The Energy Department faced a hard truth last month: Its aggressive plans to expand, and ideally retrofit, crude and natural gas pipelines to transport carbon emissions and blue hydrogen may be delayed.
“There are still a lot of challenges” in converting, building, and burying pipelines to accommodate CO2 and hydrogen, said Daniel Swanberg, energy practice leader in Houston for the global design and engineering company, Stantec
Swanberg was one of three-dozen energy experts from whom DOE Loan Programs Office chief Jigar Shah sought input about “carbon management” during a three-hour, closed-door workshop at S&P Global’s CERAWeek conference in Houston in March.
Jigar Shah, director of the Loan Programs Office for the US Department of Energy, speaks during the ... [+]
Carbon management was one of three DOE Deploy Dialogues during CERAWeek that was kept well under wraps.
The other two Dialogues assembled experts to discuss “clean hydrogen” and next-generation geothermal.
Deploy Dialogues is an offshoot series of industry workshops DOE developed from its Demonstrate Deploy Decarbonize 2023 “Deploy23” meeting last Fall. Deploy23 blended 500 federal, state, local, and tribal officials with executives from the broad energy ecosystem to discuss challenges and solutions in clean energy areas correspondent with DOE’s Liftoff reports. Dialogue recommendations will be folded into the Liftoff Reports.
A year ago, DOE launched Liftoff Reports, living documents that outline pathways to commercialization, taking innovation from research and development to deployment in seven areas: advanced nuclear, carbon management, clean hydrogen, industrial decarbonization, grid deployment, long duration energy storage, next-generation geothermal power, and virtual power plants.
During CERAWeek, DOE issued a Liftoff report on how to increase U.S. geothermal energy exponentially. Today, April 12, DOE will host a meeting to discuss that Liftoff report and plan.
During the carbon management Dialogue at CERAWeek, experts were divided into four breakout groups directed to dissect deployment, supply chain and scalability, financial realities, and barriers to build out pipeline infrastructure.
Carbon management turned out to be code for DOE’s interest in subsidizing transport infrastructure for carbon emissions from blue hydrogen production, and the hydrogen itself.
Late last year, the White House and DOE announced they would invest $7 billion into seven U.S. Regional Clean Hydrogen Hubs (H2Hubs) to “accelerate the commercial-scale deployment of low-cost, clean hydrogen” for industrial processes, agriculture and power generation chiefly.
About two-thirds of DOE’s funding would advance green hydrogen projects. The other third would finance blue projects using a process called steam methane reforming which splits the molecule into hydrogen and carbon, combines the carbon with oxygen, and sequesters the CO2 gas underground.
Pipelines are needed to transport that CO2.
Carbon capture process stages with CO2 storage underground outline diagram. Labeled educational ... [+]
Swanberg, an expert on midstream operations, chose to be part of the transport segment to unearth realities around pipeline expansion.
Another breakout group looked at engineering, procurement and construction (EPC) of CCS infrastructure considering supply chain and scalability.
The group looked at whether EPC firms could graduate from conceptual design phases into procurement, construction and installation relatively quickly.
The breakout groups reunited for a larger discussion.
“Can our EPC firms handle it? Do they have the capacity, that’s a real issue and concern that was brought up,” Swanberg said.
Another breakout group looked at the financials, the break-even cost of a CCS project, and the return on investment based on DOE incentives.
Questions remain, such as the impact CO2 or hydrogen in a pipeline underground would have on the environment.
The EPA’s National Environmental Policy Act, how it comports with DOE’s goal to expand infrastructure, was also brought up as a question and concern.
“There are all these uncertainties,” Swanberg said. “No matter how much the push is from DOE, people are hesitant.”
During his session, Swanberg said there was no clarity about how to get landowners to allow for new or existing pipelines under or around their property.
“If you want the community, you’ve got to get the landowners. You’ve got to incentivize them. That’s the only way it’s going to take off.”
Landowners and farmers need to know what impact the pipelines will have on crops and livestock. There are also safety concerns that much be addressed in collaboration with communities impacted, he said.
“They know what natural gas is going to do. They know what crude is going to do,” but there are still questions when it comes to hydrogen and CO2 for local stakeholders, he said.
“There’s just a lot of uncertainty, but we have experts in the industry who are working to solve these challenges,” Swanberg added.
One issue raised during the discussion was federal oversight of hydrogen and CO2 pipelines.
The U.S. Department of Transportation’s Pipeline and Hazardous Materials and Safety Administration oversees transport of hazardous materials, including hydrogen and carbon dioxide.
FILE - Corn grows in front of an ethanol refinery in Chancellor, S.D. Opponents of planned liquid ... [+]
The Pipeline Safety Trust, a nonprofit education and advocacy organization commissioned a report two years ago citing regulatory shortfalls of CO2 pipelines. Out of more than 200,000 miles of hazardous liquid pipelines in the U.S., about 5,000 miles of pipes are used to transport CO2, and mostly for enhanced oil recovery.
The Trust said in its report, “Current federal safety regulations regulate only pipelines that transport supercritical CO2 containing over 90% carbon dioxide molecules, and not pipelines that ship CO2 in these other lower concentrations or forms, leaving a large regulatory gap…even the regulations for supercritical CO2 pipelines are incomplete or inadequate and place the public at great risk, especially from the tens of thousands of miles of CO2 pipelines that may be driven by CCS efforts.”
Two years later, in January 2024, Transportation officials told Congress that PHMSA had made research progress that could lead to regulatory progress.
PHMSA Deputy Administrator Tristan Brown told the House Energy and Commerce Committee that it is working through 12 active hydrogen transportation research projects from Fiscal 2021, 2022, and 2023 totaling about $11 million.
PHMSA is also working with DOE’s Office of Fossil Energy and Carbon Management to establish partnerships to research the safe pipeline transport of CO2.
PHMSA has four active projects to determine how to safely operate CO2 pipelines. The projects will examine the impact of leaks, leak detection methods, and the material quality of pipelines to see if they can be repurposed for underground storage facilities for CO2 transport and storage.
“The results of these may help inform a current rulemaking related to carbon dioxide pipelines,” Brown told House members.
“I could go in circles for hours and hours with all the gaps that I see,” that the government and institutional investors are not seeing in DOE’s push for pipelines, Swanberg said.
“We can figure it out from the financial, government level, how it works on paper, the business case. But none of that matters if you can’t move the product sustainably,” he said.
No feedback yet from Shah or his Dialogue team, which included: Noah Deich, DOE’s Deputy Assistant Secretary for Carbon Management in the Office of Fossil Energy; and Vanessa Chan, Chief Commercialization Officer and Director in DOE’s Office of Technology Transitions.
DOE was only in listening mode; The Department did not add anything to the discussion.
“They wanted us to have the debates,” Swanberg said.
The next Dialogue will be in early December 2024 in Washington, assuming a Biden victory in the presidential election in November.
“Interesting that the Loan Programs Office would be interested in pursuing pipelines in a proactive way given everything else that’s coming out of the administration,” said Matt Leggett, partner at Washington, D.C.-based K&L Gates
President Biden began his term by killing the celebrated Keystone XL pipeline by denying TC Energy
Beyond Keystone, Leggett recalls all of the legal wrangling required to clear the way for the Mountain Valley Pipeline, which will carry natural gas from West Virginia to southern Virginia thanks to Senator Joe Manchin (D-WVa) who chairs the powerful Senate Energy and Natural Resources Committee.
The Mountain Valley Pipeline took years to secure permits and environmental impact statements and nearly a year to build congressional consensus.
“There just seems to be this fundamental bias in terms of actual concrete meaningful impactful decisions where their true colors come out and they end up on the side of electrons and not on the side of molecules,” Leggett said.
“You see it in the LNG export pause. In the LNG export pause, it’s a very good microcosm for the divide in the Biden administration between the progressive environmentalists and the national security, energy security, diplomatic corps.”
Now, President Biden is ending his first term with an eye toward pipeline expansion.
