DEP receives permit application for Mason County hydrogen plant tied to state support

MGS H2 1 shares its Houston address with Fidelis New Energy LLC. In 2023, the West Virginia Economic Development Authority approved a forgivable $62.5 million loan with a three-year term for Fidelis subsidiary Mountaineer GigaSystem LLC, which was formed to develop a hydrogen production facility in the Point Pleasant area.

The loan from the then-Department of Economic Development, now the Division of Economic Development within the Department of Commerce, is to be forgiven if Mountaineer GigaSystem meets preconstruction, employment and investment benchmarks. Those benchmarks include, within six years, employing at least 125 full-time equivalent employees that earn an average of $110,000 annually in salary and wages and Mountaineer and its affiliates investing $2 billion in project development, per the memorandum of agreement.

In 2023, then-Gov. Jim Justice‘s office said Fidelis planned for data centers to be powered by net-zero carbon hydrogen as part of its Mason County hydrogen production plan, with data center capacity potentially reaching 1,000 megawatts when fully built out.

The Justice administration announcement spurred environmental and economic concerns due to its planned buildout of infrastructure to support an unproven energy system that could commit pore spaces underlying state properties, including state forests, for storing carbon dioxide.

Justice’s office said Mountaineer would implement proprietary technology that enables hydrogen production with zero lifecycle carbon emissions from a combination of natural gas, carbon capture, use and sequestration, and renewable energy.

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. It’s unproven at commercial scale, fueling environmentalist concerns the state is making an unwise, fossil fuel-supported investment in Fidelis in the guise of clean energy.

Mountaineer GigaSystem subsidiaries acquired the rights to buy four contiguous properties totaling over 1,000 acres in the area for the project.

The MGS H2 1 air quality permit application lists 1451 Airport Road, Point Pleasant as the proposed facility address for the MGS H2 Plant, noting that the site is under option for purchase. An air quality permit notice attached to the application document lists Nov. 15, 2028 as the planned operation startup date.

In February, Gov. Patrick Morrisey announced Fidelis and Akron, Ohio-based energy and environmental technology company Babcock & Wilcox had partnered in development of the latter’s planned BrightLoop facility at the Mountaineer GigaSystem site.

The BrightLoop facility will provide power to a planned 2,300-acre Monarch AI Data Center System, which is to consist of the Monarch Compute Campus in North Point Pleasant and an expansion campus, according to the Governor’s Office.

Also in February, another Fidelis affiliate, MGS CNP 1 LLC, filed a pending air quality permit application with the DEP to construct a biomass-fired boiler to generate electricity not for sale near the proposed hydrogen production facility, with a planned facility address listed as 5801 Ohio River Road, Point Pleasant WV 25550.

Biomass is organic material that comes from plants and animals that can be burned for heat or converted to liquid and gaseous fuels.

The biomass-fired boiler with a carbon capture unit would be roughly 1,300 feet from a cluster of residential homes, according to a DEP engineering evaluation in which DEP Division of Air Quality Engineer Edward Andrews recommended the division go to public notice with a preliminary determination to issue the requested permit.

MGS H2 1 LLC vice president Jack Calhoun did not respond to a request for comment. Neither did permit consultant Michael Dearing of Environmental Resources Management Inc. Calhoun is also listed as vice president of Fidelis New Energy.

Processes would include CO2 removal, steam production

The hydrogen production plant proposed by MGS H2 1 would draw from autothermal reforming, which combines oxidation and steam conversion to produce syngas, a mixture of hydrogen and carbon monoxide gases that is used as an energy industry feedstock, from hydrocarbons. Other processes would include:

• Carbon dioxide removal
• Steam production by waste heat recovery
• Electric and diesel-driven firewater pumps
• Cooling towers
• Storage tanks

Major emission sources at the site would include:

• One fired heater equipped with burners to make steam and electricity and technology to control emissions of nitrogen oxides, air pollutants that can damage the human respiratory system and contribute to acid rain
• Two combined-cycle gas turbines equipped with technology to control nitrogen oxide emissions
• Equipment leaks
• One auxiliary boiler
• One startup generator

Facility-wide emissions in tons per year would include:

• 56.69: Carbon monoxide
• 48.66: Nitrogen oxides
• 30.33: Volatile organic compounds, which can contribute to ground-level ozone and may cause cancer
• 25.89: Fine particulate matter, which can lodge deep into the lungs and bloodstream

The hydrogen production process would be based on autothermal reforming of natural gas with carbon capture, according to the permit application.

The natural gas feedstock would contain what the permit application calls minor quantities of sulfur compounds which must be removed to avoid poisoning of a reforming catalyst.

The aim of a carbon monoxide shift in production would be to maximize production of hydrogen through a catalytic reaction with steam. Carbon dioxide would be a byproduct of that reaction.

A chemical process would be used to remove carbon dioxide from gas streams, the permit application indicates. Extracted carbon dioxide would be cooled to the required temperature and then delivered and compressed by a carbon dioxide compressor.

MGS H2 1 asserts its production process could almost completely remove carbon dioxide with low heat consumption, leaving around 2% of carbon dioxide in treated gas.

Project tagged 'minor source,' could emit tons of pollutants

Two gas turbines, two heat recovery steam generators and one steam turbine generator would be installed to meet facility demand requirements. The turbines wouldn’t be connected to the utility grid. They would be designed to produce 100,575 horsepower to start the facility and meet power requirements for the proposed facility.

Ammonia would be used in the nitrogen oxide emission control technology system proposed for the two combined-cycle gas turbines and the fired heater.

MGS H2 1 said in its permit application the project wouldn’t be subject to the federal Prevention of Significant Deterioration program for “major sources� of pollution since it wouldn’t exceed pollution categories with a 100-ton-per-year major-source threshold.

Minor sources are subject to less stringent regulations than major sources.

The application projects there would be equipment leaks of volatile organic compounds, carbon monoxide and ammonia, with maximum potential annual emissions of 20.52, 7.58 and 2.65 tons in those respective categories.

MGS H2 1 said the final design had not been completed and that operating ranges and maintenance procedures would be determined during the final design.

Biomass-fired site could handle fly ash, wood chips

According to a company agreement memorandum with state officials, within two years of receiving a first loan tranche of $25 million, Mountaineer GigaSystem will have to:

• Obtain a permit
• Drill a test well
• Apply for a sequestration well permit
• Apply for all required major-source air permits

The turn off to the MGS CNP 1-proposed, biomass-fired steam-to-electricity power plant would be roughly 3 miles north of Point Pleasant High School, according to a DEP engineering evaluation.

MGS CNP 1 has proposed controlling emissions from the biomass boiler with methods including nitrogen oxide control technology and an amine absorber for carbon dioxide capture. Amines are organic derivatives of ammonia that often have a fishy odor.

Pollutants would be below the major-source threshold for Prevention of Significant Deterioration programs, according to the DEP’s engineering evaluation.

Facility-wide emissions in tons per year would include:

• 90.9: Nitrogen oxides
• 75.65: Fine particulate matter
• 55.78: Volatile organic compounds
• 46.48: Carbon monoxide

MGS CNP 1 intends to begin construction of the facility in 2026 with startup operations in 2029, according to the engineering evaluation. Major processes would include:

• Power generation
• Receiving, storing and handling raw materials such as wood chips and sand
• A post-combustion carbon capture unit
• Storage and handling of fly ash, a coal combustion byproduct, and bottom ash, coarser residue that can be collected from the bottom of furnaces that burn coal to produce steam

Fly ash and bottom ash may contain toxic elements that harm humans and aquatic life.

Raw material used as fuel would be clean wood chips delivered to the site by trucks, according to the DEP’s engineering evaluation. Wood chips would be stored outdoor in piles until burned as fuel. Other materials trucked to the facility would include sand, ammonia and amine solutions. Substances trucked out of the facility would include fly ash, bottom ash and degraded amine.

The facility’s post-combustion carbon capture unit would be designed to remove more than 95% of carbon dioxide in combustion flue gas from a biomass boiler. The DEP said in the engineering evaluation the applicant wouldn’t be required to control carbon dioxide emissions because it would be a minor-source facility not triggering the federal emission standard to control carbon dioxide emissions.

A wastewater treatment plant onsite would receive water from a cooler and scrubber system. The DEP cited a conservative estimate that 10% of ammonia, sulfuric acid and hydrochloric acid in the flue gas could be emitted from the wastewater treatment plant.

Data center-related permit applications have advanced

The DEP hasn’t yet announced public comment periods for the MGS applications.

The DEP has advanced air quality applications for data center-linked projects amid state leaders’ push to attract more data center development.

On Friday, the DEP announced it approved an air quality application for an expected data center facility in Tucker County vehemently opposed by many community residents and leaders there over environmental health concerns.

On Monday, the DEP held a public comment meeting on two nearly identical air quality permit proposals for planned data center facilities in Mingo County, drawing ire from environmental and community advocates over its preliminary determination to approve the permit requests.

House Bill 2014, which Morrisey hailed as the economic development centerpiece of the Legislature’s 2025 regular legislative session, is designed to ease in-state data center development in part by prohibiting counties and municipalities from enforcing or adopting regulations that limit creation, development or operation of any certified microgrid district or high-impact data center project.