[Senate Hearing 118-313]
[From the U.S. Government Publishing Office]
______
S. Hrg. 118-313
OPPORTUNITIES AND CHALLENGES IN DEPLOYING CARBON CAPTURE UTILIZATION
AND SEQUESTRATION AND DIRECT AIR CAPTURE TECHNOLOGIES ON FEDERAL AND
NON-FEDERAL LANDS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 2, 2023
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
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Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
55-816 WASHINGTON : 2025
COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ALEX PADILLA, California JOSH HAWLEY, Missouri
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Chris Bowman, Senior Professional Staff Member
Richard M. Russell, Republican Staff Director
Justin J. Memmott, Republican Chief Counsel
Valerie Manak, Republican Professional Staff Member
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 5
WITNESSES
Crabtree, Hon. Brad J., Assistant Secretary for Fossil Energy and
Carbon Management, U.S. Department of Energy................... 7
Pigott, Bruno, Principal Deputy Assistant Administrator, Office
of Water, U.S. Environmental Protection Agency................. 15
Burns, Erin, Executive Director, Carbon180....................... 23
Barkau, Lily R., Groundwater Section Manager, Water Quality
Division, Wyoming Department of Environmental Quality.......... 35
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Barkau, Lily R.:
Opening Statement............................................ 35
Written Testimony............................................ 37
Barrasso, Hon. John:
Opening Statement............................................ 5
New York Times Article entitled ``Offshore Wind Firm Cancels
NJ Projects, as Industry's Prospects Dim'' by Stanley Reed
and Tracey Tully, November 1, 2023......................... 53
Burns, Erin:
Opening Statement............................................ 23
Written Testimony............................................ 25
Responses to Questions for the Record........................ 101
Carbon Capture Coalition:
Statement for the Record..................................... 104
Crabtree, Hon. Brad J.:
Opening Statement............................................ 7
Written Testimony............................................ 10
Responses to Questions for the Record........................ 82
Hoeven, Hon. John and Hon. Joe Manchin III:
Letter addressed to Secretary of Energy Jennifer Granholm,
dated June 7, 2023......................................... 66
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Chart entitled ``Class VI Well Permit Applications Pending
Approval''................................................. 3
Pigott, Bruno:
Opening Statement............................................ 15
Written Testimony............................................ 17
Responses to Questions for the Record........................ 93
Portland Cement Association:
Letter for the Record........................................ 110
Verde C02:
Statement for the Record..................................... 113
OPPORTUNITIES AND CHALLENGES IN DEPLOYING CARBON CAPTURE UTILIZATION
AND SEQUESTRATION AND DIRECT AIR CAPTURE TECHNOLOGIES ON FEDERAL AND
NON-FEDERAL LANDS
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THURSDAY, NOVEMBER 2, 2023
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m., in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. The Committee will come to order.
Before we begin today's hearing, I want to take a minute to
say that we are thinking and praying for the families and loved
ones of the man that was killed at the Martin Coal Mine Prep
Plant demolition site in Martin County, Kentucky this week, and
the worker still trapped beneath the rubble that still has not
been located. It is a tragic reminder of the dangers our coal
communities face and the sacrifices they make to power our
nation. In this case, the sacrifices continue, even after this
facility has been closed.
I also want to express my frustration that just this
morning, the Bureau of Ocean Energy Management announced that
it will again delay the Gulf of Mexico Lease Sale 261, despite
the Director testifying before this Committee one week ago that
``all systems are go'' to hold the lease sale on November 8.
BOEM is once again blaming the courts for delaying the sale,
but the delays are entirely the Administration's fault. The
Department of the Interior was so eager to meet the demands of
environmental groups to restrict the sale that it bypassed
important legal requirements, leading to this litigation.
Moving to today's topic, we are going to be hearing about
the examined opportunities and challenges our country has with
deploying carbon capture utilization and sequestration, or
CCUS, and direct air capture, or DAC. Both of these critical
technologies have received significant bipartisan support from
Congress in recent years, and that should come as no surprise,
as they will play a vital role in protecting American energy
security, keeping electricity reliable, and creating jobs here
at home, while reducing our emissions for decades to come.
Between the improvements we made to the 45Q tax credit in the
Inflation Reduction Act and the funding that we included for
deployment and demonstration in the Bipartisan Infrastructure
Law, CCUS and DAC are now on the rise. In the IRA, we increased
the value of the 45Q tax credit from $50 per ton to $85 for
carbon captured and sequestered, from $35 to $60 per ton for
carbon captured and utilized, and more than doubled the credit
for direct air capture because that technology is currently
more expensive. These IRA provisions built off of earlier
improvements to 45Q that our colleague Senator Barrasso
spearheaded and I supported. In the IRA, we made important
changes to the 45Q proposal in the BBB bill, which would have
excluded many of our dispatchable coal and natural gas power
plants from continuing to use the credit. Furthermore, our
Committee's portion of the Bipartisan Infrastructure Law
included over $10 billion in DOE programs to commercialize
large CCUS and DAC projects.
We spent decades researching and proving CCUS technologies
work. The program in the IRA and Infrastructure Law were
intended to accelerate the full-scale deployment of them, and
this legislation is attracting unprecedented private-sector
investment. CCUS and DAC developers have submitted more than
120 applications to EPA for Class VI well permits to sequester
carbon since the IRA passed, and there are 169 total pending
applications. You can see where we are, and not one approval
has been made by the Biden Administration. The current
Administration claims to be supportive of carbon capture, just
as Congress has been.
[Chart depicting Class VI well permit applications pending
approval follows:]
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The Chairman. They issued a report in June of 2021 which
stated: ``The Administration is committed to accelerating the
responsible development and deployment of CCUS to make it a
widely available, increasingly cost-effective, and rapidly
scalable climate solution.'' The same report also argues that:
``if the United States is to achieve its climate goals,
research suggests that CCUS deployment should increase tenfold
over the next decade.'' But it's hard for me to square this
Administration's own report with its actions. Nearly two and a
half years after that report came out, not a single Class VI
well has been approved. The chart behind me shows the backlog.
Many of these applications have been pending for years. At the
same time, the Administration is more than happy to mandate
widespread deployment of carbon capture on gas and coal-fired
power plants.
All we want is a level playing field, just a fair, level
playing field. So let me be clear: issuing a mandate to use
carbon capture on power plants while withholding Class VI well
approvals is nothing more than a mandate to shut down all of
our dispatchable coal and gas-powered plants prematurely, and
the Supreme Court has been clear that Congress has not given
EPA the authority to mandate a transition of our generation
fleet. I am disappointed that the talk from the Administration
seems to be completely out of step with their inaction.
However, I am optimistic that as more states, including West
Virginia, Louisiana, and Texas, are granted primacy from EPA to
approve Class VI wells themselves, the backlog will decline,
and we will really scale up carbon capture sequestration. I am
also concerned that while the Bipartisan Infrastructure Law
passed more than two years ago, much of the CCUS funding has
yet to go out the door. As we wait for awards on the carbon
capture large-scale pilot programs, financial assistance for
CO2 pipelines, and other programs, the clock is
ticking to deploy this technology and build out infrastructure
necessary to do so.
I am glad we have witnesses joining us from the EPA and DOE
to discuss how to get these important permitting and financial
assistance programs back on track. Earlier this week, the EFI
Foundation, which is led by former Secretary of Energy Moniz,
released a report highlighting the potential infrastructure
needed to meet the EPA's proposed power plant regulations. In
fact, it was released on Halloween, which is fitting, because
it really presents a scary picture. As they explain,
``permitting CCS is a highly uncertain process that can take
years in ideal conditions'' because ``the CCS value chain
covers multiple sectors'' and there is ``little federal
coordination.'' As one example, the report predicts that we may
need to increase the total miles of CO2 pipelines
from 5,000 to over 50,000, which is a 1,000 percent increase in
just over a decade. The report specifically notes that the
current Class VI well and NEPA permitting processes call into
serious question the feasibility of EPA's power plant proposal.
I have already expressed my grave concern with the EPA's
power plant proposal, highlighting its threat to electric
reliability and energy security, and EFI's analysis just adds
to my concerns. If we are going to recognize the economic,
energy security, and environmental benefits from CCUS and DAC,
it will require much more coordination from the Federal
Government. CCUS is also essential for applications much
broader than coal or gas power plants. Hydrogen projects may
rely on CCUS to realize the incentives for clean hydrogen
production that we included in the Infrastructure Law and the
IRA. Steel and cement companies will look to CCUS to
decarbonize their manufacturing to compete in global markets.
DOE's own analysis found that widespread deployment of carbon
capture and removal technologies could add nearly $1.5 trillion
to the economy by 2050.
We are at an inflection point. We are really at an
inflection point. Historic investment from Congress is meeting
scientific innovation to deploy cutting-edge technologies and
infrastructure. However, regulatory and permitting uncertainty
could cause this tremendous opportunity to slip right through
our fingers. This is an opportunity, not just for American
companies here at home, but for us to lead the world in the
energy economy of the future, and it's also an opportunity to
learn from our partners abroad. For example, our allies in
Norway are ahead of us sequestering carbon in subsea
formations. They are already sequestering carbon at depths of
more than 3,000 feet beneath the sea floor and are pursuing new
projects beyond 8,000 feet. Yet here in the U.S., we are a year
behind schedule even issuing the requirements to apply for
carbon sequestration permits on our Outer Continental Shelf, a
permitting program that was required by the Infrastructure Law.
The U.S. has led the world in developing both CCUS and DAC,
and forgoing that leadership because of government inaction is
unconscionable. Its success is crucial to our energy security,
our economy, and our environment. I hope today's hearing will
shed some light on what else is needed to ensure deployment of
these critical technologies, and I look forward to continuing
to work with the Ranking Member and all members of this
Committee to that end.
With that, I look forward to an engaging discussion today
with our panel of distinguished witnesses, and I will turn it
over to my Ranking Member and friend, Senator Barrasso, to give
his opening remarks.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thanks so much, Mr. Chairman.
And before giving any opening statements, I want to
address, like you did, the news from this morning, where just
last week the Director of the Bureau of Ocean Energy
Management, Elizabeth Klein, sat at this table, at that seat,
and she told the Committee ``all systems are go'' for Lease
Sale 261. She went on to say ``we don't see anything in the way
of holding that sale.'' Well, she lied to the Committee,
because today, this very morning, she postponed the sale
indefinitely. This Administration is becoming even more brazen
in its disregard for the law of the land and for the members of
this Committee, and it is shameful.
So Mr. Chairman, I want to thank you for holding today's
very important hearing. President Biden has made it clear that
he wants to eliminate the production and the use of coal in the
United States. Just last year, the President said ``we are
going to be shutting these coal plants down all across America
and having wind and solar.'' Well, the Biden Administration has
followed through on this reckless promise. The Biden
Administration has blocked coal leasing on federal lands. It
has slow-walked mining permits. It has proposed emissions
regulations aimed at shuttering coal-fired power plants. It is
attempting to kill coal by a thousand cuts. This is a recipe
for disaster for our country and for our citizens.
According to the Department of Energy's Energy Information
Administration, coal will be an important part of our energy
mix for decades to come. It makes no sense to block American
coal production and then import coal from other countries.
There is a good reason that coal will be needed well into the
future. In contrast to wind and solar, coal-fired plants can
provide dispatchable power, that is, they can provide
electricity 24 hours a day, seven days a week. In the last six
months, this Committee has received testimony from
representatives of FERC, the Federal Energy Regulatory
Commission and NERC, the North American Electric Reliability
Corporation. So we are talking about regulations as well as
reliability. They all told us that the premature retirement of
dispatchable generation, which includes coal--they all say it
jeopardizes our nation's electric reliability. Eliminating this
generation risks putting Americans in the dark and keeping the
electric vehicles that they want to force on the American
public parked and on empty.
Instead of elimination, we should encourage innovation.
Wyoming is doing just that. The Integrated Test Center in
Gillette, Wyoming is a shining example of an innovative public-
private partnership. It develops carbon capture utilization and
storage technologies in real-world conditions. The University
of Wyoming has also been at the cutting edge of research and
development of carbon capture utilization and sequestration. It
sponsored one of the original proposals picked to participate
in the Department of Energy's CarbonSafe program. The program
aims to develop geologic storage sites to store 50 million
metric tons of carbon dioxide. The University was recently
awarded additional funding under the program. This funding will
be used to advance a carbon capture and storage hub in the
Greater Green River Basin. It will do this with carbon dioxide
derived from trona mining and direct air capture.
Despite advances in carbon capture technology, challenges
remain. For example, new carbon dioxide pipelines are needed to
transport the carbon dioxide. And there is uncertainty around
the rules that govern how to store carbon dioxide on federal
land. Now, I believe we can overcome these challenges. More
difficult are the ideological obstacles. Some environmental
extremists don't want to see carbon capture move forward. To
them, carbon emissions are not simply the problem. To them,
coal, oil, and natural gas are the problem. The Environmental
Protection Agency is under immense pressure from extremists to
deny states the authority to permit carbon dioxide injection
wells. Opponents of carbon capture fear that states would
actually permit these projects in a timely manner. Well, the
EPA appears to have buckled under that pressure from the
extremist groups because only two states have the authority at
this point to permit these wells--my home State of Wyoming and
Senator Hoeven's home State of North Dakota. Projects in other
states must get a permit from the EPA.
Currently, 163 wells are seeking approval from the EPA in a
process that can take up to six years. Meanwhile, the EPA is
pushing extreme air regulations that require the widespread use
of carbon capture technology long before it can be implemented.
It appears the EPA's goal is not to help carbon capture
technology, but to kill it. If we intend to maintain electric
reliability in this country and reduce emissions at the same
time, it is critical that we get this right. That means
advancing policies that give carbon capture technologies a
chance to reach their full potential. So I am hoping today's
hearing, Mr. Chairman, will move us in that direction.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
As I mentioned, we have a distinguished panel of witnesses
with us today, including The Honorable Brad Crabtree, Assistant
Secretary for Fossil Energy and Carbon Management at the
Department of Energy.
We have Mr. Bruno Pigott, Deputy Assistant Administrator
for Water at the Environmental Protection Agency.
We have Ms. Erin Burns, Executive Director of Carbon180,
and a proud West Virginian. I would like to note that Ms. Burns
previously served her home state in my office from 2011 to
2015. She earned her bachelor of arts from Carnegie Mellon
University. It's always nice to have a fellow West Virginian
and former colleague of mine working side by side. Erin,
congratulations on two young children--one and three, I
understand. That's wonderful.
And I am going to turn to my colleague, Senator Barrasso,
to introduce our final witness.
Senator Barrasso. Well, thanks, Mr. Chairman. I would like
to welcome Ms. Lily Barkau, who is one of our witnesses today.
She has traveled from Cheyenne, Wyoming to be here with us, and
she is an expert on siting underground injection wells for
carbon capture and sequestration projects. She has a bachelor's
degree in geology from Wichita State University. She then
earned a master's degree in environmental sciences and
engineering from the Colorado School of Mines. She has served
at the Wyoming Department of Environmental Quality since 2006,
which were the dates when I was back in the Wyoming State
Senate. Lily, thanks so much for being here today, for sharing
your expertise with the Committee, and I look forward to
hearing your testimony.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And now we are going to hear from our witnesses with their
opening remarks, and Mr. Crabtree, we will start with you.
STATEMENT OF HON. BRAD J. CRABTREE, ASSISTANT SECRETARY FOR
FOSSIL ENERGY AND CARBON MANAGEMENT, U.S. DEPARTMENT OF ENERGY
Mr. Crabtree. Thank you, Chairman Manchin, Ranking Member
Barrasso, and members of the Committee, I appreciate the
opportunity to discuss with you the work being done at the
Department of Energy to advance carbon management technologies
and infrastructure to meet our energy security and climate
goals. It is also an honor to join my colleagues, Bruno Pigott
of EPA, Erin Burns of Carbon180, and Lily Barkau of the Wyoming
Department of Environmental Quality. I appreciate the
Committee's longstanding, bipartisan interests supporting
commitment to providing the Department of Energy and the Office
of Fossil Energy and Carbon Management with the funding and
tools necessary to advance critical carbon management
technologies and infrastructure. Thank you for that support.
As you know, Mr. Chairman, we have been investing in carbon
management technologies for more than 25 years and across five
presidential administrations, and this longstanding support
from both sides of the aisle for this important work has
enabled carbon management to emerge into a promising, scalable,
and commercially viable decarbonization option in which the
U.S. can continue to lead the world in the coming decades.
Thanks to bipartisan legislation from annual appropriations to
the 2020 Energy Act, Bipartisan Infrastructure Law, bipartisan
efforts, as the Chairman mentioned, to enhance the 45Q tax
credit, and most recently the CHIPS and Science Act, the
Department of Energy has been able to deliver a range of
critical successes for carbon management. These include over
5,000 miles of CO2 pipeline infrastructure and 13
operating commercial-scale carbon capture projects across
multiple industries that collectively capture, safely
transport, and permanently store over 20 million metric tons of
CO2 annually. This represents more than one-third of
the 30 commercial-scale projects operating globally at the end
of 2022.
The past several years of legislative progress have enabled
us to build on this foundation of success, and have prompted a
significant shift in the commercial outlook for deployment of
carbon management projects. Nearly 200 projects have been
publicly announced in response to improvements to the 45Q tax
credit, a massive increase over today's 13 operating commercial
projects. Given the powerful leveraging effect of the
Infrastructure Law investments in the 45Q tax credit, our
Office of Fossil Energy and Carbon Management, the Office of
Clean Energy Demonstrations, and the Loan Programs Office, have
been working aggressively on implementation to ensure that
federal funding can flow to the highest-impact projects as
quickly and effectively as possible. DOE's carbon management
research development, demonstration, and deployment activities
are also evolving alongside this shift in commercial outlook,
and our funding opportunities have begun to focus on later-
stage innovation, including implementation of the
Infrastructure Law funding for pilots, demonstrations, and
hubs. We are also expanding our focus to enable carbon capture
at a wider range of industrial facilities, often in
collaboration with other offices at DOE that are pioneering
complementary industrial decarbonization strategies.
Additionally, our Carbon Negative Energy Earthshot is aimed
at advancing carbon removal by driving down the cost of that
technology over the next decade to less than $100 per metric
ton of carbon dioxide removed from the atmosphere, and we have
expanded our CO2 conversion program to explore ways
to convert waste carbon emissions, both carbon monoxide and
CO2, into value-added industrial products that can
help decarbonize our built environment and petrochemical and
fuel supply chains. All of these advances are important for our
domestic priorities, but they are also good news for
international carbon management efforts, and for America's
longstanding global leadership and initiatives to stand up and
deploy these technologies around the world.
Meanwhile, here at home, DOE recognizes that we simply
cannot realize the full deployment potential of the funding,
financing, and incentives in recent legislation without broad-
based understanding and support from local communities and
other stakeholders. To that end, we are including community
benefit plan requirements in our funding opportunities to
ensure that the recipients of DOE funding create high-quality
jobs, protect the environment from unintended pollution, and
ensure that projects are sited and operated with significant
input from and benefit to local communities. And finally, we
are exploring a voluntary responsible carbon management
initiative designed to identify and elevate industry best
practices and encourage project developers to pursue the
highest levels of safety, environmental stewardship,
transparency, and community engagement and benefits.
Mr. Chairman, thank you again for the Committee's interest,
support, and commitment to providing DOE with the funding and
tools necessary to increase the speed and scale of carbon
management deployment. I look forward to your questions. Thank
you.
[The prepared statement of Mr. Crabtree follows:]
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The Chairman. Thank you, sir.
Mr. Pigott.
STATEMENT OF BRUNO PIGOTT, PRINCIPAL DEPUTY ASSISTANT
ADMINISTRATOR, OFFICE OF WATER, U.S. ENVIRONMENTAL PROTECTION
AGENCY
Mr. Pigott. Good morning, Chairman Manchin, Ranking Member
Barrasso, and members of the Committee. My name is Bruno
Pigott. I serve as the Principal Deputy Assistant Administrator
for Water at EPA. Thank you for the opportunity to testify
before this Committee today on the critical topic of carbon
capture and storage. Prior to my serving in my current position
over the past year and a half, I served in bipartisan
administrations for 20 years in a coal state--Indiana--in a
variety of roles at the Department of Environmental Management
in Indiana, including as its Commissioner. That state
experience taught me the importance of issuing timely,
defensible permits, and I am committed to doing the same here.
The Biden-Harris Administration set a goal of reducing
greenhouse gas emissions 50 percent by 2030, and net-zero
emissions economy-wide by 2050. Carbon capture utilization and
storage, widely known as CCUS, will be central to achieving
those goals. The growth of CCUS is expected to produce between
390,000 and 1.8 million good-paying jobs, especially in those
communities that have been most affected by the transition to a
net-zero economy. CCUS, then, holds enormous environmental and
economic potential, and recognizing that potential, Congress
provided historic funding through the Bipartisan Infrastructure
Law and Inflation Reduction Act. Thank you for that.
CCUS is a proven technology. It has been used for decades.
It traps carbon emissions from industrial sources and stores
them permanently. EPA's role, under the Safe Drinking Water
Act, is to ensure that these activities do not contaminate our
waters, and that is why we issue permits for injecting
CO2 in underground wells. These permit requirements
protect America's drinking water from contamination, and as a
result, protect public health.
I would like to talk for a minute about primacy. EPA
strongly supports efforts by states to obtain primacy for the
Class VI program. My time in Indiana taught me that states play
a key role in regulatory programs, and we are working hard to
grant primacy to states for Class VI, as we have in most of our
other permitting programs. We are grateful to Congress for the
appropriations we received to grow our state primacy team, and
for the more than $50 million Congress provided in the
Bipartisan Infrastructure Law to support primacy activities.
EPA is announcing this morning the opening of the application
process for those dollars for states. Currently, as indicated,
North Dakota and Wyoming have primacy for Class VI, and
Louisiana is in the final stages of the application process.
Texas, West Virginia, and Arizona are all in the pre-
application phase, and 21 other states and two tribal nations
have expressed interest in primacy. We believe this grant
program will provide the resources states need to set up these
programs. Thank you so much for that funding.
Where states have not obtained Class VI primacy, EPA issues
permits. EPA is committed to reviewing the Class VI
applications efficiently. Permit applications are technical
documents. They contain information about the geology to ensure
the area is free of faults and fractures, the injected
CO2 plume, to know where that CO2 goes,
and specifics about well construction to make sure it is
operated in a way that works. We evaluate this information to
ensure our source water is protected. Interest in Class VI
wells has grown exponentially over this last year. To meet the
increased demand, EPA is using the resources from both Congress
and the Federal Permitting Improvement Steering Council to
increase our staff of experts to review these permits.
Additionally, through interagency agreement with the Department
of Energy, many of the applications are being reviewed by the
National Laboratories that DOE operates to ensure that we
review the models appropriately.
EPA's goal is to make permit determinations within 24
months after receipt of a complete application. Our job is to
ensure all people are fully protected from the adverse
environmental and health hazards and have equitable access to a
healthy environment. EPA has taken several actions over the
last year to fulfill this commitment. Most recently, in August,
the agency finalized guidance to provide clear expectations for
transparency in community engagement. And these common-sense
practices will help set clear expectations. EPA and our growing
Class VI team are committed to clear, consistent, speedy
issuance of these permits.
Thank you for the opportunity to testify.
[The prepared statement of Mr. Pigott follows:]
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The Chairman. Thank you.
Now we have Ms. Burns.
STATEMENT OF ERIN BURNS,
EXECUTIVE DIRECTOR, CARBON180
Ms. Burns. Thank you.
Thank you for the opportunity to testify today on the
deployment of direct air capture in the United States. I am
Erin Burns, the Executive Director of Carbon180, an independent
non-profit organization focused on reversing two centuries of
emissions. I also want to take a moment to say I am
particularly honored to be here today. As Chairman Manchin
mentioned, I previously staffed him, my home-state senator,
when he was a member of this Committee.
Direct Air Capture can play an essential role in meeting
climate goals through addressing legacy emissions. It can also
bring enormous benefits beyond climate, including bolstering
American technological leadership and driving economic growth.
And those benefits can be realized across the country. Today,
the U.S. is the global leader in direct air capture. The
majority of DAC companies are headquartered here in the U.S.
And while some of the largest companies are not U.S.-based,
they still have their first full-scale deployments planned
here. That is because of legislation like the Energy Act, the
Infrastructure Investment and Jobs Act, and the Inflation
Reduction Act.
Today, global DAC capacity is in the tens of thousands of
tons. Recently enacted policies, however, are estimated to
result in one to eight million tons of DAC deployment by 2030,
and by 2035, that figure could be as high as 84 million tons.
This deployment can create new jobs and businesses, it can
promote market and economic growth, and it can provide long-
term wealth-building opportunities. According to an analysis
released just this past month, a 500,000-ton direct air capture
plant could generate more than 1,200 jobs in construction,
engineering, materials, and equipment, and more than 300 jobs
in operation and maintenance over the facility's lifetime.
Eight million tons of deployment by 2030 would mean up to
24,000 jobs. Eighty-four million tons of deployment by 2035
could mean more than 260,000 direct air capture jobs. To fully
realize this economic opportunity, however, we must also invest
in domestic supply chains. Around a third of the jobs
identified are in supply chains, and direct air capture plants
should be built using steel and other materials produced in the
U.S.
There is also enormous private-sector demand for direct air
capture that can be unlocked by policy support. Voluntary
carbon removal markets are estimated at $10 to $40 billion by
2030. But in that same year, demand for direct air capture is
expected to exceed productive supply. Importantly, direct air
capture projects can be sited in many regions, including those
that are navigating an economy impacted by a reduction in the
production and use of fossil fuels where workforces have many
overlapping skill sets with those required in the construction,
operation, and maintenance of a direct air capture facility.
Personally, this opportunity on economic growth and wealth
creation is one I am particularly excited about. I am from
southern West Virginia, an area whose history is deeply
interconnected with coal, and I want to see a DAC industry
where the wealth created goes into the pockets of those folks
who are doing the work, supporting high-paying union jobs and
the benefits that come with those jobs. The opportunity for a
place like West Virginia to build a new industry that leverages
our existing skill sets, that has a long future in a world
where markets have a preference already for low- and zero-
carbon industries, is one that I am personally deeply invested
in.
To make those potential benefits a reality in places across
the U.S., however, we are going to need additional policy. My
written testimony includes several specific recommendations,
but I would like to highlight three, in particular. First, one
of the most significant barriers to direct air capture
deployment today is infrastructure. We need to capture billions
of tons of CO2. Those are going to need to be safely
and securely stored. The Department of Energy should coordinate
with the Environmental Protection Agency to ensure timely and
thorough Class VI review for things like the Direct Air Capture
Hubs projects, and also provide technical assistance to those
projects. We are also really excited about more ambitious ideas
like the DOE and EPA looking at pre-permitting carbon storage
hubs, including in places where communities might opt-in to
hosting those hubs.
Second, we need continued, robust R&D support. Over the
past few years, Congress has passed really groundbreaking
legislation, and it has helped secure American leadership on
direct air capture. Continued funding can and should include a
diverse portfolio of direct air capture pathways supporting
emerging technologies alongside those being deployed today.
This can increase learnings, drive innovation, and prevent
technology lock-in. DAC will also require additional clean
energy coordination across DOE's applied offices and can
support research on key questions at the intersection of carbon
removal and renewable energy.
Finally, with a $35 million Carbon Dioxide Removal
Procurement Prize, the Federal Government can play a unique
role in establishing high standards for direct air capture and
other long-duration carbon removal pathways in ways that unlock
additional private capital and increase public acceptance.
Robust performance-based standards across a portfolio of
durable carbon removal technologies and solutions will help
drive the market toward quality and consistency, de-risking
investment, crowding in private funding, and setting the stage
for more robust policy support.
Thank you again for the opportunity to testify, and I look
forward to your questions.
[The prepared statement of Ms. Burns follows:]
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The Chairman. Thank you.
Now we have Ms. Barkau.
STATEMENT OF LILY R. BARKAU, GROUNDWATER SECTION MANAGER, WATER
QUALITY DIVISION, WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY
Ms. Barkau. Good morning, Chairman Manchin, Ranking Member
Barrasso, and honorable members of the Committee. I appreciate
the opportunity to be with you here today.
My name is Lily Barkau, and I am the Groundwater Section
Manager at the Water Quality Division at the Wyoming Department
of Environmental Quality. The Groundwater Section oversees the
implementation of the underground injection control program.
Wyoming received primacy of the Underground Injection Control
(UIC) program in 1983 for five classes of wells, and in
September 2020, the Department received primacy of Class VI
wells for permanent storage of carbon dioxide. Our long history
in implementing the UIC program demonstrates expertise and
experience that is easily transferrable to the Class VI
program. Wyoming began enacting legislation in 2008 to allow
and promote CO2 storage.
Within Wyoming's regulatory framework, prospective
CO2 storage operators can pursue CCS in an
environment with well-defined risks and liabilities. Wyoming is
also well-suited geologically for CO2 storage due to
the number of high-storage potential sedimentary basins in the
state. Because of these factors, Wyoming is poised for
successful deployment of CCS, and interest in CCS projects is
high. Currently, 12 proposed Class VI wells in Wyoming are in
various stages of the permitting process, ranging from the pre-
application stage to the permit issuance stage. The Department
anticipates issuing its first three Class VI permits for well
construction by the end of the calendar year. In order to help
applicants meet the Department's rules and expedite permitting
of these Class VI wells, the Department has developed and is
implementing a streamlined permitting process that encourages
operators to meet with regulatory agencies early in that
process. The Department anticipates it will be able to issue a
Class VI permit authorizing injection within one-and-a-half to
two years from the date it received the application. However,
the permitting timeline ultimately depends on the condition of
the submitted permit application and the responsiveness of that
applicant.
Permitting for CO2 storage is only one facet of
the CCS process. Other factors may pose obstacles for Class VI
permitting. CO2 storage on federal lands needs
further consideration. Given the high concentration of federal
lands located in Wyoming, large-scale CCS projects are almost
certain to implicate federal holdings, generating questions
about how federal land agencies, such as the Bureau of Land
Management, will approach CCS and access to pore space, in
particular. Current federal law does not provide a legal
definition of pore space, much less clarify the ownership of
pore space in situations of split estates where the surface
rights are privately owned but the mineral rights are federally
owned. Therefore, clarification on federal pore space and
unitization of that pore space is needed to support timely
permitting of CCS projects.
Furthermore, improved coordination between the Department
and Wyoming BLM is needed to ensure that Class VI permit
issuance and BLM right-of-way authorizations are issued at the
appropriate times and such that each agency has the information
it needs to make its decisions within its regulatory
authorities. The Class VI permit authorizes injection of
CO2 such that underground sources of drinking water
(USDWs) are protected. Whereas, under the BLM right-of-way, BLM
is charged with ensuring access to federal pore space and the
federal mineral estates are not damaged. It is important to
keep these two roles and authorities distinct. Further,
clarification on financial assurance through bonds for Class VI
permits on federal lands is needed to identify what portions of
the CO2 storage site require bonding through the
Department and BLM. Avoiding duplication of bonding will be
important to CCS projects financially.
In addition to federal pore space just discussed,
interstate pore space may pose an obstacle as well. Wyoming's
sedimentary storage basins traverse or are situated near state
borders. The CO2 storage site is defined as a
CO2 plume, pressure front, and any displaced fluids,
and is referred to as the Area of Review. The federal Class VI
program regulations do not consider pore space in the issuance
of the permit, and only require public notification to local,
tribal, or neighboring states in the Area of Review. However,
the process for acquisition and storage in a neighboring
state's pore space has not been identified, especially if that
neighboring state does not have current regulations regarding
pore space.
Another topic of consideration is that Class VI regulations
require that CO2 injection occur below the lowest-
most USDW, and do not allow for new aquifer exemptions to be
approved. Wyoming has deep formations that may be considered a
USDW, but under other UIC well classes, would be afforded an
aquifer exemption in accordance with federal regulations. Not
allowing aquifer exemptions for Class VI may eliminate
additional storage reservoirs. And finally, there is currently
no federal funding being provided to states to implement Class
VI primacy programs. While under the Infrastructure Investment
and Jobs Act, EPA is offering one-time grant funding to support
states either with or seeking Class VI primacy, long-term
funding opportunities and grant requirements are not available.
Thank you again for the opportunity to be here, and I will
gladly answer any questions.
[The prepared statement of Ms. Barkau follows:]
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The Chairman. Thank you. I want to thank you all for your
introductory statements, and now we are going to start with our
questioning. I will begin with Mr. Pigott.
This May, EPA proposed a new rule under the Clean Air Act
to restrict carbon emissions from both new and existing coal
and natural gas plants, largely using carbon capture. A typical
Class VI well can sequester around one megaton per year,
depending on the geology. According to EPA's own greenhouse gas
inventory, the U.S. power sector emits around 1,500 megatons of
CO2 annually. Even if we want to capture one-third
of that, that would be 500 Class VI wells. So, as you know, the
EPA has the permitting responsibility. Do you think they will
be able to permit enough wells to meet the demand created by
these rules that have been proposed by you all?
Mr. Pigott. Thank you, Senator Manchin. It is an important
question, and it recognizes that importance of the Class VI
program to all of these projects. The Class VI well application
process is a linchpin to the success of these things. And we
have been--thank you to you all--the Bipartisan Infrastructure
Law and the Inflation Reduction Act granted the funding to
increase our staffing to ensure that we meet that demand. But
also, I recognize, as we have heard from Lily, the importance
of states in ensuring that we allow them to have primacy that
has been granted for all of our permit programs because states
can operate efficiently and effectively to issue permits.
The Chairman. Let me add to that as you go into your final
statement here. Do you believe that carbon capture is cost
effective?
Mr. Pigott. I believe that carbon capture is the linchpin
to ensuring that we use all the tools necessary to meet our
climate goals, sir.
The Chairman. Do you believe it can be done?
Mr. Pigott. I believe we can accomplish this together, and
through the funding provided by Congress, we have increased our
staffing from 7 people to 34, and because of the Federal
Permitting Improvement Steering Council, we have more funds to
direct for increased staffing at the same time that we award
primacy because the good work that we have seen----
The Chairman. We have seen the surge of demand. There are
169 wells that are still in the permit process waiting for
actions. And that depends an awful lot on whether we are able
to meet the demand that's going to be brought on by market
conditions. That's what we are concerned about. So I would say
with the additional funding that you have, and DOE's role in
this too, hopefully, you all are able to get up to speed.
Let me segue into that. Ms. Barkau, a proven way to bring
more resources to speed up Class VI wells is allowing primacy.
Primacy means that the states would have the responsibility. In
Wyoming, you are one of the two states that successfully
applied for Class VI primacy. I can ask you two things--how has
it affected, and how long did it take you to get that? We have
been trying since 2022 in West Virginia because we have a lot
of formations that'll work also. How long was your process in
getting your permit, and how has it affected uptake since
receiving primacy in your state?
Ms. Barkau. Yes, so we have received--it took approximately
33 months to get through the entire primacy application process
from submitting that application in January 2018 through
receipt of that in September 2020. Since receiving primacy, we
have held numerous informational meetings to work with
operators on getting those permits issued and setting up the
program to outline the exact needs so that we can streamline
that permitting process. So it's very important for----
The Chairman. It took you about two years to get approval?
Ms. Barkau. Yes, sir.
The Chairman. Do you have any wells in activity right now?
Any wells permitted in Wyoming?
Ms. Barkau. We are about to issue three permits for
construction. We don't have any to date that have been
permitted.
The Chairman. How long will it take to put that in
production? How long would it take for those to get in
production once you permit them?
Ms. Barkau. They will have to construct those wells. They
are looking to possibly construct them starting in May and then
that will take several months. We will have to do any kind of
permit modifications to get through the authorization to inject
and then it should be within a year or two.
The Chairman. Ms. Burns, how important are timely Class VI
well permits? Your organization is kind of watching what we are
doing with all this CO2. We have a way to do it, we
want to do it, and we have the technology to do it. We just
have to have the will to do it in a timely fashion. So what is
your----
Ms. Burns. Extremely important. I appreciate why a lot of
the focus, historically, on things like direct air capture has
been in bringing down the cost of the technology, which we need
to continue to do. I think we also have a really strong track
record at the Department of Energy being really good at
bringing down the cost of new technologies, and I am pretty
bullish on the opportunities to bring down the cost of things
like direct air capture. What worries me more is the
infrastructure. We are going to need to store billions of tons
of carbon dioxide and we need a robust and well-functioning
Class VI permitting process.
The Chairman. And have you weighed in on that with the EPA
and with the DOE and all of them on how important it is to get
this done?
Ms. Burns. Yes, sir.
The Chairman. Yes. Okay.
With that, Senator Barrasso.
Senator Barrasso. Thanks, Mr. Chairman.
Let me start with Mr. Crabtree. Welcome back to the
Committee. This is a Committee with diverse opinions, and you
were confirmed unanimously by the Committee and unanimously by
the U.S. Senate, which shows there is a lot of faith in your
ability to handle this problem. And you know, earlier this
week, two offshore wind projects were officially scrapped. A
story in the New York Times today, and Mr. Chairman, I ask that
we unanimously consent to put this in the record.
The Chairman. Without objection.
[The article referred to follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
Senator Barrasso. ``Offshore wind firm cancels New Jersey
projects, as industry's prospects dim.'' It says a combination
of ``high inflation and soaring interest rates are making
planned projects that looked like winners several years ago no
longer profitable,'' and that this move ``will crimp the Biden
Administration's plans to make the wind industry a critical
component of plans to reduce greenhouse gas emissions,'' which
says to me it's even more critical to achieve the goals of the
Administration for carbon capture and sequestration to work. So
if we are serious about reducing CO2, projects
advancing this technology need to continue to move forward, and
at a brisk pace.
In May of this year, the Department announced it is going
to award the University of Wyoming's School of Energy Resources
a grant under the CarbonSafe program. The project is going to
play a critical role in expanding carbon dioxide transportation
and storage infrastructure in the region. My understanding is
that the Department has not yet started negotiations with the
University on this grant. It has been about five months. When
do you expect the Department to begin negotiations with the
University on this grant?
Mr. Crabtree. Senator, just to clarify, is that the
Sweetwater project?
Senator Barrasso. Yes.
Mr. Crabtree. Yes. I actually had a conversation this week,
coincidentally. My understanding--so let me take one step back
to answer your question. There is about $2.5 billion in the
infrastructure bill for the geologic storage program. We are
implementing that through an expanded CarbonSafe, of which
Sweetwater is one of many projects that have been approved. Our
goal is to enable, with private sector investment and federal
investment, 20 to 40 regional geologic storage sites over the
five-year life span of the funding from the infrastructure
legislation. We need to make sure that we engage consistently
with all the different projects and that we co-fund in a
consistent way.
I heard from one of your constituents concern that this was
taking too long. I have followed up. And the reason for the
delay is the team is trying to make sure that, in response to
Wyoming's situation, we are treating Wyoming in the same way--
in terms of the number of wells, types of wells--that we are in
Pennsylvania or any other state. I was assured that they would
be getting feedback shortly.
Senator Barrasso. Great, because we do have a cowboy
culture. We kind of get things done quickly, and that's an
ability to do that, and in Wyoming we don't think we ought to
be held back because of delays in other states. So thank you.
Thanks for your attention.
Mr. Crabtree. Well, sir, I am from North Dakota. I
appreciate that.
Senator Barrasso. Great.
Ms. Barkau, if I could go to you, the Environmental
Protection Agency granted the state the authority to permit the
Class VI wells in 2020, the second state to receive the
authority. How many applications is your agency currently
working on? I know you said you had three that you are doing
the permits for now.
Ms. Barkau. We have five that are in house that are under
review, the three that are about to be issued, one that has
been somewhat stagnant and deficient and we asked the applicant
to reattempt the application, and one that is currently in
discussions. We received five additional ones for a pre-
application phase. And then there are the CarbonSafe projects
up in the Dry Fork Station that will be converted from Class I
to Class VI in the near future, and a number of other permits
submitted by them.
Senator Barrasso. So do you believe that this authority
that we have in Wyoming helps Wyoming stay on the cutting edge
of carbon capture?
Ms. Barkau. Absolutely. Basically, Wyoming knows Wyoming.
So with us getting out there to issue these permits and do the
reviews, we are protecting the underground sources of drinking
water. We are able to streamline the process and work
collaboratively with operators to move this forward. And so,
having the primacy of the program really helps us to work best
with the operators for the state itself.
Senator Barrasso. Okay.
So Mr. Crabtree, a rule that recently came out of the EPA
requires coal plants to capture 90 percent of their carbon
dioxide emissions. Under the Clean Air Act, the EPA can only
rely on emissions reduction technologies that are ``adequately
demonstrated.'' So could you name the commercial power plants
that are currently and consistently achieving this 90 percent
capture rate? Because I don't think there is one at all.
Mr. Crabtree. Well, actually, Petra Nova--the project at
the power plant in Houston--contrary, Senator, to all the
criticism of the project that you see in the media, it has met
all of its technical milestones. It was on time, it was on
budget, and its capture rates were exactly what the Department
of Energy was expecting. Now, as I think you know, the business
model for that power plant was to store its CO2
through enhanced oil recovery. They did not claim the 45Q tax
credit. They were an early adopter. So they were in a much more
challenging commercial environment to do a second-of-a-kind
project in the world. And so they, when COVID happened and
everything collapsed in terms of the oil market, they took that
project offline, but it is now back up and operating. And so
it's very much a success story in terms of the application of
retrofit technology to a thermal power plant.
Senator Barrasso. Yes, and it's not 90 percent. I mean,
that's the concern, that the technology isn't there for broad
distribution to really be at 90 percent, which is what the
EPA--I think it's an unrealistic effort by----
Mr. Crabtree. I feel a need to defend the technology
because we have environmental critics asserting that is not the
case. What is important to bear in mind is that that project
was designed to optimize its economic performance given that it
was a demonstration project.
Senator Barrasso. Sure.
Mr. Crabtree. So it's not designed to capture all the
CO2 from all the flue gas stream. It's a portion of
that flue gas stream. But what is important is that it is
achieving 90 percent or better from that flue gas stream that
it was designed to capture. So it's actually a technical
success in that regard and important to recognize.
Senator Barrasso. Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Heinrich.
Senator Heinrich. Thank you, Chairman.
Ms. Burns, how important are the 45Q tax subsidies in the
Inflation Reduction Act to both carbon capture and direct air
capture projects?
Ms. Burns. Thank you, Senator Heinrich.
So the 45Q tax incentive for direct air capture to saline
storage is $180 per ton, up from $50 per ton. That is really
significant. It is based on an analysis out of 2019 from the
Rhodium Group, looking at, really, what value is needed. And
the fact that Congress was able to take quick action in
response to that was really helpful in the direct air capture
sector, and in particular, paired with other pieces of the
Inflation Reduction Act, the infrastructure bill, all of those
pieces combined--robust R&D support. Congress has been
extremely responsive to needs identified through those
analyses, through things like the National Academies Report,
and it has really spurred, again, you know, even though some of
the early direct air capture companies, like Climeworks and
Carbon Engineering came out of countries not the U.S., we are
still the global leader in direct air capture because of that
policy support.
Senator Heinrich. What would be the--as you know, there are
a number of Members of Congress who have called for the repeal
of the Inflation Reduction Act. What would be the impact on
direct air capture, and for that matter, CCS projects in the
pipeline right now, were the Inflation Reduction Act to be
repealed in its totality?
Ms. Burns. Yes, I think it would be, without any sort of
formal analysis, pretty catastrophic. Again, it's because of
the federal policy support that the U.S. is seeing far more
deployment in technologies like direct air capture and other
durable carbon removal pathways. There is excitement about what
other durable carbon removal pathways could be supported
through things like tax incentives that are modeled after the
success of the 45Q tax incentive. And so, I think that would
represent sort of waving the white flag on American leadership
on things like direct air capture.
Senator Heinrich. The word you used was catastrophic,
right?
Ms. Burns. Yes, sir.
Senator Heinrich. Yes.
Mr. Pigott, you were asked by the Chair about the economic
viability of CCS and direct air capture projects. Setting aside
enhanced oil recovery--and we have seen that that has a
business case here--without 45Q, would any of these projects be
economically viable at this stage in technology development?
Mr. Pigott. Well, in the Class VI program, our evaluation
is not of the economics of the viability, but how quickly do we
process and ensure that the projects that are put in place
protect our sources of drinking water. And therefore, our
economic analysis is not in regard to the viability. I am sure
that the incentives that have been provided through the
Bipartisan Infrastructure Law, the Inflation Reduction Act, and
other funding sources, such as the 45Q tax credit, have
provided an incentive, and therefore, we have seen a dramatic
increase in the interest in these Class VI applications and----
Senator Heinrich. Mr. Crabtree, why don't you answer that
question then? Without the 45Q incentives, what percentage of
the projects in the pipeline for both direct air capture and
CCS would be economically viable today, do you believe?
Mr. Crabtree. Very few would be economically viable without
a tax credit, as is the case with most clean energy
technologies. That is the role that tax credits have
historically played to accelerate innovation, and ultimately,
deployment. I think--if I might?
Senator Heinrich. Sure.
Mr. Crabtree. It's really important to distinguish--if you
think about the full suite of technologies we need to meet our
climate challenge and net-zero emissions by 2050--carbon
capture and storage, as a family of technologies, including
carbon removal, has historically received very little federal
policy support compared to other clean energy technologies.
That started to change in 2018 with the reform and expansion of
45Q. It has dramatically changed with the 2020 Energy Act,
followed by the infrastructure legislation and the Inflation
Reduction Act. Now, you know, parity can be defined in many
different ways, but we have, broadly, parity across a family of
technologies that we need. And what is really misunderstood
about costs for carbon management is that it's the only set of
technologies that are expected to justify themselves on a per-
ton basis.
But you can look at all the technologies we need from a
climate standpoint, in terms of what they cost on a per ton
basis, and what you will find across that cost spectrum is,
whether it's carbon management, or renewables, or fuels, or a
whole range of technologies, they go from very, very
inexpensive to very, very costly. So we have carbon capture
projects that will move forward now under the 45Q tax credit,
ethanol production, gas processing, hydrogen production,
fertilizer production, with just the tax credit, and dozens of
projects will be likely moving forward. But when you get to
things like heavy industry, power generation, then we will need
the investments from the infrastructure bill to help de-risk.
Senator Heinrich. If we repeal the IRA in its totality,
what would happen to all those projects, Mr. Crabtree?
Mr. Crabtree. Well, ``all'' is many, but historically, I
think if you look at 13 operating commercial-scale projects,
the reason there are only 13 is that until very recently, those
projects could only be financed because a wide range of optimal
things came together--location, infrastructure, opportunity to
store CO2 through enhanced oil recovery. That is a
very limited universe that nearly 200 projects that have been
publicly announced would shrink dramatically to probably near
nothing.
Senator Heinrich. Thank you, Mr. Chair.
The Chairman. Thank you, Senator.
I just want to add that. The whole purpose of these pieces
of legislation is to mature proven technologies. And if we can
mature them, the quicker we mature them, we all benefit by
them. So that is really what we see happening. Sometimes we get
in our own way, and everyone has their ideological beliefs that
slow things down or they would like to see things fail. We
never put the money toward carbon capture that we should have.
We talked about it. We never did it. And now that we are doing
it, it's going to basically, rapidly change the face of how we
provide energy, the type of energy we can provide to have
dependability and reliability.
With that, Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. We don't want
to see things fail. In fact, we feel we have great,
extraordinary opportunities up north, and as we think about
carbon capture utilization and sequestration and direct air
capture, I don't think there is a single climate model that
exists that states that these technologies are not going to be
needed in the future, and then, of course, dramatically scaled
up.
So I am curious this morning to hear how Department of
Energy is implementing these provisions, how we are getting
funding out the door, and I will start by expressing, Mr.
Crabtree, my appreciation for the announcement that ASRC, in
consortia with Repsol and Santos, was selected to receive funds
for the feasibility of the direct air capture hubs up on the
North Slope. We are excited about that. I also want to express
my hope that the Department will take a real hard look at the
existing Alaska applications for the carbon capture large-scale
pilot project up there as well. It is really exciting. And when
you think about it, it can be so transformative. What this
application would do is, test the technology of these seven
Frame-5 gas turbine generation equipment units there at
Prudhoe. But when you think about the potential to make a
difference, this alone has the potential to address 35 percent
of the state's emissions--not just of the emissions up there--
35 percent. And then again, once it's successful in
demonstrating the replication of this technology, to then move
that to 20 Frame-5 turbines, all located within a five-mile
perimeter there on the Slope.
So my question for you this morning is, when the Department
is looking to make determinations on these pilots, and I know
that you are somewhat restricted in giving too much
information, but just more holistically, when you are looking
at these applications, how important is the ability of
replication for these projects to then be able to expand to
address emission sources in nearby areas? Do you take that into
account?
Mr. Crabtree. We do, Senator. And by the way, I just have
to say, I was as excited as you were to see the award on the
North Slope.
Senator Murkowski. Yes.
Mr. Crabtree. If you would have asked me a few years ago,
would we have Native Alaskan and industry cooperation around a
direct air capture project on the North Slope of Alaska, I
would not have imagined that.
Senator Murkowski. Super-exciting.
Mr. Crabtree. It is very exciting.
Obviously, you already acknowledged this. I can't speak to
projects under consideration, but yes, replicability, it's
actually inherent in the whole approach to demonstration. The
idea is, with the demonstration funding, as with the success of
these projects, it will de-risk these projects and facilitate
investment in future similar projects in the marketplace. And
that's why it's so important that Congress provided--and you,
Senator, played a role with the 2020 Energy Act in expanding
the role, not just to R&D that DOE can play, but supporting
commercial-scale demonstration of these technologies.
Senator Murkowski. And that's why I think we are so excited
about the potential out there, because we are in this unique
ecosystem, if you will, given the topography and the geography
of the Slope compared to other areas in the Lower 48. You know,
you have an opportunity here where you can utilize both CCUS
and direct air capture in a heavily concentrated and primarily
industrialized area there between Prudhoe and Kuparuk. And so,
you have an amazing opportunity up there to demonstrate in a
way that is unique, driven by, again, the topography and how
things are concentrated. So we are very, very excited about it.
You mentioned the recognition that we are working with
Alaska Natives--ANCs and Arctic Slope Regional Corporation. I
think you have been up to Alaska enough to know and understand
the complexity of the institutions that are serving Alaska
Native people. It's not just tribes--it's tribal consortia,
it's the corporations. And I have heard from some applicants
that there is a worry or a concern that there is this
disconnect, or perhaps a lack of appreciation or understanding
for how ANCs work as part of the project--their place in the
community, how the benefits actually flow back to shareholders.
So I hope that you can give me some assurance that these
applications aren't being discounted because, perhaps, some
within the systems lack an understanding about ANCs and how
they operate.
Mr. Crabtree. I appreciate that question. I would suspect
that probably, more broadly, you encounter a lot of lack of
understanding----
Senator Murkowski. Yes.
Mr. Crabtree [continuing]. Of Alaska Native Corporations
and the role that they play. Because we have our Arctic Energy
Office, for example, on my first trip to Alaska I was fully
briefed. The team actually organized a dialogue for me with
representatives of the corporations. I think a greater
challenge, if I may, in Alaska right now that I think my two
visits and the subsequent follow-up of my team has helped, you
and I talked about this in Anchorage, is that you have enormous
opportunities in Alaska for regional initiatives. Turning the
Cook Inlet into a carbon hub, for example.
Senator Murkowski. Right.
Mr. Crabtree. You have been mentioning the North Slope
here. There is also the decarbonization of your regionally
isolated grid.
Senator Murkowski. Which we are really excited about.
Mr. Crabtree. And there are enormous opportunities there,
but when I--the first trip I made, I sensed there was not an
appreciation for the multiple provisions in the infrastructure
legislation and in the Inflation Reduction Act that could be
layered together to do comprehensive projects. In my sense,
that is changing. And from our DOE perspective, the Alaska
Native Corporations are fundamental to all of that.
Senator Murkowski. Well, I will look forward to working
with you, and if you have identified something that we need to
speak to, just about how the whole system knits together up
there, I am happy to do that. These are exciting.
Mr. Chairman, I really appreciate that you and the Ranking
Member have put this before the Committee today. I have a whole
host of questions, not only for Mr. Crabtree, but Mr. Pigott,
that I would like to ask to be included as part of questions
for the record.
The Chairman. Absolutely. And I think you might get another
chance at this real quick.
Senator King.
Senator King. Thank you, Mr. Chairman.
I want to inject, if you will pardon the term, another
factor into this discussion, and that is time. We don't have
time. There has to be a sense of urgency about this. We are in
a race with climate change. We are seeing the impacts
accelerating year by year by year. And Ms. Barkau, you
testified about the process to get to where you are today, and
the well will be ready, my calculation was seven years from the
time it started in 2018. That can't be the standard. And I am
very disturbed by the Chairman's chart of 169 applications, no
approvals. This is--if the goal is protecting the environment,
we have got to get on with it. We can't be delaying and slow-
walking the process in order to achieve our climate goals,
whether it's CCUS or transmission lines or any other of the
necessary infrastructure, to achieve a green energy future.
And so, I guess I want to start with Mr. Crabtree. Where
are we on feasibility? And I am an old alternative energy/
renewable energy developer. I think in terms of cents per
kilowatt-hour. What are we talking about for CCUS when added to
the cost of the output of a coal plant, for example?
Mr. Crabtree. That is so site specific, but----
Senator King. Give me a range, a ballpark. Are we talking
two cents a kilowatt-hour or ten cents a kilowatt-hour?
Mr. Crabtree. I would want to get back to you in a question
for the record to show on that, but here is what I can say. For
coal-powered power generation, the cost of carbon capture and
storage is in the neighborhood of the 45Q tax credit. There is
substantial commercial risk that increases the financing costs
of projects. Some of the investments we are making, that we
have been talking about, and CO2 transport and
geologic storage, will help to de-risk those commercial
investments because part of the challenge is that you are not
just investing in the capital--in the operations of the carbon
capture equipment--you have that whole value chain of the
CO2 transport and storage.
Senator King. Well, I would appreciate it if you could give
me an answer on the numbers. In other words, will the cost of
carbon capture equal the cost of producing the energy, or will
it be more? Will it be less? And I just--that is a crucial
factor because, again, one of the factors we are thinking about
here is consumers--what they have got to pay for electricity.
So I just would like that data, if you could. You don't need to
answer now, but----
Mr. Crabtree. I will definitely provide it for the record.
Senator King. And Mr. Pigott, can we do this without
damaging local communities? The objection is potential damage
to local communities, water pollution--again, not a detailed
answer, my time is ticking away, but can it be done in an
environmentally sound manner?
Mr. Pigott. We believe yes, it can, Senator.
And I very much appreciate the sense of urgency that you
brought to this discussion. We believe it's urgent too. That's
why we are working to ensure and announce today the grant to
ensure that states across the nation are able to put in place
primacy applications. And we are willing to work with states,
not only to provide them with the funding, but knowing on the
front-end what they should expect in order to process and
receive primacy.
Senator King. Ms. Barkau testified that it took almost
three years to get their primacy designation. That's not
acceptable. I mean, if it takes you three years to get to the
starting point, and then the state has to do the permitting,
and then there is a period for construction, there has got to
be a process to accelerate that primacy determination.
Mr. Pigott. Senator, we are working every day, and I agree
with that sense of urgency to expedite our processes. There are
important considerations to keep in mind. The federal programs
are required to be mirrored by the states. So the legislation
and the regulations have to mirror the federal regulations. So
when we talk to states--and we have a four-phase application
process--one, as Ms. Barkau mentioned, is the preapplication
meeting. And one of the ways to speed that process up is to
communicate upfront what we need from their legislature and
regulations.
Senator King. Perhaps you could produce a national template
to all the states and say, here is the need, and not make it
one by one. I would remind you that Eisenhower retook Europe in
11 months.
Mr. Pigott. Thank you for that reminder, sir, and we agree,
which is why we recently put out guidance to our regions and to
states to ensure that they know what needs to be embedded in
their processes when they submit permit applications. And it's
all on our website and available for all the states and
individual applicants. But we are meeting with them in addition
to that, to ensure that they have all the tools on the front-
end and that things are expedited, not delayed because
something is not ready.
Senator King. And Mr. Crabtree, finally, in just the last
few seconds. This is a necessary technology in order to achieve
the climate goals, is it not? I looked at my ISO app a few
minutes ago--eight percent of our energy in New England is now
coming from renewables--eight percent. That means fossil fuels
are going to be there for a while, and we have got to be able
to deal with the carbon impact.
Mr. Crabtree. Yes, it is essential, not only from a climate
standpoint and for decarbonizing fossil fuels, but I would note
that if you just look at industrial processes, upon which
modern life utterly depends, many of them, a majority of the
emissions are unrelated to the energy inputs. The actual
industrial processes themselves produce CO2, and if
you don't capture and manage that CO2, we cannot
decarbonize cement, steel, chemicals. On those industries
alone, we will fail to meet our climate goals without economy-
wide deployment of carbon management.
Senator King. I would summarize my questions by the term
``hurry up.'' Thank you.
Mr. Crabtree. Thank you, sir.
The Chairman. Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman. Thanks for holding
the hearing today.
Good to see you, all of you. Thank you for being here and
testifying today.
Secretary Crabtree, particularly good to see you--of
course, our time from North Dakota, working on these important
issues, and I appreciate that you are working on them now in
your current role. Given that you are from North Dakota, you
are aware of our projects. Obviously, the Denbury EOR project
in Bowman County has been operating for quite some time. Dakota
Gasification company has been operating for--I think I turned a
wheel on that for the carbon to go to the oil fields about 20
years ago. Yeah, well, I wasn't far off then. Red Trail Energy,
Blue Flint now. So Red Trail has been operating for a while
now. Blue Flint is just added. Dakota Gasification company,
now, in addition to their EOR, they are now adding
sequestration. I think that they are getting very close. That
will be the largest carbon capture project in the world when
they have completed the next phase. And they will be capturing
up to 85 percent of the CO2 they produce at that
point. Project Tundra is moving forward--a conventional coal-
fired electric plant adding CO2 capture. That one
being a rural electric cooperative owned, and of course, Coal
Creek, an investor-owned coal conventional plant also working
to do the same thing. And undoubtedly, you are aware of the
Marathon renewable diesel refinery project, which was part of
the hydrogen hub for our area, probably a $2.5 billion project
for carbon capture, fertilizer production, and so forth, on a
renewable refinery that we have in western North Dakota.
So, as the Ranking Member said earlier, North Dakota and
Wyoming, two states with primacy. I have always said primacy is
very important in terms of getting projects going. And I would
encourage both you and Secretary Pigott to, you know, work with
more states to get the ability to get primacy. I mean, that is
one way, I think--I know you have been hearing it, and
rightfully so, that you need to get these projects going. One
way to help yourself is to get more states primacy, I believe,
as a solution to get this done. You just get, you know, it's
like, you just get a lot more hands on deck. And so, I am going
to come to you in a minute and ask you, Secretary Pigott, about
what you think can happen there to get more states primacy. We
welcome the competition.
But specifically, Secretary Crabtree, for you, and you know
what's coming here--the regional partnerships. We could not be
doing all these things without the work of the EERC at the
University of North Dakota--Energy and Environmental Research
Center at the University of North Dakota, which is the manager
of the hydrogen hub for our region. Almost a billion dollars,
and they will do a tremendous job, but their partnerships, the
regional carbon sequestration partnership that we have with the
outstanding University of Wyoming, the Cowboys, but also my
partner just left, but Alaska, as well. We need those regional
partnerships to be funded, and we worked very hard to
appropriate funds to do that. I am also on the Appropriations
Committee, as is our Chairman. And the Chairman and I recently
sent a letter, and we want to know when the FOAs are going to
go out and when we are going to get that funding for '23 for
those regional partnerships. And I hope, Mr. Chairman, you will
agree with me, that is an absolute priority that that get done
and that outstanding partnerships like ours, and West Virginia
has one too, are able to continue their good work.
Would you agree with that, Mr. Chairman? I would like that
to be on the record, if you would.
The Chairman. Without objection.
[Letter regarding regional partnerships follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
Senator Hoeven. Secretary Crabtree, I didn't surprise you,
did I, with this question?
Mr. Crabtree. Didn't surprise me, and let me just say, I am
very----
Senator Hoeven. Kind of a question and a bit of a
statement, yeah.
Mr. Crabtree. Yes. Very excited about the projects in North
Dakota. You recall many years ago when I used to harass you as
the Governor about things we could do to encourage exactly
these kinds of developments. So it has taken too long, but it's
very exciting.
With respect to the regional partnerships, I agree with you
about their importance. As far as the funding, the NOI is out.
The funding opportunity announcement will be out this year, and
we will work to expedite its implementation once it is
announced. That was a commitment we made to you and your staff
and the Committee and we will honor that. As you know, things
were challenging on the Committee. There were different views
at the member level. We did not have four corners of agreement.
Senator Hoeven. There certainly were.
Mr. Crabtree. It strikes me from what I have seen, kind of
reading the tea leaves, that maybe there is a coalescing on the
Committee.
Senator Hoeven. Good.
Mr. Crabtree. So, as I have always told you, we have our
own point of view about these things, but we will implement
Congressional direction and we will gladly do it. That is our
commitment to you. So I guess what I would want to emphasize
though, and you were a lead sponsor of the SCALE Act, is what
we are doing with the regional initiatives is now using them to
drive commercial deployment of geologic storage, which is now
fully commercial, and the $2.5 billion in the infrastructure
bill, organizations like EERC are extremely well-positioned to
lead that technical assistance effort.
Senator Hoeven. No doubt.
Mr. Crabtree. And so, that is what we are doing in our
funding opportunity announcements. It's all about building
facts on the ground--real projects, real storage. We will
complement that with the CO2 pipeline infrastructure
through CIFIA and all the other things that you supported prior
to the infrastructure legislation. And so this can be a tool to
see these results in project development on the ground.
Senator Hoeven. This is really happening now, you know.
Mr. Crabtree. It is.
Senator Hoeven. You know, you and I talked about this 20
years ago, and now it's really happening. And so----
Mr. Crabtree. We are both a little older, Senator.
Senator Hoeven. A little bit, yeah, a little lighter hair
color and all, particularly me, but you know, your work is
really important that we get this out there, so----
Mr. Crabtree. Well, I feel the urgency of it every day.
Senator Hoeven. Good.
Mr. Crabtree. I agree with what Senator King said about----
Senator Hoeven. And Mr. Chairman, I know I am over my time.
The Chairman. Senator Hawley, he will give you a few
minutes----
Senator Hoeven. Oh, Senator Hawley, will you hold for a
minute?
Senator Hawley. Absolutely.
Senator Hoeven. What about getting more states primacy,
Secretary Pigott?
Mr. Pigott. Senator, we agree with the approach that we
need all hands on deck.
Senator Hoeven. So you are pushing for that?
Mr. Pigott. Absolutely.
Senator Hoeven. Okay.
Mr. Pigott. In fact, today we are announcing the
availability of that $50 million that you all authorized us to
grant to states to assist in that primacy process, and we are
totally on board. And we are going to get that money out so
that states can get primacy, and we worked together to issue
these permits.
Senator Hoeven. Well, that's good, because the Chairman has
kind of a temper. Don't tell anybody.
The Chairman. No, no, no, we have one we have been waiting
for. We are just about there, hopefully. We are close, right?
Mr. Pigott. That is correct, sir.
The Chairman. Close.
Senator Hoeven. Thank you. Thanks, Mr. Chairman.
The Chairman. Senator Hawley.
Senator Hawley. Thank you, Mr. Chairman. Thanks to the
witnesses for being here.
Mr. Pigott, I am going to address my comments to you, and
what I am about to talk about will probably come as no surprise
to you. It's not--I want to acknowledge at the start--it's not
within your remit at EPA. But I want you to carry back to your
colleagues at EPA my seriousness about this issue and my
consternation about it. And I am talking about the radioactive
nuclear contamination in the State of Missouri, and in
particular, in the St. Louis and St. Charles areas. This dates
back to the Manhattan Project, when St. Louis was used as a
processing site for uranium. Proudly did their duty--the
residents of St. Louis contributed to that important project,
but when it was over, the Federal Government didn't dispose of
the waste. They left it for the people of St. Louis to deal
with. Worse than that, they negligently attempted to dispose of
it themselves, the government did, and what it ended up doing
was, a whole bunch of it got into, ran off--it was left in oil
tankers, drums--there are photos of this--that just sat in an
open parking lot for years. The runoff went into a creek called
Coldwater Creek, North County, St. Louis, where many, many
homes were at the time, and still are. Generations of kids grew
up playing in that creek. Now, many, many of them have cancer,
autoimmune diseases, you name it.
Then, a whole other batch of it was put into a landfill,
and that's what I want to bring to your attention, because the
EPA has jurisdiction over it. It's the West Lake Landfill in
Bridgeton, Missouri. That's just right outside of St. Louis.
And there, for years now, that landfill has been sitting there
with nuclear radioactive material underground, not cleaned up.
The State of Missouri can't do anything about it because you've
got jurisdiction. And now, there is a subterranean fire that is
burning. I mean, you cannot make this stuff up. There is a
subterranean fire that is burning in the landfill that
threatens to ignite the nuclear material. Meanwhile, the
material in the landfill is very close to the water sources, to
the water table.
Now, this has been going on--when I say years, I don't just
mean for a few months--I mean for decades now, this has been
going on for decades--decades, and it's not cleaned up at all.
In 2018--2018--there has been a Superfund site, could I just
say for the record, since 1990.
The Chairman. Without objection.
Senator Hawley. So in 2018, the EPA finally said, well,
they have come up with a plan for remediation and it would take
four years to remediate--2018. This is 2023. So far, no
remediation has been done. The latest thing the EPA said is,
well, maybe they would announce a remediation schedule to begin
in 2024, but then in March of this year, the EPA announced that
the contamination was worse than they thought, which the
residents have been saying for years. And now they cannot
provide a timeline for cleanup. I mean, this is unbelievable,
which has led to my push, which I am proud to say has passed
the Senate, to make sure that every resident in the St. Louis
and St. Charles region who has been exposed to this nuclear
contamination from their own government has their medical bills
paid for. That is the only fair and just thing to do. Glad to
say it passed the Senate. I hope it will soon pass the House.
But here's the deal: I need the EPA to get moving on this
and clean this up. A Superfund site since 1990 and there is
still nothing being done. EPA sent me a response letter on
August 24th of this year in which they said they still don't
have a timeline for remediation. The letter reads, in part,
``Once the EPA approves the remedial design and there is an
enforceable legal agreement in place with the responsible
parties, then the remedial actions process can begin.'' Oh, my
gosh.
So Mr. Pigott, I need you to communicate once again to your
colleagues at the EPA that this is--people are dying. This is
not an acceptable situation. It hasn't been acceptable for
decades. And I will just make one other point here, and that
is, it's probably no coincidence that the folks who live in
this area are not big-time donors to political parties. They
are not big-time party activists. These are working people. And
they have been taken advantage of for years, and the
government, for years, has just expected them to live with it,
and when they said over and over and over, this contamination
is bad, this contamination is spreading, there is a ground fire
in the landfill, they were told just shut up and live with it.
And they are dying in record numbers. You go look at the cancer
rates in the St. Louis region, you will find them off the
charts. You go look at breast cancer for women, in particular,
in the St. Louis region, you will find it's the leading center
of it in the nation--in the nation.
This has got to stop and we need the EPA to clean this site
up. That's my message.
Thank you, Mr. Chairman.
Mr. Pigott. Thank you, Senator. And I promise I will
deliver your message directly back to us at headquarters to
ensure that everyone is aware of the concerns that you raised.
As a widower of a spouse that passed from breast cancer, I
certainly understand the concern with which you raise these
issues, and I promise I will deliver this message.
The Chairman. Senator Hickenlooper.
Just in time.
Senator Hickenlooper. Thank you, Mr. Chair. Thank all of
you for being here, for your service, all your hard work.
Mr. Crabtree, I will start with you. I share the view of
the International Energy Agency and others, that view that we
need to increase our carbon capture, our storage capabilities,
to stay on track for zero emissions by 2050. We think of this
in our office as a great transition. And it's part of
artificial intelligence. I mean, all the technology that is
changing is part of this energy transition as well, as
different as they seem to be sometimes. I think what we have
been lacking in the great energy transition is a business plan
where we look at all the various risks and opportunities, try
to be able to map out specific priorities, and why this
priority over that priority. And I think that is part of why we
need to get the private sector fully engaged. DOE was using
funds from the Bipartisan Infrastructure Law to look at
productive uses for carbon, including those uses to create
revenue and hopefully generate long-term success.
So can you describe a little bit more the Department of
Energy's carbon utilization program and how they can help
achieve long-term economic vitality in this arena?
Mr. Crabtree. Senator, thanks for the question. Good to see
you again.
I actually really--everyone says appreciate the question--
but I appreciate this question because carbon conversion has
not actually received the attention it deserves. Part of it, I
think, is that there are a lot of different technologies and
potential business models. It's a much broader and more diverse
and complex field than, say, capturing CO2 from even
the industrial sector, but especially from power plants. And
it's also, relatively speaking, newer, and so, the
infrastructure bill was important because it actually doubled
our office's funding for carbon conversion from $50 million a
year to roughly $100 million. But if you look at the relative
investments across a carbon management portfolio, in the
infrastructure bill, it's still a very small part of the larger
puzzle. We think it could be quite a bit bigger.
And in terms of thinking about some of the pathways--first
of all, it's not just CO2, it's also carbon monoxide
that comes out of industrial processes, steel production, in
particular, before it is combusted to become CO2.
Senator Hickenlooper. Right.
Mr. Crabtree. And so, we are going to be providing support
to things like the development of building materials from waste
carbon emissions. There is a lot of attention, of course, to
taking cement and then, of course, making concrete and curing,
having CO2 in that curing process. Also, substitutes
for the portland cement, which is very CO2 intensive
to produce. Those are all opportunities. We are also seeing
lots of opportunities for mineralization in the production of
products, taking captured carbon emissions. I am also very
excited about biological pathways, but not the way most people
would think--for example, taking carbon monoxide, and in
effect, feeding that to microorganisms and then producing
energy and products through those microorganisms.
The other thing that is exciting about carbon conversion
is, in some industrial contexts, you can avoid combustion
altogether, so there are environmental benefits beyond reducing
carbon emissions.
Senator Hickenlooper. That's--I have got to cut you off.
Mr. Crabtree. Sorry.
Senator Hickenlooper. I have written questions as well.
I do want to get a question to Ms. Barkau.
The U.S. Geological Survey--I have bored most of you one
time or another with the fact that I am an ex-geologist. The
U.S. Geological Survey was my home base for part of my life.
They have estimated that as many as 130 million acres of
federal land have carbon storage potential. That includes large
basins in western states like Colorado. There can be complex
ownership issues--some mix of federal, state lands, private
ownership, many places in the west where the surface ownership
is different than the mineral rights. Sometimes those mineral
rights are federally owned. And so, it makes it tricky to
decipher who owns the pore space, that empty space between the
grains, once the oil is taken out, where carbon would be
injected.
How does this ambiguity surrounding pore space on federal
lands hamper carbon capture sequestration permitting, and what
can we do--what can Congress do--to provide clarity?
Ms. Barkau. Yes, it's certainly an issue that's in Wyoming.
Our southwest corner of the state is a checkerboard pattern
consisting of state or private lands mixed with federal lands.
Senator Hickenlooper. Those old railroads.
Ms. Barkau. Yes, exactly. And it is a problem. Not
understanding how to correlate the right-of-way authorizations
with the Class VI permitting and financial assurance will play
a part of that. The split estate is certainly an issue that we
are currently seeing with some of our permits where it is a
private surface owner and so, in Wyoming, the surface owner is
the pore space owner. But there are federal minerals there, and
what exactly their role will be when it comes to the rights-of-
way and the Class VI permitting and receipt of comments from
BLM for this particular situation, there needs to be further
guidance on how the roles and responsibilities of the different
agencies, whether it's in a state with primacy, or EPA for that
Class VI permitting and the BLM so that there's not duplication
of efforts during the review process is really needed.
Senator Hickenlooper. Duplication of efforts, not in
government--I can't imagine that.
Anyway, I have more questions, and I will submit them in
writing, and I appreciate all of you being here.
I yield back to the Chair.
The Chairman. Senator Daines.
Senator Daines. Chairman, thank you. Ranking Member
Barrasso, thank you as well.
Since taking office, the Biden Administration has
promulgated rule after rule attacking Montana oil, Montana gas,
Montana coal. At this moment in history, as we are watching
what is happening in the Middle East, the world unraveling,
whether it's what has happened with Putin invading Ukraine and
natural gas, whether what's seen with the Biden Administration
releasing sanctions on Iranian oil, at the same time shutting
down Alaskan oil, shutting down the Keystone pipeline, shutting
down oil and gas production wherever they can. It's insane, and
it ties right back to national security.
I don't know why this Administration is not trying to do
all it can to produce more made-in-America energy, coal, oil,
and natural gas. We have anti-coal EPA regulations, like MATS
and the Clean Power Plan 2.0. This Administration is doing
everything they can to kill jobs and make my home State of
Montana an energy importer rather than the energy hub it has
been and would continue to be if the Administration left their
hands off our state. We should be able to come together to
promote carbon capture technology, to reduce carbon emissions,
to maintain a stable grid, and to build jobs, but instead, this
Administration is focused on an ideology that has become a
religion, focused on regulate first, ask questions later.
Mr. Pigott, the EPA has proposed rules like MATS and Clean
Power Plan 2.0 that seem to be directly focused on shutting
down the Colstrip Power Plant in Montana. Both rules appear to
give an ultimatum--install prohibitively expensive capture
technology in a very short time period or shut down. Neither
rule gives coal plants like Colstrip the time or the money to
meet these prohibitive standards. Instead, they set
unattainable requirements in hopes that Colstrip will be forced
to shut down. Instead of over-regulating, we should be focused
on innovation, making carbon capture technology affordable for
coal plants to install to meet these carbon reduction goals.
Mr. Pigott, why is the EPA charging forward with these
impossible-to-meet standards before technology like CCUS is
widely commercialized and affordable?
Mr. Pigott. Senator Daines, thank you for the question.
I will say the issues of air quality regulations are not
within my wheelhouse, so I am not prepared to answer the
questions about where we are or the impact of those, but what
is in my wheelhouse is the carbon capture permitting program,
the Class VI program. And we are committed to ensure that we
put in place the resources, which is why we are announcing
today that we are getting the $50 million that you and Congress
have allocated to states to assume primacy, because we believe
states are critical partners in ensuring that we get these
Class VI programs off the ground and running. And we are fully
committed to doing so and doing it correctly.
Senator Daines. But we can't--it's a noble statement, but
it's unattainable based on the timelines that have been set
here. I mean, the technology is not ready for prime time, and I
recognize, I mean, you are not in that specifically at the EPA,
but please help us here, because you are talking out of two
sides of the mouth in this, saying we want this technology to
reduce carbon, but we are not going to allow the technology
time to mature. I am a chemical engineer by degree. I am big in
innovation. Love the idea that we continue to make coal an
important part of our energy future because it will be, as we
look long-term, because the sun doesn't always shine and the
wind doesn't always blow.
I am not opposed to renewable energy, but we need to expand
our portfolio when the world is going to need 50 percent more
energy in the next 25 years than we use today. So in other
words, you have to take that portfolio and go like this (hands
far apart) over the course of the next 25 years, not like this
(hands close together).
Mr. Pigott. Senator, I come from Indiana, where for 20
years I worked at the Indiana Department of Environmental
Management. As you probably know, it's a coal state. And so, I
am well aware of the concerns about providing reliable energy.
And I am committed to ensuring that we put in place an
effective Class VI program that issues permits in a timely
manner. And I am happy to communicate with our folks in the
Office of Air Quality of concerns that you have had.
Senator Daines. Maybe they will watch the hearing and they
will hear it directly as well. It would be helpful. It's deaf
ears right now. I don't think they want to hear it, I really
don't. I have been around Washington just long enough to see
they really want to see these plants shut down. They think it's
a noble cause as part of their belief that they are doing the
right thing here for everybody in doing so.
Assistant Secretary Crabtree, the Department of Energy
plays an important role in assuring grid reliability. Is the
Department reviewing the EPA rules and the drastic effect they
have on the reliability of the grid in places like Montana and
the rest of the country?
Mr. Crabtree. Senator, yes, as you know, we are not the
regulator here, but we do provide technical input on the
regulations with respect to reliability. I would urge a more
optimistic perspective on the technology. As someone who has
been an advocate for carbon capture for over two decades now,
in the time frames that are in the regulation and what we are
doing with respect to the build-out of----
Senator Daines. With all due respect, are they talking to
the folks right now--the engineers, the project managers--who
are in charge of delivering this? That's the problem. I mean,
there's a major disconnect here in terms of probably the time
that I think it's realistically going to take versus the EPA
mandates that are coming out. And it's an existential threat to
our operations in Montana.
And grid reliability is really important, because if you
don't have baseload power, you don't have grid reliability, as
you know.
Mr. Crabtree. Well, and that's why I think carbon capture
is so important, because it allows us to decarbonize power
generation and have that 24/7 dispatchable power, and I am very
optimistic about--I am working with companies that literally
have projects over the next decade where they hope to manage a
significant portion of their emissions.
Senator Daines. Have you meshed that with the EPA mandates
that are coming down to make sure there is enough room to get
both accomplished? Have you looked at that in detail?
Mr. Crabtree. Well, our technical team has, yes.
Senator Daines. Okay. I am out of time. Thank you.
The Chairman. Thank you, Senator.
I am going to have to go vote and then Senator Padilla is
going to have his questions and then Senator Cassidy. He will
be chairing the remainder of this meeting. But thank you all so
much. It has been a great influence for all of us and great
input from you all. We understand how important this is. And
the bottom line is, we need an all-of-the-above energy policy
and we need to do everything we can to make sure all the energy
that we have is done in the cleanest fashion. I think we can
lead the world in that. And elimination isn't going to cure the
problem, but innovation can cure the problem. I think that's
what we are striving for.
So with that, I turn it over to Senator Padilla.
Senator Padilla [presiding]. Thank you, Mr. Chair.
The Chairman. You are now the Chair.
Senator Padilla. Thank you, myself.
[Laughter.]
Senator Padilla. So proud that California remains committed
to leading the nation in the innovation that Senator Manchin
just spoke of in working to reduce our greenhouse gas
emissions. As part of that broad portfolio, there are currently
11 geologic carbon sequestration proposals in California
undergoing review for Class VI underground injection control
permits at EPA. Also pleased to hear that the Administration is
carefully considering environmental justice concerns when
reviewing these projects and applications. While these
technologies have the potential to address disproportionate
rates of illness experienced by vulnerable communities due to
air pollution, we are mindful enough that we recognize it is
vital that these new technologies do not inadvertently harm
communities in other ways, including through harmful
contamination of groundwater basins that provide drinking water
to communities.
A question for Mr. Pigott: you mentioned in your testimony
that the EPA has a responsibility to ensure that carbon capture
and storage technologies do not contaminate drinking water. Can
you elaborate for a minute on how specifically the EPA is
planning to ensure these projects do not have those adverse
impacts?
Mr. Pigott. Thank you, Senator Padilla.
Yes, I can. I know that the geological formations in the
ground are very important for us to consider as we look to
ensure that we put these carbon wells in the right places. We
examine the geology to ensure that the area is free of
fractures and faults. We look at the injected CO2
plume--where is it expected to go, and what is the likelihood
that it could spread? And then we look at the specifics of the
well construction itself to ensure that the well is constructed
in such a way as to operate properly.
But it does not stop there and it does not stop with just
the issuance of a permit. Long after a well is closed, we
ensure that there are requirements in the permits for the
permittees to monitor and to put in place and have financial
insurance in place, corrective action plans, in the event that
something unexpected happens. So there are several technical
aspects that we embed within our approval of our permits. In
addition to that, we--our job being to secure that people are
fully protected from adverse environmental consequences--have
taken several steps over this past year to ensure that
communities are involved and aware of that process. These
common-sense practices set out clear expectations for
communities and for the project proponents so that everybody
knows what the expectations are. So there is a thorough
analysis of where these wells are sited, but there is a
thorough participation by the communities to ensure everyone is
aware and assured of the functional ability of these projects,
Senator.
Senator Padilla. I am pleased to hear about the
consideration, not just during the application and approval
process, but ongoing. It is a very different type of facility,
but you are speaking to a Senator who lives in the shadow of
the Aliso Canyon gas storage facility in Southern California,
which was the source of the largest methane gas leak, I
believe, in our nation's history just a couple of years ago,
due to aging and not sufficiently maintained, obviously, wells
and other infrastructure.
On a different topic, I know 45Q has been discussed a good
amount earlier in the hearing, but I have a question with a
slightly different angle to it. In 2020, the International
Energy Agency published a report examining the role for carbon
capture in the clean energy transition, noting that it would be
virtually impossible to reach net zero without carbon capture
utilization and sequestration and direct air capture
technology. Now, some innovators in California and around the
country are going even further in making products like cement
with lower or even zero emissions. However, the 45Q tax credit
only applies to companies that emit and then capture their
emissions, but not companies that are directly lowering or
eliminating emissions altogether.
The question is for Mr. Crabtree. How should we think about
balancing current incentives for carbon capture versus
rewarding innovation or innovative technologies for low or
reduced emissions?
Mr. Crabtree. Thank you, Senator.
So you have identified, obviously, what needs to be a top
priority, which is if you can avoid the emissions in the first
place, then you should do that. And so, I would note that
outside the context of carbon management, fortunately, the
infrastructure bill is comprehensive, as are the tax credits in
the Inflation Reduction Act, so you mentioned the 45Q tax
credit, but there is the 48C tax credit, there are other tax
credits that are focused on decarbonization, as well as funding
provisions in the infrastructure bill--one I would note that
gets to, I think, your concern, is being implemented by the
Office of Clean Energy Demonstrations, and that is the
Industrial Decarbonization provision. It's a $6 billion
provision in the infrastructure bill and it allows for carbon
capture, but it also funds things like advanced energy
efficiency in industrial settings, electrifying of different
heating processes.
One of the major demands of energy and sources of emissions
in the industrial sector is heat. And so, to the extent that we
can electrify that heat, we are obviously avoiding emissions.
That is assuming the electricity is decarbonized. And then
there are just a range of--the role of hydrogen also can be
brought into industry to avoid emissions in the first place. So
that is, I think, a critical area where we can make progress
and avoid emissions in the first place.
Senator Padilla. Ms. Burns, would you have anything else to
add?
Ms. Burns. Thank you, Senator.
I would say what Brad said on where we can reduce is
incredibly important. And I would say also, you know, you
touched on the role of California. I will say Carbon180 started
out of California. We were proudly headquartered there until
very recently. We are also a part of one of the direct air
capture hubs projects, the Community Alliance for Direct Air
Capture in the Central Valley. And I think we are particularly
excited about the role that California has played in leading
the nation on things like direct air capture, including the
plant that is going to be unveiled next week in Tracy,
California, led by Heirloom.
And so, I think, looking holistically at the innovation
that we can support in the state and across the country is
really essential.
Senator Padilla. Thank you. Well, flattery will get you
very far.
And just a final note before recognizing Senator Cassidy. I
think the longer-term question here is, as new technologies
come, we want to make sure that we are keeping up with our
incentive structure that reflects new technologies that will
not necessarily always fit into the categories as we structure
them initially.
Senator Cassidy.
Senator Cassidy. Thank you.
Mr. Pigott, Louisiana is seeking to get primacy for Class
VI wells. I mean, this is like a year overdue. I think,
literally, maybe two years overdue, but just amazing. And we
were told--the Governor and I were on the phone with Mr. Regan
not long ago--I guess it was a long time ago, maybe eight
months, maybe six months, in which it was intimated that we
were about to receive. We still haven't received. What's the
holdup? Louisiana apparently is a model for many aspects of the
application, and we still haven't received. Can you tell me why
not?
Mr. Pigott. Senator Cassidy, first I want to say I
appreciate your concern about the primacy process and the
number of applications that are currently under review. I share
that concern, and we are working hard to provide that process,
and we are following the rule process that we have articulated,
which is, we public-noticed the rule and now we have 66,000
comments. And we will be responding to each and every comment.
Senator Cassidy. But you reopened the public--do I recall,
did you reopen the public? I mean, you've done it. You
completed that, and then you reopened it? Excuse my
frustration, but I mean, I get the impression you don't want to
give us primacy.
Mr. Pigott. Sir, we are fully committed to this primacy----
Senator Cassidy. Then why did you reopen?
Mr. Pigott. We reopened it because Louisiana submitted
additional documentation to us regarding the application. And
we wanted to make sure----
Senator Cassidy. That must be something that was solicited,
because as far as the Governor was concerned, we were about to
announce that we were going to receive it, and boom--it's
reopened. So I am thinking that there may have been something
like--kind of like, we need to hear from you guys again.
Mr. Pigott. There was a change in the statutory provisions
in Louisiana that Louisiana submitted to us. And in order to
make sure that the primacy for Louisiana was fully defensible,
we public-noticed that, and we did it for an additional 30
days.
Senator Cassidy. Can I ask--my staff tells me that the
filing said no changes were needed because the application
addressed the changes in the law.
So I am hearing that--I am getting mixed messages here. And
I am getting a sense that I am hearing an excuse as opposed to
that which was actually offered. And I don't mean to be
obnoxious about it, but how long does it take EPA, if you don't
have--the state does not have primacy--how long does it take
the EPA to permit, on average, a Class VI well?
Mr. Pigott. The permitting process takes approximately two
years, sir.
Senator Cassidy. So okay, so Louisiana has direct air
capture. We are trying to sequester carbon. We are trying to
achieve the goals that have been laid out there, and we have
met all the goals, and I am told that your filing said that we
had accommodated our change in law by our application. But
instead, it has been reopened. Tell me why I shouldn't be
incredibly frustrated with EPA.
Mr. Pigott. We are interested in ensuring that the primacy
application is fully defensible, and now we are past the public
comment period. We received 66,000----
Senator Cassidy. And how long will it take to review those
66,000?
Mr. Pigott. We are in the end stages of this process.
Senator Cassidy. So end stages. I used to talk to medical
students, and they would say ``about to.'' Can you tell me what
end stages means? Is it a week? Is it two weeks? Because it has
been two years. So is it a month? Can you give me a time frame?
Mr. Pigott. Senator, I certainly appreciate the frustration
that you have with the process. And we are all very interested
in----
Senator Cassidy. Can you just tell me what is the time
frame? Because I have limited time.
Mr. Pigott. We are hoping in the near future----
Senator Cassidy. The near future doesn't mean anything to
me. Is it a month? Is it two months? Is it a week?
Mr. Pigott. We will continue to ensure----
Senator Cassidy. That is a non-answer and you know it. Can
you give me a month?
Mr. Pigott. Senator, we are committed--fully committed to
issuing primacy for Louisiana. And I want to make sure that----
Senator Cassidy. I hear you say that, but I see no evidence
of it. No evidence whatsoever, and you won't give me a straight
answer.
Mr. Pigott. Senator, we have finished the process, except
for the part where we are responding to all the public
comments, which is required in that process.
Senator Cassidy. If you have got 66,000 of them, how long
does it take you to respond to 66,000 comments?
Mr. Pigott. Well, we have been working to do that and we
will continue to work on it.
Senator Cassidy. I'm sorry. I apologize. I have to move on
because I am not getting an answer.
Mr. Pigott. Yes, sir.
Senator Cassidy. And you know I am not getting an answer.
Mr. Crabtree, another bit of frustration. Louisiana had a
hydrogen hub application, which made all the sense in the world
to me. We have the pipelines. We actually had the guaranteed
offtake of the hydrogen that we were going to make, and we have
the Mississippi River, which allows us to ship it around the
world. Looked pretty good to me. But it turns out only one hub
was approved on the Gulf Coast, even though we have the
infrastructure, we have the natural gas, we have the
transportation. A bunch were in the Northeast, which is quite
remarkable to me, since they don't have, typically, the
advantages we do. And yet, then I heard that the merit
reviewers, paid by DOE to judge applications in some cases, did
not ask questions or comment upon Louisiana's application. And
DOE did nothing about that.
Then we were told last week that there was no standardized
way by which the questions were supposed to be formed on these
applications. There isn't a uniform sending of questions or
clarifications of any of the 28 hydrogen hub applications. Now,
heck, I couldn't help but notice that a lot of the hydrogen hub
places were blue states. Then I heard a rumor that they were
just trying to spread the love as opposed to going where there
was increased merit. So knowing that I am frustrated by all
this, tell me why I should believe in this process when some of
the reviewers didn't even comment or ask questions on the
Louisiana application?
Mr. Crabtree. Senator, so I was involved in my capacity as
Assistant Secretary of the Office of Fossil Energy and Carbon
Management, as many of my colleagues heading other offices
were, in the development of the funding opportunity
announcement for the hydrogen hubs. And we routinely do that
with different provisions in the infrastructure bill. But at
the point at which it was announced as a solicitation of
funding opportunity announcement, my involvement in the
hydrogen hubs process ceased. And as you know, a merit review
process of federal civil servants takes over, and even in those
funding opportunity announcements that are the province of
FECM, the office I oversee, once the FOA is released, I am not
personally involved as a political appointee----
Senator Cassidy. So----
Mr. Crabtree. I am not trying to dodge your question. I
actually watched the hearing. I understand your concerns and
all the arguments you laid out. And my understanding is that
there is a process in place to follow up with the office that
is responsible for----
Senator Cassidy. So far, we have not heard from them.
Mr. Crabtree. Okay, well, I can take that back, that
concern, but my understanding is that you would have the
opportunity to address your concerns.
The one thing I would like to address, just as someone who
is deeply committed to the bipartisan implementation of the
Bipartisan Infrastructure Law, we make every possible effort we
can to implement these provisions equitably, fairly. And I
recognize your support and other members from both political
parties for that legislation and how profoundly important it is
that all regions of the country benefit. And I think if you
look across the implementation of the infrastructure
provisions, states like my own of North Dakota, yours, and
others that are deeply red states, are very competitive and
receiving significant funding in other areas.
Senator Cassidy. I accept that, but the goal of it was not
necessarily to give some to California because California has
not received enough. It was to go where you are going to
achieve the goals of the legislation, which is to remove carbon
from the atmosphere or otherwise create lower carbon intensity
products. That was actually the goal. And so, it should be upon
merit, not upon let's make sure everybody gets a little piece
of the pie. But whenever the Federal Government does that, we
lose effectiveness.
So I am way over time and I got to go vote, but thank you
all very much.
Mr. Crabtree. Senator Cassidy, I wasn't speaking to the
hydrogen provision. I was speaking more generally to our
commitment----
Senator Cassidy. I agree with that.
Mr. Crabtree [continuing]. With the bipartisan
implementation.
Senator Cassidy. Thank you.
Senator Padilla. Thank you, Senator Cassidy.
I want to take a minute to thank, again, all of our
witnesses for joining us this morning and for such a robust
discussion.
Announcement for members and their staff: members will have
until close of business tomorrow to submit additional questions
for the record.
And with that, this Committee stands adjourned.
[Whereupon, at 11:53 a.m., the Committee was adjourned.]
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