Advancements in carbon capture and sequestration have made the Appalachian region a potential hub for hydrogen production and distribution.
By Samantha Cart
For years, energy leaders, environmental experts and government entities have been working to find ways to decrease and divert greenhouse gases emitted into the atmosphere while burning fossil fuels. While resources like coal and natural gas will continue to be part of West Virginia’s economy and the U.S. energy policy for years to come, advancements in carbon capture and sequestration can help mitigate the risks associated with their biproducts.
“As we develop new, advanced energy technologies, fossil fuel resources will provide the energy America continues to need to power our grid and economy and to remain the superpower of the world,” says Senator Joe Manchin. “That said, we have a responsibility to produce and use our fossil fuels cleaner than anywhere else, and carbon capture, utilization and sequestration can help us to do just that.”
Capturing and Converting CO2
The ability to trap these gases, particularly carbon dioxide (CO2), and store them in a solid or liquid form has the power to transform the energy industry and help meet the clean energy standards being set by consumers, businesses and governments. To do this, the emissions from a power plant or industrial facility are processed to extract CO2, which is then pressurized and converted to a liquid form. According to Curtis Wilkerson, CEO of Orion Strategies, the liquid is pumped deep underground into pore spaces below impermeable cap rock layers to permanently trap the material.
As with any advancement, there are challenges that will need to be overcome, most of which include regulatory burdens and time constraints.
Competitive Power Ventures (CPV), a North American electric power generation development and asset management company headquartered in Silver Spring, MD, recently selected West Virginia as the site for its 1,800-megawatt combined-cycle natural gas power plant with carbon capture technology—a $3 billion investment that will employ 1,000 West Virginians in the construction alone.
According to Matt Litchfield, director of external and regulatory affairs for CPV, one of the major challenges facing any current regional energy project is interconnecting the electrical grid. Over the last few years, PJM Interconnection, the regional transmission organization that manages the movement of wholesale electricity in 13 states, including West Virginia and Washington, D.C., has compiled a massive backlog of projects seeking interconnection.
This barrier could be removed if the U.S. Congress prioritizes updating the process for how an RTO like PJM can prioritize projects as part of much-anticipated permitting reform, which has been proposed by both major political parties. This reform would help overcome many of the challenges facing carbon capture developments.
“It simply takes too long to permit energy infrastructure in this country, and it is an issue we must solve to realize the benefits of the energy investments we made in the 117th Congress,” Manchin says. “While individual states, including West Virginia, can administer their state permitting reform more efficiently than others, carbon capture projects often require federal permits, whether from the Army Corps of Engineers for pipelines or the U.S. Environmental Protection Agency (EPA) to inject captured CO2 underground. I’ve been pushing hard over the past year to get permitting reform legislation signed into law, and it will continue to be a top priority for me. We can’t have energy security without energy independence, and we can’t have either unless we are able to build the energy infrastructure this country desperately needs.”
This infrastructure will need to include updated power plants like the one CPV is building, according to Wilkerson.
“Carbon capture and storage (CCS) is most efficient when flue gas is least complicated,” he says. “Natural gas power plants will be a natural fit for these efforts. While Pennsylvania and Ohio have seen multiple plants built over the last few years that can now utilize CCS, West Virginia has yet to successfully build any combined-cycle natural gas power plants.”
While the challenges may seem insurmountable, several recent advances in tax structure and legislation have increased opportunities for carbon capture in West Virginia. According to Litchfield, in 2022, West Virginia passed key legislation to codify how carbon sequestration would work in the Mountain State.
“Governor Jim Justice signed the bill into law, and West Virginia became one of a limited number of states to establish the basic rules of how this burgeoning industry will unfold,” he says. “Having this framework in place increases the opportunities for carbon capture in the state by providing the regulatory certainty that these projects require. This was matched by the passage of the federal Inflation Reduction Act, which extended and expanded 45Q tax credits for carbon sequestration to provide a mechanism to recover the significant investment and operation costs for deploying this technology, thereby ensuring its economic viability for many years to come.”
The Hydrogen Hub Race
Combined with the energy provisions in the Inflation Reduction Act, the 2021 Bipartisan Infrastructure Law helps provide billions of dollars in loan opportunities, tax credits and grants to incentivize carbon capture investments.
Eight billion dollars in funding in the Bipartisan Infrastructure Law were designated for clean regional hydrogen hubs, which require CCS if the hydrogen is produced from fossil fuels. This is an exciting prospect for the Mountain State, which is located in a region with enormous natural gas resources. Using heat, steam and pressure, methane can be converted into what is known as blue hydrogen, a net-zero, carbon-free energy resource. The proposed hydrogen hubs would centralize clean hydrogen production and distribution infrastructure to serve multiple end-use sectors.
“Hydrogen is intended to serve the difficult-to-decarbonize sectors of our economy, where carbon capture or electrification are not feasible,” says Dr. Brian Anderson, director of the National Energy Technology Laboratory and executive director of the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization. “Hydrogen can fill this need in medium and heavy-duty trucking and long-duration energy storage in the electric power sector while providing process heat to heavy industry and serving as a feedstock to lower carbon chemical and fuel production.”
As part of the infrastructure legislation, capital was allocated to the U.S. Department of Energy (DOE) for the Regional Clean Hydrogen Hub program. On February 15, 2022, Justice, Manchin, Senator Shelley Moore Capito and then-Representative David McKinley announced the launch of the West Virginia Hydrogen Hub Coalition to collaborate on and support the selection of a strong West Virginia candidate to develop a hydrogen hub as part of the emerging national network.
There are more than 150 public and private regional entities participating, and together, they form the team dedicated to the creation of the Appalachian Regional Clean Hydrogen Hub (ARCH2). Initial concept papers for the hubs were due to the DOE in November 2022. Of the 79 hub concept papers received, 33 hubs were encouraged to submit full proposals.
Among other factors, the DOE is seeking applications that demonstrate the economic production of clean hydrogen from fossil fuels. According to Arria Hines, CEO of Allegheny Science & Technology, West Virginia brings four exciting advantages to the hydrogen hub race: regional proximity to the vast methane resources in the Appalachian Basin/Marcellus Shale formations and the major markets in the U.S. Northeast; existing midstream/industrial infrastructure; world-class energy research institutions; and underlying geology that has favorable potential to support CCS development—all of which position the West Virginia/ARCH2 partnership as a strong candidate for the winning hydrogen hub proposal.
The ARCH2 team submitted its full application for the second round of review in April 2023, and the final award decisions for the next phase are to be announced later this year.
According to Hines, unlike an ethane cracker or oil refinery, the ARCH2 proposal is best conceptualized as being a collection of nodes or related industrial facilities that produce hydrogen, provide CCS or create opportunities for both. The ARCH2 proposal has five nodes with locations in West Virginia, Ohio, Kentucky and Pennsylvania. She says the hydrogen projects within the ARCH2 regional hydrogen hub will bring numerous benefits to West Virginia and the entire Appalachian region. The leaders involved are confident their team and concept are a winning combination of brilliant people, cutting-edge technology and proximity to resources and markets and that the Mountain State will be a vital part of the country’s hydrogen network.
If Not Now, When?
While the ARCH2 team awaits the phase-two results, lay people may be wondering why now is an important time for the implementation of this hydrogen network.
“The timelines associated with the Bipartisan Infrastructure Law are accelerating the timeframe for hydrogen hub formation,” Anderson says. “This comes at a critical time, as hydrogen will be needed to help meet the Biden administration’s climate goals for the U.S.”
These goals include creating a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050.
While West Virginia works to once again position itself as a leader in energy, building on its skilled workforce and historic energy reputation, there are still barriers that will need to be addressed to make ARCH2 a reality. According to Hines, smart policy will be a cornerstone of the foundational transition to hydrogen and the roadmap to achieving the long-term goals of the Regional Clean Hydrogen Hub program.
To facilitate the deployment of CCS technologies, the state has applied to the EPA for primary enforcement authority, also known as primacy, over Class VI injection wells or dedicated storage. Currently, North Dakota and Wyoming are the only states in the country that have received primacy from the EPA. If granted, West Virginia could utilize wells to inject CO2 into deep geologic formations solely for the purpose of permanently storing carbon. This application is a key component to West Virginia’s stake in the hydrogen network, as it will greatly improve the efficiency with which these types of wells are administered.
Looking Ahead
With unique access to ample, low-cost natural gas feedstock, end-user demand, workforce, technology capability and CCS potential, West Virginia is well-positioned to continue its key role in the future of U.S. energy.
“Whether through jobs in research and development, manufacturing, labor, etc., West Virginia—and its many energy workers—are well-positioned to expand its workforce into new and emerging energy industries, like hydrogen,” Anderson says. “The state has support from labor organizations, environmental nonprofits, academic institutions and community stakeholders, all of which will be integral to project development and associated job retention and creation, particularly in disadvantaged and underserved communities. While West Virginia does not have an established hydrogen end-user base, the state has an opportunity to build a hydrogen hub infrastructure from the ground up rather than retrofitting existing infrastructure.”
While leadership remains optimistic about the ARCH2 becoming a reality, many also believe that even if West Virginia does not win this bid, energy leadership opportunities still exist for the Mountain State.
“President Biden’s Inflation Reduction Act proposed a hydrogen production tax credit that may incentivize private development of a hydrogen hub without DOE funds courtesy of the Bipartisan Infrastructure Law,” Anderson says.
As the world continues to demand cheaper, cleaner and more reliable energy, Appalachia is prepared to support this effort. As West Virginia continues to diversify and grow its energy portfolio, landing a hydrogen hub would enable the state to continue as a leader in supplying the country’s energy needs. This is demonstrated in the Community Benefits Plan, a critical part of the ARCH2 application that defines the impacts it would have on the communities it serves.
“Having worked and lived in a disadvantaged community my entire life, I am excited to shed some light on these areas to provide better paying jobs and educational opportunities and improve quality of life,” Hines says. “Through our outreach efforts with ARCH2, it has been exciting to speak with labor organizations and nonprofits and earn their support. It’s all part of a bigger picture, and it enables many different paintbrushes to help us paint this cleaner, safer energy future together.”
Looking ahead, it’s difficult to say what the state’s energy industry will look like even 10 years from now. While much progress has been made with clean energy and hydrogen over the last decade, it takes time for new energy technologies to penetrate existing markets. According to Hines, ARCH2’s concept has outlined a preliminary timeline based on the state’s technical readiness level and the amount of time required for permitting activities. If and when the DOE funding and the necessary permits are awarded, the effort will begin to move quickly.
“West Virginia produces more BTUs of energy through natural gas production than any other source,” Wilkerson says. “If the industries that utilize natural gas were able to sequester the associated carbon, it would ensure West Virginia’s future as an energy state that national and global companies wish to utilize for low carbon options. Just as the shale gas industry has come into full maturity, so shall the carbon capture industry over the next few years. Those companies willing to dedicate investments will be the ones to stand at the end of the decade.”
