thing isthat when you put co2
Underground, it can come back upeither through fissures or, you
know, natural cracks in therock, or it can come up through
old wells. So you know, if youhave like an old oil field, like
(19:09):
there's in the Gulf Coast with10s, of 1000s of oil, wells,
pokin, all over the place. Andyou're gonna pump co2 around
underground, the industry needsto confirm that all those old
water wells are first known andidentified in second, tight and
that kind of rupture. Because ifthe co2 gets into a well that
has been improperly kept, orsimply not kept, or is old, and
(19:31):
they didn't discover it, they'regonna pop the co2 Underground
under extremely high pressure,and if there's any way for it to
leak out, it will. So you know,in some sequestration, places
where there's no other wells,there may be greater, some
greater ability to predict thatit's not going to leak out
again, but even there, therecould be earthquakes, natural
(19:53):
fissures, or other mechanismsthat are not sure about, but you
know, in places where they'regonna use it for enhanced oil
recovery Really, there's allkinds of wells, typically that's
poked all through the earth allover the place. And if any of
those wells are defective, andthey weren't kept properly, you
know, or they degrade under theco2 pressure, that co2 could
(20:14):
come bubbling up. Also, if youhave multiple operating oil
wells in an area, the co2 canmigrate from one field to
another. And that's happenedbefore where the co2 will be
injected by one company, it willgo through cracks in the ground,
they didn't anticipate, and allof a sudden hits the oil wells
or somebody else, it is notequipped to handle that much
pressure, and it blows out thetop of the there, you know, the
(20:36):
neighboring oil wells. So, youknow, they like to think they
know everything that's going tohappen and control it all. But
the truth is that there's youknow, that they make mistakes,
there's things they don'tunderstand, they don't know. And
the soil the co2 has to make tobe effective on climate change
perspective needs to stand yourground for 1000s of years, you
know, and what infrastructure wehave 1000s of years old, that's
(21:00):
not made out of stone.
Dina Rasor (21:03):
Right. Well, then, let me ask you this question.
What do you see these taxcredits helping legitimate? No,
I don't want to say that thesethis stuff is illegitimate,
because they passed it for that.
But clearly, there's a there'snot a whole lot of excitement
about subsidizing the fossilfuel to continue to do what it's
(21:26):
doing. And so it had the 45 Qtax credit, help anybody who's
actually doing true clean energyproduction?
Paul Blackburn (21:37):
Well, the whole point of the 45 Q tax credit is
to is to pay companies toconvert co2 or fossil fuels, you
know, hydrocarbons into carbondioxide. You know, it's the dead
opposite of a carbon tax. So thecarbon tax, you charge the
emitter the polluter per tonamount for how much for every
(21:58):
tonne of co2 they emit. And it'sa liability they have to pay to
pollute. Well, with a 4050 taxcredit, it's the dead opposite.
We're paying polluters toproduce co2. That has some
pretty profound effects onclimate policy in many different
ways. And you know, this, thisenhancement of the Florida who
(22:19):
tax or through inflationReduction Act, you know, it was
the language was provided to thepublic about 10 days before the
this very long, complicated billwas enacted by Congress. So we
really didn't have a chance togo through and think about the
policy implications of doingthis for effective tax credit.
But it's, you know, the taxcredit is the dead opposite of a
policy of a tax, carbon tax. Andit really wasn't discussed that
(22:44):
much, you know, but for example,if if a company wanted to do
efficiency or conservation, orother means of just reduce or
substitution of reducing theircarbon emissions, if they have,
if they have carbon capturefacility, could have installed
the facility for every tonne ofco2 that they reduce through
(23:08):
through efficiency, conservationor substitution, they will be
paid less later earn less moneyfrom the federal government. So
you know, this works if you taxcredit will discourage
conservation, discourageefficiency, and discourage
substitution for cleaner energysources. You know, if you were
literally paying the pollutersto pollute, we're turning carbon
(23:31):
dioxide into a valuablecommodity. You know, it's we're
gonna kind of then we're goingto create a national private
sewer system of pipelines totake the co2 that they're being
paid to make and put itunderground. You know, this is
(23:51):
just a radically differentpolicy and it really wasn't
discussed, but it has profoundimplications for climate change
efforts in the future. But youknow, again, carbon tax would
say we're going to charge you$50 per ton for every tonne of
carbon you get on the ground andthen for FAQ tax credit says
we'll pay you $50 for everytonne of the ground you put on
(24:11):
the ground you know there'sthey're just simply completely
incompatible with each other. Soyou know, the 14th Few tax
credit and the inflationReduction Act should be seen as
a complete you know, it justkilled the carbon tax and the
carbon tax is no longer a viablepolicy as long as the 45 new tax
credit is in place
Dina Rasor (24:34):
well then I'm then that's one of the things that I
wanted to try to to get at isthat this is like the what would
they call a Washington freighttrain hard to get started but
once it gets started almostimpossible to stop. Now that
people aren't planning andmaking this helmet how much
money is it estimated that mightbe available for this out of in
(24:59):
this will be two taken directlyout of the out of the federal
employment money. Yep.
Paul Blackburn (25:05):
Well, originally, the 45, new tax
credit had a cap on it about 750to half a one and a half billion
dollars total. But the inflationReduction Act remove the cap
altogether. So now there's nolimit on how much federal tax
credit dollars could becommitted to this program. You
know, the big projects thatwe're proposing Midwest, one of
(25:27):
which has since been cancelled,would have together per year,
pulled out about three and ahalf billion dollars in tax
credits at most. But that's justthe first three projects and
there's been dozens and dozensand dozens of them proposed, the
tax credit is only so you know,ultimately, it could be 10s of
billions of dollars, or maybeeven hundreds of billions of
dollars a year and tax creditcommitments from the federal
(25:50):
government. But you know, thetax credit, the perfect new tax
credit present only lasts for 12years from the date that of a
carbon capture facility startsoperating. But we know that if
they're going to spend billionsof dollars building these
carbon, these capture facilitiesthat those owners are not kind
of well, what held them just goout of business in 12 years. I
(26:11):
mean, nobody builds a bigindustrial facility expecting it
to last just 12 years. So weknow that you know, we for the
12 years is up if they build allthese facilities, just like you
said, you gotta be hard to stopbecause those facility owners
are going to come in and say weneed extensions of the 40 Front
View tax credit, oh, by the way,make it more generous while
you're at it. So it's going tobe you know, the gift that just
(26:32):
keeps giving to the fossil fuelindustry. And, you know, another
thing I'll just mention is that,you know, in North Dakota there
are three coal facilities thatwere planned to be retired the
Senate fuels plant, GreatPlains, foods and fuels plant
near Beulah concrete plant, coalplant, power plant near also
(26:53):
near real but and then theproject tundra, the middle and
our young coal plant, all thesecoal plants are expected to be
retired because they were nolonger economic. And
particularly the send fuelsplant was always always heavily
subsidized loans cost withsubsidizes loans were repaid by
the government, it was a veryheavily subsidized project. And
none of them were reallyeconomic anymore, because clean
(27:15):
energy was cheaper. And so whathappened was that all three of
them have, well, they allproposed carbon capture and
storage projects, the sun fuelsplants, probably an operation
and working. And, you know, thiscarbon capture for FAQ tax
credit, back to the envelopecalculation suggests that that
(27:38):
sin fuels converting coal tonatural gas than to be sold,
that's in fuels plant with morethan double its profitability,
you know, because of the new taxcredit. So basically, this was
going to be retired and now thiscoal Sun fuels plant is is is
likely to be wildly profitable.
And the same with a coal plantsthat they haven't got those
(28:01):
projects running yet. But Butessentially, what they're going
to do is use the 45 Q tax creditto justify keeping these coal
plants in operation even thoughthey were considered to be on
economic until before it's ourcue credit was expanded and
2022. So, you know, that's thekind of effort we were going to
see when you start entrustingthe fossil fuel industry, which
(28:24):
has fought climate change andclimate change for over 30
years, and you're gonna givethem 10s, if not hundreds of
billions of dollars to mitigateclimate change. I mean, what
could go wrong? You know, Imean, billions of dollars to
mitigate climate change, sothey're gonna really do a good
job at it, you know, are theyjust going to take the money and
run?
Dina Rasor (28:46):
Well, just knowing Washington DC, that there'll be
so many jobs involved, becausethe thing will have these plants
will keep going on be jobs. Andso what they'll do is that is
that tax credit gets down to thetime it will close, they'll all
come in and say oh, my gosh,then I lose, you're gonna have
to lay off all these people andthis state that state this state
(29:07):
that say that it all becomes anissue. This is what happens in
defense all the time. And theyyou know, if they if you've got
to kind of weapon they actuallyput out a chart showing where
all the subcontractors are andhow many states. And so once
this thing gets started, and theother part of it that just
drives me nuts, but it's theit's the culture of the two
(29:28):
agencies that are overseeing it.
Explain the UK, how do you getthis tax credit? Well, you
report, you self report to theEPA, on how much you're think
you're capturing. And it's alsosometimes it's not, it's not
from exact measurements.
Sometimes it's by extrapolation,which just to me is crazy. And
(29:52):
then so the EPA gets it the EPAdoesn't really know you know,
they're not thinking of taxcredits or anything else. They
just and they don't verify it.
And then they send it over tothe IRS. And the IRS says, well,
the EPA says you self reportedthis amount of tons and here's
your here's your tax credit. Howdo you know if we aren't able to
stop 4045? Q? Completely? Howwould you change the reporting
(30:17):
system? So that is not a massivefraud formula?
Paul Blackburn (30:24):
Yeah, well, let's talk about what the IRS
does. Because you know, the IRSdoesn't track physical shipments
of carbon dioxide, they dodollar things, they don't do
sciency things like having theequipment and pipelines and
stuff. You know, they just careabout the dollars. And to get
the 45 Q tax credit, theofficial form with the IRS is
(30:45):
only two pages long and makingthen some folks may only fill
out a couple of lines, two orthree lines and check a few
boxes, and then they get theirtax credits. That's the official
form. Now, they also aresupposed to do these model
certificates, which report, youknow, more detailed information,
but those models don't have tobe used. So they're going to
(31:08):
reporting information about, youknow, tax credit use on non
standardized forms. And why isthat significant? Well, for
these big, the big US carboncapture projects proposal
Midwest, you know, we knew thatsummit, for example, had over
400 investors, so each of those400, investors might have a
right to a tax credit share. Soall of a sudden, you've got 400
(31:31):
different investors plus theyhad 32 ethanol plants signed up.
So you're going to have in thecarbon capture the fuel tax
credit is is arises from thepeople that own and initially
the car, whoever owns the carboncapture equipment. So you're
going to have all theseinvestors that all these
different plants, and they'reall going to claim tax credits.
So the permutations andcombinations of who gets to
(31:54):
claim tax credits is prettybroad. So all these different
individual claimants, not thecompanies that are capturing the
co2, but the individualclaimants are going to file
claims to the IRS using thesemodel forms which are not
standardized. So they can, theycan just put in a PDF, and
however they want to report it,they can, that means the IRS
isn't going to have a premadedatabase of who's using these
(32:17):
tax credits, they'd have to goback and look at all these
customized form pick pieces ofpaper, try to enter the data
into a unified database in orderto figure out whether there's
any fraud going on. But they'renot going to do that. So, you
know, the first part of it isthat the IRS reporting is
completely inadequate. It's justlaughable. You know, and, and,
(32:40):
clearly, Congress wanted seemsto just they just wanted it to
be as easy as possible for richpeople to claim tax credit. You
know, another thing about taxcredits, we should just throw in
your on the side is that they'remost tax credits, and especially
these are inherently regressive.
You know, everyday people aren'tgoing to don't have tax bills
that require hundreds ofmillions of dollars of
investment or tax credits. Andso most of the people that are
(33:03):
almost all the people are goingto invest in these carbon
capture and storage facilitiesare accredited investors,
meaning people with over amillion dollars or more of of
investment funds, and peopleeven richer than that. So, you
know, this, these tax creditsaren't going to help everyday
people, they're going to helpthe oligarchs in our society,
and that's really the onlypeople that help. But then
(33:24):
again, you know, they could domore detailed reporting, but
they aren't. It's all just, youknow, ad hoc reporting in non
standardized ways. And, youknow, the IRS doesn't even
actually require that the EPASanlam, anything, anything, they
just say that the the reportsthat the tax claims filed by the
(33:45):
companies just simply need to beconsistent with what they're
saying to the EPA. But the EPAand the IRS don't talk to each
other about this. So you know,they're two totally different
agencies. And then the otherhand, the PAs track co2 for a
couple of reasons. One is toprotect groundwater, what the
heck does that have to do withthe IRS? Well, nothing. And the
(34:06):
other reason is, is for carbonemissions for how much you know,
Herb is going the atmosphere.
But they're not necessarilytracking where it comes from,
how it goes through pipelines,who owns it, and that ownership
can change. You know, how muchof it goes to er, how much of it
goes to sequestration. And eventhen they could pull it back out
(34:28):
of the ground for asequestration site or an ER so I
can pump it to someplace else.
It could go through multiplehubs through multiple pipelines.
So it's a very complex system.
And the EPA isn't tracking isn'tprepared to track the
complexity. So you have twoagencies that do totally
different things that don't talkto each other, and don't you
know, actually track any datathat's going to be useful to
(34:48):
enforce the fourth IQ tax forhit. So the chances of fraud
here are just, you know, almostseems like almost inevitable.
Because it'd be basically anunenforceable tax credit. It's.
Gregory A. Williams (35:01):
So I'm going to move here. And I
understand something youmentioned a couple of minutes
ago, which is you, you weredescribing all the different
parties that might be involvedin carbon sequestration, you
know, sequestering the same, thesame carbon. And if I understood
you correctly, there's reallynothing to stop all of them from
claiming the same carbon to theEPA and the IRS.
Paul Blackburn (35:27):
Well, they're not supposed to, but there's no
reporting to say that theycouldn't double dip massively.
You know, how's the IRS going tofigure out if they're double
dipping? If, if, you know, andthe other thing is that the
first the carbon credits arecreated by whoever captures the
carbon, and then they cantransfer those credits to either
anybody who owns an injectionwell, either for enhanced oil
(35:49):
recovery or for sequestration.
So you know, all those peoplethat the ethanol on carbon
capture over the ethanol plantsfor the big Midwestern projects
could then transfer their co2,carbon cut their carbon credits,
to enhanced oil recoveryoperations, or sequestration
sites. And those can all beowned by multiple partnerships,
you know, part joint ventures orcorporations, which split up the
(36:12):
tax credits. So these taxcredits are gonna get missed and
parsed, to go to whoeverwhichever rich people need them
the most. And, you know, so thatmeans that it's, it's, you know,
it's going to be virtuallyimpossible to track all that
moving from through all theseparties.
Gregory A. Williams (36:34):
That sounds like you know, if somebody
installed solar panels onsomebody else's roof, and then
that person rented that home tosomebody else. There don't seem
to be much in the way ofguardrails that would prevent
all three of those parties fromclaiming that, that tax credit.
Paul Blackburn (36:54):
Right. And although it gets even worse,
because it's sort of like, well,if you had, you know, two dozen
people on the part, some shareof the solar panels and, you
know, on the roof, and then theycould split them back and forth,
and share them and trade themaround, you know, like playing
cards, like, you know, baseballcards or something. You know,
(37:15):
that's, that's what that's thesituation, there just really
isn't any, any structure. Andthe tax credits Congress in the
flesh Reduction Act specificallymade them made up did amendments
to make these tax credits veryfungible or transferable between
parties. And in fact, fornonprofit organizations such as
(37:42):
public utilities, meaning RuralElectric Co Ops, and municipal
utilities, they can actuallyjust be paid directly for their
tax credits, rather thanclaiming, because they don't
have they don't pay any taxes.
Since they're nonprofits, thefederal government does pay them
cash for the value of those taxcredits. And other entities can
do that as well. And so youknow, then finally, I say, with
(38:05):
the tax and not finally, withwhatever the tax credits is that
because these are all claimed ontax returns, and tax returns are
by law confidential, all thesetax credit claims will be
confidential and unable, andcitizens will not be able to
know who's claiming these taxcredits. So it could be
(38:26):
corporations, it could be fossilfuel industry, it could be
private investors, it could bemembers of Congress, there's
nothing stopping members ofCongress who are millionaires or
billionaires and cashing inthese tax credits. But because
it's done via it's all claimedon tax returns, it's all secret,
it's all confidential. So youknow, it's impossible, it'll be
(38:50):
impossible for anybody but theIRS to even attempt to terminate
those fraud, and then prosecutethose who are conducting fraud.
And again, if the IRS isreporting requirements are so
weak, that, you know, they thepeople have this report in an ad
hoc way, using forms or whateverform they want, and we've got
(39:12):
10s of 1000s of people reportingthe IRS, you know, the IRS isn't
gonna be able to enforce it,that means nobody's gonna be
able to enforce it in theindustry is gonna be able to
figure out that it'sunenforceable, and even if they
got caught. They could say,well, this is also complicated
that we didn't really know whatyou will pay you back and it's
okay. You know, and they'll andthey'll just fake it and, you
know, and, and not get and getsrisk slapped, you know, by the
(39:35):
IRS. So this is just completelyset up to be to be a massive rip
off from the very wealthiest insociety of all the rest of us
who are who, who then would behave to absorb the budget
deficits that go up to pay forthis program.
Dina Rasor (39:56):
Well, now that we are all thoroughly depressed, no
England Where the billions ofclimate money may be going? And
you know, when you and your thevarious groups are banding
together to publicize this? Whatwould you suggest? You know,
what would you suggest to helpstop the bleeding? And what
(40:18):
would you suggest to stop theneed to put guardrails into the
situation? Or can you actuallystop this credit? Is it too
late?
Paul Blackburn (40:28):
Well, I think that the environmental community
first off should really take ahard look at this, I know that
there were a lot of folks whobought into the original initial
push for the inflationreduction, I thought it was the
greatest thing since slicedbread. And, and you know, those
who supported it should reallytake a second look at the 45 Q
tax credit and look at it verycarefully in terms of its actual
(40:49):
regular statutory regulatorylanguage to understand what it
is and how it operates. Becausethe potential for climate fraud
here is nificant. And it waspassed with a lot of green
environmental organizationsupport. So first off, I think
that the folks who aresupporting the IRA in carbon
capture and storage in theenvironmental community really
(41:11):
need to take a second look atthis. For everybody else, you
know, we're planning a series ofefforts to publicize these
concerns and to proposecongressional statutory fixes to
put guardrails in this program,for example, requiring the IRS
have uniform standardizedreporting that's entered into a
(41:33):
database so that they canhopefully track who gets carbon
captures carbon credits, we alsowant what's called a cradle to
grave tracking so that we knowwhere the carbon is produced,
who owns it, if it's sold tosomebody else, because it's a
commodity, who it's transferredto, and how those tax credits
(41:54):
follow the carbon dioxide to asequestration side or hassle
recovery or some other facility.
You know, there needs to becrale from where the carbon
dioxide is first produced tograve where it ends up on the
ground. And that tracking needsto be like invoices. And the
same thing is done. Similarthings are done for hazardous
waste. So you know, it has thisway to generate there's
(42:15):
generated this cradle to gravetracking, the generator has to
have paperwork, they can't haveit to a shipper that ships it to
a hazardous waste disposalfacility, they all have
paperwork has invoices, and andand manifests up manifests, and
then certifications that it'sproperly disposed of. Well, the
same kinds of cradle to gravetracking needs to happen for
(42:37):
carbon dioxide, and it needs toboth be usable by the IRS for
IRS purposes, but it also needsto be used usable by the EPA so
they can track carbon emissions.
You know, another thing aboutthe this carbon capture and
storage is that capturing thecarbon dioxide, compressing it
(42:59):
pumping it through pipelines,compressing, pumping on the
ground is very energy intensiveand resource intensive. And yet
the 45 year tax credit programdoes not have any net carbon
doesn't doesn't give benefitsbased on net carbon
sequestration. It only givesbenefits based on gross carbon
(43:19):
injected underground, either forenhanced oil recovery or or or
sequestration. So you know,there really should be a net
carbon sequestration net carbonbenefit amendment to the Ford
effect new tax credit, so thatwe aren't, you know, subsidy
subsidizing projects thatultimately ended up emitting
(43:41):
more carbon into the ground andthey are into the air of the
night supposedly underground.
There's a lot of differentguardrails that could be done
for this program. And we'regoing to be proposing those and
hope that people support that,you know, whether, you know,
whatever side of the politicalspectrum you're on, we don't
want to have massive fraud ofpublic tax dollars. And you
(44:03):
know, whether you supportcarbon, really believe climate
change is real and supportcarbon mitigation. You know, we
don't want to have this simplybe a massive fraudulent ripoff
that increases budget deficitsand makes everybody poor at, you
know, the oligarchs expense,that and the benefits the
(44:24):
oligarchs.
Dina Rasor (44:28):
Okay, well, that pretty much answers my
questioning. Greg, do you? Isthere anything that you would
like to add or, or ask about,
Gregory A. Williams (44:37):
but I just wanted to ask you so you've,
you've said we're doing on anumber of occasions, and I'm
wondering if that's the pipelinefighters hub, the anti carbon
sequestration community ingeneral, or are there other
organizations you'd like topoint our listeners to for more
information or ways to protestpaid in the fight against this
(45:01):
kind of fraud. Yeah,
Paul Blackburn (45:03):
there are a variety of different
organizations that are workingon this both at a federal level
and at a state level and projectlevel for these carbon
sequestration projects. And and,you know, rather than trying to
name them all here, because I'mgoing to forget, what I would
suggest you do is go to the, ourwebsite, pipeline fighters hub,
(45:31):
and and look at look at where wehave all the materials we have
there and just search online andGoogle, there's the science,
Environmental Health Network,the Center for Biological
Diversity is working on this.
There's Deena and Greg'sorganization. And a number of
other, you know, policy expertsthat are working on this. So we
think that there's, there needsto be a growing awareness of
(45:57):
this effort, and we are growingthat awareness, but it's going
to take time to do it. Do youhave any folks that you would
suggesting that should be thepeople could be referred to
here? No,
Dina Rasor (46:10):
I would just highly, you know, what I would suggest,
if anybody's, you know, in alather about this, which I hope
we've been able to do is onehave the, you know, pass on this
podcast, which helps because alot of people don't have time to
read a lot of tech stuff. But Ialso would say, if you really
want to get a good grounding onit, go to go ahead and go to
(46:34):
Paul sights and look at theseries we'll have, we'll have
connections to it on our on ourblog, and go to the various
blogs that he wrote upon thisand articles he wrote on this,
because he's gives you lots ofgood, solid information and
passing that along to otherpeople, is probably the most
(46:54):
important thing. And one of thereasons we do these podcasts is
that when somebody comes and youknow, you think if there's a
politician or a staffer inCongress that doesn't really
understand this, you can sendthe link to this podcast, and
they can just sit down andlisten, because I, you know, I
know that thing in WashingtonDC, if you keep adding on what
people read, it doesn't getread. But this is the kind of
(47:16):
thing that they can listen, onthe car in the car on the way
home, something like that. Sothat's why we're doing these
kinds of things, with veryhighlighting various activists.
And that's why I wanted Paul onbecause I knew that he he, he
was able to explain a veryByzantine attempt at the
(47:38):
government to do somethingthat's actually turning out to
be rather stupid.
Paul Blackburn (47:42):
Yeah, I mean, campaigns to stop this kind of
thing. You know, first, we needto do a lot of public education,
we're still in that phase.
Ultimately, we'll start todevelop political power as more
more people understand what'sgoing on. And, and then we'll
have specific actions thatpeople can take to stop this.
But remember, and this ispotentially hundreds of billions
of dollars that the fossil fuelindustry wants are up against
(48:04):
some very powerful players. Andit's gonna take a while to build
power to push back on this. Andalso, there's been a lot of I
think, misrepresentation aboutthe potential benefits of carbon
capture and storage and thepotential risks. And the more
that that the people who careabout climate change are aware
of these risks, the better.
(48:27):
Because, you know, frankly, thisis being pushed to a significant
degree by the Bidenadministration by Democrats. So
we frankly, need to startpushing back democratic
representatives and senators andalso President Biden to say,
hey, you know, there may be somerole for carbon capture and
storage, which, you know, is wasis mostly understood to be
(48:50):
industries like coal, and likethe steel industry and the
cement industry, but this taxcredit doesn't prioritize them.
But you know, there needs to beguardrails on this. Otherwise,
it's just going to be one big,huge, massive ripoff. And it's
kind of, you know, we're gonnalook back and see that the
fourth hukou tax credit, didn'tdo anything for climate change,
and instead, really hurt ourcountry's economy, you know, and
(49:12):
then built all these potentiallybuilt all these pipe dangerous
pipelines all over the UnitedStates. And we already talked
about that. Just how dangerous amajor pipe co2 plan is, if
eruptions. You know, thepotential for mass casualty
events from these pipelines isreal. You know, so there's just
a huge amount to understand andno here. But again, you know,
(49:33):
the industry hires tons and tonsof attorneys and policy people,
lobbyists, and they all schemeabout how to do this. And so
their scheme here is to pretendto be helping the climate while
ripping off the public to thetune of hundreds of billions of
dollars and continuing thefossil fuel industry
indefinitely. It's quite adevious and remarkable scheme
(49:53):
and audacious scheme, but italso has some very obvious
vulnerabilities and slaws and astime goes on, I think we're
going to see the truth about the43 new tax credit coming out
more and more.
Gregory A. Williams (50:09):
So we will do is, Dina said, Put these
links on our blog. But they willalso be included in the
description of these podcasts,as they're represented in all of
our different syndicatingpartners. So whether you consume
this on Apple podcasts, orAmazon, or any of any of the
popular podcasts indicatingplatforms, you'll get all of
(50:31):
these links. And if you pass onthe podcast, you will be passed
on all of those links as well.
Paul Blackburn (50:39):
Just add real quick, the blogs didn't were all
written before the inflationreduction that came up. So I
haven't gone back and updatedthem, I should really do that.
But they assume that the 2018bills in place. So the thing is,
this situation is the worst,it's much worse now than it was
when those blogs were written interms of the potential financial
(51:01):
liabilities faced by taxpayers,but most of the basic structure
is still there. And those blogs,I think will help folks
understand this relativelycomplex situation, in common
sense terms.
Dina Rasor (51:16):
And you do have articles to in the same place
where you list the blogs whereyou have updates in different
different publications like Thethe hill and other places where
you update the blogs. And soit's it's easy to find that
information.
Gregory A. Williams (51:30):
And so we encourage our listeners to read
from as many different sourcesas they can. But regardless of
what source you're consuming,always ask the question, you
know, where's the money goingto, you know, who is benefiting
from this? You know, it's theclassic advice to follow the
money. And if it's not clearfrom the article where the
(51:51):
money's going, then, you know, Iencourage you to question the
integrity of the source. So withthat said, Is there anything
you'd like to add as finalremarks?
Paul Blackburn (52:04):
No, I just thank you for having me on tonight.
And again, people should reallylook into this because it's a
huge issue for climate change.
It's a huge issue for our healthdepartment, financial health of
our government, is a huge issuefor equity in how we're spending
our tax dollars. So, you know,we all need to work together,
we're trying to take back ourgovernment from the people who
(52:24):
are just simply ripping all ofus off.
Dina Rasor (52:29):
And we're gonna keep following this. We're gonna keep
sorry, right? We're gonna keepfollowing this so that when you
get to the point where you'reactually starting to present it
to various members of Congressand things like that, that we'll
have another podcast on maybe ifyou and another person talking
about Okay, now we're trying todo something about it, and this
is how you can help.
Gregory A. Williams (52:48):
All right.
Well, thank you very much forjoining us tonight, Paul. Thank
you.
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