Testimonies

Energy Resources - Innovative Energy Testimony

With changes to our legal, economic and regulatory structure, Texas could become the leading producer of low-cost hydrogen in the nation. With an increased focus from the industry, coupled with state incentives and leadership to map out the infrastructure for hydrogen-fueled transportation, Texas could be positioned to benefit from an increased reliance on this zero-emissions fuel.

Energy Resources - Increase Production Testimony

The introduction of Carbon Capture, Utilization and Storage (CCUS) can help Texas continue and even increase production of oil and gas in the state, while also meeting demands for lowering carbon emissions. CCUS can enable an increased use of hydrogen, a clean energy source, and also provide resiliency for the electric grid with more dispatchable, and low carbon, energy.

Electric Grid Testimony

Incentives to promote all forms of carbon-neutral electricity will be necessary through technology investments, direct incentives and the creation of a system strengthened underpinned with baseload power, that is carbon neutral, and operated with the full range of technology and fuels to optimize performance. Therefore, creating an economic framework to encourage the adoption and deployment of CCUS is critical.

RRC Primacy Comment

CNC submitted a response in support of the Railroad Commission of Texas application for Class VI Primacy from the EPA and related proposed rule changes. Streamlining the regulation of Class VI injection in Texas to one state agency will encourage and expedite the use of CCUS in Texas, helping the state produce needed energy while reducing emissions.

Senate Transportation Committee Testimony

The Senate Committee held an interim hearing on the use of alternatively fueled vehicles in Texas. CNC submitted testimony outlining the benefits of an increased reliance on alternative fuels, such as CNG and hydrogen, in the effort to provide reliable, affordable energy while also reducing carbon emissions.

Environmental Regulation Committee Testimony

The House Committee held an interim hearing on a charge related to the Texas Emissions Reduction Program (TERP), a program that offers financial incentives to eligible businesses for the reduction of emissions from vehicles and equipment. CNC submitted testimony advocating for CCCUS eligibility under TERP.

CEQ Filing April 2022 Testimony

The Council for Environmental Quality published a Carbon Capture, Utilization and Sequestration Guidance document, touting the benefits of CCUS and expressing a commitment to accelerating the development and deployment of the technology on a federal level. CNC responded with a public comment in support of advancing CCUS, on both the federal and state level.

SEC Response

CNC submitted a public response to the SEC's proposed rule amendments requiring climate-related disclosures for investors. CNC opposes the SEC's involvement in climate-related issues, and the prohibitive and overly burdensome reporting requirements proposed.

Energy Resources - Innovative Energy

Energy Resources - Increase Production

Electric Grid Testimony

RRC Primacy Comment

Senate Transp Alt-Fuel Testimonial

May 3, 2022 To:

Senate Transportation Committee

Re: Interim Charge:
Alternatively Fueled Vehicles: Review the Texas Department of Transportation's plan for federal funding related to alternatively fueled vehicle infrastructure development. Examine the increase of private and public owned alternatively fueled vehicles registered in the state and make recommendations for road user fee fairness between alternatively fueled vehicles and gasoline and diesel vehicles.

The Carbon Neutral Coalition (CNC) is a Texas organization dedicated to preserving our high-skilled, high-paying energy sector jobs and shaping the future of fossil fuels. The objective of CNC is to achieve carbon neutrality in Texas by 2050, while also preserving affordable, reliable energy, creating new jobs, and maintaining a strong economy.

The energy industry continues to face growing energy demands from an increasing population, while also being called to reduce emissions on a significant scale. Innovations in technology and process, including Carbon Capture, Utilization, and Storage, provide one pathway for the fuel industry to both meet demand and move towards carbon neutrality. Another way is the increased use of alternative fuels, including compressed natural gas (CNG), propane, and hydrogen in the transportation sector, allowing the industry to create new opportunity while rebuffing challenges by Washington and Wall Street. Expanding our energy sources, while ensuring continued funding for the state highway fund, is the key to addressing the problems facing the transportation sector today.

The use of CNG provides the benefits of similar performance to gasoline or diesel-powered vehicles, reduced emissions, more stable pricing than gasoline due to its pricing structure, abundance of supply, and lowered risk of leak or spillage. There remains a need in the state for more fueling stations and infrastructure to support CNG-powered vehicles, but due to its abundance in the state, natural gas as a fuel source for vehicles provides the added benefit of promoting a Texas-based energy resource that can satisfy the call for lowered emissions.

The utilization of hydrogen as a fuel source also provides many benefits and has gained more traction in recent years by both industry and the government. Hydrogen is known as an affordable, reliable, clean, and secure energy source. Hydrogen has the ability to be a zero-emissions fuel, making it a critical part of many industry and government goals for reducing or eliminating emissions. Hydrogen can also be used as a ‘responsive load’ on the grid, enabling stability and energy storage and increasing utilization of power generators. In October of 2021, Senator Cornyn introduced a bi-partisan infrastructure package to support hydrogen technologies, touting it as a versatile, clean, and reliable energy source, with the goal of making hydrogen more accessible and cost-effective. The package would create grant and financing programs to incentivize the building of hydrogen infrastructure at ports and heavy industrial facilities, as well as hydrogen transport infrastructure, including storage and vehicle refueling stations.

While all of these energy sources provide the benefit of meeting energy demand while also reducing emissions, the use of alternative fuels presents the problem of a decrease in state funding stemming from a reduction in the motor fuels tax, which would have a significant impact on state revenue. At least 30 states have imposed special fees for hybrid and electric vehicles to address the gap in gas tax revenue, through a special registration fee, or road user charges.i CNC supports a fair and equitable fee or tax in Texas for all vehicles, including alternatively fueled and electric vehicles, whether that be a flat registration fee, or tax per recharge. CNC supports the need to continue to generate the revenue necessary for the growing state in the state highway fund.

Thank you for your consideration of this matter.

Environ.Reg Testimony.TERP.4.26

The Carbon Neutral Coalition (CNC) is a Texas organization dedicated to preserving our high-skilled, high-paying energy sector jobs and shaping the future of fossil fuels. The objective of CNC is to achieve carbon neutrality in Texas by 2050, while also preserving affordable, reliable energy, creating new jobs, and maintaining a strong economy. We can achieve this through the use of carbon capture, utilization and storage (CCUS) technologies. To materially rebuff attacks from Washington and Wall Street against fossil fuels, Texas must be pre-eminent in this new industry. Economic incentives are key, however, and the Texas Emissions Reduction Program (TERP) provides a great opportunity for the state to meet increasing energy demand while also reducing emissions.

The TERP program offers financial incentives to eligible businesses and others for the reduction of emissions from vehicles and equipment. TCEQ administers the program, funded by revenues from fees and surcharges relating to certain off-road equipment and on-road vehicles. TERP is intended to help Texas meet the goals of reduced pollution and improved air quality. Establishing an avenue for TERP funding to apply to CCUS can help TCEQ and the state achieve those goals.

CCUS is the technology that will be necessary at scale to effectively reduce carbon emissions from existing industries. Because of the cost of this technology, there is a great need for economic incentives. If increased federal CCUS economic incentives are enacted into law, such as the proposed increase in the Section 45Q tax credit, state legislation to create profitable investments could effectively bridge the gap for emitters and states to pursue these projects and lower carbon emissions on fossil fuels.

TERP is one of many state programs already in statute that could be revised to help incentivize deployment of carbon capture technology. Amending TERP to include CCUS technology and equipment as eligible for incentives would allow Texas to get engaged in this new industry, charting a way for the state to continue to provide reliable, affordable energy while also reducing emissions and cleaning the air. CCUS should be considered eligible either through a specific grant program such as the New Technology Implementation Grant Program or Alternative Fueling Facilities Program, a new grant program, or inclusion in statute as a potential recipient of TERP funds. By utilizing programs like TERP, Texas will be strategically enabled to advance the CCUS industry, which will promote transformative economic growth AND emissions reductions. CNC encourages the use of TERP to develop a viable CCUS industry in Texas, to move toward carbon neutrality while maintaining a robust economy, a good standard of living, and affordable energy to power our lives. Economic support from the state is a critical need in achieving these goals.

CEQ Filing April 2022

April 18, 2022

VIA FEDERAL eRULEMAKING PORTAL


Brenda Mallory, Chair
Council on Environmental Quality
730 Jackson Place NW
Washington, DC 20503

RE: Request for Comments on Council for Environmental Quality’s “Carbon Capture, Utilization and Sequestration Guidance,” Docket Number CEQ-2022-0001

Dear Ms. Mallory:

Thank you for the opportunity to respond to the Council on Environmental Quality’s “Carbon Capture, Utilization, and Sequestration Guidance.” The Carbon Neutral Coalition supports the Administration’s commitment to “accelerating the responsible development and deployment of CCUS to make it a widely available, increasingly cost-effective, and rapidly scalable climate solution across all industrial sectors.”i

The Carbon Neutral Coalition (CNC) is a Texas organization dedicated to shaping the future of fossil fuels. CNC was founded by Corbin J. Robertson Jr., Chairman and CEO of Natural Resource Partners, and its Advisory Board is chaired by Susan Combs, former Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior. The objective of CNC is to achieve carbon neutrality in Texas by 2050 while also preserving affordable, reliable energy, creating new jobs, and maintaining a strong economy, through the use of carbon capture, utilization and storage (CCUS) technologies.

Without question, fossil fuels are essential to the state and nation, and Texas is the current leader in energy production and economic activity. The fossil fuel industry generated $422 billion of Texas economic activity alone in 2019; it also makes Texas the number one U.S. CO2 emitter. To that end, CNC is currently working with institutions, business leaders and government officials to support initiatives and policies that will drive carbon neutrality in a way that creates jobs and continues to provide reliable, affordable energy. As energy demand continues to grow, CNC believes that supporting and growing the carbon capture, utilization and storage (CCUS) industry in Texas and in the nation will allow the fossil fuel industry to meet increasing energy demand while simultaneously reducing carbon emissions to meet the goal of carbon neutrality.

There are many CO2 emitters and abundant permanent storage opportunities in the nation, but there are also many issues that need to be resolved to create a CCUS industry: permanent storage liability, pore space ownership, a regulatory review and approval process, and economic incentives needed to justify the capital and operating costs of CCUS. CNC is working closely with the Texas legislature to resolve these issues on a state level, but on the federal level, there must be support for the industry as well to meet future carbon emissions goals, including carbon neutrality.

To meet the goal of carbon neutrality, CCUS should be considered the first order enabler, or “lynchpin”, for the future of energy. CCUS at scale will be necessary to reduce carbon emissions from existing industries and to enable system-wide carbon management and emissions reduction in the focus areas. Specifically, CCUS use will enable the reduction of CO2 emissions faster and more effectively. As validated by the International Energy Agency (IEA), for global climate targets to be met, broad commercialization of CCUS must contribute 15% of global CO2 emissions reduction.ii The utilization of CCUS as a means of carbon reduction also enables a hydrogen economy that will fuel transportation and meet the industry requirement of H2 at scale with H2 that is decarbonized.

The 2019 National Petroleum Council issued an extensive report on Carbon Capture, Utilization and Storage (CCUS)iii that was produced by hundreds of contributors: scientists, engineers, energy executives, environmentalist, market exports, and federal and state government representatives. The comprehensive report outlined many recommendations that need to be implemented to allow emitters to capture carbon, transport and permanently sequester CO2. If federal CCUS economic incentives are enacted into law, emitters and states can create profitable investments to further clean fossil fuels. Building on federal incentives, state legislation can enable low capital cost and property taxes; permanent storage fees could be split between surface and mineral owners, states can administer state-sponsored liability programs for the permanent storage liability, like North Dakota has established; and $85/tone of CO2 sequestered Section 45Q tax credit is enough to bridge the gap to profitable CCUS investments. The current $50/ton Section 45Q tax benefit is not enough to justify the CCUS projects. The $35/ton increase to $85/ton will bridge the gap and emitters and investors will then initiate CCUS projects.

CCUS, as determined by the NPC study, would create the following economic impact: (1) $680 billion in capital investments (U.S. alone and union jobs) through 2050 to reach the deployment scale of 500MM tons of CO2 abatement; and (2) 230,000 jobs on an annual basis for construction and ongoing O&M at facilities.

While also enabling the reduction of emissions as desired by the Administration, the use of CCUS in conjunction with renewable energy will also support a reliable, affordable, electrical grid. The U.S. will benefit from an electrical grid that can provide 24/7 decarbonized baseload electrons to meet reliability, resiliency, and low-cost delivery. Texas leads the United States in this area as its $88 billion investments in wind and solar provide over 20% of its electricity. CCUS can be coupled with a growing renewables investment to ensure we have the baseload, resilient system that only natural gas power plants can provide. Eventually these turbines will run on H2 rather than natural gas, and advance the baseload power production platform of carbon free power. CO2 emissions reductions in manufacturing represent about 45% of total US emissions, as most of the rest is transportation tailpipe; in pursuing this goal the industry can create a Scope 1,2,3 emissions reduction to our products that would then be sold on a global market as the lowest carbon intensity products. Cement, steel, fuels, chemicals, and more would all be lower carbon intensity. The electrical grid requires baseload power to provide reliable and resilient electricity. Natural gas-based power, with CCUS, provides what does not exist today, outside of nuclear: a carbon-free source of baseload electricity.

Many significant companies are already advancing CCUS technology and projects. Attached to this document is a current list of NETL CCA Initiatives and other CCUS technology and project sponsors. The CCUS consortia for commercialization of CCUS is funded by the Department of Energy through the Southern States Energy Board (SSEB) and centered at University of Houston and its Center for Carbon Management in Energy (CCME). There are forty-two entities including NGOs as well as universities, and thirty companies for Oil and Gas, Petrochemical and Electric Power all represented.

If supported, Texas will be strategically enabled by the state’s industry clusters, abundance of pipeline and infrastructure, and the proximal geology for storage in both Enhanced Oil Recovery and saline formations unmatched in the world. Support on the federal and state level for the legal, regulatory and economic framework for CCUS would serve to advance the CCUS industry, which needs tax policies, access to low-cost loans or classes of bonds, and incentives to promote transformative economic growth AND emissions reductions.

CNC, along with our Advisory Board, believes that the developing a viable CCUS industry could enable Texas and the nation to reach three objectives: (1) become carbon neutral by 2050; (2) maintain a robust economy that provides a good standard of living and affordable energy, products and services; and (3) lead the way toward carbon neutrality, create jobs, increase efforts to reduce carbon emissions and continue to provide reliable, affordable energy to power our lives.

Thank you for your consideration and support of the CCUS industry.

Sincerely,

Corby Robertson, Jr.

Susan Combs



CNC Advisory Board

Susan Combs, Austin, Texas (Chairperson): Fellow at the University of Texas Center for Identity, Former Texas Comptroller of Public Accounts, and Former Assistant Secretary for Policy, Management and Budget, and Chief Financial Officer at the United States Department of Interior. 

Thurmon Andress, Houston, Texas: President of Andress Oil & Gas LP.

Mike Belenkie, Calgary, Alberta, Canada: President and Chief Operating Officer of Advantage Energy Ltd.

Sarah Biller, Boston, Massachusetts: Executive Director of Vantage Ventures and Co-Founder of the FinTech Sandbox.

Jim Blackburn, Houston, Texas: Professor of Environmental Law at Rice University and Faculty Scholar at the Baker Institute.

Tina Yturria Buford, Harlingen, Texas: Director of Education for the East Foundation, Former Board President of Texan by Nature, and Former Board President of the Texas Wildlife Association.

Tom Carter, Houston, Texas: Chief Executive Officer and Chairman of the General Partner of Blackstone Minerals.

Dan E. Cole, Frisco, Texas: Vice President of Commercial Development and Governmental Relations for Denbury Inc. 

James H. Clement, Jr., Dallas, Texas: Houston Trust Company and former Chairman of King Ranch, Inc.

Elizabeth Coleman, Rosedale, Mississippi: Partner at EnergyNorthAmerica, LLC, Former Texas State Representative, and Former Texas Railroad Commissioner. 

Jack Coleman, Rosedale, Mississippi: Founder and Managing Partner of EnergyNorthAmerica, LLC.

Robert Eckels, Houston, Texas: Founder and Director of Texas Central Railway, Former Texas State Representative, and Former Harris County Judge.

Don Evans, Midland, Texas: Chairman of the Permian Strategic Partnership, Former United States Secretary of Commerce under President George W. Bush, and Former Chairman of Energy Future Holdings.

Scott Frazier, Chapman Ranch, Texas: Texas Farm Bureau Board Member, District 13.

Kinnan Golemon, Austin, Texas: President and Founder of KG Strategies, Founder and former Chair of State Bar of Texas Environmental and Natural Resources Law Section

Maynard Holt, Houston, Texas: Chief Executive Officer of Tudor, Pickering, Holt & Co.

Devin Hotzel, Houston, Texas: Government Relations at Enbridge

Jodie Jiles, Houston, Texas: Director of Business Development for Transwestern Commercial Services and Regent on the University of Texas System Board.

Tom Luce, Dallas, Texas: Founder and Managing Partner of the Hughes and Luce Law Firm and Former United States Assistant Secretary for Education under President George W. Bush.

Tim Matthews, The Woodlands, Texas: Chief Executive Officer of Cozairo Corporation.

Dave Marchese, Houston, Texas: CEO of Caliche Storage

Charles McConnell, Houston, Texas: Executive Director for Carbon Management and Energy Sustainability at the University of Houston and Former Assistant Secretary of Energy at the United States Department of Energy under President Obama. 

Kenneth Medlock, Houston, Texas: James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at the Baker Institute and Senior Director of the Center for Energy Studies at Rice University.

Reed Morian, Houston, Texas: Chairman, Chief Executive Officer, and President of DX Holding Company Inc. and DX Service Company Inc. and Former Chairman of the Texas Parks and Wildlife Commission. 

Harriet O'Neill, Austin, Texas: Founder of the Law Office of Harriet O’Neill, PC and Former Texas Supreme Court Justice.

Julie Parsley, Johnson City, Texas: Chief Executive Officer at Pedernales Electric Cooperative, Former Texas Solicitor General, and Former Public Utility Commissioner of Texas. 

Carl Ray Polk, Lufkin, Texas: Partner at Corner Capital Advisors and Former President and CEO of Polk Oil Co., Inc.

Beth Robertson, Houston, Texas: Managing Partner of Bald Cypress LLC and Chair of the Cullen Foundation.

Ron Simmons, Dallas, Texas: Founder of Retirement Advisors of America and Former Texas State Representative.

Sean Strawbridge, Corpus Christi, Texas: CEO of the Port of Corpus Christi and Chair of the Education Task Force for the Texas Railroad Commission

Cliff Thomas, Victoria, Texas: Co-owner and Chairman of the Board of Managers of Pilot Thomas Logistics, Owner and Founder of Speedy Stop Food Stores and C.L. Thomas Inc., and Regent on the Texas A&M System Board.

Bobby Tudor, Houston, Texas: Chairman of Tudor, Pickering, Holt & Co.

SEC Response

The Hydrogen Economy

Carbon Capture, Utilization, and Storage: Incentives