Two bills that would expand the powers of the West Virginia Division of Natural Resources are headed to the governor’s desk, just over a week after the Senate approved them before making the bill text public.
The Senate on Friday morning advanced Senate Bills 161 and 162 to Gov. Jim Justice’s desk after signing off, without opposition or debate, on minor changes made by the House of Delegates on Thursday.
Both bills would be effective from passage if they become law. They are the 2023 regular legislative session’s first bills to advance to the governor.
The bills would authorize the DNR to lease state-owned pore spaces in certain areas for carbon sequestration, and allow the division to sell, lease or dispose of property under division control when it’s deemed obsolete or no longer needed.
The Senate suspended state constitutional rules last week requiring that bills be read on three separate days before passage for 25 bills in the first two days of the legislative session, including the two DNR-focused bills the House approved Thursday.
Article VI of the West Virginia Constitution requires that a bill be “fully and distinctly read” on three different days in both the Senate and the House of Delegates “unless in case of urgency” — an exception requiring 80% of members present to suspend the rule.
Republicans hold 31 of 34 Senate seats, giving them the power to suspend the rule in any party-line vote.
The House of Delegates approved the bills Thursday by overwhelming margins. James Bailey, secretary of the Department of Commerce under which the DNR is housed, had endorsed them before the House Judiciary Committee.
SB 162, which has prompted the majority of discussion in legislative discussions between the two bills on their way to passage, would allow the DNR’s director, with Department of Commerce approval, to lease state-owned pore spaces underlying state forests, natural and scenic areas, and wildlife management areas under division control for carbon sequestration. The director would be prohibited from leasing state-owned pore spaces underlying land that is designated as state parks.
Proponents of SB 162 have sided with Bailey in saying the measure could support the state’s momentum in a hydrogen energy and economic development hub competition the state and partners are in.
The West Virginia-led Appalachian Regional Clean Hydrogen Hub, which calls itself ARCH2, is pursuing support for hydrogen hubs provided by the Infrastructure Investment and Jobs Act, signed into law by President Joe Biden in 2021. The Department of Energy opened a $7 billion funding opportunity in September to create hydrogen hubs nationwide.
The coalition of dozens of entities across Appalachia said earlier this month that the U.S. Department of Energy has encouraged it to submit a full application — a blessing it bestowed to fewer than half of the 79 entities that submitted concept papers.
West Virginia officials partnered with the nation’s largest natural gas producer, an Ohio science and technology development nonprofit, an Illinois energy research firm, and a Bridgeport energy technology consulting firm to create the regional hydrogen hub last year. The project has since gained support from the governors of Kentucky, Ohio and Maryland.
The state, EQT Corp., Battelle, GTI Energy and Allegheny Science & Technology teamed up to establish the hub, regional business and political leaders announced in September.
“[T]he energy industry has yet to deliver a truly sustainable energy solution that can meet this monumental moment in our efforts to address climate change, while eliminating energy poverty and providing energy security. But that is about to change,” EQT president and CEO Toby Z. Rice said in a September statement. “America’s oil and gas industry has awakened to the opportunity in front of them.”
Members of the Appalachian Regional Clean Hydrogen Hub have touted “blue hydrogen” as a reliable energy solution. Blue hydrogen is derived mainly from breaking methane into hydrogen and carbon dioxide.
Hydrogen, which is light and has the highest energy per mass of any fuel, is viewed as key in the energy transition away from fossil fuels that drive climate change.
But environmentalists have said blue hydrogen isn’t actually clean hydrogen.
Researchers from Cornell and Stanford universities found in a study published last year that greenhouse gas emissions from the production of blue hydrogen are “quite high,” especially due to leaked methane.
Methane has a 100-year global warming potential of 28 to 36 times that of carbon dioxide, according to the U.S. Environmental Protection Agency.
The study found the greenhouse gas footprint of blue hydrogen is more than 20% larger than burning natural gas or coal for heat and about 60% larger than burning diesel oil for heat.
Renewable energy advocates have favored “green hydrogen,” which is produced by a renewable-based electric current splitting water into hydrogen and oxygen.
Blue hydrogen is supported by carbon capture and storage technology that is as yet unproven at commercial scale.
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 store it permanently underground. Such technology retrofits commercial power plants to mitigate coal and gas asset emissions.
Many green energy advocates fear that committing to carbon capture technology deployment could lock the U.S. into climate and environment-damaging fossil fuel infrastructure.
Bailey said he couldn’t say whether pipelines would be required or how much money the state could make from leasing pore space.
“The market is still developing,” Bailey said.
Under SB 162, the DNR director also may directly award a pore space lease when secretaries of the Department of Commerce and the Department of Economic Development certify that the lease is a required component of an economic development project.
SB 162 follows last year’s House Bill 4491, a law that set up a state regulatory program for underground carbon dioxide storage, and established permit guidelines for drilling injection wells and sequestering the carbon. HB 4491 clarified that pore space rights belong to the surface owner.
SB 161 was amended on the House floor to limit DNR-controlled property that the division can sell, lease or dispose of to property that is deemed obsolete or no longer needed.
Bailey told the House Judiciary Committee Monday SB 161 would remedy a DNR inability to grant right-of-way access to adjoining property owners, convey property to a public service district to facilitate a project, and pursue economic development projects with potential partners interested in unused property that isn’t a state park or state forest.
