Questions persist about potential impacts about legislation advancing toward final passage through the West Virginia Legislature that would allow the state Division of Natural Resources to lease state-owned pore spaces under land designated as state parks.
The West Virginia House Energy and Public Works Committee is pictured during its Monday, March 17, 2025, meeting.
The House of Delegates Energy and Public Works Committee on Monday advanced Senate Bill 627 to the markup stage within that committee, meaning the panel’s approval is the only step remaining before full House consideration that could result in final passage of the bill to the governor’s desk.
The legislation 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 would prohibit the DNR from allowing the disturbance of the surface of state park property for any drilling or injection activity.
But Garner Marks, counsel for the Department of Commerce which oversees the DNR, told the Energy and Public Works Committee he couldn’t speak to whether drilling just outside of state park property may be noisy or impact park visitors.
Marks said although the DNR has leases in place, it’s in the early stages of the permitting process for a class of wells key to carbon capture projects.
Marks reported that Houston-headquartered energy transition company Fidelis New Energy LLC is in the process of “doing their first test well to prove out the capacity,†with any injection still “a number of years off.â€
Marks previously told the Senate Economic Development Committee Fidelis has pore space leases with the DNR on wildlife management area properties.
SB 627 would build on W.Va. wildlife management area leases
Marks’ testimony wasn’t the first to acknowledge unknowns about SB 627’s potential impacts.
West Virginia state geologist and West Virginia Geological and Economic Survey director Jessica Moore told the Senate Economic Development Committee this month there is potential for steel pipelines to be required underneath parks and 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.
Moore indicated to the Economic Development Committee that oil and gas containment mechanisms “are not perfect†and noted there is not much carbon capture development occurring because it is “an expensive process.â€
SB 627 builds on a 2023 law, SB 162, that allowed the DNR to lease state-owned pore spaces underlying state forests and wildlife management areas for sequestering carbon dioxide underground.
A 2023 lease agreement between the DNR and Houston-based MGS CS Landco Kanawha LLC has 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
A supporting carbon sequestration pipeline and wells
Gov. Patrick Morrisey announced last month 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 is 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.
Marks told the House Energy and Public Works Committee Monday the state has eight or nine leases on wildlife management area properties and that the leases comprise 800 million metric tons of carbon dioxide to benefit the DNR.
“That’s over a long period of years,†Marks said. “It’s not all at one time, obviously.â€
ARCH2 project development partners list decreasing
SB 627’s advancement comes with uncertainty for federally supported regional hydrogen hub expected to rely on carbon capture and storage technology.
The Trump administration’s opposition to clean energy programs championed by former President Joe Biden threatens the federal Department of Energy’s hydrogen hubs program that has selected the Appalachian Regional Clean Hydrogen Hub (ARCH2) for up to $925 million in program support.
The Department of Energy’s Office of Clean Energy Demonstrations canceled in-person “scoping†meetings in Kanawha County as well as Ohio and Pennsylvania scheduled for earlier this year that were to focus on an Environmental Impact Statement pledged for the project.
The cancellations have fueled concern over whether the Trump administration would quash further federal support for ARCH2, which secured $30 million from the Department of Energy last year.
ARCH2 also has had to contend with a shrinking number of project partners.
CNX had planned to produce hydrogen via gas autothermal reforming somewhere in southern West Virginia, according to a Department of Energy project fact sheet published in July 2024.
CNX previously ended coordination under ARCH2 with a planned ammonia production site in Mingo County. The company cited concern over a hydrogen production tax credit as driving its decision to end coordination with the planned ammonia site project, in addition to failing to reach final commercial terms with project developers.
CNX and ARCH2 did not respond to requests for comment.
ARCH2 aimed to add new projects after the Chemours Company and TC Energy stepped away from the enterprise, which the Department of Energy selected to receive up to $925 million in October 2023.
Chemours — one of the area’s most prominent chemical manufacturers — is out as a project partner due to “a number of factors,†Chemours regional spokesperson Chris Hickey said in an email. But the only factor Hickey cited was “lack of progress in addressing concerns with the proposed implementation of†a hydrogen production tax credit.
ARCH2 called ‘fundamentally uneconomic’
Sean O’Leary, senior researcher at the Ohio River Valley Institute, a nonprofit pro-renewable energy think tank, argued CNX’s disappearance from ARCH2’s list of developers is a reminder it and other hydrogen projects are “fundamentally uneconomic.â€
“At what point does the so-called Appalachian Regional Clean Hydrogen Hub cease to be a hub and become a rag-tag collection of one-off projects united only by their hope of getting government handouts?†O’Leary said.
The Ohio River Valley Institute and over two dozen community and environmental groups submitted formal comments to the Department of Energy this month calling for the agency to suspend its Environmental Impact Statement review of ARCH2 until more hub details are released to the public.
Groups opposing Department of Energy support for ARCH2 said the agency should take a “hard look†at effects of funding hydrogen production using carbon capture and sequestration.
The groups raised fears of catastrophic failure of carbon dioxide pipelines, citing the 2020 rupture of such a pipeline near Satartia, Mississippi which sent 45 people to the hospital and forced over 300 people to evacuate their homes.
The groups said in their comments the Department of Energy’s approval of ARCH2 “continues a long tradition of funding extractive industry in Appalachia.â€
“Historically, and still, this development has burdened communities with harms to their water, air, and health while denying them meaningful involvement in the planning processes designed to evaluate these harms,†the groups said. “DOE should take care to avoid replicating these harms in its funding of ARCH2.â€
