November 02, 2023

Manchin Questions Administration’s Proposed Power Plant Rule, Slow-Walking of Carbon Capture Well Permits

Washington, DC – Today, the U.S. Senate Energy and Natural Resources Committee held a hearing to examine opportunities and challenges in deploying carbon capture utilization and sequestration (CCUS) and direct air capture (DAC) technologies on federal and non-federal lands. During the hearing, Chairman Joe Manchin (D-WV), highlighted federal government investment in commercializing CCUS and DAC, the Administration’s slow-walking of Class VI well permitting, and challenges to scaling up CCUS and DAC technologies.

“Between the improvements we made to the 45Q tax credit in the Inflation Reduction Act (IRA)and the funding we included for deployment and demonstration in the Bipartisan Infrastructure Law, CCUS and DAC are on the rise. In the IRA, we increased the value of the 45Q tax credit from $50 per ton to $85 for carbon captured and sequestered; from $35 to $60 per ton for carbon captured and utilized; and more than doubled the credit for direct air capture because that technology is currently more expensive,” said Chairman Manchin. 

Chairman Manchin continued, “Furthermore, our Committee’s portion of the Bipartisan Infrastructure Law included more than $10 billion in DOE [Department of Energy] programs to commercialize large CCUS and DAC projects. We’ve spent decades researching and proving CCUS technologies work. The programs in the IRA and Infrastructure Law were intended to accelerate the full-scale deployment of them. And this legislation is attracting unprecedented private sector investment. CCUS and DAC developers have submitted more than 120 applications to EPA [Environmental Protection Agency] for Class VI well permits to sequester carbon since the IRA passed, and there are 169 total pending applications, and not one approval has been made by the Biden Administration.”

Chairman Manchin highlighted the EPA’s inconsistent position on CCUS — drafting a power plant proposal to require deployment of carbon capture on gas and coal-fired power plants, but not issuing any permits for Class VI wells.  

“The current administration claims to be supportive of carbon capture, just as Congress has been. They issued a report in June of 2021 which stated: “The Administration is committed to accelerating the responsible development and deployment of CCUS to make it a widely available, increasingly cost-effective, and rapidly scalable climate solution.” The same report also argues that: “If the United States is to achieve its climate goals, research suggests that CCUS deployment should increase tenfold over the next decade.” But it is hard for me to square this Administration’s own report with its actions. Nearly two and a half years after that report came out – not a single Class VI well has been approved,” said Chairman Manchin. “At the same time, this Administration is more than happy to mandate widespread deployment of carbon capture on gas and coal fired power plants. Let me be clear: issuing a mandate to use carbon capture on power plants while withholding Class VI well approvals is nothing more than a mandate to shut down all of our dispatchable coal and gas power plants. And the Supreme Court has been clear that Congress has not given EPA the authority to mandate a transition of our generation fleet.”

Chairman Manchin also discussed the infrastructure challenges and feasibility of deploying CCUS and DAC technologies under current Class VI and National Environmental Policy Act (NEPA) permitting processes.

“Earlier this week, the EFI Foundation, which is led by former Secretary of Energy Moniz, released a report highlighting the potential infrastructure needed to meet the EPA’s proposed power plant regulations. In fact, it was released on Halloween, which is fitting – because it presents a scary picture. As they explain, “permitting CCS is a highly uncertain process that can take years in ideal conditions” because “the CCS value chain covers multiple sectors” and there is “little federal coordination.” As one example, the report predicts that we may need to increase the total miles of CO2 pipelines from 5,000 to over 50,000 – a 1,000% increase in just over a decade. The report specifically notes that the current Class VI well and NEPA permitting processes call into serious question the feasibility of EPA’s power plant proposal. I have already expressed my grave concern with the EPA’s power plant proposal, highlighting its threat to electric reliability and energy security. And EFI’s analysis just adds to my concerns. If we are going to recognize the economic, energy security, and environmental benefits from CCUS and DAC, it will require much more coordination from the federal government,” said Chairman Manchin. 

Chairman Manchin questioned Mr. Bruno Pigott, Principal Deputy Assistant Administrator, Office of Water, U.S. Environmental Protection Agency, about a proposed new rule under the Clean Air Act to restrict carbon emissions from both new and existing coal and natural gas plants, largely using carbon capture.

“A typical Class VI well can sequester around 1 megaton per year, depending on the geology.According to EPA’s own greenhouse gas inventory, the U.S. power sector emits around 1,500 megatons of CO2 each year. Even if we want to capture one third of that, that would be 500 Class VI wells. As you know, the EPA has the permitting responsibility, do you think they’ll be able to permit enough wells to meet the demand created by these rules?” asked Chairman Manchin.

“The Class VI well application process is a lynchpin to the success of these things and we’ve been, thank you to you all through the Bipartisan Infrastructure Law and the Inflation Reduction Act, granted the funding to increase our staffing to ensure that we meet that demand. But also, I recognize the importance of states in ensuring that we allow them to have primacy that’s been granted for all of our permitting programs because states can operate efficiently and effectively to issue permits,” said Mr. Pigott. 

Mr. Pigott continued, “We’ve increased our staffing from seven people to thirty-four and because of the Federal Permitting Improvements Steering Council, we got more funds to direct for increased staffing at the same time we award primacy.” 

Chairman Manchin questioned witnesses on the importance of timely permitting of Class VI wells. 

“How important are the timely Class VI well permits for your organization?” asked Chairman Manchin.

“Extremely important. I appreciate why a lot of the focus historically on things like direct air capture has been in bringing down the cost of the technology, which we need to continue to do. I think we also have a really strong track record of the Department of Energy being really good at bringing down the cost of new technologies. I’m pretty bullish on the opportunities to bring down the cost of things like direct air capture. What worries me more is the infrastructure. We’re going to need to store billions of tons of carbon dioxide and we need a robust and well-functioning Class VI permitting process,” said Ms. Erin Burns, Executive Director, Carbon180 

Chairman Manchin asked Ms. Lily R. Barkau, P.G., Groundwater Section Manager, Water Quality Division, Wyoming Department of Environmental Quality, about state primacy over Class VI wells and the permitting process for Class VI wells. 

“A proven way to bring more resources to speed up Class VI wells is allowing primacy. Primacy means that the states would have the responsibility. In Wyoming, you’re one of the two states that successfully applied for Class VI primacy. We’ve been trying since 2022 in West Virginia. How long was your process in getting your permit and how has it affected [development of Class VI wells] since you got primacy in your state?” asked Chairman Manchin. 

“It took approximately thirty-three months to get through the entire primacy application process, from submitting that application in January of 2018 through receipt of that in September 2020. Since receiving primacy we’ve held numerous informational meetings to work with operators on getting those permits issued, setting up a program to outline the exact needs so that we can streamline the permitting process,” replied Ms. Barkau, P.G.

The hearing featured witnesses from the U.S. Department of Energy, U.S. Environmental Protection Agency, Carbon180, and the Wyoming Department of Environmental Quality.

To watch the hearing in full, please click here.

To watch a video of Senator Manchin’s opening remarks, please click here.

To watch a video of Senator Manchin’s questioning, please click here.