West Virginia lawmakers could not agree on legislation to regulate timber-related carbon capture agreements on the final day of the 2023 regular legislative session, resulting in the bill’s failure.
The Senate refused to accept the House of Delegates’ removal of a moratorium on timber-related carbon capture agreements from a bill that would require such agreements to be registered with the state.
Saturday evening, the Senate again passed a version of Senate Bill 739 that included a 60-day moratorium on timber-related carbon capture agreements and asked the House to sign off on it. But the House never took up the bill afterward.
The two chambers appointed members to serve on conference committees to seek a compromise on other bills on which they didn’t agree Saturday, but no such panels were announced for SB 739.
The House passed SB 739 in an 86-11 vote Friday night after that chamber’s Energy and Manufacturing Committee removed a 60-day moratorium on timber-related carbon capture agreements.
The committee added registration requirements to the bill.
Under the House-approved version of SB 739, any parties that enter or have entered into a carbon offset agreement with a West Virginia landowner would have had to register with the State Tax Department within 60 days of the agreement or the legislation taking effect, whichever is later.
The Energy and Manufacturing Committee removed the 60-day moratorium after representatives from Pittsburgh-based gas producer EQT Corp. and the West Virginia Land and Mineral Owners Association spoke out against it during the committee’s meeting Tuesday.
EQT lobbyist John Bane said the moratorium would send “a negative message” regarding carbon capture in an effort the company, the state and other partners have joined in to pursue funding through a $7 billion federal hydrogen hub competition supported by the 2021 Infrastructure Investment and Jobs Act.
The Department of Energy opened a $7 billion funding opportunity in September to create hydrogen hubs nationwide.
The Appalachian Regional Clean Hydrogen Hub, which calls itself ARCH2, is pursuing support for hydrogen hub support.
The state, EQT, Battelle, West Virginia officials partnered with the nation’s largest natural gas producer, an Ohio science and technology development nonprofit, GTI Energy, an Illinois energy research firm, and Allegheny Science & Technology, a Bridgeport energy technology consulting firm, teamed up to establish the hub, regional business and political leaders announced in September.
Carbon capture, use and sequestration is an umbrella term for technology that removes carbon dioxide from the atmosphere and uses it to create products or stores it permanently underground. Such technology retrofits commercial power plants to mitigate coal and gas asset emissions. It’s unproven at commercial scale.
SB 739, as passed by the Senate in an effort fronted by Senate Finance Chairman Eric Tarr, R-Putnam, would have set a 60-day moratorium for any agreement to be entered into including any limit on timber harvesting or any property transfer related to timber harvesting relating to carbon capture, storage or other offset methods.
Forest carbon offset agreements are deals in which landowners profit from businesses or individuals investing in environmental projects paying to offset their carbon emissions that pollute the atmosphere and warm the world.
Carbon offset agreements enable the carbon sequestered by enrolled landowners to become part of a carbon market in the form of carbon credits. Carbon credits are permits companies use to offset the carbon dioxide they emit. Credits represent the removal of one metric ton of carbon dioxide from the atmosphere.
Landowners profit from deals with companies moving toward carbon neutrality by a given date, a common practice meant to offset corporate fossil fuel-related emissions.
As approved by the Energy and Manufacturing Committee Tuesday, SB 739 excludes agreements for injecting and containing carbon dioxide or other greenhouse gases into underground pore spaces and methane capture and flaring operations from its definition of carbon offset agreements.
“I simply want to consolidate this with the State Tax Department so when you or I or any member of this Legislature wants to know the magnitude of these tree carbon sequestration agreements, that we can have the State Tax Department give us that information,” Energy and Manufacturing Committee Chairman Bill Anderson, R-Wood, said in a Friday night floor speech.
Parties entering into carbon offset agreements would have had to list their names and addresses, the location of real estate covered by the agreement, the number of years comprising the agreement, any restrictions on the property and estimated yearly consideration to be paid.
The State Tax Department would have had to report to the governor and the Joint Government and Finance Committee the number, type of and acres covered by carbon offset agreements and amount of consideration paid to state landowners during the preceding calendar year annually starting in 2024.
Peter Shirley, director of the West Virginia Legislature Division of Regulatory and Fiscal Affairs, has told lawmakers that private carbon offset deals come with no reporting, notification or registration requirements, leaving the state in the dark about their duration and financial terms.
Shirley told lawmakers last year that active forest carbon offset projects cover at least 616,044 acres across 14 counties in the southern and central parts of the state.
Many carbon offset projects require long-term commitments to maintain greenhouse gas removal, some up to 100 years.
Proponents of legislative efforts to limit carbon offset agreements in West Virginia have argued some of their minimum term lengths unfairly bind future landowners and encumber swathes of land that could be used for economic development.
