[Senate Hearing 119-268]
[From the U.S. Government Publishing Office]
S. Hrg. 119-268
ADVANCING CARBON CAPTURE, UTILIZATION,
AND SEQUESTRATION TECHNOLOGIES AND
ENSURING EFFECTIVE IMPLEMENTATION
OF THE USE IT ACT
=======================================================================
HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 12, 2025
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
62-636 WASHINGTON : 2026
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
SHELLEY MOORE CAPITO, West Virginia, Chairman
SHELDON WHITEHOUSE, Rhode Island, Ranking Member
KEVIN CRAMER, North Dakota BERNARD SANDERS, Vermont
CYNTHIA M. LUMMIS, Wyoming JEFF MERKLEY, Oregon
JOHN R. CURTIS, Utah EDWARD J. MARKEY, Massachusetts
LINDSEY O. GRAHAM, South Carolina MARK KELLY, Arizona
DAN SULLIVAN, Alaska ALEX PADILLA, California
PETE RICKETTS, Nebraska ADAM B. SCHIFF, California
ROGER F. WICKER, Mississippi LISA BLUNT ROCHESTER, Delaware
JOHN BOOZMAN, Arkansas ANGELA D. ALSOBROOKS, Maryland
JON HUSTED, Ohio
Adam Tomlinson, Republican Staff Director
Dan Dudis, Democratic Staff Director
C O N T E N T S
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Page
FEBRUARY 12, 2025
OPENING STATEMENTS
Capito, Hon. Shelley Moore, U.S. Senator from the State of West
Virginia....................................................... 1
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
Island......................................................... 3
Cramer, Hon. Kevin, U.S. Senator from the State of North Dakota.. 4
WITNESSES
Connors, Kevin, Assistant Director for Regulatory Compliance and
Energy Policy, Energy and Environmental Research Center........ 5
Prepared statement........................................... 8
Responses to additional questions from:
Senator Cramer........................................... 17
Senator Whitehouse....................................... 27
Senator Markey........................................... 29
Senator Blunt Rochester.................................. 34
Yates, Dan, Executive Director, Ground Water Protection Council,
Inc............................................................ 38
Prepared statement........................................... 40
Responses to additional questions from:
Senator Whitehouse....................................... 45
Senator Markey........................................... 47
Senator Blunt Rochester.................................. 49
Cavanaugh, Jack Andreasen, Manager, Carbon Management, U.S.
Policy and Advocacy, Breakthrough Energy....................... 52
Prepared statement........................................... 54
Responses to additional questions from:
Senator Markey........................................... 70
Senator Blunt Rochester.................................. 73
ADDITIONAL MATERIAL
Letter to Senator Pete Ricketts from the Office of Water,
Environmental Protection Agency (EPA).......................... 84
Letter to Michael Regan, EPA, from multiple signatories: EPA Must
Immediately Stop CO2 Injection Wells to Protect
Public Safety and Drinking Water............................... 86
Letter to Radhika Fox, EPA, from Senator Peter Ricketts and
Senator Deb Fischer............................................ 95
Letter to President Biden from multiple signatories: CO2
Pipeline Moratorium Now!....................................... 104
Letter to Senator Crapo, Senator Wyden, Senator Smith and Senator
Neal from multiple signatories: Repeal Wasteful and Dangerous
Carbon Capture Subsidies....................................... 109
Letter to Senator Capito and Senator Whitehouse from the Western
Governors Association (WGA).................................... 115
Carbon Capture Coalition Statement for the Record: Senate
Committee on Environment and Public Works...................... 153
ADVANCING CARBON CAPTURE, UTILIZATION,
AND SEQUESTRATION TECHNOLOGIES AND
ENSURING EFFECTIVE IMPLEMENTATION
OF THE USE IT ACT
----------
WEDNESDAY, FEBRUARY 12, 2025
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10:02 a.m. in
room 406, Dirksen Senate Office Building, Hon. Shelley Moore
Capito (chairman of the committee) presiding.
Present: Senators Capito, Whitehouse, Cramer, Curtis,
Ricketts, Husted, Alsobrooks.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. I would like to call this hearing to order.
I thank everybody for coming. I think this morning's hearing
about advancing carbon capture utilization, sequestration, or
CCUS, we will be referring to it as such.
I am excited to start the year with a hearing on a
bipartisan topic that Ranking Member Whitehouse and I have
worked together over the years to address, and I look forward
to continuing bipartisan efforts to champion meaningful
legislation on this issue with Ranking Member Whitehouse and
the rest of the committee. Certainly, the gentleman to my right
knows a lot about this, at the same time, in the great State of
North Dakota.
Innovative CCUS technologies will play a critical role in
reducing emissions, particularly for facilities that face
unique challenges because of their size, location, or
industrial application.
In my State of West Virginia, several CCUS efforts are
underway. West Virginia University is currently exploring
direct air capture technologies, and the Department of Energy's
National Energy Technology Laboratory, which is located in
Morgantown, is supporting a suite of CCUS research.
West Virginia is also a partner in the Appalachian Regional
Clean Hydrogen Hub, known as ARCH2, that includes project
partners who are working to deploy CCUS technologies.
Collectively, these projects position West Virginia to continue
as a national energy leader, while also reducing our air
emissions. We cannot realize the full benefits of these
projects and emerging technologies like CCUS if there is not a
permitting framework that will allow for the rapid and safe
deployment of these projects.
That is why Ranking Member Whitehouse and I, working with
Senator Barrasso and former Senator Carper, moved forward to
get the Utilizing Significant Emissions with Innovative
Technologies Act, or the USE IT Act, signed into law in
December 2020.
This legislation was intended to ensure that carbon capture
projects at all types of facilities can be permitted in a
timely and efficient manner. Despite the progress made by the
USE IT Act, there have been significant problems with its
implementation that have held back the deployment and the
development of CCUS.
First, while the Council on Environmental Quality, or CEQ,
released a report in 2021 and subsequent interagency guidance
for the deployment of CCUS in 2022 as the USE IT Act required,
the guidance failed to present a clear pathway to expedite
permitting for these projects.
Second, the law required at least two Federal task forces
be established to help identify challenges to and solutions for
permitting these projects. The Department of Energy and CEQ
missed the required 18-month deadline to establish these task
forces. They were not chartered until April 2024, more than
twice as long as the Congress mandated in the USE IT Act. The
delay in standing up these task forces has hindered our
progress in supporting CCUS, but at least they are finally
working on recommendations to improve the permitting process.
After the USE IT Act, Congress and the EPW Committee worked
in a bipartisan way to expedite carbon capture projects by
including $25 million dollars in the IIJA for the EPA to review
and approve Class VI well applications. The IIJA also included
$50 million to help our States obtain primacy for permitting
such Class VI wells. This funding gave the EPA needed resources
to clear its backlog of individual Class VI applications and
reduce the total number of applications that the EPA must
review by granting States primacy.
Despite receiving additional help and funding with the
process, the Biden Administration only approved two Class VI
projects, and only granted primacy to two States, Louisiana,
after more than three and half years, and your State already
had your primacy. You are No. 1, you are No. 1. have not, I was
getting there, and my home State, just really the last day of
the Biden Administration, received their permit for primacy on
Class VI wells.
I am very excited that we got our primacy over that
permitting process. I hope EPA Administrator Zeldin will
prioritize reducing the current backlog of pending applications
and support additional States that are seeking to obtain
primacy.
The North American Electric Reliability Corporation has
found that over the next 10 years, due to a rise in energy
consumption and the early retirement of our existing fossil
fuel generation, our Country could face major electric
reliability concerns.
The deployment of CCUS can be a tool to not only maintain
but expand reliable electric generation capacity and ensure the
reliability of our electric grid, while improving the
environment and growing our economy. I believe that is a win-
win situation.
I look forward to our discussion today on this important
topic, so we can figure out how we can continue to work in a
bipartisan manner to advance CCUS deployment.
I now recognize our Ranking Member Whitehouse for his
opening statement.
OPENING STATEMENT OF HON. SHELDON WHITEHOUSE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Whitehouse. Thank you, Chairman. I want to thank
you for calling today's hearing on carbon capture and
utilization. I want to recognize Senator Cramer for his work on
the PROVE IT Act. As I have said before, I want to get things
done to solve the climate change problem.
Chair Capito and I have worked well together to encourage
and expand carbon capture. There is a solid foundation of
bipartisanship here.
I want to start by establishing the context for our hearing
and why carbon capture is so important. We have just come off
of Earth's two hottest years on record. For years, scientists
warned of the perils of exceeding 1.5 degrees Celsius above the
preindustrial norm. Well, it happened last year; 2024 crossed
above what science tells us is the safety threshold. This does
not necessarily mean that we have reached the point of no
return, but it serves as yet another big red warning sign that
we are dangerously close.
In this 11th hour, what does the path forward look like?
The Potsdam Institute reviewed 1,200 forward-looking, peer-
reviewed scenarios used by the IPCC to predict our future with
climate change. Of these 1,200 scenarios, all the ones that led
to safety depended on limiting warming to 1.5 degrees Celsius
by the end of the century. Now, only 11 of those 1,200 are
still achievable. This review was done 3 years ago, so, likely,
we have actually fewer than 11 pathways to climate safety.
Those remaining 11 scenarios that give us a pathway to
climate safety have two things in common. One, they overshoot
the 1.5-degrees safety limit, so carbon removal, particularly
direct air capture, is necessary to claw our way back. Two, it
just can not be free to pollute. There must be a cost to fossil
fuel emissions. These all require a price on carbon emissions.
It is simple. Direct air capture, price on carbon
emissions, or we fail.
Here is the IPCC, ``Reaching net zero GHG emissions
primarily requires deep reductions in CO2, methane,
and other GHG emissions, and implies net negative CO2
emissions. Carbon dioxide removal will be necessary to achieve
net negative CO2 emissions.''
To reach climate safety, we must deploy carbon capture, and
we are doing it, but way too slowly.
In 2015, I visited Saskatchewan with Senator Graham to see
the Boundary Dam Power Station, the first electricity
generating facility to successfully deploy carbon capture
technology. We know this works. It was working there and then,
but there are only 45 facilities operating worldwide with a
total capture capacity of only 50 million tons annually, when
we need to be operating at a gigaton scale. That is, we need to
be capturing 1,000 times more carbon annually to find that
pathway to climate safety.
I have consistently led efforts to promote carbon capture.
I co-led the USE IT Act, a focal point of today's hearing, with
our current Chair and with then Chair Barrasso. I led repeated,
successful efforts to improve 45Q, the tax credit for carbon
capture with our Chair and Senators Barrasso, Cramer, and
Hoeven. My Federal CDR Leadership Act is being piloted now by
the Department of Energy. I have advocated for funding for
offices and programs that support carbon capture deployment,
including for EPA's Class VI wells program that the Chairman
mentioned.
Bipartisan steps to support carbon capture included DOE's
Regional Direct Air Capture Hubs and DOE's Carbon Dioxide
Transportation Infrastructure Finance and Innovation Program,
God, we know how to name things, both part of the Bipartisan
Infrastructure Law, but we cannot dawdle. We have entered the
era of climate economic consequences.
Families are paying higher prices in grocery store aisles
because climate change is disrupting supply chains and
diminishing crop yields. Worse, families are facing a
homeowner's insurance affordability and availability crisis.
This threatens to cascade from insurance markets to mortgage
markets to home property values and then, like 2008, into the
general economy.
The more we overshoot 1.5 degrees, the more of this looming
economic pain and dislocation. Plus, the added risk of far
graver, irreversible changes: the collapse of ice sheets in
Greenland or Antarctica, mass coral reef die-off, the collapse
of the Amazon rainforest. It will take direct air capture as
well as a price on pollution to pull us back from this danger.
The happiest estimates peg the cost of widespread,
commercial CO2 removal at about 100 dollars per
metric ton. This is a negligible cost compared to the costs of
ignoring the problem. The Economist says a $25 trillion hit to
global real eState markets. Deloitte says a $220 trillion
global GDP swing between getting climate right and continuing
to fail.
The Financial Stability Board has issued a warning to the
global banking system of this climate risk. First Street
Foundation has found that the climate-driven insurance crisis
will erase $1.5 trillion in U.S. real eState value over the
next 30 years, i.e. the period of a mortgage that is issued
today.
Ramping up carbon capture is a step we need to take with
urgency, and I am delighted to join our Chairman in this
hearing.
Senator Capito. Thank you.
Next, I will turn to Senator Cramer for his introductory
remarks.
OPENING STATEMENT OF HON. KEVIN CRAMER,
U.S. SENATOR FROM THE STATE OF NORTH DAKOTA
Senator Cramer. Thank you, Chair Capito, Ranking Member
Whitehouse. It seems like such an appropriate early hearing on
a topic that we really have worked closely together on,
successfully, frankly, in this committee. It is really fun to
be part of it, so thanks for digging in on this topic that we
are so familiar with.
Thanks for the shoutout as No. 1. I mean, when you referred
to me as a gentleman at that beginning, I was impressed, but
No. 1 was really something. I am sorry, I love the opportunity,
of course, to highlight North Dakota's place in the area of
carbon capture, utilization, and storage. There is a lot that
goes into why North Dakota has been at the forefront.
One of the central reasons is the Energy and Environmental
Research Center at the University of North Dakota, who sends us
a wonderful witness today. In fact, the last EPW hearing on
this topic, then-Ranking Member Capito invited John Harju from
EERC, who is to be our star witness, and John is with us today,
as well as the CEO, Charles Gorecki. Thank you all for being
here today.
I would just say this about the EERC. If you are from a
State that is looking at primacy or carbon capture, if you
think that is a potential, they are not confined to North
Dakota. Their expertise is used everywhere. In fact, there is a
good chance, if you are pursuing a project, that they are
already working with you, so thank you, EERC.
Today, we are joined by Kevin Connors, who serves as the
Assistant Director for Regulatory Compliance and Energy Policy
at EERC. Kevin has been an invaluable asset to me and to my
staff. In fact, we look to EERC as a bit of an extension of our
staff in all matters relating to carbon capture, utilization,
and storage.
From permitting to engineering to safe geological storage
and the use of carbon, Kevin's expertise is invaluable to this
committee's work. The successful sequestration of CO2
is a matter of national concern, as it obvious today, and I am
glad Kevin can tout the good work of North Dakota in this space
and how other States can benefit from our State's success in
permitting Class VI wells.
Prior to his time at EERC, Kevin served on the North Dakota
Industrial Commission in several capacities, including Carbon
Capture and Storage Supervisor, Underground Injection Control
Supervisor, and Petroleum Engineer. His expertise is not
limited to the theoretical, however. He began his career as a
well site geologist in the oil fields of Western North Dakota.
If you are familiar with the nature of the work day in the
Bakken, it is safe to say he has earned his stripes.
In addition to his well-deserved professional accolades,
his most important duties are, of course, as a husband and a
father. Kevin and Julie are the proud parents of seven
wonderful children. That will keep you busy.
We want to thank you and your wife and your children for
sharing you with us today. Thank you, Madam Chair, for allowing
me to introduce Mr. Connors to our committee. I look forward to
a productive discussion.
Senator Capito. Perfect introduction, and we will lead, Mr.
Connors, you are welcome to give your opening statement. Thank
you.
STATEMENT OF KEVIN CONNORS, ASSISTANT DIRECTOR FOR REGULATORY
COMPLIANCE AND ENERGY POLICY AT THE ENERGY AND ENVIRONMENTAL
RESEARCH CENTER
Mr. Connors. Good morning, Chairman Capito, Ranking Member
Whitehouse, and members of the committee. I must say, praise
the Lord, it is an honor to be here. Thank you so much for the
introduction, Senator Cramer.
My name is Kevin Connors. As was mentioned, I am the
Assistant Director for Regulatory Compliance and Energy Policy
at the e University of North Dakota's Energy and Environmental
Research Center, or the EERC. Thank you for the invitation to
provide testimony concerning the implementation of the USE IT
Act, the Class VI well permitting, and related efforts to
accelerate CCUS deployment.
For the purpose of my testimony, prior to coming to work
for the EERC, I led North Dakota's efforts to become the first
State in the Nation to receive Class VI primacy. In 2019, I
began working at the EERC where today, I manage the Plains
CO2 Reduction Partnership, or the PCOR Partnership,
and work closely with EERC clients to support CCUS project
development. It is important for the committee to note the EERC
has been the technical lead tasked with the development of all
nine Class VI projects that have been approved in North Dakota.
The history of the EERC dates back to 1951 as part of the
U.S. Bureau of Mines. Later, in 1977, the U.S. Department of
Energy, and in 1983, the EERC became a business unit of the
University of North Dakota. The EERC is focused on practical
solutions to our world's energy and environmental challenges.
As a leading developer of technologies, the EERC has spent
decades performing applied research in CCUS. The EERC leads the
PCOR Partnership, one of DOE's Regional Carbon Sequestration
Partnership Programs. PCOR is an industry-government
partnership with more than 250 member organizations across a
10-State, four Canadian province region in the upper great
plains in Northwestern-North America.
What has become apparent over the course of now over 20
years of PCOR Partnership activities is that while our region
has astounding potential for geologic CO2 storage,
our region's emissions are interwoven with the economy. The
local, State, and regional economies and the industrial tax
base that supports these communities represent the primary
emission source of CO2. This is consistent
nationwide.
This is where we encounter the dual challenge, the dual
challenge of reducing carbon intensity of our major industrial
sectors while simultaneously ensuring continued economic growth
and prosperity for our local economies tied to these
industries. The deployment of CCUS technologies offers a unique
solution to meet this dual challenge.
Today, the 45Q tax credit and low carbon fuel markets have
created a business case for CCUS. However, carbon capture
technology has not been economically deployed across the full
spectrum of emissions sources.
There are three main barriers preventing accelerated CCUS
deployment. First, the cost of retrofitting our largest
electricity generation facilities with capture technologies
continues to be a major hurdle. Second, CO2 pipeline
permitting and public opposition concerned with pipeline safety
and eminent domain laws have created transportation challenges.
Third, long lead times and delays in permitting Class VI
storage projects as the Federal level persists.
The solutions to these barriers are all actively underway.
The industry continues to advocate for increases to the 45Q tax
credit to strengthen the incentive and offset record inflation
on materials and increased labor costs. PHMSA has proposed new
regulation to enhance CO2 pipeline safety, and there
are policy solutions being proposed at the Federal level to
improve CO2 pipeline permitting and Class VI
permitting.
The solution to alleviate the significant backlog in Class
VI permit applications at the EPA regional offices begins with
Class VI primacy. The Class VI primacy process can take between
four and 7 years for States to receive this authority from the
EPA. I hope we all can agree that this process is inefficient
and must be improved.
States are best positioned to regulate these activities.
States have a broader framework to consider, in addition to the
environmental protections offered by the Class VI rules, such
as promoting the development of geologic CO2
storage, and maximizing the use of pore space of storage
reservoirs.
As soon as a State has demonstrated equivalent Class VI
program protections, EPA should move expeditiously to approve
their Class VI application and hand that authority over to the
States. The State has already demonstrated that the program
meets the criteria.
An important technical challenge facing the CCUS industry
has to do with the prohibition of new aquifer exemptions for
Class VI. There are many examples of deep geologic formations
that meet Federal definitions for an underground source of
drinking water, but there are extenuating circumstances, such
as depth or economics, that make these particular formations
unsuitable as a drinking water source. The result of this
prohibition removes billions of tons of CO2 storage
potential in States like North Dakota, Montana, Wyoming,
Colorado, Utah, Oregon, and Alaska, to name a few Western
States.
Thank you again, Chairman Capito, Ranking Member
Whitehouse, and members of the committee for your invitation to
provide these remarks. I would be happy to answer any questions
you might have regarding my testimony and views on carbon
management.
[The prepared statement of Mr. Connors follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito. Thank you, Mr. Connors.
Our next witness is Dan Yates, and he is the Executive
Director of the Groundwater Protection Council, or GWCP. He has
been with GWCP for over 20 years and has worked with his
members on the challenges that have been experienced with the
Class VI primacy process.
I would note, he has two children, so we are up to nine. We
are getting up to a high average here. Thank you, Mr. Yates,
for coming.
STATEMENT OF DAN YATES, EXECUTIVE DIRECTOR OF THE GROUND WATER
PROTECTION COUNCIL, INC.
Mr. Yates. Thank you, Madam Chairman Capito, Ranking Member
Whitehouse, and all the members of the committee for inviting
me to speak today. It is an honor to be here to discuss the
work the Groundwater Protection Council has been doing with our
State members for the past 40 years.
We were created in 1983 to bring together the technical
regulatory experts to address underground injection control and
groundwater protection issues. Our national organization
represents both energy and water agencies, including such
programs as Water Quality, Underground Injection, Drinking
Water Source Protection, Groundwater Protection, and Oil and
Gas.
My experience spans 25 years helping aid State programs in
tool development, regulatory considerations, and capacity
development. We have been at the forefront of CCUS, including
work on CO2 injection for enhanced oil recovery, the
creation of the Class VI UIC program, and promulgation of State
regulations in order to get primacy.
Class VI well regulations, like all UIC programs, are
designed to protect public health and underground sources of
drinking water. They cover injectionsite evaluation,
construction specifications, operational constraints, well
testing, monitoring, emergency response, and closure
requirements, among others.
As part of primacy applications, States develop their own
rules and regulations that meet or exceed Federal rules. The
UIC program is a novel and complex program that relies heavily
onsite-specific determinations. As previously mentioned, four
States have primacy currently, and several of this committee's
States have submitted primacy applications, while even more are
in the process of completing primacy applications.
As Kevin mentioned, North Dakota waited several years for
their primacy, and now States are waiting many years once they
have submitted their applications to obtain primacy. State
agencies have a vested interest in the communities where they
live, work, and raise their families. They understand
environmental protection, economic development, water use, and
public health needs of their State. They have the expertise in
local geology, water sources, geography, and they are the most
efficient and can provide faster responses.
Some challenges remain toward obtaining primacy. State
regulators have expressed to us that EPA has been helpful in
providing information about the Class VI application process.
They have made themselves available to meet and discuss the
process, provided guidance documents, and interfaced with
States, both individually and through work groups through the
Groundwater Protection Council.
However, the current application process is extremely
rigorous. Though EPA has done some work to improve this
process, States that already have regulatory programs in place,
including other components of the UIC program, are well suited
to manage the Class VI program and should have a more
streamlined process to obtain primacy.
Regulations for Class VI should be based primarily on
geologic siting, operation, and secure project closure. States
are best equipped to administer the complexities of this Class
VI program, but more resources are needed for permitting and
regulatory capacity, including staffing, training, and
technology.
Some funding has been provided by Congress, either directly
to State programs or to EPA, but not all of those funds have
been released by EPA, including $1.2 million for the Fiscal
Year 2024 budget for State training.
GWPC has initiated a Class VI training program, including
developing a Class VI curriculum in conjunction with States for
their needs, but additional funding from Congress could speed
the development.
Data management focused on full well life cycle is critical
for this program. States and GWPC have previously developed
similar programs and have begun work on a Class VI data
management program, but funding is needed to complete a robust,
State-managed system for Class VI.
How can Congress help? Federal funding enacted as part of
an annual appropriations could provide essential support for
geologic storage deployment by expanding capacity of States to
permit geologic storage. From industry partners that have the
technology to construct these projects, to States ready to
develop safe and effective regulations, all the ingredients are
there to implement safe and secure carbon sequestration.
GWPC stands ready with its State agency members to work
with Federal partners and stakeholders to attain geologic
storage on a needed scale.
Thank you again for your time on this important topic
today. I am happy to answer any questions.
[The prepared statement of Mr. Yates follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito. Thank you very much, Mr. Yates.
Our final witness is Jack Cavanaugh, who is the Manager of
Carbon Management for Breakthrough Energy. Mr. Cavanaugh
focuses on carbon capture technologies for the organization as
a member of the CCUS Federal Lands Permitting Task Force.
Thank you very much, Mr. Cavanaugh, for joining us today.
We look forward to your testimony.
STATEMENT OF JACK ANDREASEN CAVANAUGH, MANAGER OF CARBON
MANAGEMENT, U.S. POLICY AND ADVOCACY, BREAKTHROUGH ENERGY
Mr. Cavanaugh. Chairman Capito, Ranking Member Whitehouse,
and members of this committee, thank you for the opportunity to
appear before you today. I am here to discuss the USE IT Act,
Class VI wells, and the challenges and opportunities this
committee faces as it continues to foster carbon management,
including carbon dioxide removal.
My name is Jack Cavanaugh, and I oversee carbon management
at Breakthrough Energy. Breakthrough Energy was founded to
accelerate energy innovation and build the industries of the
future without emissions, and we deploy for-profit investment
funds, nonprofit grant-making programs, and policy efforts to
achieve that mission. I serve on the White House Task Force for
Carbon Capture Utilization and Sequestration on the
Subcommittee, Federal Lands and the Outer Continental Shelf,
established through the bipartisan efforts of this committee
and the USE IT Act.
I am also a Husker. It is great to see you, Senator
Ricketts. I was born and raised in the great State of Nebraska.
A natural gas pipeline runs through my family farm in South
Hastings and was recently retrofitted to carry CO2.
This was made possible by the 45Q tax credit. We are happy to
have the infrastructure on our land and proud to be part of the
growing carbon management economy.
Carbon management includes carbon capture for power and
industrial sectors, pipelines, geologic storage, and carbon
removal. My testimony reviews important research, including the
Potsdam Institute paper on the absolute need for CDR going
forward, and we need gigatons. To put a gigaton in perspective,
a single blue whale weighs around 146 metric tons, which means
six million blue whales constitute a single gigaton, and we
need multiple gigatons of both CCS and CDR from here on out.
The total summary of the research is this: the world is
warming, it is warming faster, and it will continue to warm,
mostly because of carbon dioxide emissions that we are putting
into the air. We have no choice. We should reduce carbon
emissions wherever we can, remove those that we cannot reduce,
and also use carbon dioxide removal as an environmental
remediation tool for legacy emissions.
Each small rise in temperature matters, and each small rise
results in climate impacts getting progressively worse. The
rise in temperature is having steep physical and economic
impacts. Wildfires in California, hurricanes in Florida, all
have resulted in hundreds of deaths and tens of billions in
economic damages. Insurance has simultaneously pulled out due
to this climate risk.
The U.S. is the dominant Country and driving force in
carbon removal today. Corporations and countries are paying
U.S. companies for carbon removal, and investors from around
the world are coming to build here. This is fundamentally due
to the bipartisan policy support for CDR, the commitment to
cutting edge research and development coupled with an
incredibly innovative private sector.
We have the policy infrastructure, like the DAC Hubs
Program from the Infrastructure Investment and Jobs Act, the
USE IT Act from this committee, the 45Q tax credit, and the
Class VI well program. We have the early stages and the
incredible potential for the physical infrastructure of carbon
capture and removal technologies, pipelines, and safe, proven
geologic storage. This innovation and infrastructure
combination sets the United States apart. Thousands of good
paying jobs are currently being created with hundreds of
thousands more upon scale-up.
Carbon management brings economic development. It brings a
more competitive America and a healthier environment for
American citizens. This is only possible if we can permit and
build fast enough. The committee should work with the
Administration to make sure the USE IT Act, the White House
task force delegated by the USE IT Act, continues to be a
priority. Specifically, the task force needs to replace its two
political appointees before it can conclude its recommendations
and share it with both this committee and Congress.
We need Federal permitting clarity and efficient Federal
permitting regimes for CO2 pipelines and all forms
of CDR, which are currently not sited federally, sited or
permitted federally. We need authorized funds for continued
research and development on driving down the costs of all use
cases for carbon management technologies. We need the next
phase of Federal Class VI program to reach permitting decisions
on project level timelines. We need to provide lessons learned
and a clear roadmap, the information EPA needs to reach
decisions, on applications from States seeking Class VI
primacy.
Advancements in these areas will allow the U.S. to secure
domestic energy supply resource production. It will strengthen
our supply chains, trade, and our national security. We have a
rich history in this Country of coming together and advancing
technologies to overcome the most pressing challenges, but to
rise to this challenge, we need clear permitting regimes,
funding, and public-private partnerships to deploy these
necessary carbon management technologies.
If we do not deploy this technology, China will. China will
enjoy the economic development, hundreds of thousands of jobs,
and a healthier environment. America is leading the way, and
the future, as always, is a policy choice. This committee has
put our Country on a path to achieve American dominance in
carbon management, in energy, and in a healthier environment.
Breakthrough Energy stands ready to work with you to help
our Nation's carbon management policies reach their full
potential. Thank you.
[The prepared statement of Mr. Cavanaugh follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito. Thank you. Very good.
I am going to refer my time to Senator Husted. He has to
leave. As we know, there are several committee meetings going
on at the same time here, so there will be a lot of in-and-out,
but go ahead, Senator.
Senator Husted. Thank you very much, Chairwoman Capito, for
arranging the hearing and giving me chance to ask a couple of
questions.
It is, my background, Ohio, the State I represent, has a
large oil and gas shale play in the Utica Shale Basin. I have
spent a lot of time at the State level working with our EPA on
injection wells and the primacy issues that we have at the
State level.
I really have been impressed at how the people who work in
this area in our State really understand the unique nature of
how things happen in our State, what the geology is, what the
history of these regulations are. I am a big fan of primacy in
general and am interested in learning more about how we do this
for carbon sequestration for Class VI primacy.
Dr. Yates, just give us, give me some perspective on how
States are better suited to do this. My belief is that they are
better suited to handle primacy. I just want to hear your
thoughts on my conclusions, and if you agree with that, or if
you have advice to the contrary.
Mr. Yates. Thank you, Senator, for that question. We do
quite a lot of work with Ohio. Both Ohio EPA and Ohio DNR are
very involved with our organization on UIC, and you are right,
very knowledgeable and conscientious staff that do really,
really good work, and our leaders and our organization.
You are right. States are best suited; they are better
suited. One of the reasons is just a simple numbers game.
Rather than one agency trying to manage wells for multiple
States, having staff in your State have management authority
over the wells in your State.
Then I think another important piece is just the
overwhelming amount of knowledge that State staff have about
the operations in their State: previous UIC projects, access to
data on those non-Class VI UIC, those other well classes, the
ability to engage with their State geologic surveys and
understanding the history. They have more staff that can focus,
and they have better access to data information to make these
management decisions to approve wells. Thank you.
Senator Husted. Thank you.
Just to followup with that, if I could, Madam Chair, it is,
the EPA, the States have, for example, in Ohio, we have primacy
in everything except for these Class VI wells, and so it works,
it has worked. It has worked successfully.
Tell me what lessons are there? If I were to talk with our
State regulators in this, what lessons have we learned that
they should know regarding underground injection for carbon
capture and as we prepare to look at this Class VI provision
for States to have the primacy? What is it that you have
learned that is applicable, that everybody should know?
Mr. Yates. One of the things that we have learned over time
managing the UIC program, both in Ohio and nationwide, are the
existing geologic plays that exist that can hold this carbon,
so we have that data. We know a lot about the underlying
geology because of both the Class II program, which is
injecting produced water from oil and gas, and then also using
CO2 for enhanced recovery.
We have got experience, actually, injecting CO2
through the Class II program, and then we have, at the Ohio EPA
and at other State agencies, additional deep geology experience
and understanding from the Class I program that injects other
types of wastes for, again, long-term storage. We just have a
wealth of information among these State agency staffs on how
UIC works, where the successes have been, where the challenges
have been, and even specifically with CO2 injection
that is outside the Class VI program.
Senator Husted. Thank you very much.
Senator Capito. Senator Whitehouse?
Senator Whitehouse. Thank you very much, Chairman.
Mr. Cavanaugh, the new Director of the Department of
Energy's Loan Programs Office has stated that he is exploring
canceling existing already approved loans. This could affect
$69 billion in issued loans and loan guarantees and $41 billion
in conditional commitments, including a billion-dollar
conditional commitment to Monolith for a carbon utilization
project in Nebraska.
How would cancellation of these loans and the continuing
freeze in related Federal grants and loans hinder the
development of U.S. domestic CCUS?
Mr. Cavanaugh. Thank you for the question, Senator. We
support, and I think it is important that all government
spending and taxpayer dollars are spent efficiently. Freeze on
funding on things like guaranteed loan and, specifically with
this project in Monolith, would undoubtedly hamper the
project's ability to deploy, and very likely would render the
project to unable to come to a final investment decision, and
end up becoming operational.
Public-private partnership, investment from private
industry, especially in the carbon management sector, is not
just dependent on the innovation that they are bringing
forward, but also with the firm support of the Federal
Government and programs like the LPO, the Direct Air Capture
Hubs.
To put it succinctly, with a freeze, with a delay in these
funds, the likelihood that these projects reach full operation
is incredibly dubious.
Senator Whitehouse. There has been reliance, both by
private parties and States, on these loans and commitments,
correct?
Mr. Cavanaugh. That is correct.
Senator Whitehouse. The other topic I wanted to touch on
with you is what I see as fossil fuel industry's split
personality around carbon capture. When the industry wants to
reassure everyone that it is safe to continue to pollute, they
trot out carbon capture as the rhetorical vehicle for excusing
continuing to pollute.
When it actually comes to putting money into a carbon
capture project on a plant or accepting an EPA power plant reg
that implements that, they do not spend the money, and they
claim that the thing they said is the answer is actually not
feasible.
Any comments on how we works our way through that split
personality problem?
Mr. Cavanaugh. Yes, thank you for the question, Senator. I
think, first and foremost, when you are looking at these oil
and gas companies, these are publicly traded companies, and in
their investor decks, it is actually very clear to be able to
see who is deploying billions of dollars on actually putting
steel in the ground on projects, and who is spending----
Senator Whitehouse. The Good actors.
Mr. Cavanaugh. Sorry?
Senator Whitehouse. The good actors.
Mr. Cavanaugh. The good actors, and who is spending
millions of dollars on marketing campaigns.
Second, outside of this public transparency, we also have
strong regulatory regimes in the United States, on like the
Class VI Well Program, like PHMSA, with CO2
pipelines, to ensure that when they do deploy these
technologies, they are done in a safe manner.
Finally, I think it is important to note that the oil and
gas industry does have an incredible overlap and work force
relative to the deployment of some of these technologies. In
particular, direct air capture has a massive work force
development piece there, where you are not only relying on the
expertise, especially on the transportation of CO2
and injection into the subsurface that you already have within
these companies, but you are also then recruiting new folks
into climate technology.
Senator Whitehouse. I think it is important to note the
discrepancy between what significant segments of the industry
say about carbon capture and what they actually do about it
when it comes to either their wallets or the regulatory
environment that they operate in.
Let me ask, my time is short, so if you do not mind, Mr.
Connors and Mr. Yates, I will ask these questions for the
record so you have time to respond in writing.
For Mr. Connors, my question is how U.S. Federal agencies
can improve coordination with State and local governments, both
on CCUS and CO2 transportation permitting. As the
Chairman and I have both announced, we are hoping to work
together on rekindling permitting reform here and with the
Energy Committee. so this could be very helpful to us in that
effort, if you would respond to that.
Mr. Yates, with respect to Class VI well permitting, how
can the current approach be streamlined or improved to expedite
project development and deployment while maintaining real
safeguards for drinking water? If you can get back to us on
that, I think your answers would be very helpful to our
permitting reform effort. Thank you for being here today.
Thank you, Chairman. Now, I am off to the Budget Committee.
Senator Capito. I know that will be fun for you.
I mentioned in my opening statement that the USE IT Act was
signed in 2020. I also alluded to the two CCUS permitting task
forces that had been established, one for Federal lands and one
for non-Federal lands. I am interested to know.
I am going to start with you, Mr. Connors, and then I am
going to go to you, Mr. Cavanaugh, because you are on one of
the committees, I believe. Now that these task forces have been
chartered and are operating, do you believe that will make an
impact on identifying opportunities to improve the permitting
through these task forces as the law requires? What is your
opinion of the two committees now that are moving forward, and
is that going to be as helpful as we would hope?
Mr. Connors. Chairman Capito, I am confident today, you
mentioned it was a slow start to get these task forces
established, but starting really in this summer, but in the
fall, and as of recently, I have actually been given the
opportunity to lead the authorizing of a section focused on
permitting.
A lot of the information that we have talked about today in
terms of Class VI permitting and reforms will be within that
report, so I actually have a lot of confidence that the report
will be helpful to this committee and the other committees.
Senator Capito. Does that report go to these two task
forces? I mean, that is required by the law, the report?
Mr. Connors. Correct. The task forces are tasked with
preparing guidance for this Senate committee, Senate Energy and
Commerce, House of Representatives Committees for Natural
Resources and Transportation Infrastructure, and the guidance
is being prepared by both task forces to identify permitting
and other challenges, and then ultimately making key
recommendations to improve permitting process and promote the
efficient, orderly, and responsible development of specifically
CO2 Class VI permitting.
Senator Capito. Right, good.
Mr. Cavanaugh, what is your perspective on this, your view
as a member of the Federal lands permitting task force?
Mr. Cavanaugh. Thank you, Chairman Capito.
Yes, I share similar sentiments to Mr. Connor's. The Task
Force on Federal Lands is working to provide recommendations
that are not only an amalgamation of the total experience in
the room, which includes both industry, public policy experts,
as well as folks from communities that will be receiving CCUS
technologies, but also working across a number of different
agencies on Federal lands and the outer continental shelf. You
are not only dealing with the Department of Interior, but also
BOEM, as well.
Our recommendations will take into account the total
information that we have from everyone, and we will also be
actionable in the near term.
The one thing that I do want to stress, and this came from
the gentleman who is leading my task force on the Federal
lands, is we need to replace the new political appointees
before we are able to conclude the task force and give
recommendations to you and to Congress. Thank you.
Senator Capito. have not, thank you. Mr. Connors, you
mentioned that there are nine projects in North Dakota, is that
correct, that have been permitted?
Mr. Connors. Yes, that is correct.
Senator Capito. Could you just kind of, really quickly, so
that I can understand, because I think somebody mentioned it. I
can not remember which one, that some projects are easier than
others to permit. Could you tell me what those nine projects,
generally, are they natural gas plants, are they ethanol
plants? What are they, industrial?
Mr. Connors. Chairman Capito, there are a variety of
industrial sources. The first project that was permitted was a
single ethanol plant that is sitting right on top of ideal
geology.
Senator Capito. have not, so they have their well right
there.
Mr. Connors. They have been operating since June 2022.
Senator Capito. have not.
Mr. Connors. There is also another ethanol plant, again,
sitting on top of ideal geology, and that was also permitted.
These were, in terms of scale, 180,000 to 200,000 metric tons
of CO2 are being captured and injected on an annual
basis.
There is a third project that is operating that is co-
located with the Great Plains Synfuels Plant is through,
CO2 is being captured through the coal gasification
process, and they are storing CO2 right there
onsite. They are also capturing that CO2 stream and
transporting it via 205-mile pipeline to southern Saskatchewan
for enhanced recovery, and they have been doing that since
2000.
There are also permits that have been issued for CO2
capture and storage for the Milton R. Young Station, and
currently that is operated by Minnkota Power Cooperative, and
they are currently working on determining their final
investment decision for that carbon capture project.
The latest project that has been approved is the Summit
Carbon Solutions Project, and that is three large storage units
that have been permitted in North Dakota, there.
Senator Capito. What is that, is that a power generator?
Mr. Connors. Summit has aggregated, I believe it is over 50
ethanol and other biofuels facilities in the corn belt in Iowa,
southern Minnesota, eastern Nebraska, and eastern South Dakota,
and North Dakota with intents to construct a network of
pipelines to bring that CO2 to western North Dakota.
Senator Capito. have not. Well, I would just say, I think
that is very interesting, because I think part of what the
Ranking Member was alluding to that certain types of projects
have not really been able to move forward with the Class VI for
whatever reason, but you did line out what those reasons are:
cost of the retrofit, CO2 pipeline permitting, and
then the long lead times, which has led to probably some
confusions. If the political appointees can be going forward
and confirmed, that might alleviate some of the long lead time
issues.
Senator Cramer?
Senator Cramer. I feel like my work is done. This is really
great, actually.
[Laughter.]
Senator Cramer. Along the same theme, and maybe, Mr.
Connors, you could just help us. How was it that North Dakota
was first? When I think of the small number of resources we
had, now, we have a long history, as you have just pointed out,
we have been capturing and piping and utilizing CO2
for 25 years. We were doing it way before it was cool.
Other than that, what is it that put North Dakota at the
front? How did we do it so quickly, and what lessons can be
learned in terms of getting that Class VI primacy authority?
Senator Capito. We thought it was you.
[Laughter.]
Senator Cramer. Yes, well, I would like to take credit, but
I think it was more than that.
Mr. Connors. Chairman Capito, Senator Cramer, thank you for
the question. This began in the early 2000's, and the State of
North Dakota recognized early on that our economic pillars for
North Dakota, our agriculture and our energy industry, which
are both intensive in terms of CO2 emissions. We set
out in the early 2000's to develop frameworks, regulatory
frameworks, to provide certainty specifically to our energy
industry, that if they were to be able to advance carbon
capture technology, that they would have the certainty in order
to store that CO2.
North Dakota took the approach of developing a resource
management framework, so CO2 storage in North Dakota
is regulated much like we regulate oil and gas. It is in the
public interest to promote geologic storage of carbon dioxide.
We declare CO2 as a valuable commodity for its
industrial use, specifically for enhanced oil recovery, and we
regulate the pore space in North Dakota like a resource, under
a resource management framework. That gives the State the
ability to create unitization or unitize these projects in
order to allow landowners to monetize their resource or
monetize their pore space, looking to maximize the use of that
pore space.
All nine projects that have been approved in North Dakota
all have units that have been established by the State
regulatory authority.
Senator Cramer. You touched on something that I have said
for a long time. By the way, John Harju, I will never forget,
as a utility regulator, when PCOR became an idea, and you
presented, and I thought, what in Sam Hill is this? This sounds
crazy to me, and look at where you are today. Look where I am;
that is even weirder, but anyway.
[Laughter.]
Senator Cramer. By the way, when it comes to primacy, and I
appreciate all your testimony on this, one of Cramer's
convictions is that Federal mediocrity should never be imposed
on a State's excellence. I am sorry that it takes so long to do
what should be obvious in terms of just, general philosophy of
governance, not to mention constitutional. We will get there.
Mr. Connors, you laid in your testimony, referenced
something that is intriguing to me and I think we should
explore a little bit, and that is the aquifer exemption issue.
Can you sort of walk through that a little bit with me? First
of all, what are the dangers, and second of all, why do you
need the exemption? If we do not get the exemption, how does
that affect the availability of space for storage?
Mr. Connors. Chairman Capito, Senator Cramer, thank you for
the question.
This is an extremely important technical challenge that the
industry is facing today. It is a little bit of a complex
challenge, so I will do my best to explain it in a way that
makes sense to everyone.
It really has to do with the way in the terms of our Safe
Drinking Water Act, the way we define underground source of
drinking water. It is a broad definition. The definition of an
underground source of drinking water includes a process for
identifying aquifers that meet some criteria for serving public
water supply, but they will not and they would never be a
public water supply.
You have deep, subsurface geologic formations that do meet
some criteria for water quality, but there are certain criteria
that would eliminate those formations to be used for drinking
water, whether it is other constituents, or it just not
economical to develop, or that formation will not produce
enough water to be a drinking water source.
It is a complex challenge, but EPA created a process to
allow for the exclusion of those formations, to be able to use
them for underground injection. When the EPA published the
Class VI rule in 2010, they excluded, aquifer exemptions are
not allowed for Class VI injection. All the other well classes
are allowed to have or apply for aquifer exemptions other than
Class VI.
What that means to this committee is that there are
formations that are ideal and suitable for CO2
storage that will never be used for drinking water, yet you
cannot permit or inject into those formations because of the
current regulations.
Senator Cramer. Does Congress need to address that, or why,
and what is the blockade?
Mr. Connors. Chairman Capito, Senator Cramer, the challenge
with it, it is kind of a three-pronged solution.
Congress can address it and direct EPA to amend their rules
and allow for aquifer exemptions for Class VI. EPA will have to
amend their rules and remove that provision. Then the third
piece is also challenging. EPA is the final authority when it
comes to making that decision for aquifer exemptions, and that
still takes a long lead time. I have previously administered
North Dakota's Class II UIC Program, and it would take a year
or 2 years to get an aquifer exemption from the EPA when they
do allow it for that injection well class.
Senator Cramer. I am glad I asked. Thank you.
Senator Capito. Senator Ricketts?
Senator Ricketts. Chairman Capito, thank you very much for
holding this, and also my regards to Ranking Member Whitehouse
as well for this important hearing. I look forward to working
on a bipartisan way to be able to get all the members of the
committee on these common-sense carbon arrangements and
programming, which is a win-win-win-win, right? It is great for
consumers; it is great for the environment; it is great for
farmers; it is great for bio-producers. It really is something
that we need to continue to pursue. I congratulate the State of
North Dakota on your great progress on it already.
It is also great to have Mr. Cavanaugh, to have you here.
It is great to have a husker, as you mentioned before, so
thanks for taking the time to be a witness, and thank you to
all of our witnesses for being here.
Nebraska is actually the second-ranked ethanol State in the
Country, and I know the Chairman knows this because of my
service on this committee the last 2 years. She has heard me
oftentimes talking about why I love this committee so much
because we get to talk about ethanol all the time.
Ethanol is great because it saves consumers money at the
pump, helps cleanup our environment, and as mentioned, is great
for our farmers and ranchers. Nebraskan farmers benefit from
the certainty of premium markets associated with the biofuel
industry. As we are talking about it, if you could lower the
carbon score through ethanol, right, you can actually charge a
premium for it. That is a good thing. That is the market at
work. It is a fantastic thing.
Carbon pipelines help add that premium to biofuels and
biofuel markets by lowering that carbon intensity even further
through this carbon sequestration. Nebraska and other
midwestern States tend to benefit greatly from pipeline
projects like Tallgrass Pipeline, which originates in Beatrice,
Nebraska and terminates in eastern Wyoming. Tallgrass has the
capacity to do ten million cubic tons of CO2. That
is like two million cars being taken off the road.
The potential for growth of this carbon storage industry is
just another reason why we ought to be doing E15 year-round and
implement the renewable fuels standard on time. Ensuring the
development of carbon storage infrastructures requires
compliance with different agencies and regulatory schemes.
I would certainly agree with my colleague from Ohio when he
said he agrees with the primacy of States, because again,
having been a former Governor, I know what a great job our
Department of Environment and Energy did in that primacy.
In Tallgrass's case, the State of Wyoming was responsible
for issuing the Class VI well permit through EPA's Underground
Injection Control Program. The Wyoming Department of
Environmental Quality successfully did that. It was a huge win
for Nebraska and the Midwest and neighboring States.
While I am relieved to hear the Tallgrass project has that
Class VI permit, so many other projects have not had that same
success. According to the EPA, only eight Class VI wells have
been permitted. One hundred sixty-one are still awaiting that
permitting, or are still pending.
Again, getting back to the Ranking Member's concerns, maybe
this is one of the reason why other companies do not jump in.
If you only have eight Class VI wells permitted and there are
161 waiting, why would I jump in on this? The EPA has got to
get it going. This is just unacceptable.
At the beginning of last year, Senator Fischer and I led a
letter asking the EPA about Class VI well permit approval
process. A biofuel stakeholder has been waiting 33 months for a
permit, despite the commitment from the agency that the process
would take no longer than 24 months. I have actually got copies
of those letters right here, and without objection, I would
like to submit these letters that we sent to the EPA and the
response for the record.
Senator Capito. Without objection, so ordered.
[The referenced information follows:]
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Senator Ricketts. These delays and excuses demonstrate what
we already know to be true: that the Biden Administration was
not serious about a holistic approach to clean energy, and
favored toxic Chinese-based suppliers for batteries. Second,
State governments often are better stewards of taxpayers'
dollars, as we have demonstrated by what is going on in North
Dakota and should play a more active role in the Federal
programming for implementation.
Federal roadblocks for CO2 permitting stand in
the way of leveraging every penny that could be going to
helping Nebraska farmers feeding and fueling the world. Farm
country is struggling and access to the biofuel market
supported by the Class VI wells would pad producers' bottom
lines.
I am encouraged by the bipartisan support from both
Chairman Capito and Ranking Member Whitehouse and other members
of this committee for the USE IT Act. This legislation includes
language specifically to streamline the permitting process for
CO2 pipelines. There are critical provisions in the
USE IT Act, like expedited permitting to review development of
cases of carbon infrastructure.
As a Governor of Nebraska, I am going to Lean Six Sigma to
be able to streamline our processes. For example, we are able
to bring some of our permits down from 110 steps to 22 steps
and cut the time to issue them from 190 days to 65 days. We
ought to be looking for those same sort of answers in our EPA.
Mr. Connors, your work in North Dakota on carbon
sequestration is impressive with regard to Class VI. How has
Class VI well permitting been different from what it would be
in the USE IT Act's passage?
Mr. Connors. As I mentioned, when you have Class VI
primacy, like you do in North Dakota, and certainly Nebraska, I
believe, has decided to pursue Class VI primacy, the State
regulator is able to evaluate these complex applications in a
much more efficient manner.
We have a drastic comparison. On the Federal level, it
takes EPA two to 4 years to issue a Class VI permit. The most
recent ones were just the permit to construct, so that operator
is going to have to turn around and actually apply for the
authorization to inject, which is an unknown timeframe.
In North Dakota and Wyoming, who have both issued these
project permits, North Dakota takes about 8 months to issue a
permit, and Wyoming takes about 12 months, on average, to issue
their first three permits.
It is efficient. This is an efficient process. These are
complex applications, but certainly, you would have a regulator
that is able to work through that process in a more efficient
manner.
Senator Ricketts. Thank you, Chairman, for being lenient
with the time here, but I just wanted to say, as a Governor, I
wholeheartedly agree with your assessment of it, that the
States can be much more efficient in getting this done. Again,
for example, when I talked about that Lean Six Sigma process,
we at the State, we can not change any of the environmental
regulations. Is that right, Mr. Connors?
Mr. Connors. That is correct. In order to receive Class VI
primacy, your State program has to be as stringent as the
Federal EPA's program in protecting underground sources of
drinking water.
Senator Ricketts. Yes.
Mr. Connors. EPA recognized when they published the Class
VI rule in 2010, in the preamble of that rule, that States are
best positioned to regulate and implement this program, because
they can enact a broader framework, and that is the framework
that I was discussing, where States can regulate a project,
they can create pore space unitization, and EPA is just limited
to regulating the injection well.
EPA recognizes that the States are best positioned and
suited to regulate this activity and to be able to do so in a
manner that is more efficient. The way we talk about it in
terms of these regulatory frameworks is, the State is really
positioned to regulate from cradle to grave, and that is an
important piece, where the State can regulate the project. EPA
has limitations to what their regulatory authority is when they
are the implementation authority.
Senator Ricketts. Thank you, Mr. Connors. I appreciate your
answer there, because that is something that, again, as a
former Governor, I appreciate. Nobody cares more about having
clean air or clean water in the State of Nebraska than
Nebraskans, and that is why we do such a great job with the
environment, and that is why we need primacy.
Thank you for your indulgence.
Senator Capito. Thank you.
Senator Curtis?
Senator Curtis. Thank you, Madam Chair.
I actually would like to pick up where my colleague left
off. Utahns, I think, find themselves equally as concerned
about leaving the Earth better than we found it, clean air,
clean water, and clearly, the ability to take carbon out of the
air is a very, very important part of that. I firmly believe
our Nation's energy security depends on what I call affordable,
reliable, and clean energy. Carbon capture can play a critical
role in achieving that balance.
Companies in Utah are eager to innovate, but often faced
delays in obtaining approvals from Federal agencies to
implement new technologies. The USE IT Act is an important law
that clarifies the role of Federal research agencies in
advancing carbon management technologies, including carbon
capture through research, development, and demonstration
efforts.
Additionally, the USE IT Act ensures that carbon capture,
utilization, and storage projects qualify for streamlined
permitting under the FAST Act, which was originally designed to
expedite the review of surface transportation infrastructure
projects.
Mr. Yates or Mr. Connors, or both, currently, only two
carbon capture and sequestration projects are listed as FAST 41
covered projects on the permitting dashboard for Federal
infrastructure projects. What actions can the Administration
take to fully implement the USE IT Act, particularly ensuring a
more efficient permitting process?
Mr. Yates. Thank you, Senator Curtis. That is a really
great question.
One of the problems for States as they apply for primacy
is, EPA uses what they call a crosswalk, which can be a very
good tool, but it is a complicated tool. There is not very good
transparency to States on the process of where they are within
primacy. Making that a more transparent process, training that
is for both States and EPA simultaneously on what the
crosswalk's purpose is and how it is to be used would be very
helpful in speeding primacy.
If we can get States primacy faster, we have already talked
a great deal today about how States are more efficient with
their permits. I would say an answer to your question is
reviewing EPA's process, causing them to be more transparent.
Often, States will get a copy of the crosswalk with things
highlighted, but no description of what any of those highlights
mean. Specific questions to States on what is holding up the
primacy process. It is EPA's role to determine whether or not a
State's rules and regulations meet or exceed Federal. It is not
the State's role to do that, but we are getting confusing
information back from EPA during that primacy process.
Senator Curtis. Thank you. Yes, go ahead, Mr. Connors.
Mr. Connors. As we have mentioned, there is, last I
checked, 161 well permits that have been backlogged at the EPA
regional offices. The No. 1 solution is, there are States that
are in the preapplication process to apply for primacy.
If EPA were to grant Texas alone primacy, 35 percent of
those applications would go to the State of Texas. There are a
lot of projects in Texas. If the EPA were to grant primacy to
the States that are in the queue, that are pursuing primacy, it
is about 40 percent, and there are several States that have
announced that they are pursuing primacy. That is another 50
percent of the applications.
Those other 50 percent of the applications are in States
that have not indicated that they are interested in pursuing
Class VI primacy. EPA could focus their resources on California
and Illinois, where there are a lot of projects today, but
granting States primacy that have applied and expediting that
process is crucial to alleviating the backlog.
Second of all, EPA can incentivize more States applying for
primacy and requesting that authority from EPA if they knew
that EPA was going to expedite that process. I think there
would be an advantage there.
Senator Curtis. That is great.
Madam Chairman, we need to talk to Mr. Zeldin and give him
a few minutes to get his feet underneath him and then light a
fire underneath him. I would like to agree with my colleagues
about just the difficulty of Class VI permits. I do not need to
go deeply into that because I know it has been discussed today,
but I do want to add my voice to that.
Mr. Connors, what resources can the Federal CCUS Permitting
Task Team, in coordination with the DOE, provide to States,
particularly those with Class VI primacy, like Utah, to assist
in the review and the permit of processes, review of permits?
Mr. Connors. The Underground Injection Control Program
historically, and I think it has been around for about 40 years
now, historically there are grants that the States apply for
through EPA, and there is funding resources to those States
that have primacy.
For the history of Class VI, which began in 2010 when EPA
published the Class VI regulations, there has been no resources
through those UIC grant applications. The States are applying
for and administering those Class VI programs with their own
State funding to do so, and so additional funding for the
States, to have those resources to implement their Class VI
programs, would be extremely helpful.
Senator Curtis. Thank you.
I thank the witnesses, but I also thank the Chair. This is
a really important topic, and I suspect most of America does
not really understand fully the potential here. Thanks for
holding this hearing, and I look forward to additional
discussions. I yield my time.
Senator Capito. Thank you.
Apparently, Senator Schiff is going to be coming. We were
just called for our votes, so I am going to ask a question.
Mr. Cavanaugh, you have done a lot of work on direct air
capture. I guess I am curious to know, are any of the wells
that have been permitted direct air capture wells, and what
kind of, Mr. Connors lined out three difficulties for getting
these projects moving, retrofitting, permitting on the
pipelines, and long lead times.
How does direct air capture work into this? Is the
technology fully proven, and who is doing this work?
Mr. Cavanaugh. Thank you, Chairman Capito.
To my knowledge, there has been one conditional permit in
West Texas for the Occidental Petroleum Stratos facility, a
Class VI well, the Brown Pelican Project, that is specific for
direct air capture project.
As a general rule, Class VI wells, you need, mostly from an
economic standpoint, you need about a million tons a year down
well to make it worth putting in a permit for. As of yet, there
are no direct air capture projects that can remove a million
tons a year, so, unlikely that many Class VI wells will
uniquely be situated for a single direct air capture project.
Direct air capture shares many of the similar challenges
associated with point source capture. However, instead of
removing it from a relatively concentrated source, out of a
power plant, industrial sites, moving directly out of the
ambient air. The No. 1 thing that we can do to drive down the
cost of direct air capture is cheap, abundant power.
At the end of the day, 80 percent of the cost associated
with DAC is heat, 20 percent is related to electricity. We need
cheap, abundant power sources, whether that is natural gas with
CCS, nuclear, hydro, geothermal. We need not just those
projects to be built, but we need the large transmission lines
to be able to carry that energy to these projects to drive down
the cost on the capture side.
They share the same concerns on pipeline permitting and
CO2 storage, although a benefit of direct air
capture is because you are pulling out of the ambient air, you
can site directly on top of geologic storage to minimize the
amount of pipelines you need.
Senator Capito. Right. Let me ask you this: can you combine
a direct air capture project with a point source capture
project to make it to that scale that you have talked about? Is
that permissible? I do not know.
Mr. Cavanaugh. Yes, absolutely. This is happening today
with a lot of direct air capture projects, where they are
deploying, for instance, the South Texas DAC Hub and also the
Cyprus Project, which is a direct air capture hub facility in
Louisiana, are deploying in industrial-rich areas where they
can aggregate the carbon capture from these industrial sources
alongside of their direct air capture to make the unit and
project economics better.
Senator Capito. You know, it is interesting that you
mention the need for more energy, because as you create the
energy, and you mentioned, you said natural gas with CCUS, so
than you are double CCUS-ing in one project, here. You are
CCUS-ing to get the energy to do the direct air capture.
I do not see how the economics of that will work. Maybe
into the future, hopefully. We have a repeating theme here, and
I mentioned it in my opening statement of the reliabilities,
because not only is this an intensive process, the process that
we see on AI and other things are putting great pressures on
our potential for providing electricity for all of this.
The key to all of this, and it is not the only key, but it
is the key to every one of these projects, is a permitting
process that you can move along. You can not permit a nuclear
plant, you can not permit a pipeline, you can not permit a
transmission line. You are sort of, at every point of the
project, all hands point to permitting. Any help that you can
give us with permitting Class VI and those pipelines, I think,
will cross benefit all projects.
I think what is good about it is, as Senator Whitehouse
said, this is going to be a bipartisan push. It is the only way
to do it effectively, to get it into legislation, because we
see what happens with the regulatory environment, is the shifts
of Administrations go from one to the other at the Federal
level.
I would just say, I really appreciate you all being here
today. I am going to go to Senator Cramer, and we will go a
couple more minutes, and if Senator Schiff does not show, we
will just ring it down.
Senator Cramer. Yes. Thank you, Madam Chair.
This is a really fascinating discussion. Quite honestly, we
could take it into lunch if you want, and sit around a table
somewhere in a cafeteria.
I run the risk of sounding silly, perhaps, in asking a
couple of these questions, but we have referenced, now, on the
energy, particularly the electricity issue, the challenge that
we have. We have talked about all the permitting. There is a
linear permitting, whether it is a transmission line or a gas
pipeline to get there, the CO2 pipeline, you know,
and then to do all that, you have to have a generator of some
sort, right?
We have that challenge in permitting, and then it really
would help to have customers on the other side of it, because
we can generate a lot of electricity and create transmission
lines to nowhere, and that does not help anybody.
This is a very big issue. This is a very big and complex
issue. As we prepare for permitting, we are going to be needing
a lot of help, but we need to do it, to the Chairman's point.
You have alluded, Mr. Connors, to Class II wells and the
ability to look at the similarities of all of these sources.
There are a lot of Class II wells that are approved and
permitted. Is there any reason why the application for a Class
VI well, in space, it has already got a Class II well, does
that complicate the Class II designation in any way? Do you
know, or does there need to be a fixing of that?
This could apply to all of you, but we will start with you,
Mr. Connors. Does that question make sense, even? It is
possible it does not.
Mr. Connors. Yes. Chairman Capito, Senator Cramer, I
appreciate the question, and that is a question that I do get
somewhat often.
There are different standards for well construction when it
comes to a Class VI well versus a Class II well. Again, both
are protective of the underground sources of drinking water.
That is the cornerstone of the regulatory framework. A Class VI
well has more specific requirements for the way that that well
is constructed in terms of well design and engineering that
would not be compliant, typically, in, say, a Class II disposal
well.
We also have Class II wells that are used for injection of
CO2 for enhanced oil recovery in our oil fields, and
certainly, there is phenomenal opportunity there as we look at
the U in CCUS, utilizing the CO2.
Senator Cramer. Yes, I noticed we have not talked about
that a lot, and I wanted to get to that, so thank you. Keep
going.
Mr. Connors. That is where I think you have an opportunity
to advance and accelerate widescale carbon capture and
utilization and storage to be able to have, when we are able to
capture CO2 and address the economics associated
with capturing CO2 from some of our largest
emitters, and again, these are the industrial sectors, the
industrial operators, that are the life bread of the community
in terms of economics, in terms of industrial tax base.
It is a dual challenge, but if the economics do make sense
to retrofit with carbon capture technology, we can have readily
available CO2 that, I believe, and I am optimistic
about leads to greater innovation and greater utilization of
that CO2. I think the opportunity is in front of us
if we are able to knock down some of these barriers.
Senator Cramer. One of you, early on, actually referenced
the difference between a commodity and a waste product, or a
pollutant. That is what makes it a commodity, is the
utilization piece of it.
We really have not talked a lot about that, but Mr.
Cavanaugh, I sense that you had something to say about my wonky
question about wells, and you explained it well, but anything
you would want to add to that?
Mr. Cavanaugh. Thank you, Senator.
No, I would just say, on something like enhanced oil
recovery, enhanced oil recovery is sort of a microcosm of
climate in and of itself. Climate change is a complex, societal
problem, but fundamentally, a simple math one. We need to
reduce emissions very quickly and remove those that we can not
reduce.
Enhanced oil recovery is when you inject CO2
into an already existing field to push out more oil. In a world
where you have stagnant or declining oil demand, oil produced
from enhanced oil recovery is the lowest carbon intensive
barrel of oil that you can get out of the ground. We have seen
a demand for this globally with these barrels being sold right
now. I think it is around 6 percent of current U.S. production
is with enhanced oil recovery.
It is a simple math problem: however much CO2
you sequester in the ground, you subtract that from the total
that would come from the combustion of the oil, and you receive
more carbon intensive oil. Anyway, from your utilization
question, I think it is a positive pathway.
Senator Cramer. Yes. We actually have, in Southwestern
North Dakota, a project that produces net negative oil as a
result. I do not know what all the great potential is for that,
but it is fascinating.
My time is up. This has really been fun. I mean, I know I
am nerdy, but this has actually been fun. Thank you, guys.
Senator Capito. Well, great. Listen, Senator Schiff is, I
think, voting, so with no further questions, I would like to
ask the witnesses and all of my colleagues, thank them for
their participation today. Thank you. I know some of you have
travelled quite far, so I appreciate that.
Senators who wish to submit written questions for the
record have until 5 p.m. on Wednesday--I believe Senator
Whitehouse was going to be submitting some written questions--
February 26th to do so. The nominees' responses to those
questions for the record are due back to the committee no later
than 5 p.m. on Wednesday, March the 12th.
With that, the hearing is adjourned, and thank you all.
[Whereupon, at 11:18 a.m., the hearing was adjourned.]
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