The next big thing


By Holly Riddle 

If you’ve been keeping up with our coverage of the $2 billion KeyState project, which is poised to bring Pennsylvania’s first-ever carbon capture project to the region, then you already know a few important details.

One, the project includes a closed system of natural gas extraction and production of hydrogen using near zero carbon power that results in zero-emission and emission-reduction products.  Two, the project also captures CO2 and returns that CO2 deep underground for permanent storage. Three, as KeyState Energy’s CEO Perry Babb told us last time, the project will have the lowest carbon intensity score in natural gas production at a large scale on the planet, virtually eliminating methane and CO2 emissions.

This is all a big deal, with long-lasting (we’re talking generations-long) impacts for the region’s workforce and economy, as well as, in a broader sense, the planet. Recently, we caught up with Babb to learn more about the project’s latest milestones, as well as implications for Penn State and the Happy Valley community.

A vote of confidence for KeyState and a great deal for taxpayers

On Oct. 31, KeyState announced that, as a principal project of the Appalachian Regional Clean Hydrogen Hub (ARCH2), it would be one of the beneficiaries of a $925 million U.S. Department of Energy grant. In a statement, Babb said, “With this announcement, KeyState will receive substantial grant funding over the coming years to undergird the much larger private sector investment required to develop KeyState’s Qualified Clean Hydrogen and Carbon Storage Complex in North Central Pennsylvania.”

We’re small developers trying to do something enormous and this is already helping us attract partners that will make this a terrific project.

However, as he told HappyValley Industry, the grant money’s impact goes beyond the financials. While the grant money that KeyState will receive accounts for approximately 5% of the cost of the overall project, the grant is more so an acknowledgement of the Department of Energy’s confidence in KeyState’s plans for the future.

Babb said, “It shows government support for the concept of the project, so [the grant’s impact goes] beyond the dollars… It’s a huge validation for the KeyState project. We’re small developers trying to do something enormous and this is already helping us attract partners that will make this a terrific project. We’ve already done the design and concept, and brought together the initial parties, but this recognition is bringing us other partners and investors that are going to make the project go.”

He mentioned that, to even be accepted as a principal project under the ARCH2 umbrella required a rigorous application process, and then, ARCH2 was up against significant competition for the Department of Energy grants. For ARCH2 and, by extension, KeyState to then be selected for the grant, it was a “huge validation from the industry,” Babb said, noting the “probability of success has dramatically leaped forward.”

And as for the taxpayers whose money is funding grants like this? Babb said they’re getting a great deal.

He explained, “From a return on tax dollar perspective, the allocation to KeyState will be many, many, many times returned in the capital investment that is required to build the facility. Then, of course, the jobs and tax revenue in the first couple years will more than eclipse the allocation we received.”

“It’s a very exciting time for everyone”

Another focus for Babb and the KeyState team recently? Solidifying the project’s relationship with Penn State University. There, the Institute of Energy and the Environment will act as a conduit for the KeyState-Penn State relationship.

Sanjay Srinivasan is a professor in the Department of Energy and Mineral Engineering in the College of Earth and Mineral Sciences, and is a director of an institute within the Institute of Energy and the Environment.

It's a very exciting time for everyone, whether you’re contemplating a career in the energy sector or you’re already in an energy-related educational program at Penn State.

“This energy institute does a lot of energy-related research, as the name would suggest, but one of the key areas we look at is shale gas production, a key component of the KeyState project, and also carbon sequestration, another aspect of the project,” Srinivasan explained. “We also have a very big interest in environmental monitoring and mitigating the footprint associated with energy production and utilization.”

The Institute will work with KeyState on multiple aspects of the project, with the overarching goal of helping optimize production while minimizing environmental footprint through the design of a safe and effective carbon sequestration program. Beyond the research, though, Penn State’s University Park campus, as well as other campuses in the KeyState vicinity, will be using the project and connected curricula to help develop a well-trained workforce, from tradespeople to students who go into more nuanced fields, such as policy.

KeyState’s significant facilities located just 50 miles away from University Park will also provide ample opportunities for student research. Additionally, since KeyState plans to set up an office in Innovation Park, including a mock operational center, students will be able to engage in the project and watch it grow from the ground up. Some of those students will be able to benefit from internship opportunities, while others will later find full-time employment opportunities thanks to the experience.

“For future generations,” Srinivasan said, “it’s going to be a great educational opportunity, a great way to market to and recruit students. You hear so many things about the energy transformation and this is what is meant by that. We’re going from traditional use of shale gas to something very novel, which will have pretty close to a zero-carbon footprint. There’ll be a great message to send to prospective students about careers in the energy industry and energy sector… It's a very exciting time for everyone, whether you’re contemplating a career in the energy sector or you’re already in an energy-related educational program at Penn State.”

At the same time, Srinivasan noted, Penn State will be working with federal and state agencies and similar decision-makers to expedite discussions and decisions around policy and compliance-related issues, to ensure the project can move ahead in a timely manner. Similarly, the university will be using its presence in the community to help KeyState succeed.

He said, “We need to make sure that the communities feel benefited by this project and they see value in engaging with this project. Penn State is a university with a neutral, unbiased voice. We can communicate the realities of this project in a much more effective manner.”

For those community members who jump on board, Srinivasan anticipates ample opportunities — for jobseekers, for startups, for capital investors and for anyone “looking for the next big thing.”



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