Paul Rodden • Season: 2024 • Episode: 321
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Welcome to The Hydrogen Podcast!
In episode 321, As we continue to discuss CNX and coalbed methane, let’s see if we can find some middle ground on these topics of methane reduction, CO2 reduction and federal funding using the GREET model. I’ll go over all of this as we dive into part two of Audrey Carleton’s article covering CNX wanting in on the hydrogen revolution on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
As we continue to discuss CNX and coalbed methane, let’s see if we can find some middle ground on these topics of methane reduction, CO2 reduction and federal funding using the GREET model. I’ll go over all of this as we dive into part two of Audrey Carleton’s article covering CNX wanting in on the hydrogen revolution on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally, and where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In a quote from Danny Cullenward, climate economist and senior fellow with the Kleinman Center for Energy Policy at the University of Pennsylvania,It’s substantially more expensive to produce hydrogen from truly clean, green, 100% clean electricity. If we give [the highest tax credit] to conventional gas producers, there’s a risk that they will outcompete the green producers. While the original version of the GREET model that guides tax credits allows for negative carbon accounting, the Treasury Department is creating its own version for 45V, and has yet to determine how it will treat captured methane that would otherwise be spewed into the atmosphere. Methane is a climate menace — around 80 times more potent in the atmosphere than carbon dioxide over a 20-year timeframe — and one way to limit its impact on the atmosphere is to burn it, emitting carbon dioxide in its place. Still a greenhouse gas, carbon dioxide is considered the lesser of two evils for its lower potency in the atmosphere in the short term.
In a 26-page public comment filed to the Treasury Department, Brent Bobsein, CNX’s vice president of sustainable development, laid out the stakes: “Methane emissions reduction plays a key role in our national strategy to meet climate goals.” CNX argues that selling and burning methane is a climate solution — coal mines are responsible for 8% of total planet-warming methane emissions in the U.S. Capturing it would turn it into a fuel that CNX deems to be “low carbon.” In the past, the company has called itself “carbon-negative” for this activity, a claim oil and gas analysts dispute. Nonetheless, “absent a government subsidy,” Bobsein wrote, coal mine methane projects are “often uneconomical.” McNamara shares that view, but fears subsidizing projects that aren’t economical on their own will, “at best, lead to stranded assets.” Capital & Main sent Aiello, the CNX lobbyist, a list of questions about the tax credit and the firm’s goals.
The following day, the company published a blog post disputing the reporter’s credibility and dismissed Capital & Main as an organization “known for its deeply biased coverage of the U.S. oil and natural gas industry.” Aiello also responded privately with a statement: “By capturing and utilizing waste mine methane for clean hydrogen production, we can mitigate a significant climate threat that currently lacks incentives,” he wrote. “Our goals are simple: help clean up the environment by reducing methane emissions while creating jobs and opportunity in some of the most disadvantaged regions of the nation in the process.” Aiello urged as much in an email to Shapiro’s office on Oct. 18, but with a more specific vision. “Let GREET be GREET,” Aiello wrote in a bulleted talking point to a staffer. “No new restrictions … no adjustments to negative carbon accounting per the current model.”
The Shapiro administration made the same case to the Treasury Department in a Feb. 26 memo. “As currently drafted, the 45VH2-GREET model would exclude key low carbon intensity sources for H2 production,” the governor wrote, and “disincentivize the productive use of emissions abatement technologies such as coal mine methane.” Sean O’Leary, senior researcher at the nonprofit environmental think tank the Ohio River Valley Institute, expressed alarm. “The governor’s letter is distressing in that its recommendations read like a warmed over repetition of industry lobbying goals,” he told Capital & Main. “The measures would perpetuate reliance on coal and gas-fired power plants and erect economic barriers to the development of genuinely clean hydrogen.”
Capital & Main sent Gov. Shapiro’s office a list of questions, and received a statement from spokesperson Manuel Bonder in response: “We know the successful development of clean hydrogen is key to Pennsylvania’s energy future,” he said. “Allowing 45V to be implemented in a way that offers sufficient flexibility to grow and not stifle the emergence of a hydrogen economy is critically important.” O’Leary’s own ballpark calculations project CNX’s proposal would earn the company billions in federal subsidies, without making meaningful emissions reductions, while risking reinvigorating the coal industry — all from a tax credit designed to help decarbonize the economy. “This is a lifeline for coal mines,” O’Leary said. “The only way to get rid of coal mine methane is to close coal mines.” The Ohio River Valley Institute is not alone in questioning Shapiro’s support for fossil fuel-based hydrogen. At the beginning of his term in 2023, a group of environmentalists sent him a letter urging him to reject blue hydrogen as a “false climate solution.”
The governor chairs a public-private partnership called Team Pennsylvania, which unsuccessfully vied for a different set of federal dollars for blue hydrogen and includes representatives from Mitsubishi Power and the coal mining company CONSOL, and which has given Shapiro tickets to sporting events, including the 2023 Super Bowl in Arizona. Grassroots environmentalists also question whether Shapiro has indirectly accepted money from the fossil fuel industry through the Democratic Governors Association (DGA), a political organization that gave Shapiro more than $7 million in 2022, the year he was elected, campaign finance filings show. That same year, CNX contributed $75,000 to the DGA. “Who gives a self-policing agreement to a climate-denying gas company?” said Rabbi Michael Pollack, executive director of March on Harrisburg, an anti-corruption advocacy organization.
“I mean, that’s really something, especially [from] a governor who calls himself a climate reformer.” Among other donations, in September, CNX donated $5,000 to West Virginia’s Sen. Joe Manchin, a chief architect of the Inflation Reduction Act who has since vowed to dismantle its “radical climate agenda.” Two months later, Manchin co-signed a letter to the Treasury Department, along with Pennsylvania Democratic Sens. Bob Casey and John Fetterman, urging it to use the “well-established GREET model” and allow for “carbon-negative gas credits” in its final rule. CNX cited the letter in its comment to the Treasury Department, arguing that the agency would be overstepping its authority were it not to keep the current model in place. As the environmental and energy communities alike await a final ruling, Cullenward, the climate economist, worries what will happen after the subsidy runs out. Should the Treasury Department accept CNX’s proposal for coal mine methane, he said, the company will be back in 10 years, hand out, saying, “another subsidy, please.”
Okay, so is this project just a lifeline for coal mining, or is this the best way to deal with coal bed methane emissions? Because we do need to keep in mind that even when shut down, methane continues to escape. Also. The discussion of federal dollar allocation was a big focus in this piece, and there were good points made by both sides. If methane feedstock projects take the bulk of federal funding, what does that mean for electrolytic opportunities in the next 10 to 20 years? Conversely, if the 45v will only favor green hydrogen projects, will the hydrogen economy in the US even get off the ground? Now I’ve made my stance on that topic well known.
I believe that for the hydrogen economy to live up to its full potential, all opportunities need to be evaluated. And I believe all technologies need their full carbon life cycles analyzed. If the CI score for a project is under the threshold, then it should qualify for the 45v tax incentives, simple as that. And also keep in mind that there are several other technologies that can be leveraged for hydrogen beyond electrolysis and steam methane reforming. Let’s not forget about those. But back to the topic of subsidies.
Yes, they will dry up at some point, and the hydrogen economy will need to be able to stand on its own two feet, regardless of the technologies at the time. So my ultimate take on the matter is this, unchecked methane emissions are a real problem. If CNX can come in and clean up those emissions and build up the hydrogen economy while doing it, I say let them, and that is assuming that they intend to capture and sequester or utilize the CO2. If that’s the case, they deserve to receive the 45v as does everyone else producing clean hydrogen.
All right, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
