Thank you, Secretary Goodman. [Energy and Environment Cabinet Secretary]

And thank you Ryan [Watts - Executive Director]for inviting me to speak today.

It has been a number of years since I have been to Kentucky, and it is good to see colleagues again, including Rebecca Goodman, John Lyons and Kenya Stump.

I'm honored to join you all and I appreciate the invitation to talk about what we're doing at the Department of Energy to advance clean hydrogen production and carbon capture and storage, which provide important opportunities for Kentucky and the broader Appalachian region to continue to diversify and revitalize the region's economy, sustain and create high-wage jobs and help safeguard America's energy security.

Today, I will outline some of the strategic opportunities now made possible by the robust federal funding and incentives provided by the Biden Administration and Congress, combined with leadership from the private sector, Governor Beshear and other state and local officials. These include the Appalachia Regional Clean Hydrogen Hub, or ARCH2, and other carbon capture, transport and geologic storage projects.

Kentucky and the broader Appalachian region have long been an epicenter of American energy production and helped power our nation's industrialization. Now, you are poised to be leaders in the deployment of both clean hydrogen production and carbon management.

And we cannot build a clean energy and industrial economy without the support and efforts of industry, state and local governments, communities, unions, environmental organizations and other stakeholders here in the region.

That's why my team at the Department of Energy's Office of Fossil Energy and Carbon Management is engaging intensively with industry, stakeholders and communities across the country-in red states, blue states and those in between-as we work to implement a once-in-a-generation package of federal funding, financing and tax credits included in the Bipartisan Infrastructure Law and Inflation Reduction Act and accelerate deployment of critical projects and infrastructure.

For example, my office worked with the private sector, governmental, NGO, academic and other members of the National Petroleum Council, who developed comprehensive analysis, strategies and recommendations outlining a path forward for building a clean hydrogen economy that draws on all technology pathways and energy resources and for reducing greenhouse gas emissions, both methane and carbon dioxide, across the entire natural gas supply chain.

And here in Kentucky, you are helping to lead the way with your support for clean hydrogen production and carbon capture, transport and geologic storage.

In that context, I want to recognize the Kentucky Oil and Gas Working Group, which represents an ongoing dialogue and collaboration between Kentucky Oil and Gas Association and other stakeholders, including the state's Energy and Environment Cabinet, public advocacy and environmental groups, landowners, farmers, regulators and others.

I am impressed by the success you have had over the years on advancing legislation here in Kentucky to address waste disposal issues, plugging of orphan wells, Class II oil and gas wells, and other issues. I understand that you're batting a thousand - that all legislation sponsored by the Working Group has passed the legislature. As someone who spent many years working on legislation in my own state of North Dakota and other Midwestern states, that is quite a feat.

I hope you can bring that same collaboration and success to advancing clean hydrogen here and exploring ways to increase the deployment of carbon capture, and particularly geologic storage of CO2.

What you are doing highlights the importance of stakeholder and community engagement - which is the centerpiece of President Biden's approach to federal support for clean energy and industrial projects across the spectrum. And at DOE we have transformed how we do our work to put local communities and stakeholders at the center of our efforts.

Frankly, as local community and stakeholder concerns mount over the development of projects and infrastructure-whether they involve carbon capture and storage projects on Gulf Coast, hydrogen projects here in Appalachia or high voltage transmission for renewable energy development across the country-this kind of collaboration and dialogue will be essential, if we are to successfully deploy the technology and build out the infrastructure needed to meet our nation's energy and climate goals.

So, thank you for what you're doing here in Kentucky.

Now, I was asked to provide an overview of our DOE priorities and activities on hydrogen and carbon management, so I will do that and then open it up to questions.

Let me begin with clean hydrogen production, which is integral to helping the nation achieve net-zero greenhouse gas emissions by 2050 and advancing a wide range of decarbonization solutions for energy and industrial production.

Our National Clean Hydrogen Strategyis focusing federal efforts on achieving a goal of 50 MMT of clean hydrogen production per year by 2050, and DOE is playing a central role in that effort. The Department's Hydrogen Shot provides the framework for accelerating clean hydrogen deployment through a variety of pathways, including electrolytic hydrogen production from renewable and nuclear power, fuel cell technologies, and fossil, biomass, and waste resources coupled to carbon capture, utilization and storage.

The ultimate goal of the Hydrogen Shot is to reduce the cost of clean hydrogen by 80% to $1 per 1 kilogram in one decade and grow new, clean hydrogen pathways in the United States. To help us get there, the Department is investing nearly $10 billion in clean hydrogen technologies and approaches, including regional clean hydrogen hubs, electrolyzer development, carbon capture deployment with hydrogen production, and use of clean hydrogen in a range of industrial and manufacturing processes.

We're also collaborating with other federal agencies to support domestic supply chains and accelerate both domestic and global clean hydrogen markets.

Our Office of Fossil Energy and Carbon Management has a particular role in supporting this larger Department-wide effort.

As most of you know, more than 95 percent of the roughly 10 million metric tons of hydrogen we produce domestically comes from natural gas. And natural gas provides the lowest-cost pathway to jumpstarting the development of a clean hydrogen economy, but only if we capture and store the CO2 emissions associated with the process and ultimately reduce methane emissions to near zero across the natural gas supply chain.

The Biden Administration has embarked on a comprehensive and ambitious agenda to detect, measure, monitor and reduce methane emissions in the oil and gas sector, which is a major focus of our office at DOE and one that is strongly supported by much of industry. However, for today, I will focus on the decarbonization side of the equation.

DOE's Hydrogen with Carbon Management Program has deep roots and a real track record, perhaps most notably with Air Products' highly successful first-of-a-kind commercial scale demonstration of carbon capture storage from two steam methane reformers producing hydrogen at Valero's refinery in Port Arthur, Texas. This DOE-funded pioneer project has successfully captured and permanently stored more than 90% of the CO2-a million tons annually for over a decade.

Our work in this arena received a major boost with the Bipartisan Infrastructure Law, which provided historic levels of funding for the Department of Energy, including $12 billion for carbon management, as well as $8 billion for the development of regional clean hydrogen hubs.

Since January 2021 our Office of Fossil Energy and Carbon Management has committed about $138 million in projects that explore new, clean methods to produce hydrogen and to improve the performance of hydrogen-fueled turbines. With clean hydrogen production from natural gas already commercially demonstrated, our current research, development and early demonstration projects focus on innovative approaches to producing clean hydrogen with carbon capture at lower costs from additional feedstocks, including municipal solid waste, legacy coal waste, waste plastics, and biomass.

We are also developing gas turbine combustion systems to accommodate hydrogen and hydrogen-natural gas fuel blends while minimizing nitrogen oxide emissions and maintaining efficiency.

The biggest game-changer came last October, when DOE announced $7 billion to launch seven regional hubs to accelerate commercial scale deployment of clean hydrogen production across the nation, plus additional funding to support a consortium to purchase hydrogen and provide early market demand for these hubs as they develop. All but two of these regional hubs featureproduction of hydrogen with carbon capture and storage, either from natural gas or biomass.

The consistent focus on a regional hub approach is one of the most important and exciting aspects of the Bipartisan Infrastructure Law and our approach at DOE. Prioritizing hub development in the deployment of technology and infrastructure enables individual facilities and entire industries to share common infrastructure such as CO2 pipelines and geologic storage sites to reduce costs and commercial risk, as well as to build markets for decarbonized energy and products.

We expect these hubs will kickstart a national network of clean hydrogen producers, consumers, and connective infrastructure, ultimately producing three million metric tons of hydrogen annually, which is 30 percent of our total annual goal in 2030 for clean hydrogen production.

But in addition to the energy and environmental benefits, these regional hydrogen hubs represent one of the largest federal investments in clean manufacturing and jobs in history.

At the end of the day, a key strategy for this hub effort is to provide a near to medium-term bridge of support until we establish a critical mass of clean hydrogen supply, transport and storage infrastructure, and market demand from sectors such as refining, power generation, heavy freight, and steel, cement, and other heavy industries.

In the meantime, the Appalachian Regional Hub - or ARCH2 - is a perfect example of how we can match regional capabilities and resources with innovative technology to ramp up large scale clean hydrogen production.

The Appalachian region provides significant existing resources for ARCH2, including extensive natural gas resources, gas processing, pipeline and other infrastructure, and a highly skilled energy workforce.

With your existing infrastructure, manufacturing base, transportation and pipeline network, underground storage capacity, and energy workforce, Kentucky is a natural fit to support clean hydrogen production and distribution - and to reap the benefits of a regional hydrogen hub, which is expected to create more than 21,000 direct jobs.

As I noted earlier, community engagement will be fundamental project success. Just as we do with other larger-scale projects, we required all hydrogen hub applicants to submit Community Benefits Plans and Workforce plans to ensure that projects deliver tangible economic and environmental benefits to communities and workers.

Going forward, the Appalachian Hydrogen Hub will create a Community Benefits Advisory Board to oversee implementation of their Community Benefits Plan, as well as a fund to help implement the plan.

Requiring Community Benefits Plans are part of our larger effort to put community engagement at the heart of our hydrogen hub development so that everyone comes to the table for honest and open discussion and that community feedback and concerns help shape the design and implementation of projects.

Just last month the Department's Office of Clean Energy Demonstrations organized a listening session on ARCH2 in West Virginia. The feedback and the concerns of communities there will help inform project development.

Now, I will shift from hydrogen to carbon management specifically.

To achieve net-zero greenhouse gas emissions goals, we will need to be capturing billions of tons of CO₂ every year by midcentury from industrial facilities, power plants and directly from ambient air. We know from analyses by the Intergovernmental Panel on Climate Change and the International Energy Agency that we simply cannot meet global emissions targets without deployment of carbon capture, use and storage across industry and energy sectors and removal of legacy emissions already in the atmosphere.

That is also the case here in the United States, where President Biden has set goals of a 50 percent reduction in greenhouse gas emissions by 2030, zero emissions in the power sector by 2035, and net-zero emissions economy-wide by 2050 DOE estimatesthat reaching the President's ambitious plan for a net-zero emissions economy in the U.S. will require capturing and storing between 400 million and 1.8 billion metric tons of CO2 from emissions sources annually by 2050.

Over the past three decades, and under both Democratic and Republican administrations, the Department of Energy - and, in particular, the Office of Fossil Energy and Carbon Management - has invested in research and development that has demonstrated carbon capture to be a scalable, and commercially viable decarbonization option for multiple industries.

From pilot projects for novel, cutting edge carbon capture technologies to engineering or FEED studies for commercial carbon capture retrofits to large-scale, real-world demonstrations of carbon capture technologies and geologic CO2 storage, this work has helped industry prove out the technical and commercial feasibility of carbon capture, transport and geologic storage.

In the process, DOE's technology and infrastructure investments over a quarter century and across multiple president administrations have helped place the United States squarely in the forefront of global leadership on carbon management. And now we are building on that legacy by implementing the historically unprecedented framework of federal funding, financing and tax credits in the Bipartisan Infrastructure Law and Inflation Reduction Act.

First, some important examples of infrastructure bill investments:

• $2.5 billion is being targeted to support at least six commercial-scale carbon capture demonstration projects, two for coal power plants, two for natural gas and two for industrial facilities.
• This includes nearly $190 millionfor eight carbon capture FEED studies that will lay the groundwork for future full-scale demos to accelerate the implementation of integrated carbon capture technologies
• DOE announced an additional $890 millionunder this program in December 2023 for three demonstration projects, one for a coal-fired power plant in North Dakota and two for natural gas generation in California and Texas.
• In February, the Department announced up to $304 million for four large-scale carbon capture pilot projects for power plants and industrial sites, including a project at Cane Run Generating Station in Louisville.
• We have announced more than $1 billion out of $3.5 billion to develop regional direct air capture hubs, two of which have been selected-one in Louisiana and the other in Texas. Each direct air capture hub is expected to capture and store one million tons of CO2 from ambient air annually.
• Another $2.25 billion is being invested with industry in the development of 20-40 dedicated regional geologic storage sites around the country, each of which must store at least 50 million tons of CO2 over 30 years; and
• $2.1 billion is also being used to stand up the Carbon Dioxide Transportation Infrastructure Finance and Innovation Authority, also known as CIFIA, which will help jumpstart the financing of CO2 transport infrastructure and knit together all the capture, storage, hydrogen and direct air capture projects into regional carbon hubs.

Here in Kentucky, we have around 20 carbon management projects, which include:

• A carbon capture test at Nucor Steel's Gallatin Plant in Ghent;
• A University of Kentucky feasibility study of a direct air capture hub powered by solar and biomass; and
• Battelle's Phase II CarbonSafe commercial CO2 storage project in Paradise.

If the Bipartisan Infrastructure Bill investments are helping industry to buy down the cost and commercial risk of technology demonstration and infrastructure, the comprehensive package of tax credits in the Inflation Reduction Act are helping marshal hundreds of billions of dollars of private investment in clean energy and industrial projects.

In particular, the IRA significantly enhanced the federal 45Q tax credit to make it the most powerful incentive in the world for carbon capture, carbon conversion and direct air capture projects. In fact, the revamped 45Q incentive is allowing many projects to move forward in the commercial market without any additional DOE or other federal funding.

We are seeing a powerful response in the marketplace with over 200 new commercial-scale carbon management projects have been publicly announced, with about 25 in the power sector and the remainder spanning a wide range of industries. For comparison, the U.S. has 15 currently operating commercial carbon capture projects.

Yet, challenges remain. In addition to growing opposition to local projects and infrastructure from across the political spectrum and in every region of the country that I already mentioned, a major related constraint to the deployment of carbon management biggest challenges centers on the permitting processes involved in every major step of a project - particularly when it comes to geologic storage of the carbon dioxide and interstate siting and permitting of CO2 pipelines.

The Environmental Protection Agency's Class VI permitting of underground injection and storage of CO2 is a necessary and rigorous process - but one that presents a timing challenge given the ten-year window that the 45Q credit is available. All eligible projects must begin construction by the end of 2032-that means projects must be engineered, permitted and financed by then, if they are to move forward.

Currently, rapidly rising industry demand for geologic storage permits has led nearly 140 Class VI applications pending at EPA. This backlog risks undermining the full potential of current federal funding and incentives by constraining industry's ability to deploy carbon capture, transport and storage projects, as well as a potential barrier to DOE meeting its own own deployment obligations under the Bipartisan Infrastructure Law.

Due to this increase in applications, EPA has developed tools and training opportunities for regulators across EPA and states, and Congress has provided additional funding to expand capacity at EPA headquarters and in the regions.

In response to permitting timeframes and challenges, many states are expressing growing interest in Class VI primacy, where EPA delegates to states the authority to permit projects, so long as those states meet or exceed federal standards.

Three states-North Dakota, Wyoming and Louisiana-currently have primacy enforcement authority to process applications and oversee Class VI wells in EPA's Underground Injection Control program. Several other states are in the pre-application phase for primacy, others are considering applying for primacy, and several other states, including Kentucky, have expressed interest.

In response to state interest, Congress has appropriated funds to help states develop the capacity to do geologic storage permitting at the state level. At DOE we are also actively supporting state primacy as a critical tool for meeting our own statutory responsibilities in the infrastructure bill but, more importantly, in supporting a wider scale-up of carbon management projects commensurate with meeting our nation's climate goals.

That's why we have an interagency agreement with the EPA to provide technical assistance on Class VI well permits for dedicated geologic storage of CO₂ and to provide capacity building to EPA and state regulators. And the staff from DOE six federal labs are actively supporting EPA's permitting process, and the number of labs involved will soon increase to eight.

While much remains to be done, all of these efforts are encouraging and aimed at speeding up approvals for CO2 injection permits.

Finally, there is another related and important challenge -- the process for approving CO2 pipelines, where there are local, state and federal regulations at play, as well as a range of regulatory and permitting processes, standards and responsibilities that vary across different states and projects - not to mention the various land, cultural, environmental, and siting considerations in different areas of the country.

Congress recognized this challenge and passed the USE IT Act to advance collaboration between federal, state, and a diverse group of stakeholders to encourage the development and construction of carbon capture and storage facilities and CO2 pipelines. And it called for the establishment of task forces to provide recommendations to the federal government on:

• identifying permitting and other challenges that permitting authorities and project developers and operators face and
• improving the performance of the permitting process and regional coordination

With that direction from Congress, our DOE Office of Fossil Energy and Carbon Management and the White House Council on Environmental Quality are working together to staff two carbon capture, utilization, and sequestration Permitting Task Forces-one for federal lands and one for non-federal lands-that bring together industry, community and environmental advocates, technical experts, state and tribal officials, federal officials, and others to help us make the permitting process efficient, orderly, and responsible. And we just had our first meeting of these task forces last month.

So, we're excited about the opportunities to advance clean hydrogen and carbon management technologies and infrastructure that will be central to a clean energy and industrial economy. And we're focused on doing what we can to accelerate and expand the deployment of both and to overcome the barriers to that deployment.

But we can't do that successfully without the support of partners like you here in this room. And we welcome the opportunity to collaborate with you in this effort.

So, thank you again for having me today. I'm happy to take your questions.

Public link

Please use the above public link if you want to share this noodl on another website.