HARRISBURG, Pa. — Natural gas producer CNX Resources said it plans to build a $1.5 billion plant at the Pittsburgh airport to make hydrogen-based fuels, but only if President Joe Biden’s administration allows coal mine methane to qualify comes for tax breaks central to the Democrat’s plan to fight climate. change.
The proposed facility has the support of Pittsburgh-area unions, which hope to fill thousands of construction jobs, and top officials in Pennsylvania, including U.S. Sen. Bob Casey. But it will likely face criticism from clean energy and climate change activists.
The announcement comes as the Biden administration decides how to spend billions of dollars in tax credits in a massive effort to build a hydrogen industry as a cleaner alternative to fossil energy and to curb planet-warming greenhouse gas emissions. Reduce.
CNX said the facility would remove a potent greenhouse gas from the atmosphere — methane vented from coal mines — and blend it with natural gas to produce enough hydrogen-based jet fuel to replace nearly all of the jet fuel used at Pittsburgh International Airport.
“We want to produce our gas here and use it here to solve complex problems and this is one of those that solves a very difficult problem to solve: decarbonizing aviation is a challenge,” says Ravi Srivastava , president of new technologies at CNX.
CNX’s partners include the airport and KeyState Energy, which is building a plant in northern Pennsylvania to produce hydrogen from natural gas.
Darrin Kelly, chairman of the Allegheny/Fayette Central Labor Council, called it the “most important energy project” in years in a region where many boosters hoped a natural gas boom would reindustrialize an economy ravaged by the collapse of coal and steel.
Climate activists do not want coal mine methane and other fossil fuels to qualify for tax breaks.
They don’t like coal mine methane escaping into the atmosphere, but producing hydrogen from fossil fuels, rather than from carbon-free electricity, would undermine the entire hydrogen program’s goal of displacing fossil fuels, they say.
“I’m afraid that if we go down this path, 10 years from now we will look into the future and see that we have just poured hundreds of billions of taxpayer dollars into something that is not clean and is not moving us in the right direction. says Julie McNamara, senior energy analyst at the Union of Concerned Scientists.
The final rule is heavily lobbied, giving Biden a political hot potato in a top battleground state with less than six months until the November election.
The Treasury Department has not yet said when it will issue a final rule, and nothing may happen before the election.
A final rule could determine how eligible hydrogen projects must calculate their emissions and billions in public tax dollars on a sliding scale. Eligible projects with the lowest emissions scores would receive greater tax benefits.
As part of that, the department could determine whether a project could use coal mine methane as a feedstock. The federal government believes that methane capture has a negative emissions rating, which helps lower the emissions rating of a project that also uses natural gas as a feedstock.
CNX could get natural gas from beneath the airport, and it has the rights to capture methane from coal mines in northern Appalachia.
Methane from operating and closed coal mines is normally vented directly into the atmosphere. Catching it requires expensive equipment and there are no legal requirements or incentives to catch it.
The tax credit, however, makes methane capture economically viable as part of a project “that checks all the boxes when it comes to the economy, jobs and climate that the law set out to check,” said CNX CEO Nicholas DeIuliis.
The project is not financially viable without a tax credit to competitively price the jet fuel, CNX officials said.
The draft regulation for the tax credits – part of the Democrats’ Inflation Reduction Act passed in 2022 – was published in December. At the time, the Treasury Department said it expected a final rule would allow “hydrogen production pathways” using coal mine methane.
Administration officials estimate that the hydrogen production credits will help the U.S. produce 50 million tons of hydrogen by 2050.
Hydrogen is being developed around the world as an energy source and can be made by splitting water with solar, wind, nuclear or geothermal electricity, producing little or no greenhouse gases.
Most hydrogen today is made from natural gas. Currently, approximately 10 million tons of hydrogen are produced annually in the United States, primarily for petroleum refining and ammonia production.
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Follow Marc Levy at twitter.com/timelywriter.