The West Virginia Senate overwhelmingly has passed legislation that would allow the state Division of Natural Resources to lease state-owned pore spaces under land designated as state parks.
The Senate on Monday approved in a 29-3 vote that sent the legislation to the House of Delegates for its consideration.
Casting votes against the bill after no Senate floor debate were Banking and Insurance Committee Chair Michael Azinger, R-Wood, Health and Human Resources Committee Chair Laura Wakim Chapman, R-Ohio, and Government Organization Committee Chair Patricia Puertas Rucker, R-Jefferson.
SB 627 builds on a 2023 law, , that allowed the DNR to lease state-owned pore spaces underlying state forests and wildlife management areas for sequestering carbon dioxide underground.
SB 627’s lead sponsor, Economic Development Committee Chair Glenn Jeffries, R-Putnam, claimed in a Senate floor address Monday that fears were unfounded that senators had learned of through “getting emails†that the legislation would let developers drill, set up a well pad and install pipelines on state park lands.
An August 2023 DNR lease agreement following SB 162 with a Houston-based developer to allow transportation, injection, storage and withdrawal of carbon dioxide at Kanawha State Forest to support a Mason County carbon sequestration project granted the developer the right to conduct geological surveys, drill wells and install, operate and remove pipelines at DNR-approved sites.
The version of SB 627 adopted by the Senate would prohibit the DNR from allowing the disturbance of the surface of state park property for any drilling or injection activity. That prohibition wasn’t in the original version of SB 627, and environmentalists have welcomed its addition. The head of the Division of Natural Resources told the committee he viewed the version of SB 627 it approved as a step toward opening a new stream of revenue for the state.
But witnesses testifying before the committee on the bill acknowledged many unknowns about the outlook for potential carbon sequestration in the state, fueling persistent environmental concerns.
Drilling, pipelines OK per Kanawha State Forest lease accord
SB 627 is designed to accommodate carbon capture, use and sequestration technology. Unproven at commercial scale, such technology removes heat-trapping carbon dioxide from the atmosphere and uses it to create products or store it permanently underground to stave off impacts of warming in the atmosphere. Such technology retrofits commercial power plants to mitigate coal and gas asset emissions.
SB 627’s barring the DNR from allowing the disturbance of the surface of state park property for any drilling or injection activity is a protection not afforded to state forests and wildlife management areas through 2023’s SB 162.
A 2023 lease agreement between the DNR and Houston-based MGS CS Landco Kanawha LLC allowed MGS CS to transport, inject, store and withdraw carbon dioxide at Kanawha State Forest to support the Mountaineer GigaSystem project in Mason County.
The West Virginia Economic Development Authority in 2023 approved a forgivable $62.5 million loan for Mountaineer GigaSystem LLC, a subsidiary of Houston-based Fidelis New Energy LLC.
Per a memorandum of agreement between Mountaineer GigaSystem and state economic development officials, the project is to include:
A hydrogen production facility that yields 640 metric tons of hydrogen per day
A 75-megawatt biomass power plant
Carbon capture equipment, which is unproven at commercial scale
A supporting carbon sequestration pipeline and wells
Gov. Patrick Morrisey announced last week Fidelis and Akron, Ohio-based energy and environmental technology company Babcock & Wilcox have partnered in development of the latter’s BrightLoop facility at the Mountaineer GigaSystem site.
The 2023 Kanawha State Forest lease agreement between the DNR and MGS allows the latter to drill wells and install, operate and remove pipelines at DNR-approved sites.
The lease agreement was for an initial exploration term of eight years and could be renewed for additional one-year periods upon written agreement by the parties. But the lease was to stay in full effect throughout carbon dioxide injection and storage operations once underway.
Executed fewer than seven months after SB 162 was enacted, the agreement required MGS to pay a royalty of $3.35 per metric ton of carbon dioxide injected under the Kanawha State Forest, adjusted for inflation starting 10 years after injection activities begin. The accord required MGS to post surety bond or equivalent form of security securing payment of all sums due and performance of all obligations under the lease.
Per the lease agreement, MGS was granted the right to occupy for each storage well a rectangular well site area of up to 3 acres per well. MGS could enclose any part of a well site with a chain-link fence at least 6 feet high.
The accord allowed MGS to place pipelines aboveground on the leased premises with prior written approval, and without such approval, pipelines could be placed underground. The agreement required MGS to give the DNR written notification prior to any construction, with the DNR permitted to determine if the proposed construction would interfere with “the public’s enjoyment.â€
No laws, rules or regulations enacted after the lease was executed are allowed to alter its terms and conditions, per the agreement.
‘It is not happening a lot’
West Virginia state geologist and West Virginia Geological and Economic Survey director Jessica Moore noted to the Senate Economic Development Committee prior to it advancing SB 627 last week that carbon capture is “an expensive process.â€
“So it is not happening a lot at the current moment,†Moore said.
Moore noted the underground units the state is eyeing for carbon sequestration are much deeper than it has explored for gas and oil — at least 7,000 feet below the surface.
Advances in directional drilling could allow vertical drilling just outside a state park’s boundaries, Moore said.
Moore said there is potential for steel pipelines to be required underneath parks.
Moore referenced carbon leakage issues at an Archer-Daniel-Midland Co. carbon injection site in Decatur, Illinois, where the Chicago-headquartered agricultural supply chain manager and processor reported leaks last year that raised water safety concerns. The Archer-Daniel-Midland project was the first large-scale integrated carbon capture and storage demonstration project funded by the Recovery Act of 2009 to move into a construction phase.
“And that CO2 leak just got into a shallower zone. So we hope that these containers are secure,†Moore said, referring to underground cap rock.
Moore acknowledged such containment configurations “are not perfect.â€
“We don’t have a perfect understanding of them,†Moore said.
EPA granted DEP key enforcement authority over wells
The U.S. Environmental Protection Agency in January granted a West Virginia Department of Environmental Protection application for primary enforcement authority over wells essential for storing carbon emissions underground.
The EPA granted the DEP that authority, known as primacy, over wells used to inject carbon dioxide into deep rock formations, known as Class VI wells. Class VI is one of six classes of injection wells regulated under the EPA’s Underground Injection Control program that regulates the injection of fluids like water, wastewater, brines from gas and oil production and carbon dioxide into the subsurface for storage or disposal.
The approval is just the fourth the EPA has issued to a state for primacy over Class VI wells, after North Dakota, Wyoming and Louisiana.
West Virginia Surface Owners’ Rights Organization cofounder Dave McMahon indicated to the Economic Development Committee his group is concerned with that approval, contending the state has done a poor job of plugging other wells given the many thousands of unplugged wells statewide.
McMahon also noted the prevalence of undocumented wells throughout the state could complicate underground carbon sequestration efforts.
