Carbon management and hydrogen technologies can help Pennsylvania meet its climate goals and allow its industries to reduce emissions while continuing to provide local jobs. Deploying these technologies requires careful consideration and examination of the commonwealth’s existing infrastructure, resources, and legislation.
The Great Plains Institute (GPI) recently worked with Team Pennsylvania to develop Successful Deployment of Carbon Management and Hydrogen Economies in the Commonwealth of Pennsylvania, a Road Map for Carbon Management and Hydrogen Development in the Commonwealth of Pennsylvania.
Team Pennsylvania is a nonpartisan, 501(c)(3) nonprofit and released the Road Map on behalf of the Pennsylvania Energy Horizons Cross-Sector Collaborative on September 22, 2022. The Collaborative is a group of over 50 organizations from state agencies, industry, academia, and non-governmental entities working to decarbonize Pennsylvania’s economy through carbon management and hydrogen technologies.
In the Road Map, GPI analyzes opportunities for carbon management and hydrogen projects in the commonwealth and defines challenges that must be addressed for these projects to be successful. The Road Map suggests next steps for the commonwealth, which are summarized in this post and the Road Map Fact Sheet, including the following:
- Developing a statutory framework
- Considering Class VI primacy
- Evaluating regional approaches (intrastate and interstate collaboration)
- Leveraging federal funding
- Conducting future studies
- Digitizing relevant data
- Commenting and engaging where possible
- Developing and using standards and best practices
Throughout these steps, the commonwealth will need to consider environmental, energy, and social justice.
Statutory framework
The commonwealth will need to develop a statutory framework—rules and laws—to guide deployment of carbon management projects. A carbon management project normally involves multiple parties, including companies capturing, transporting, and storing carbon dioxide (CO2) and contractors who may oversee the operations; landowners; and state and government officials and entities.
To help guide these parties, the commonwealth should study and address issues related to statutory framework, including pore space ownership for CO2, long-term stewardship, and program administration.
Pore space ownership
Pore space is the part of a geologic formation below the surface that can hold materials like injected CO2. It’s critical for Pennsylvania to properly define who owns pore space, how pore space ownership is combined among owners for CO2 storage (often referred to as unitization), and how CO2 pore space rights interact with mineral rights. These questions are important for Pennsylvania to answer because they define who has the authority to make decisions for land use and who may be eligible for compensation for a given project.
Pore space can be publicly or privately owned, and these property rights are typically defined through state statute, with most states currently giving ownership to the surface owner.
While a single well will be located on a single landowner’s property, the CO2 plume—the space the injected CO2 fills in the subsurface while and after it is injected—may cover multiple properties. When this happens, operators must work with owners to legally access all pore space, or if applicable, they will need to work through established processes to pool the multiple property owners’ interests.
Depending on state statute, unitization will require a substantial percentage of pore space owners to agree for a project developer to utilize their pore space prior to pooling all affected properties. The percentage varies by state but is typically 60 to 80 percent of the pore space area. Once this percentage is reached, the remaining owners may be directed by state statute to contribute their pore space to the project, and operators must compensate them at a fair market value. The above topics require careful consideration of property rights, and Pennsylvania needs to consider how it wants to address them through state statutes.
Stewardship
Once CO2 injection is complete, a responsible party, such as a company or government entity, needs to monitor the storage facility to verify that the CO2 plume remains where it was projected to be. This responsibility is known as taking on long-term stewardship of a project.
Just like pore space ownership, there are several ways to address long-term stewardship of CO2. For example, there is precedence in the US for states developing statutes that allow them to assume long-term stewardship immediately or several years after the CO2 injection is finalized. States have implemented different mechanisms to fund long-term stewardship plans, including fees during the permitting process and a small fee per ton of CO2 injected that is specifically held for long-term stewardship.
Pennsylvania must consider if it is willing and able to assume these responsibilities after project completion. If it is, the commonwealth will need to consider how to develop a system, such as a long-term fund, that financially supports these operations.
Administration
Pennsylvania must establish which organization or entity within its government will administer and provide the regulations to enforce CO2 storage activities. This designated administrator will need resources and capacity in the long term for efficient project review and agency oversight.
Underground Injection Control Class VI primacy
Pennsylvania must consider if it wants to obtain Class VI primacy which can help expedite the project review process.
The 1974 Safe Drinking Water Act requires the US Environmental Protection Agency (EPA) to develop Underground Injection Control programs to protect underground sources of drinking water. When injecting CO2 into a geologic formation for permanent storage, operators are required to obtain a Class VI permit. A Class VI permit submission must address the siting, construction, operation, testing, monitoring, and closure of a geologic storage site to ensure the injection of CO2 at the facility is safe and secure and will permanently contain the injected CO2.
A state can apply for primary enforcement authority over a specific class of injection wells—an authorization called primacy. States with primacy may be able to process well applications more quickly due to their ability to employ sufficient staff with local geologic expertise.
An example of primacy reducing the processing time for a Class VI well is the Red Trail Energy carbon capture and storage project in North Dakota—one of two states with primacy—where the Class VI permit was approved five months after submission, compared to multiple years for the permits that have been approved through the federal EPA process.
The commonwealth needs to identify if it has the financial resources and technical expertise for Class VI primacy. The Bipartisan Infrastructure Law provides the EPA with $50 million to assist states in addressing these issues as they apply for Class VI primacy.
Consider regional approaches (intrastate and interstate collaboration)
Pennsylvania can collaborate with other states and stakeholders on carbon management and hydrogen projects to allow for the sharing of resources and project infrastructure, benefiting everyone involved. Sometimes the opportunities for carbon capture are centered in one geographic area, while the storage potential is found elsewhere.
Pennsylvania has a great opportunity to participate in a network connecting northeastern US emission sources with low-cost, high-capacity geologic storage in the Ohio River Valley. Pennsylvania can bring together multiple states for broad carbon management implementation, but doing so will require predetermined discussions, decisions, and execution of agreements.
Leveraging federal funding
There is significant funding available to the commonwealth for carbon management and hydrogen projects in the Bipartisan Infrastructure Law, which includes the Department of Energy’s (DOE) hydrogen hubs funding opportunity announcement (FOA). This funding is time-sensitive, and the commonwealth will need to decide if it would like to apply for it.
Bipartisan Infrastructure Law funding
There is also significant funding under the Bipartisan Infrastructure Law set aside to address many of the issues and tasks necessary for the full-scale commercial deployment of carbon management and hydrogen production with carbon capture. DOE has four to five years to distribute the funding after the passage of the bill, so the commonwealth should quickly identify lead agencies and process the required applications and paperwork to gain access to funding.
US Department of Energy (DOE) Hydrogen Hubs
The Bipartisan Infrastructure Law contains up to $7 billion for 6 to 10 hydrogen hubs, which will focus on developing regional hubs for hydrogen production, processing, delivery, storage, and use. However, the commonwealth does not currently have the necessary agreements and structures to be an applicant compliant with the recently released DOE FOA, which requires project concept papers to be submitted by November 7, 2022. The funding will be awarded in the fall of 2023, so the commonwealth should quickly identify any teaming partners, likely neighboring states, and prepare the necessary agreements and memoranda of understanding to allow Pennsylvania to engage as a prime partner.
Future studies
The Road Map contains many suggestions for how the commonwealth can move forward with deploying projects in the state; however, Pennsylvania will need to do additional studies to address many of the suggested actions. These studies are described below.
CO2 capture and storage opportunities
Beyond announced projects, Pennsylvania can commission a study that looks at potential projects in the commonwealth, which may include specific companies, industries, or near-term technologies in Pennsylvania. Understanding what opportunities are available can help Pennsylvania develop a statutory framework that allows these projects to be efficient and effective in the commonwealth. This study can build off GPI’s Pennsylvania fact sheet for implementing carbon capture and storage technology.
Stakeholder engagement and outreach
The best way to identify, understand, and address stakeholder concerns is to engage with them. A coordinated outreach program can help the commonwealth prepare for commercial-scale projects.
Jobs and economic analysis of commercial deployment of carbon capture, utilization, and storage in Pennsylvania
A study to build upon Rhodium Group’s and GPI’s Economic Impact of Carbon Capture Deployment: Midcontinent Region will allow the commonwealth to better understand and forecast the job creation and financial impact (e.g., tax revenue) of large-scale deployment of carbon capture, utilization, and storage.
Hydrogen production study
This study can serve as the basis for a DOE FOA 2664 Hydrogen Hub submittal. The study would identify the variety of feedstocks available in Pennsylvania for hydrogen production, develop a plan for hydrogen distribution and use, and discuss the economic and greenhouse gas emissions reduction from hydrogen use.
Hydrogen color-blind study
Eliminating the color coding of hydrogen (e.g., green hydrogen, blue hydrogen) and undertaking a study that evaluates the carbon intensities associated with various hydrogen production processes would help address misinformation surrounding hydrogen. This study would also provide data for stakeholder engagement, environmental, energy, and social justice, and the larger overarching social license to operate that has become key to sustainable project deployment.
Digital transformation
Operators of CO2 storage projects must develop detailed geologic reservoir models to properly understand where and how much CO2 can be injected for a project, as well as show with high certainty that the CO2 injected will be stored permanently. Class VI permits require such modeling as part of obtaining a permit and during CO2 injection operations. Storage operators use geologic data, largely obtained from previous wells drilled in the area of interest, to aid in developing these models.
To reduce project screening time and attract storage operators to the commonwealth, the Road Map suggests expanding the digitization of the commonwealth’s subsurface data and advancing the development of the Exploration and Development Well Information Network (EDWIN), the commonwealth’s customer-facing portal for subsurface data.
Comment and engage where possible
As with anything involving land use and new technologies, it’s important for the commonwealth to engage with communities and industry. This engagement can be seen as positive and risk-reducing for projects and can incentivize and encourage project developers to invest in Pennsylvania.
Pennsylvania should consider engaging in public discourse and providing thoughtful responses to public inquiries to dispel some negative stakeholder perceptions and provide information about carbon management and hydrogen initiatives.
Use of standards and best practices
Standards and best practices offer an independent and pre-approved method to accomplish many aspects or tasks within the carbon management project lifecycle. These standards and best practices can be cited by statute, which can translate to economic efficiencies that provide needed de-risking for project operators and financiers.
Any state agency (e.g., Pennsylvania Department of Environmental Protection or Pennsylvania Department of General Services) can cite, refer to, or require using a standard or best practice when processing permit applications or permits to operate. For example, DOE best practices manuals are free, including its guidance on public outreach and education for geologic storage projects.
Environmental, energy, and social justice
Environmental, energy, and social justice considerations will need to be incorporated into the commonwealth’s carbon management and hydrogen actions to ensure that these technologies are implemented equitably. Environmental, energy, and social justice considerations are also a requirement of all Bipartisan Infrastructure Law funding and will likely be part of any future federal funding.
The commonwealth should consider using the EPA’s Environmental Justice Screening Tool across all state and federally funded projects and continue developing the Pennsylvania Department of Environmental Protection’s Environmental Justice Areas Viewer.
Next steps
GPI applauds Team Pennsylvania and the Energy Horizons Cross Sector Collaborative for working to address these issues. GPI hopes the Road Map gives guidance and encouragement to the commonwealth as it looks to advance carbon management projects to lower carbon emissions while providing good, family-sustaining jobs. Pennsylvania is not the only state that still needs to address many of the challenges to project deployment, and other states will also find that the suggestions contained in the Road Map may help them on their path forward.
Is your state interested in charting a path forward for decarbonization using carbon management and hydrogen? Reach out to Emma Thomley at [email protected] to connect with our Regional Carbon Capture Deployment Initiative (RDI) or to receive more hydrogen and carbon management news through our weekly RDI Update.
