The WGCI expressed concerns about the “departure of the proposed rules relative to the original intent of the IRA” and encouraged Treasury to act now to fuel the hydrogen economy

Today, Waste Gas Capture Initiative Executive Director Mike Moore delivered prepared testimony at the public hearing on the U.S. Treasury Department’s December 2023 proposed regulations governing implementation of the Section 45V Credit for Production of Clean Hydrogen. In his testimony, Mike encouraged the Treasury to consider necessary policy implementation factors to ensure the successful inclusion of mine methane under the Inflation Reduction Act.

Highlights from Moore’s testimony:

• “Fugitive methane capture and potential hydrogen production applications can stimulate economic growth and create thousands of good-paying jobs, especially in regions that have experienced economic decline due to the clean energy transition. By supporting the development of robust fugitive methane capture and clean hydrogen production industries in the U.S., we can foster innovation and job creation while propelling the nation toward a sustainable, low-carbon future. Encouraging and incentivizing the capture and beneficial use of mine methane can create much-needed jobs and expand economic activity, including in some of the most socioeconomically challenged communities in the U.S.”

• “The industry is ready to go on this effort. This is about remediation of a coal industry that is required to vent methane for safety of its workers. But by avoiding capturing this methane at the source, like we can today, we risk having to confront the more challenging, more expensive task of directly capturing methane from the atmosphere in the future. We should work to capture the methane emitted from coal mines now before it becomes necessary to capture it from the atmosphere—which is estimated to be ten times as expensive.”

• “Waiting for an additional techno-economic analysis at this point is like watching an oil spill in real time and waiting around for an environmental analysis before doing anything about it. Each day we wait is another day more methane is vented into the atmosphere. We are out of time for our climate. Let’s act now. We have the financing instrument to make a meaningful impact now and we ask you to move in haste and under the original intent of the IRA to allow for the crediting and use as a feedstock for the future of the hydrogen economy we are working to create.”

According to the U.S. Environmental Protection Agency’s (EPA) Coalbed Methane Outreach Program (CMOP), methane emissions from coal mining and abandoned coal mines accounted for approximately eight percent of total U.S. methane emissions in 2019. Meanwhile, less than one percent of coal mines currently capture fugitive methane.

Instead of establishing CMM as a clean hydrogen pathway, the proposed rules, as drafted, depart from the original intent of the IRA, which sets forth a technology-neutral metric of carbon intensity derived from the GREET model and was meant by the lawmakers to encompass hydrogen derived from low-carbon gasses, as established in the Congressional Record. The Treasury’s inclusion of CMM as a clean hydrogen production pathway would be a crucial step to ensure deployment of CMM capture and processing systems that will put fugitive methane to its first productive use, lowering greenhouse gas emissions, creating jobs, and securing America’s energy future.

Read the full text of Moore’s prepared testimony below.

Good morning. Thank you to the Treasury and the IRS for holding these important hearings this week. I appreciate the opportunity to share my views, and the views of the Waste Gas Capture Initiative.

My name is Mike Moore, and I am the Executive Director of the Waste Gas Capture Initiative. We are a diverse group of leading American energy industry partners, NGOs, and experts who are committed to recognizing the economic benefits and environmental impact of a strong mine methane capture industry, especially for local communities. The WGCI is dedicated to expanding fugitive methane capture practices, and we commend the Treasury for its commitment to exploring additional hydrogen production pathways, especially the capture and utilization of fugitive methane, such as coal mine methane.

Coal mine methane, or CMM, is distinct from coalbed methane. CMM is waste methane that must be liberated for mine safety, and it is responsible for 8-10% of all U.S. methane emissions. Still, as of today, CMM emissions are not regulated by any current framework. That is why the WGCI encourages the Treasury to consider important policy implementation factors to ensure the successful inclusion of mine methane under the Inflation Reduction Act.

First, the WGCI requests that the Treasury accept all hydrogen production pathways covered by Argonne National Laboratory’s R&D GREET model under the 45V program. As currently drafted, the 45VH2-GREET model would exclude key low-carbon intensity sources for hydrogen production that have already been vetted and assessed through rigorous scientific review. The application of 45VH2-GREET as drafted would disincentivize the productive use of methane capture from sources like CMM and other fugitive methane streams and their unique synergies with the deployment of Carbon Capture and Sequestration technology. It is therefore in opposition to U.S. federal methane reduction pledges.

In addition, the first productive use requirement, if implemented as drafted, is overly burdensome and will unnecessarily restrict opportunities to decarbonize hydrogen production as well as curtail methane abatement at scale. The WGCI strongly opposes this measure in the form proposed. Many mines have terminated productive use due to economic conditions and would not be afforded the opportunity to re-deploy capture systems if strictly implemented.

Any CMM project that achieves meaningful methane abatement is necessarily expansive and spans multiple point source boreholes for methane capture. Capturing new CMM source boreholes for beneficial use is an incremental, discrete investment decision that is unjustified economically today since the capture and collection infrastructure for each borehole requires significant investment and ongoing operational expenditures. If deemed necessary, any final first productive use requirement should therefore be applied on a per-borehole basis.

The WGCI also requests that the finalized regulations allow for storage and unrestricted book and claim delivery, as well as the implementation of the CMM-to-power pathway. This will allow hydrogen producers to have the necessary access to distribute CMM sources.

Many concerns have been brought up by stakeholders around the potential pitfalls of implementing coal mine methane and other low-carbon gases into the 45V program. A lot of these concerns are warranted, which is why the low-carbon gas industry and the agencies tasked with regulating it are actively applying robust and mature solutions, such as:

• A comprehensive lifecycle analysis of coalmine methane was performed by Argonne National Laboratory.
• Existing tracking frameworks, such as the Renewable Thermal Certificate program by M-RETS guard against double-counting. Regulatory programs such as the federal Renewable Fuel Standard or California’s LCFS have extensive third-party verification frameworks that are readily transposable into the 45V program. Of these, EPA’s RFS program has recently even undergone a major Biogas Regulatory Reform, which enhances governmental oversight and further improves program robustness using industry-specific metering and verification requirements that apply to pipeline-injected gas. These frameworks are fully applicable to fugitive methane. Extensive measurement and monitoring systems at mine methane capture operations already exist, allowing for robust auditing by third-party verifiers.
• Capturing CMM lowers pollution and greenhouse gas emissions in disadvantaged communities, ensuring that the deployment of CMM capture systems cannot negatively impact communities.
• Coal demand is forecasted to remain flat by the IEA, and methane from both metallurgic and thermal coal has the same impact on GHG emissions. Mine methane capture deployment should not be prejudiced on source.
• The industry agrees that CMM is separate from oil- and gas-related methane emissions.
• Finally, the need for a techno-economic analysis has been satisfied by a variety of sources, including Argonne National Laboratory’s GREET R&D model lifecycle analysis and a techno-economic analysis on CMM for productive use conducted by CMOP, ARI, and GMI.

Local communities near current or inactive mining areas feel the environmental impacts of emissions most strongly. It is precisely for this reason that investment is required in fugitive methane capture projects in impacted communities. Preventing the inclusion of fugitive methane sources from active and abandoned mines will continue to contribute to harmful environmental benefits in the areas most impacted by point-source methane pollution. The inclusion of mine methane capture in the proposed regulations aligns with broader goals to achieve significant emissions reductions.

Fugitive methane capture and potential hydrogen production applications can stimulate economic growth and create thousands of good-paying jobs, especially in regions that have experienced economic decline due to the clean energy transition. By supporting the development of robust fugitive methane capture and clean hydrogen production industries in the U.S., we can foster innovation and job creation while propelling the nation toward a sustainable, low-carbon future. Encouraging and incentivizing the capture and beneficial use of mine methane can create much-needed jobs and expand economic activity, including in some of the most socioeconomically challenged communities in the U.S.

These programs will benefit communities in Appalachia, the South, and the rural American West who need it most. For instance, in West Virginia—the top state for CMM emissions by volume—CMM capture would reduce emissions by 236 million metric tons of carbon dioxide equivalent over a 20-year timeframe, according to one analysis. In that same timeframe, CMM capture would create over 1,400 jobs and contribute $2.7 billion to West Virginia’s gross domestic product.

I would also be remiss to not highlight the grand departure of the proposed rules relative to the original intent of the IRA, which sets forth a technology-neutral metric of carbon intensity derived from the GREET model and was meant by the lawmakers to encompass hydrogen derived from low-carbon gasses, as established in the Congressional Record. We believe that liberties are being taken to regulate a market in a way that was not in line with the carefully negotiated guidelines of the originally intended legislation.

In closing, we appreciate the opportunity to contribute to the development of regulations that will shape the future of hydrogen production and methane emissions reduction in the United States.

The industry is ready to go on this effort. This is about remediation of a coal industry that is required to vent methane for safety of its workers. But by avoiding capturing this methane at the source, like we can today, we risk having to confront the more challenging, more expensive task of directly capturing methane from the atmosphere in the future. We should work to capture the methane emitted from coal mines now before it becomes necessary to capture it from the atmosphere—which is estimated to be ten times as expensive.

Waiting for an additional techno-economic analysis at this point is like watching an oil spill in real time and waiting around for an environmental analysis before doing anything about it. Each day we wait is another day more methane is vented into the atmosphere. We are out of time for our climate. Let’s act now. We have the financing instrument to make a meaningful impact now and we ask you to move in haste and under the original intent of the IRA to allow for the crediting and use as a feedstock for the future of the hydrogen economy we are working to create.

We look forward to continued dialogue to ensure the final rules under consideration today reflect the full spectrum of environmental and economic benefits associated with fugitive methane capture and utilization and its pivotal role in the hydrogen production landscape.

Thank you.

About the WGCI

The WGCI represents leading American energy industry partners, NGOs, and experts who are committed to recognizing the economic benefits and environmental impact of a strong mine methane capture industry. Visit wastegascapture.com and follow @WGCInitiative on X (formerly known as Twitter) and LinkedIn for more information.

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