To move forward on developing an end-to-end decarbonization hub in the Pennsylvania, Ohio and West Virginia region, the State of Pennsylvania needs some basic legislative and regulatory building blocks, said Matt Mangum, carbon capture and storage business opportunity manager for Shell.
“These blocks include comprehensive carbon capture and hydrogen legislation that addresses issues such as subsurface ownership rights and liability while creating the framework for CCS [carbon capture and storage] developers to pull together the footprint required to build out a hub,” Mangum told the Pennsylvania Senate Environmental Resources and Energy Committee during its Monday briefing on a carbon capture, utilization and storage (CCUS) hub.
Mangum said such legislation also should align the concerns of various groups and provide a “holistic regulatory path” to development of the hub. “Without this complete framework, it will be challenging for any group to develop a hub in this region and could also complicate efforts to attract DOE funding for these opportunities,” he said.
And if investments are taken in step with the right legislative framework, as well as the market, then Shell within a decade envisions the tri-state region as an end-to-end decarbonization hub that features CCUS, renewables, hydrogen (H2), low carbon intensity feedstocks and products, circular plastics, and advanced energy management. Nature-based solutions, with CO2 capture and blue H2 — the latter being hydrogen produced from natural gas and supported by CCS — also could be a hub feature, said Mangum.
“The tri-state region, and particularly Pennsylvania, are well-positioned to become a leader in decarbonization and “future-proof” the region due to its access to natural gas as an input to blue H2, advantaged regional geology, and incumbent industry with incentive and capabilities to decarbonize,” Mangum told the state legislators.
Toward that goal, Shell recently entered a non-exclusive cooperation agreement with U.S. Steel and Equinor, which is a publicly traded petroleum refining company, to advance a clean energy hub in the Ohio, West Virginia and Pennsylvania region focused on decarbonization opportunities that feature CCUS and H2 production and utilization.
Mangum said during the hearing that development of the hub and its associated infrastructure would generate new sustainable jobs, stimulate economic growth, and help achieve significant reductions in carbon emissions.
As part of the agreement, Shell and Equinor plan to jointly apply for U.S. Department of Energy funding that’s designated for the creation of regional clean energy hubs, and U.S. Steel is evaluating its role in the hub, including as a potential funding participant, customer, supplier, or partner, Mangum said.
In addition to what’s needed legislatively in Pennsylvania, Mangum suggested the state apply for Class VI permitting primacy, which would allow it to manage the process, as well as competing interests for drilling and injection. “Pennsylvania primacy would also streamline the process for development of a hub,” he said.
Pennsylvania State Sen. Gene Yaw (R-23), chairman of the PA Senate Environmental Resources and Energy Committee, said this morning’s briefing left him feeling optimistic about the potential of the CCUS technology.
“I think we accomplished what we intended and that was to bring the issue to the forefront and start some dialogue,” Yaw said in closing remarks. “At least now we have some idea about the questions we must address from the legislative perspective. It was very informative.”
Earlier this year, Yaw circulated a co-sponsorship memo to establish the Pennsylvania Geologic Storage of Carbon Dioxide Act, which would create a legal and regulatory framework for CCS projects in the state. The senator is still waiting for feedback from the industry, environmental groups, landowner organizations, and other stakeholders before introducing the bill.
“These technologies offer us a reasonable path forward to tackle greenhouse gas emissions without crippling our economy,” Yaw said. “I heard a lot of encouraging things today that reaffirm my belief that Pennsylvania can be a leader in this space.
“It will require a lot of regulatory precision of course, but if done right, it would be a gamechanger,” he added.
Another briefing panelist, Ramez Ziadeh, acting secretary of the Pennsylvania Department of Environmental Protection (DEP), testified that the Wolf administration is committed to working with stakeholders to support a path forward for industrial sector decarbonization with an emphasis on the deployment of clean hydrogen and CCUS technologies.
“As we move toward this new energy ecosystem, the department has been considering the environmental benefits of pursuing these new technologies and identifying the appropriate regulatory structure for CCUS and clean hydrogen,” he said, adding that the DEP wants to ensure that the U.S. Department of Energy invests in Pennsylvania for a regional clean hydrogen hub that would be funded under the 2021 Bipartisan Infrastructure Law.
“Doing so is a critical step in comprehensively addressing climate change while also ensuring the commonwealth is competitive in attracting investment and creating jobs in all parts of its economy,” Ziadeh said.