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The inflation bill has an advantage for some oil companies


The so-called Cut Inflation Act targets climate change, but the fossil fuel industry could also get a nice bonus.

The tax and spending proposal, for which Sen. Joe Manchin showed support last week, would increase the size of carbon capture and sequestration tax credits – known as 45Q – and extend the deadline eligibility for them to 2033 from 2026. It also would give developers the option to receive the value of tax credits as a direct payment from the government during the first five years of a project. Although the bill includes elements that would increase costs for the hydrocarbon industry, such as a levy on methane emissions, the inclusion of larger subsidies for carbon capture could end up prolonging the life – and the relevance – of the oil and gas industry in a net zero future.

wsj

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