▶ 0:16:41Chair Capito: I would like to call disappearing to order. Thank you for coming. I think this hearing about advancing carbon capture, we will be referring to it as such. I'm excited to start the year on a hearing on a bipartisan topic that ranking member whitehouse and I have worked together over the years to address.
▶ 0:17:03Chair Capito: I look forward to continuing bipartisan efforts to champion meaningful legislation on this issue with ranking member whitehouse and the rest of the committee. Certainly the gentleman to my right know a lot about this. At the same time the great state of north dakota. Innovative technologies will play a critical role in reducing emissions, particularly for facilities that face unique challenges because of their size, location, or industrial application.
▶ 0:17:31Chair Capito: In west virginia several efforts are underway west virginia university is exploring advanced air capture technologies in the supporting a suite of researcher there also a partner in the appalachian region clean hydrogen hub known as arch 2 that includes project partners looking to deploy ccus technologies.
▶ 0:17:59Chair Capito: Collectively these technologies position west virginia to continue as a national energy leader while reducing our air emissions. We cannot realize the full benefits of these projects and emerging technologies.
▶ 0:18:18Chair Capito: That is why ranking member white house and I are working with senator barrasso and former senator carper moving forward to get utilizing significant emissions -- utilizing significant emissions with innovative technology signed into law 2020. This legislation was intended to ensure that carbon capture projects at all types of facilities can be implemented in a timely manner.
▶ 0:18:44Chair Capito: Despite the progress made by the use it act, there have been significant problems with its implementation that have held back the deployment of cc U.S.. While the council on environmental quality or ceq released a report in 2020 one and subsequent interagency guidance for the deployment of ccus as the use it act required come the guidance failed to present a clear pathway to expedite permitting for these projects.
▶ 0:19:14Chair Capito: Second, the law required at least two federal task forces be established to help identify challenges to end solutions for permitting these projects. The department of energy and ceq missed the required 18 month deadline to establish these task forces or they were chartered until april 2024, more than twice as long as the congress mandated in the use act.
▶ 0:19:41Chair Capito: The delay in standing up these task forces have hindered our progress in supporting ccus, but they're working on recommendations finally to approve the permitting process. After the use act, congress and the epw too many worked in a bipartisan way to expedite carbon capture projects by including $25 million in the I ij for the epa to review and approve class six well applications are the iija included $50 million to help our states obtain privacy for class
▶ 0:20:15Chair Capito: Six wells. It gave the epa needed resources to clear the backlog of individual classics applications and reduce the total number of applications that the epa must review by granting states primacy. Despite receiving additional help and funding with the process defined biden administration only improved two class six projects and granted privacy to two states, louisiana after 3.5 years and your state already had -- you were number one, your number one. I was getting there.
▶ 0:20:42Chair Capito: My home state, really the last day of the biden administration received their permit for primacy on class six wells. I'm excited we got our primacy and I hope administrators out then will prioritize the current backlog of applications and support additional states seeking to obtain primacy.
▶ 0:21:10Chair Capito: Over the next 10 years, due to a rise in energy consumption and early retirement of our existing fossil fuel generation, our country could face major electrical liability concerns. The deployment of ccus can be a tool to not only maintain but expand reliable electric generation capacity to ensure the reliability of our electric grid while improving the environment and growing our economy. I believe that is a win-win situation.
▶ 0:21:39Chair Capito: I look forward to our discussion on this important topic so we can continue to work in a bipartisan manner to implement ccus deployment.
▶ 0:21:49Sen. Whitehouse: I want to thank you for calling today's hearing on carbon capture and utilization and I want to recognize senator cramer for his work on the prove it act. As I've said, I want to get things done to solve the climate change problem. Chair o and I have worked well to encourage and improve carbon capture. There is a solid foundation of bipartisanship here. I want to start by establishing the context for our hearing and why carbon capture is so important.
▶ 0:22:18Sen. Whitehouse: We have just come off of earth's two hottest years on record. For years, scientists warned of the perils of exceeding 1.5 degrees celsius above the preindustrial norm. Well, it happened. Last year. 2024 crossed above what science tells us is the safety threshold. This does not necessarily mean that we have reached the point of no return, but it serves as yet another big red warning sign that we are dangerously close.
▶ 0:22:47Sen. Whitehouse: So, in this 11th hour, what does the path forward look like? Reviewing 1200 forward-looking peer-reviewed scenarios looking by the ipcc to verdict our future with climate change. Of these 1200 scenarios, all of the ones who let the safety depended on limiting warming to 1.5 degrees celsius by the end of the century. Now, only 11 of those 1200 are still achievable.
▶ 0:23:19Sen. Whitehouse: This review was done three years ago. Likely we have actually fewer than 11 pathways the climate safety. Those remaining 11 scenarios that give us a pathway to climate safety have two things in common. One they overshoot the 1.5 degree safety limit. So, carbon removal, particularly direct air capture, is necessary to claw our way back.
▶ 0:23:51Sen. Whitehouse: Two, you just can't be free to pollute. There must be a cost to fossil fuel emissions. These all require a price on carbon emissions. It is simple. Direct air capture, price on carbon emissions or we fail. Here is the ipcc, reaching net zero emissions primarily requires deep reductions in co2, methane, other emissions and implies net negative co2 emissions.
▶ 0:24:19Sen. Whitehouse: Carbon dioxide removal will be necessary to achieve net negative co2 emissions. To reach climate safety, we must deploy carbon capture, and we are doing it, but way too slowly. In 2015i visited says ask in 2015i visited says a -- I visited saskatchewan to visit the first energy facility to deploy carbon capture technology. We know that this works.
▶ 0:24:45Sen. Whitehouse: It was working there and then, but there are only 45 facilities operating worldwide, with a total capture capacity of only 50 million tons annually when we need to be operating at a gigaton scale. We need to capture 1000 times more carbon annually to find that pathway to climate safety. I have consistently led efforts to promote carbon capture.
▶ 0:25:11Sen. Whitehouse: I co-led the use it act, the focal point of today's hearing, with our current chair and then chair barrasso. I led efforts to improve 45 q, the tax credit for carbon capture with our current chair and senators barrasso and hoeven. Our leadership act is being piloted now by the department of energy. I've advocated for funding for offices and programs that support carbon capture deployment, including for the epa class six wells program that the chairman mentioned.
▶ 0:25:40Sen. Whitehouse: Bipartisan steps to support carbon capture included the doe carbon capture hubs and if a finance innovation program. Both part of the bipartisan of a structure law. But we cannot dawdle. We have entered the era of climate economic consequences.
▶ 0:26:14Sen. Whitehouse: Families are paying higher prices in grocery store I'll because climate change is disrupting supply chains and diminishing crop yields. Worse, families are facing a homeowners insurance affordability and availability crisis. This threatens to cascade from insurance markets to mortgage markets home property values, and then, like 2008, into the general economy. The more that we overshoot 1.5 degrees, the more of this looming economic pain and dislocation.
▶ 0:26:33Sen. Whitehouse: Plus, the added risk of far graver irreversible changes like the collapse of ice sheets in greenland and antarctica, coral reef die offs, and the reduction of the amazon rain forest. The happiest estimates pegged the cost of widespread commercial co2 removal at $100 per metric ton. This is a negligible cost compared to the costs of ignoring the problem.
▶ 0:26:58Sen. Whitehouse: The economist says, a $25 trillion hit the global real estate markets. Deloitte says, a 200 $20 trillion global gdp swing between getting climate right and continuing to fail. The financial stability board has issued a warning to the global banking system of this climate risk. First street foundation has found that the climate-driven insurance crisis will erase 1.5 trillion dollars in U.S. real estate value over the next 30 years, I.e.
▶ 0:27:26Sen. Whitehouse: The period of a mortgage issued today. Ramping up carbon capture is a step that we need to take with urgency. I'm delighted to join our chairman in this hearing.
▶ 0:27:38Chair Capito: Senator cramer for his introductory remarks.
▶ 0:27:43Sen. Cramer: Thank you, chair capito, ranking member white house. It seems like such an appropriate early hearing on a topic that we have worked closely together on successfully in this committee. It is fun to be part of it. Thank you for digging in on this topic that we are so familiar with. Thank you for the shout out as number one.
▶ 0:28:10Sen. Cramer: When you referred to me as a gentleman in the beginning I was impressed. Number one was really something. I love the opportunity to highlight north dakota's place in the area of carbon capture utilization and storage. There is a lot that goes into why north dakota has been at the forefront. One of the central reasons is the energy and environmental research center at the university of north dakota who sends us a wonderful witness today.
▶ 0:28:38Sen. Cramer: In fact, the last epw hearing on this topic, then ranking member capito invited our star witness. Thank you for all being here today.
▶ 0:28:53Sen. Cramer: You know, if I can say this, if you are from a state that's looking at primacy or carbon capture, if you think that that is a potential, they are not defined to north dakota. There is a good chance that if you are pursuing a project that they are already working with you. Thank you to the rc.
▶ 0:29:21Sen. Cramer: We are joined by kevin connors the assistant director for regulatory compliance and energy policy at the erc, an invaluable asset to me and my staff. We look to them as an extension of our staff to all carbon capture come utilization, and storage. From permitting to engineering to save geological storage and the use of carbon, kevin's expertise is invaluable.
▶ 0:29:50Sen. Cramer: It is a matter of national concern, as is obvious today, and I'm glad that kevin can tout the good work of north dakota in this space and how other states can benefit from our success in permitting class vi wells. Kevin served on the north dakota industrial commission in several capacities including carbon capture and storage supervisor, underground injection control supervisor, and petroleum engineer. His expertise is not limited to the theoretical.
▶ 0:30:18Sen. Cramer: He began his career as a well-site geologist in the oilfields of western north dakota. If you are familiar with the nature of the workday, it is safe to say that he has earned his stripes. In addition to his well-deserved professional accolades come is most important duties are as a husband and a father. Kevin and julie are the proud parents of seven wonderful children. That will keep you busy. We want to thank you and your wife and your children for sharing you with us today.
▶ 0:30:46Sen. Cramer: Thank you, madam chair, for allowing me to introduce Mr. connors and I look forward to a productive discussion.
▶ 0:30:52Chair Capito: We will lead. Mr. connor, you are welcome to give your opening statement. Thank you.
▶ 0:30:59Mr. Connors: Good morning, chairman capito, raking number white house, members of the committee. Praise the lord, it is an honor to be here. Thank you for the introduction. My name is kevin connors, the assistant director for regulatory compliance and energy policy at the university of north dakota's energy and environmental research center, the erc.
▶ 0:31:23Mr. Connors: Thank you for the invitation to provide testimony to that use it act class vi wells permitting. And related efforts to accelerate ccus deployment. For the purpose of this testimony prior to working for the erc isla north dakota's efforts to become the first state in the nation to receive class six primacy.
▶ 0:31:46Mr. Connors: I began working at the erc where I work closely with ee rc clients to support ccus project development. It is important for the committee to note that the erc has been the technical lead task with the development of all nine classics projects that have been approved in north dakota. The history of the erc dates back to 1951 as part of the uris bureau -- U.S. bureau of mines, the U.S.
▶ 0:32:14Mr. Connors: Department of energy, and the erc became a business unit for the university of north dakota p the erc is focused on particle solutions to our world's energy and environmental challenges as a leading developer of technologies are the erc has spent decades with research and ccus. They lead one of the sequestration partnership programs.
▶ 0:32:36Mr. Connors: It is an industry government partnership with more than 250 membership organizations across a 10-state and four canadian province region in the upper great plains and northwestern north america. It has become apparent over the course of 20 years of partnership activities that while our region has astounding potential for geologic co2 storage our emissions are interwoven with the economy.
▶ 0:33:00Mr. Connors: The local, state, regional economies and industrial tax base that supports these economies represent the primary mission source of co2 consistent nationwide. This is where we encounter the dual challenge of reducing carbon intensity over major industrial sectors while ensuring continued economic growth and prosperity for our local economies tied to these industries. The deployment of ccus technologies offers a unique solution to meet this challenge.
▶ 0:33:32Mr. Connors: Today , the 45 q tax credit and low carbon fuel markets created a business case for ccus. Carbon capture technology hasn't been economically deployed across the full spectrum of emissions sources p there are three main barriers preventing accelerated ccus deployment. The cost of retrofitting our facilities with carbon capture technologies continues to be a hurdle. Co2 opposition concerned with pipeline safety and eminent domain laws have created transportation challenges.
▶ 0:34:01Mr. Connors: Long lead times and delays in permitting class vi storage projects at the federal level persists. The solutions to these barriers are actively underway and the history continues to advocate for increases to the 45q tax credit to offset record inflation on materials and increased labor costs. New proposals have been proposed to enhance pipeline safety. Policy solutions are being proposed at the policy level to improve co2 pipeline permitting and class vi permitting.
▶ 0:34:33Mr. Connors: To alleviate the backlog in class vi applications begins with class vi primacy. The class vi primacy process can take between four and seven years for states to receive this authority from the epa. I hope we can agree this must be improved.
▶ 0:34:50Mr. Connors: States are best positioned to regulate these activities and have a broader framework to consider in addition to the environment of protections offered by the rules such as promoting the development of geologic co2 storage and maximizing the use of storage reservoirs. As soon as a state has demonstrated equivalent protections, the epa should move expeditiously to improve their application and hand the authority over to the states.
▶ 0:35:25Mr. Connors: An important technical challenge has to do with the prohibition of exemptions for class vi. There are many examples of deep geologic formations that meet that old definitions for the underground source of drinking water but there are extenuating circumstances such as depth or economics that make these particular formations unsuitable as a drinking source. The result removes billions of tons of storage potential in places like montana, colorado, utah, oregon, and alaska.
▶ 0:35:54Mr. Connors: Thank you, chairman capito, ranking member whitehouse, for your invitation to provide these remarks. I would be happy to answer any questions regarding my testimony and views on carbon management.
▶ 0:36:07Chair Capito: Our next witness is dan yates, the executive director of the ground water protection council gwcp. He has worked with his members on the challenges that have experienced -- that have been experienced with the class vi primacy process. He has two children. We are up to nine and are getting up to a high average. Thank you for coming.
▶ 0:36:33Mr. Yates: Thank you. It is an honor to be here to discuss the work the ground water protection council has been doing with our state members for the past 40 years. We were created in 1983 to bring together the technical, regulatory experts to address underground injection control and groundwater protection issues.
▶ 0:37:01Mr. Yates: Our national organization represents both energy and water agencies, including such programs as water quality, underground injection, drinking water source protection, groundwater protection, and oil and gas. My experience expands 25 years helping aid state programs in tool development, regulatory considerations, and capacity development.
▶ 0:37:28Mr. Yates: We have been at the forefront of ccus, including work on co2 injection for enhanced oil recovery, the creation of the class vi uic program, and promulgation of state regulations in order to get primacy.
▶ 0:37:43Mr. Yates: Class vi well regulations like all uic programs are designed to protect public health and underground sources of drinking water.they cover injection site evaluation, construction specifications, operational constraints, well-testing, monitoring, emergency response, and closure requirements, among others. As part of primacy applications, states develop their own rules and regulations that meet or exceed federal rules. Uic program is a novel and complex program that relies heavily on site-specific determinations.
▶ 0:38:13Mr. Yates: As previously mentioned, four states have primacy currently. Several of this committee's states have submitted applications well even more are in the process of completing primacy applications. As kevin mentioned, north dakota waited for several years for their primacy. Now, states are waiting many years once they have submitted their applications to obtain primacy.
▶ 0:38:37Mr. Yates: State agencies have a vested interest in the communities where they live, work, and raise their families p or they understand environmental protection, economic development , water use, and public health needs of their state. They have the expertise in local geology, water sources, geography, and are the most efficient and can provide faster responses. Some challenges remain towards gaining primacy.
▶ 0:39:03Mr. Yates: State regulators expressed to us the epa has been helpful in providing information about the class vi application process. They have made themselves available to meet and discuss the process, provided guidance documents, and interfaced with states individually and through workgroups groups through the ground water protection council. The current application process is extremely rigorous.
▶ 0:39:30Mr. Yates: Although the epa has done some work to improve this process, states that already have some regulatory programs in place, including other uic program components, are well-suited to manage the class vi program and should have a more streamlined process to obtaining primacy. Regulations for class vi should be based primarily on geologic siting, operation, and secure project closure.
▶ 0:39:59Mr. Yates: States are best equipped to administer the complexities of this class vi program, but more offices are needed for permitting and regulatory capacity, including staffing, training, and technology. Some funding has been provided by congress, either directly to state programs or epa, but not all of the funds have been released by epa, including two p -- including $1.2 million for state training.
▶ 0:40:27Mr. Yates: Gw pc initiated the class vi training program including developing a class vi curriculum in conjunction with states for their needs, additional funding from congress could speed development. Data management focused on the full well lifecycle is critical.
▶ 0:40:48Mr. Yates: States and gwpc have begun a class vi management program but funding is needed to create a state managed system for class vi. Federal funding enacted as part of annual appropriations could provide essential support for geologic storage by expanding the capacity of states to permit geologic storage.
▶ 0:41:14Mr. Yates: From industry partners who have the technology to construct these projects to states ready to develop safe and effective regulations, all of the ingredients are there to implement safe and secure carbon sequestration. Gwpc stands ready with its estate agent ting members to work with federal partners and stakeholders to obtain geologic storage on the needed scale. Thank you again for your time on this upward and -- on this important topic today and I'm glad to answer any questions.
▶ 0:41:44Chair Capito: Our final witness is jack cavanaugh, the manager of carbon management for breakthrough energy p he focuses on carbon capture for the organization and is a member of the ccus federal lands permitting task force. Thank you very much for joining us today and we look forward to your testimony.
▶ 0:42:05Mr. Cavanaugh: Chairman capito, ranking member whitehouse, members of this committee thank you for the opportunity. I'm here to discuss the use and act class vi wells and the challenges and opportunities that this committee faces as it continues to foster carbon management, including carbon dioxide removal. I'm jack cavanaugh and I am at breakthrough energy which was founded to accelerate energy innovation and build the industries of the future without emissions.
▶ 0:42:34Mr. Cavanaugh: We deploy for-profit investment funds, nonprofit grantmaking programs, and policy efforts to achieve that mission. I serve on the white house task force for carbon capture, utilization, sequestration on the committee for federal lands and the outer continental shelf established as the bipartisan efforts of this committee and the use and act. I am also a husker, it is great to see senator ricketts, born and raised in nebraska.
▶ 0:42:58Mr. Cavanaugh: The natural gas pipeline ran through my family farm and was recently retrofitted to carry co2 made possible by the 45q tax credit. We are happy to have the infrastructure on our land and proud to be part of the growing carbon management economy. Carbon management includes carbon capture for power and industrial sectors, pipelines, geologic storage, co2 removal. There is important research, including the paper on the absolute need for cdr going forward. We need gigatons.
▶ 0:43:29Mr. Cavanaugh: Put that into perspective, a single blue whale is one hunter 46 metric tons. 6 million blue whales constitute a single gigaton and we need multiple gigatons of ccs and cdr from here on out. The total summary of the research is the world is warming faster and will continue to warm mostly because of carbon dioxide emissions we are putting into the air. We have no choice.
▶ 0:43:56Mr. Cavanaugh: We should reduce carbon emissions wherever we can, remove those that we can't reduce, and also use company oxide removal as an environmental remediation tool for legacy. Each small rise in temperature matters. Each small rise results in climate impacts getting progressively worse. The rise in temperature is having steep physical and economic impacts. Wildfires in california, hurricanes in florida, all resulting in hundreds of deaths and tens of billions in economic damages.
▶ 0:44:27Mr. Cavanaugh: Insurances simultaneously pulled out due to these risks. The U.S. is the dominant country in driving force in carbon removal today. Corporations and companies are paying U.S. companies for carbon removal and investors from around the world are coming to build here. This is fundamentally due to the bipartisan policy support for cdr, the commitment to cutting-edge research and development coupled with an incredibly innovative private sector.
▶ 0:44:53Mr. Cavanaugh: We have the policy of the structure, like the use act from this committee, the 45q tax credit, and class vi will program. We have the early stages and incredible potential for the physical infrastructure of carbon capture removal technologies, pipelines, and safe, proven geologic storage. This innovation and infrastructure combination sets the united states apart. Thousands of good paying jobs are currently being created with hundreds of thousands more upon scale up.
▶ 0:45:25Mr. Cavanaugh: Carbon management brings economic development. It brings a more competitive america and competitive environment for american citizens. This is only possibly we can permit and build fast enough. The committee should work with the administration to make sure that the use act, that the white house delegated by the use act continues to be a priority. The task force needs to replace its two political appointees before it can conclude its recommendations and share it with this committee and congress.
▶ 0:45:53Mr. Cavanaugh: We need federal permitting clarity and efficient, federal permitting regimes for co2 pipelines and all forms of cdr, which are currently not cited federally, cited or permitted federally. We need authorized funds for continued research and development on driving down the costs of all use cases for carbon management technologies. We need the next phase of federal class vi programs to reach permitting decisions on project level timelines. We need to provide lessons learned and a clear roadmap.
▶ 0:46:20Mr. Cavanaugh: The information the epa needs to reach decisions on applications from states seeking class vi primacy. Advancements in these areas will allow the U.S. to secure domestic energy supply, resource production, it will strengthen our supply chains, trade, and our national security. We have a rich history in this country of coming together and advancing technologies to overcome the most pressing challenges.
▶ 0:46:44Mr. Cavanaugh: To rise to this challenge, we need clear permitting regimes, funding, and public-private partnerships to deploy these necessary carbon management technologies. If we don't deploy this technology, china will hear china will enjoy the economic development, hundreds of thousands of jobs, and a healthier environment. America is leading the way, and the future is always a policy choice. This committee put our country on a path to achieve american dominance in carbon management in energy and a healthier environment.
▶ 0:47:15Mr. Cavanaugh: Breakthrough energy stands ready to work with you to help our nations carbon in schmidt policies reach their full potential. Thank you.
▶ 0:47:20Chair Capito: Very good. I'm going to refer my time to senator husted who has to leave. As we know, there are several committee meetings going on at the same time. There will be a lot of in and out.
▶ 0:47:37Sen. Husted: Thank you, chairwoman capito for arranging the hearing and giving me a chance to ask a couple of questions. It is in my background, ohio, the state that I represent, has a large oil and gas shale play in the utica shale basin.
▶ 0:48:03Sen. Husted: I've spent a lot of time at the state level working with our epa on injection wells and primacy issues at the state level. I really been impressed at how the people who work in this area in our state understand the unique nature of how things happen in our state, with the geology is, what the history of these regulations are, and so I'm a big fan of primacy in
▶ 0:48:33Sen. Husted: General and interested in learning more about how we do this for carbon sequestration for class vi primacy. Dr. yates, give me some perspective on how states are better suited to do this. My belief is they are better suited to handle primacy.
▶ 0:49:00Sen. Husted: I wonder your thoughts on my conclusions and if you agree or have advice to the contrary?
▶ 0:49:07Mr. Yates: Thank you, senator, for that question. We do a lot of work with ohio, the ohio epa, and ohio dnr, very involved with our organization. You are right. Very knowledgeable and conscientious staff who do good work. States are best suited, better suited.
▶ 0:49:31Mr. Yates: One of the reasons is simple numbers rather than one agency trying to manage wells for multiple states. Having staff in your state have management authority over the wells in your state. Another portant piece is just the overwhelming amount of knowledge that state staff have about the operations in their state.
▶ 0:50:00Mr. Yates: Previous uic projects, access to data on those non-class vi usc, other well classes. The ability to engage with their state geologic surveys and understanding the history. They have more staff that can focus and they have better access to data information to make these management decisions to approve wells.
▶ 0:50:24Sen. Husted: Thank you. To follow up with that, if I could madame chair, it is the epa -- the states have, for example in ohio, we have primacy on everything except for these class vi wells.
▶ 0:50:45Sen. Husted: So, it has worked successfully, but tell me, what lessons are there? If I were to talk with our state legislators, what lessons have we learned that they should know regarding underground injection for carbon capture?
▶ 0:51:11Sen. Husted: As we prepare to look at this class vi provision for states to have primacy? What have you learned that is applicable that everyone should know?
▶ 0:51:23Mr. Yates: One of the things that we've learned over time, managing the uic program in ohio and nationwide, are the existing geologic plays that exist that can hold this carbon. We have that data.
▶ 0:51:40Mr. Yates: We know a lot about the underlying geology because of both the class ii program, which is ingesting produced water from oil and gas and also using co2 for recovery. We have experience injecting co2 through the class ii program. At the ohio epa and other state agencies, we have additional deep geology experience and understanding from the class I program that injects other types of waste for long-term storage.
▶ 0:52:14Mr. Yates: We have a wealth of information among the state agency staffs on how uic works, where the successes have been, where the challenges have been, and specifically with co2 injection outside of the class vi program.
▶ 0:52:29Sen. Husted: Thank you, very much.
▶ 0:52:32Chair Capito: Senator whitehouse.
▶ 0:52:35Sen. Whitehouse: Mr. cavanaugh, the new director of the department of energy's loans programs office has stated he is exploring canceling existing already approved loans. This could affect $69 billion in issued loans and loan guarantees and 41 billion dollars in conditional commitments including one billion-dollar conditional commitment monolith to a carbon utilization project in nebraska.
▶ 0:53:04Sen. Whitehouse: How with the cancellation of these loans and continuing freeze in federal loans hundred the development of domestic ccus?
▶ 0:53:15Mr. Cavanaugh: It is important all government spending and taxpayer dollars are spent efficiently. The freeze on funding on things like guaranteed loans, specific with this project and monolith, would undoubtedly hamper the project's ability to employ and would likely render the project unable to come to a final investment decision and end up becoming operational.
▶ 0:53:44Mr. Cavanaugh: Public-private partnership investment from private industry, especially in the carbon management sector, is not just dependent on the innovation that they are bringing forward, but also with the firm support of the federal government and programs like the opo, the direct capture hubs. To put it singly, with the freeze, with the delay in funds, the likelihood that these projects reach full operation is dubious.
▶ 0:54:11Sen. Whitehouse: There has been reliance from private parties and states on these loans and commitments?
▶ 0:54:16Mr. Cavanaugh: That is correct.
▶ 0:54:18Sen. Whitehouse: The other topic I want to touch on is what I see as fossil fuel's split personality around carbon capture. When the industry wants to reassure everyone that it's safe to continue to pollute, they trot out carbon capture as the rhetorical vehicle for excusing continuing to pollute.
▶ 0:54:41Sen. Whitehouse: When ashley comes to putting money into a carbon -- when it actually comes to putting money into carbon capture on a plant or accepting an epa powerplant reg that regulates that, they don't spend the money and they claim that the thing that they said was the answer is actually not feasible. Any comments on how we work our way through that split personality problem?
▶ 0:55:05Mr. Cavanaugh: Thank you for the question, senator. First and foremost, when you're looking at these oil and gas companies, they are publicly traded companies. It is clear to be able to see who is deploying billions of dollars on actually putting steel in the ground on projects and who is spending -- sorry?
▶ 0:55:26Sen. Whitehouse: The good actors.
▶ 0:55:29Mr. Cavanaugh: The good actors. And who is spending millions of dollars on campaigns. Outside of this public transparency we have strong regulatory regimes in the united states, like co2 pipelines, to ensure that when they deploy these technologies they are done in a safe manner.
▶ 0:55:49Mr. Cavanaugh: Finally, it's important to note that the oil and gas industry does have an incredible overlap in workforce relative to the deployment of some of these technologies, in particular direct air capture has a massive workforce development piece where you are not only relying on the expertise, especially on the transportation of co2 and injection into the subsurface you already have within these companies come you are recruiting new folks into climate technology.
▶ 0:56:17Sen. Whitehouse: I think that it's important to note the discrepancy between what significant segments of the industry say about carbon capture and what they actually do about it when it comes to the regulatory environment that they operate in. My time is short. If you don't mind, Mr. connors and Mr. yates, I will ask these questions for the record so you have time to respond in writing. Mr.
▶ 0:56:46Sen. Whitehouse: Connors, my question is, how U.S. federal agencies can improve coordination with state and local governments both on ccus and co2 transportation permitting. As the chairman and I have both announced, we are hoping to work together on rekindling permitting reform here and with the energy committee. This could be very helpful to us in that effort if you would respond to that. Mr.
▶ 0:57:14Sen. Whitehouse: Yates, with respect to class vi well permitting, how can the current approach be streamlined or improved to expedite project development and deployment while maintaining real safeguards for drinking water? If you can get back to us on that, I think that your answers would be helpful to our permitting reform effort.thank you for being here today, thank you for being here.
▶ 0:57:40Chair Capito: I mentioned in my opening statement that the use it act was signed in 2020. I alluded to the two ccus permitting use taskforces, one for federal lands and one for nonfederal lands. I will start with you Mr. connors, and then you Mr. cavanaugh because you are on one of the committees, I believe.
▶ 0:58:08Chair Capito: Now that the taskforces are operating, do you believe that that will make an impact on identifying opportunities to improve the permitting through these taskforces as the law requires? What is your opinion of the two committees now that they are moving forward and will it be as helpful as we would hope?
▶ 0:58:30Mr. Connors: I am confident today -- you mentioned that it was a slow start to get the task forces established, but starting really in the summer, but in the fall, and as of recently I have been given the opportunity to lead the authoring of a section focused on permitting. A lot of the information that we've talked about today in relation to class vi permitting and reforms will be in that report.
▶ 0:58:59Mr. Connors: I actually have a lot of confidence that the report will be helpful to this committee and other committees.
▶ 0:59:05Chair Capito: Does the report go to these two taskforces? That is required by the law, the report?
▶ 0:59:09Mr. Connors: Correct. The taskforces are tasked with providing guidance to the senate committee, senate energy, house of representatives committees for natural resources and transportation infrastructure, and the guidance being prepared by both taskforces to identify permitting and other challenges, and ultimately making key recommendations to improve permitting process and promote the efficient, orderly, responsible development of specifically co2 class vi permitting.
▶ 0:59:39Chair Capito: Mr. cavanaugh, what is your perspective, your view as a member of one of the federal lands permitting task force?
▶ 0:59:46Mr. Cavanaugh: Thank you. I share a similar sentiment to Mr. connors.the task force on federal lands is working to provide recommendations that are not only an amalgamation of the total experience in the room, which includes both industry, public policy experts, as well as folks from communities that will be receiving ccs technologies, but working across a number of different agencies on federal lands and the outer
▶ 1:00:16Mr. Cavanaugh: Continental shelf. Our recommendations will take into account the total information that we have from everyone, and will also be actionable in the near term. The one thing that I do want to stress, and this came from the gentleman who is leaving my task force on the federal lands, is we need to replace the new political appointees before we are able to conclude the task force and give recommendations to you and congress.
▶ 1:00:46Chair Capito: Mr. connors, you mentioned nine projects in north dakota that have been permitted?
▶ 1:00:54Mr. Connors: Correct.
▶ 1:00:56Chair Capito: Quickly so that I can understand, I think that someone mentioned it but I can't remember which one, some projects are easier than others to permit. Can you tell me -- generally, are they natural gas plants? Ethanol plants? What are they? Industrial?
▶ 1:01:16Mr. Connors: They are a variety of industrial sources. The first project that was permitted was a single ethanol plant sitting on top of ideal geology.
▶ 1:01:27Chair Capito: So they have the well right there.
▶ 1:01:30Mr. Connors: They have been operating since june of 2022. There is an ethanol plant on top of ideal geology that was also permitted. 180,002 180,000 to 200,000 tons are being captured on a regular basis. One is co-located, co2 is being captured through the coal gasification process.
▶ 1:02:00Mr. Connors: They are capturing the co2 stream and transporting it to saskatchewan. There are permits that have been permitted for co2 capture and storage for the milton r young station. They are currently working on determining their final investment decision for that carbon capture project.
▶ 1:02:28Mr. Connors: The latest project that has been approved is the carbon solutions project, three large storage units that have been permitted in north dakota.
▶ 1:02:37Chair Capito: Is that a power generator?
▶ 1:02:38Mr. Connors: Some of it has aggregated I think over 50 ethanol and bio fuel facilities and the corn belt and north dakota with intents to construct a network of pipelines to bring that co2 to western north dakota.
▶ 1:02:57Chair Capito: I think that's interesting, because what the ranking member was alluding to is certain types of projects haven't really been able to move forward with the class vi, for whatever reason, but you did line out what those reasons are. The cost of the retrofit, co2 pipeline permitting, and then the long lead times which has probably led to confusions.
▶ 1:03:25Chair Capito: The political appointees can be gone forward and confirmed that might alleviate some of the long lead time issues. Senator cramer.
▶ 1:03:34Sen. Cramer: I feel like my work is done. This is really great, actually. Along the same theme, and may be, Mr. connors, you can help us , how was it that north dakota was first? When I think of the small number of resources that we have -- we do have a long history as you pointed out, we have been capturing and utilizing, piping and utilizing co2 for 25 years.
▶ 1:04:05Sen. Cramer: We were doing it way before it was cool. Other than that, what is it that put north dakota at the front? How did we do it so quickly and what lessons can be learned in getting the class vi primacy authority?
▶ 1:04:21Chair Capito: We thought it was you.
▶ 1:04:23Sen. Cramer: I would like to take authority.
▶ 1:04:28Mr. Connors: Thank you for the question. This began in the early 2000's. The state of north dakota recognized early on that our economic pillars for north dakota are agriculture, our energy industry, which are intensive in terms of co2 emissions.
▶ 1:04:48Mr. Connors: We set out in the early 2000 to develop frameworks, regulatory frameworks, to provide certainty specifically to the energy industry that if they weren't able -- if they were able to advance carbon capture technology they would have certainty in order to store that co2. North dakota took the approach of developing a resource management framework so that co2 storage in north dakota is regulated, much like we regulate oil and gas. It is in the public interest to promote the geologic storage.
▶ 1:05:19Mr. Connors: Co2 is a valuable commodity for its industrial use, specifically for its enhanced ore recovery. North dakota is under a resource management framework giving the state the ability to create unitization or unitize these projects to allow landowners to monetize their resource or monetize their space, looking to maximize the use of that space. All nine projects that have been approved in north dakota have units that have been established by the state regulatory authority.
▶ 1:05:49Sen. Cramer: You touch on something that I've said for a long time. I will never forget as a utility regulator, you presented and I thought, what is this? It sounds crazy to me.
▶ 1:06:07Sen. Cramer: Anyway, when it comes to primacy, and I appreciate all your testimony on this, one of the convictions is that mediocrity should never be imposed on a state's excellence. I'm sorry it takes so long to do what should be obvious with general philosophy of governance not to mention constitutional. Mr.
▶ 1:06:32Sen. Cramer: Connors, you laid in your testimony a reference to something that is intriguing to me and we should explore a little bit. That is the aquifer exemption issue. Can you walk through that a little bit with me? First of all, what are the dangers? Second of all, why do you need the exemption? If you don't get the exemption how does that affect the availability of the space for storage?
▶ 1:06:57Mr. Connors: Thank you for the question. This is an extremely important technical challenge that the industry is facing today. It is a little bit of a complex challenge, so I'll do my best to explain it in a way that makes sense to everyone. It has to do with the way in terms of our safe drinking water act, the way that we define an underground source of drinking water. It is a broad definition.
▶ 1:07:24Mr. Connors: The definition includes a process for identifying aquifers that meet some criteria for serving public water supply. They will not and would never be a public water supply. You have deep subsurface geologic formations that meet some criteria for water quality, but there are certain criteria that would eliminate those formations to be used for drinking water.
▶ 1:07:49Mr. Connors: Whether it is other constituents or it is just not economic to develop, or that will not produce enough fresh water to be a drinking water source. It is a complex challenge but epa created a process to allow for the exclusion of those formations and be able to use them for underground injection. When the epa published the class vi rule in 2010, they excluded aquifer exemption is not allowed for class vi exemptions.
▶ 1:08:14Mr. Connors: All of the other well classes are allowed to have or apply for exemptions other than class vi. What that means to this committee is that there are formations that are ideal and suitable for co2 storage and will never be used for drinking water, and yet you cannot permit or inject into those formations because of the current regulations.
▶ 1:08:32Sen. Cramer: Does congress need to address that? What is the blockade?
▶ 1:08:38Mr. Connors: The challenge with it is this is a three-pronged solution. Congress can address it and direct the epa to amend their roles and allow for aquifer exemptions for class vi. Epa will have to remove that provision or the third piece is also challenging. Epa is the final authority when it comes to making that decision for aquifer exemptions, and that takes a long lead time.
▶ 1:09:10Mr. Connors: North dakota's class ii program, it would take two years to get an exemption.
▶ 1:09:18Sen. Cramer: I'm glad I asked. Thank you. >> thank you very much for holding this and my regards to ranking member whitehouse for this important hearing and I look forward to working in a bipartisan way to be on these carbon arrangements, which is a win, win, win, win.
▶ 1:09:48Sen. Cramer: Great for consumers, the environment, farmers, bio producers, something that we need to pursue and I congratulate north dakota on your great progress already. It is great, Mr. cavanaugh, to have you here. Thank you for taking the time to be a witness. Thank you to all of the witnesses for being here. Nebraska is the second-ranked ethanol state in the country. The chairman knows this because of my service on this committee the last two years. She has often heard me talking about why I love this committee so much.
▶ 1:10:17Sen. Cramer: We get to talk about ethanol all the time. Ethanol is great because it saves consumers money at the pump, it cleans up our environment, it is great for our farmers and ranchers. Nebraskan farmers benefit from the certainty of premium markets associated with the biofuel industry. You can lower the carbon score through ethanol, right? You can charge a premium for it. That is the market at work. It is a fantastic thing.
▶ 1:10:47Sen. Cramer: Carbon pipelines add that premium to biofuels and biofuel markets by lowering the carbon intensity even further through this carbon sequestration. Nebraska and other midwestern states stand to benefit greatly from pipeline projects like tallgrass pipeline, which originates in nebraska and terminates in eastern wyoming. Tallgrass has the capacity to do 10 million cubic tons of co2, like 2 million cars been taken off of the road.
▶ 1:11:18Sen. Cramer: The potential growth of this carbon storage industry is another reason why we should be doing 15-year round and implement the fuel standard on time, ensuring the development of carbon storage infrastructures requires compliance with the different agencies and regulatory schemes. I would certainly agree with my colleague from ohio when he said that he agrees with the primacy of states because having been a former governor I know what great job our department of energy did with primacy.
▶ 1:11:47Sen. Cramer: In tallgrass's case, wyoming was responsible for the class vi will permit for the underground injection control program while the department of fbar mental quality successfully did that. It's a huge win for nebraska and neighboring states. While I am relieved to hear that the tallgrass project has that permit, so many other projects haven't had that success. According to the epa, only eight class vi wells have been permitted.
▶ 1:12:16Sen. Cramer: 161 are still awaiting that permitting. Getting back to the ranking member's concerns, maybe this is why other companies don't jump in. If you have only eight permitted and 100 621 waiting, why would I jump in on this? At the beginning of last year senator fischer and I wrote a letter asking epa about the class vi class vi wells approval process.
▶ 1:12:44Sen. Cramer: A biofuel stakeholder has been waiting 33 months for a permit despite the commitment from the agency that the process would take no longer than 24 months. I have copies of those letters here. Without objection, I would like to submit these letters that we sent to the epa and the response for the record. These delays and excuses demonstrate what we know to be true.
▶ 1:13:13Sen. Cramer: The biden administration wasn't serious about a holistic approach to clean energy and favorite toxic chinese-suppliers for batteries. Second, state governments often our better stewards of taxpayer dollars, as we demonstrated with what is going on in new york, and should pay a -- and should play a more active role in implementation. Wrote locks for permitting -- roadblocks for permitting, going to help grassroots farmers.
▶ 1:13:43Sen. Cramer: Farm country is struggling and access to biofuel markets would pad bottom lines. I'm encouraged by bipartisan support from chairman capito and ranking member whitehouse for the use act. The legislation includes legislation specifically to streamline the permitting process for co2 pipelines, critical provisions in the use it act, permitting to review development of carbon infrastructure.
▶ 1:14:13Sen. Cramer: For example, we are able to bring some of our permits down from 110 steps to 22 steps and cut the time from 90 days to 65 days. We should be looking for those c1 your work is impressive with regard to the classic spring. How has it been different from the use it act passage?
▶ 1:14:40Sen. Cramer: >> as I mentioned, when you have class six like north dakota, and certainly nebraska I believe has decided to produce -- the state regulators are able to evaluate these complex applications in a much more efficient manner. We have a drastic comparison on the federal level it takes epa two years to freeze to issue a class six permit.
▶ 1:15:07Sen. Cramer: The most recent where the permit to construct so that operators could have to turn on and apply for the authorization to inject, which is an unknown timeframe. In north dakota and wyoming, north dakota takes about eight months to issue a permit and wyoming takes about 12 months on average to issue the first three permits. It is an efficient process. These are complex applications. If a regulator able to work through in a more efficient manner.
▶ 1:15:37Sen. Ricketts: Thank you, chairman, with the time but I want to say is the governor I wholeheartedly agree with your assessment that the states can be much more efficient getting this done. For example, when I talked about the process, we as a state can't change environmental regulations?
▶ 1:15:57Mr. Connors: Your program has to be as stringent as the federal epa's in protecting underground sources of drinking water. The epa recognized when they help push the class six role in 2010 the preamble that states our best position to regulate and implement this program because they can enact a broader framework and that is the framework I was discussing which states can regulate a project, create unitization and epa is limited to indian injection well.
▶ 1:16:27Mr. Connors: The epa recognizes the states are best suited to regulate this activity and be able to do so in a manner more efficient. The way we talk about in terms of these regulatory frameworks, the state's position to regulate from cradle-to-grave and that is important piece. Where the state can regulate the project come epa has limitations to what the regulatory authority is when they are the implementation. Sen. ricketts thank you. I appreciate your answer because that is something as a former governor I appreciate.
▶ 1:16:58Mr. Connors: Nobody cares more about having clean air or clean water in the state of nebraska then nebraskans. That is always -- that is why we need this. Thank you for your indulgence.
▶ 1:17:15Chair Capito: Senator curtis.
▶ 1:17:19Sen. Curtis: Thank you. Equally is concerned clean air, clean water. Clearly, the ability to take carbon out of the air is very important part of that. I firmly believe our nation's energy security depends on what I call affordable, reliable, and clean energy. Carbon capture can play a critical role in achieving that balance. Companies in utah are eager to innovate but often face delays in obtaining approvals from federal agencies to implement new technologies.
▶ 1:17:48Sen. Curtis: The use it act clarifies the role of federal research agencies in advancing carbon, management technologies including carbon capture through research, development, and demonstration efforts. It ensures carbon capture utilization and storage projects qualify for streamlined permitting under the fast act which is originally designed to expedite the review of surface transportation infrastructure projects. Mr. gates or Mr.
▶ 1:18:14Sen. Curtis: Connors or both currently, only two projects are listed as fast 41 covered projects on the permitting dashboard for federal infrastructure projects. What actions can the administration take to fully implement the use it act act? >> thank you, that is a great question.
▶ 1:18:41Sen. Curtis: One of the problems for states is they apply -- the epa uses what they call a crosswalk which could be a very good tool but it is a complicated tool. There is not very good transparency to states on the process of where they are within primacy.
▶ 1:19:03Sen. Curtis: So making that more transparent process, training that is for both states and epa simultaneously on what the crosswalk's purpose is and how it is to be used would be very helpful in speeding primacy. If we can get states primacy faster -- we have already talked a great deal about how states are more efficient with their permits.
▶ 1:19:26Sen. Curtis: I would say in answer to your question, reviewing epa's process causing them to be more transparent often states will get a copy of the crosswalk with things highlighted but no description of what any of those highlights mean. Specific questions to states on what is holding up the primacy processed.
▶ 1:19:50Sen. Curtis: It is epa's to determine whether or not a states laws and regulations meet or exceed federal. It is not the states role to do that. But we are getting confusing information back from epa during that primacy process.
▶ 1:20:06Sen. Curtis: . Mr. connors? Mr. connors last I checked 160 well permits that have been backlogged. The number one solution is there are states that are in the pre-application process to apply for primacy. If epa were to grant texas alone primacy, 35% of the applications would go to the state of texas. There are a lot of projects in texas. It epa were to grant into states in the queeu, it is about 40%.
▶ 1:20:40Sen. Curtis: Several states have announced they are pursuing primacy. Those other 50% of the applications are in states that have not indicated they are interested in pursuing class vi and epa could focus on california and illinois where there are a lot of projects to date. Granting states primacy that have applied and expediting that process is crucial to alleviating the backlog.
▶ 1:21:03Sen. Curtis: Second of all, epa can incentivize more states apply for primacy and requesting that authority from epa if they knew that epa was going to expedite that process event I think there would be an advantage there.
▶ 1:21:15Sen. Curtis: Great. Mattern chairman, we need to talk to Mr. selden and give him a few minutes to get his feet underneath him and then light a fire under him. I would like to agree with my colleagues about the difficulty of class vi permits. I don't need to go deeply into that because I know it has been discussed today but I want to add my voice to that. Mr.
▶ 1:21:36Sen. Curtis: Connors, what resources can the federal ccs you --c provide to statescsu class vi assist in the process? Review of permits?
▶ 1:21:54Mr. Connors: The program historically, I think it is been around for about 40 years now, historically there are grants the states apply for the epa and funding, resources to the states that have primacy. The history began in 2010 when epa published the regulations. There's been no resources through those grant applications.
▶ 1:22:21Mr. Connors: The states are applying for and administering those programs with their own state funding. Additional funding for the states to have those resources to implement would be helpful.
▶ 1:22:38Sen. Curtis: I think the witnesses and the chair. This is a really important topic. I suspect most of america does not really understand fully the potential. Thank you for holding this hearing. I look forward to additional discussions and yield my time.
▶ 1:22:46Chair Capito: Apparently senator schiff is going to be coming. I'm going to ask a question. Mr., have done a lot of work on capture. I guess I'm curious to know are any of the wells that have been permitted direct capture -- direct air capture wells and what kind of -- Mr.
▶ 1:23:09Chair Capito: Connors lined out three difficulties forgetting these projects moving, retrofitting, permitting on pipelines and long lead times. How does direct air capture work into this? Is the technology fully proven? Who is doing this work?
▶ 1:23:30Mr. Connors: Thank you. To my knowledge there has been one conditional permit in west texas for the class vi welcome a brown pelican project that is specific for direct air capture project. As a general rule, class vi wells, you need mostly from the economic standpoint from about a million tons a year down well to make it worth putting in a permit for.
▶ 1:24:01Mr. Connors: As of yet, no direct air capture projects that can remove a million tons a year. Unlikely many class vi wells will uniquely be situated for singular direct air capture project. Direct air capture is -- shares many of the similar challenges associated with others but instead of removing it from a relatively concentrated source out of a power plant industrial rights moving rightly out of the ambient air, the number one thing we can do to drive down the cost of direct air capture
▶ 1:24:31Mr. Connors: Is cheap abundant power. At the end of the day, 80% of the cost associated with it is heat, 20% is related to electricity and we need cheap abundant power sources whether that is natural gas, nuclear, hydro, geothermal. We need not justice -- just the project to be built, but the transition is to carry that energy to these projects to drug on the cost on the capture side.
▶ 1:24:59Mr. Connors: They share the same concerns on pipeline permitting and co2 storage, although a benefit is because you are pulling out of the ambient air you can cite directly on top of geologic stores to minimize the amount --.
▶ 1:25:13Chair Capito: Can you come and direct air capture project -- combine a direct air capture project to make it to that scale you talked about? Is it permissible?
▶ 1:25:28Mr. Cavanaugh: This is happening today where they are deploying for a south texas hub and the cyprus project in louisiana are deploying an industrial rich areas where they can aggregate the carbon capture from these industrial sources alongside of their direct air capture to make the unit of economics better.
▶ 1:25:54Chair Capito: Interesting image of the need for more energy because as you create the energy, and you mentioned that she said natural gas with cc U.S., so you are doubling in one project here. Ccusing to do the direct air capture -- I don't see how the economics of that will work. Maybe into the future hopefully.
▶ 1:26:22Chair Capito: We have a repeating theme here and I mentioned it in my opening statement of the reliabilities because not only is this an intensive process of the process we see on ai and other things are putting great pressures on our potential for providing electricity for all of this. The key to all of this, and not the only key but the key to every one of these projects come is permitting process you can move along.
▶ 1:26:51Chair Capito: You cannot permit a pipeline or nuclear plant or transmission line. At every point of the project all hands point to permitting. So any help you can give us with permitting class vi and thus pipelines I think will cross benefit all projects. I think what is good about it is , as senator whitehouse said, this is going to be a bipartisan push.
▶ 1:27:18Chair Capito: It is the only way to do it effectively to get into legislation because we see what happens with regulatory environment as the shifts of administration government to another at the federal level. I would say I really appreciate all being here today. I'm going to go to senator cramer and then of centre verse ship does not -- senator schiff does not show up, we will write it down.
▶ 1:27:41Sen. Cramer: We could quite honestly take it in the lunch and sit around a table somewhere in the cafeteria. I run the risk of sounding silly perhaps and asking questions but we referenced now on the energy, particularly electricity challenge that we have, we talked about their permitting. Linear permitting whether it is the transition line or gas pipeline, co2 pipeline.
▶ 1:28:09Sen. Cramer: Then you have to have -- to do that, up to have a generator of some sort. So we have that challenge of permitting. Then we have -- it would help to have customers on the other side of it. We can generate electricity and create transmission lines to nowhere and that does not help anybody. This is a very big issue, complex issue. As we prepare for permitting, we will be needing a lot of help.
▶ 1:28:44Sen. Cramer: You alluded, Mr. connors, to class ii wells and the ability to -- similarities of the sources. So there are a lot of class ii wells are approved and permitted. Is there any reason why the application for class vi well -- in space, already class ii well.
▶ 1:29:11Sen. Cramer: Does that complicate the calass designation ii? This applies to all of you. Does that question make sense even? I guess it is possible it doesn't.
▶ 1:29:28Mr. Connors: That is a question I get somewhat often. There are different standards for well construction when it comes to classics well versus class ii. Both are protective of sources of underground drinking water.
▶ 1:29:43Mr. Connors: Class vi well has more specific requirements for the way the well is constructed in terms of design and engineering that would not be compliant typically in a class ii disposal well.
▶ 1:30:03Mr. Connors: We have class ii used for co2 injection in her oil fields and certainly there's a phenomenal opportunity there as we look at the u in ccu. That is where I think you have the opportunity to advance and accelerate widescale carbon capture utilization and storage to be able to have -- when we are able to capture co2 and
▶ 1:30:35Mr. Connors: Address the economics associated with capturing co2 from some of our largest emitters and again, these are the industrial sectors, industrial operators that are the life brett of the community in terms of economics and industrial tax base so it is a dual challenge. But if economics do make sense to retrofit with carbon capture technology, we could have readily available co2 that I believe, and of domestic I've need for greater innovation and utilization of that co2.
▶ 1:31:05Mr. Connors: I think the opportunity is in front of us if we are able to knock down some of these barriers.
▶ 1:31:10Sen. Cramer: One of you early on reference the difference between commodity and waste product or pollutant. That is what makes it a commodity, the utilization piece that we have not talked a lot about. Mr. kavanaugh, I sent you something to say about my walking question about wells. You explained it well. Anything you want to add to that?
▶ 1:31:32Mr. Cavanaugh: I would say on something like enhanced oil recovery, it is sort of a microcosm of climate in and of itself. Climate change is the complex and subtle problem, but fundamentally, a simple math one. We need to reduce emissions quickly and remove those that we can't reduce. Recovery is when you inject co2 into an already existing field to push out more oil.
▶ 1:32:01Mr. Cavanaugh: In a world where you have stagnant or declining oil demand , oil produced from enhanced oil recovery is the lowest carbon intensive barrel of oil that you can get out of the ground period we see a demand for this globally with these barrels being sold right now. I think the 6% with enhanced oil recovery.
▶ 1:32:21Mr. Cavanaugh: It is a simple math problem period however much co2 you sequester in the ground, subtract that from the total that would come from the combustion of the oil, receive more carbon intensive oil . I think it is a positive pathway.
▶ 1:32:37Sen. Cramer: We have a project that produces net negative oil as a result. It is fascinating. My time is up. I know I am nerdy, but this has been fun. Thank you guys.
▶ 1:32:53Chair Capito: Listen, senator schiff I think is voting so with no further questions, I would like to ask the witnesses and all my colleagues, thank them for their participation. Some of you traveled quite far. Senators who wish to submit written questions for the record have until 5:00 p.m. On wednesday. February 26.
▶ 1:33:19Chair Capito: The nominees responses to those questions for the record are to back to the committee no later than 5:00 p.m. On wednesday, march 12. With that, the hearing is adjourned. Thank you all. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]