WV Legislature OKs allowing DNR to lease state park land spaces for CO2 storage

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 to reduce carbon dioxide emissions driving the world’s warming climate behind increasingly destructive weather patterns.

The House Energy and Public Works Committee amended SB 627 this month to prohibit the center of any well pad leased per the bill for pore space underlying state parks from being located within 200 feet of a state park boundary. But the Department of Commerce secretary, in consultation with the DNR director, could waive that requirement after considering the impact of the proposed well site in terms of noise, viewshed and other possible barriers to public use and enjoyment of state park property.

The House approved an amendment from Delegate Adam Vance, R-Wyoming, that required the proceeds from any lease to be used for improvements and maintenance in the state parks, state forests, natural and scenic areas, wildlife management areas and other lands under DNR control where the leased pore space is located.

Kanawha State Forest agreement has allowed well-drilling

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 yielding 640 metric tons of hydrogen per day
• A 75-megawatt biomass power plant
• Carbon capture equipment
• A supporting carbon sequestration pipeline and wells

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 requires 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.

Morrisey in February announced 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.

‘Coal, oil, gas bill’ stalled

Unlike SB 627, another bill designed to protect coal, oil and gas minerals from storage of carbon dioxide underground didn’t make it to final passage in the Legislature.

SB 899 would have required that a carbon storage operator design a carbon sequestration project to isolate any existing or future production from a commercially valuable mineral, including a coal, oil or gas estate, from an underground carbon plume.

John Bane, government affairs director at Pittsburgh-based EQT Corp., one of the nation’s largest gas producers, told the Senate Energy, Industry and Mining Committee SB 899 was a “coal, oil, gas bill� that would guard against possible carbon capture issues “so we can focus on our base business, which is extracting natural resources.�

The Senate passed SB 899 unanimously on March 26, but it then stalled in the House Energy and Public Works Committee.