Environmentalists Question Future Gas Storage Hub In Light Of Federal Spending Language

Dec 19, 2019

 

Language included in the federal spending deal Congress passed this week could imperil a major natural gas storage project planned for the Ohio Valley that is seeking a $1.9 billion federal loan guarantee, according to environmental advocates. 

In June, an amendment by Democratic Reps. Ilhan Omar from Minnesota and Pramila Jayapal of Washington, sought to clarify requirements for the Department of Energy’s Title XVII Innovative Energy Loan Guarantee Program. The program was designed to finance clean energy and advanced technology projects. 

The amendment stipulates the program should only be used “for projects that avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly improved technologies as compared to commercial technologies in service in the United States upon issuance of the loan guarantee.”

Language from the amendment was included in the guidance document, or manager’s report, associated with the $1.4 trillion spending package snaking its way through Congress this week. The newly-passed spending package, which the president is expected to sign, provides $29 million to the Title XVII program.

A screenshot of the manager's report associated with the 2020 federal spending bill package, H.R. 1865.

Some environmental groups argue the new language makes it clear the so-called Appalachian Storage and Trading Hub, a fossil fuel storage project, should not qualify. 

The project, which has been in the works for nearly a decade, would provide underground storage for natural gas liquids like ethane, which are used to make plastics and other products. It has the support of West Virginia's Congressional delegation and Justice administration

Project developers are currently seeking a federally-backed $1.9 billion loan under the Title XVII program.  

“The idea that we're going to use a clean energy program to incentivize the build out of a plastics industry that is going to lead to more fracking and lead to more emissions of greenhouse gases flies in the face of the purpose of the program,” said Mitch Jones with environmental group Food & Water Watch. 

Experts say building ethane storage is key to attracting new plastics and petrochemical manufacturers to the region. 

In an emailed statement, Steve Hedrick, president and CEO of the Appalachian Development Group, LLC (ADG), said he remains confident the project will move forward. 

“ADG's engagement with the DOE on its Part II application of under DOE’s Title XVII authority is authorized under the current standard,” he said. “If those standards change as presented publicly, [the Appalachian Storage and Trading Hub] still meets the criteria.”

A representative for the Department of Energy declined to comment on specifics related to the project or the new Congressional language.