What do we know about the KeyState to Zero Project?

Background

KeyState to Zero is a proposed industrial facility that would take fracked gas and turn it into

“blue” hydrogen and products such as diesel exhaust treatment and ammonia (which would be

sold to make fertilizers) and for other industrial, manufacturing, and medical uses. The project,

spearheaded by Pennsylvania-based businessman and KeyState CEO, Benjamin “Perry” Babb,

has garnered attention as the first facility in Pennsylvania that would combine fracked gas

drilling with on-site carbon capture and sequestration (CCS). CCS is a process that is intended

to capture carbon dioxide (CO2) pollution from smokestacks and industrial sources and store it

combined with nitrogen to manufacture ammonia and urea to be used as fertilizers. These

products would be transported by rail and truck and the remaining CO2 would theoretically be

sequestered underground on site, despite there being no feasibility studies exploring if it’s even

possible at the proposed site.

What is Blue Hydrogen?

The idea of “clean” hydrogen has become popular in recent years among policymakers and the

fossil fuel industry as a potentially cleaner source of energy that can be made from fossil fuels,

but not emit greenhouse gases when combusted. However, hydrogen can be produced in

multiple ways with different power sources, each of which results in different climate impacts.

The “cleanest” form is “green” hydrogen, which uses renewable energy to split water molecules

into hydrogen energy. Green hydrogen is currently only 1% of the global hydrogen supply. Gray

hydrogen, which accounts for 95% of the global hydrogen supply, is created by using

methane-generated steam to break apart methane.

only with the added step of CCS. Safely, securely, and permanently storing carbon underground

has yet to be proven at commercial scale and certainly not at any sites in Pennsylvania, making

this “blue” hydrogen project purely theoretical. The vast majority of CCS projects worldwide to

date have either failed or dramatically underperformed projected capture rates. There is no

current manufacturing facility similar to KeyState to Zero that permanently holds its captured

The production of blue hydrogen is capable of resulting in large amounts of greenhouse gas

emissions, primarily from upstream fugitive methane emissions. Hydrogen, while itself not a

GHG, is capable of interacting with GHGs in the atmosphere to compound their warming effects;

it is an “indirect” GHG. Hydrogen is also the lightest element in the universe and extremely

leaky. Hydrogen atoms are so small they can diffuse into metals, embrittling them, creating leak

and explosion risks. Research indicates that fugitive hydrogen emissions can be 11 times more

potent than CO2 at heating the atmosphere over a 100-year period.

The storage of CO2 through CCS also poses risks to the environment and public health.

Capturing and storing the CO2 itself is expensive and energy-intensive. CO2 is odorless and

colorless. Because CO2 is heavier than oxygen, if it leaks from pipelines or underground

Perry Babb has offered no projections on emissions from the project. There are only two

Texas, reported 2.4 million metric tons of GHG emissions in 2020, mostly CO2. And a 2021

study showed that blue hydrogen has marginally less GHG emissions than gray hydrogen,

about 9-12% less. The authors of the study (Robert Howarth and Mark Jacobson) indicate that

this factor, combined with the unproven assumption that captured CO2 can be completely and

permanently contained, means that “the use of blue hydrogen appears difficult to justify on

climate grounds.” In addition, they suggest that going forward, analyses of the impact of blue

hydrogen projects should include upstream emissions from gas development and the heat and

process energy to run carbon capture systems.

initiative of the Department of Conservation and Natural Resources (DCNR) to preserve areas

of outdoor tourism and recreation. According to proposals, products would be transported by rail

and truck. However, there are few developed roads and limited rail, meaning that developers will

have to expand roads and rail to allow for construction and access to fracking wells. The PA

Wilds is also home to the largest elk population in the northeast United States and contains

largest in the state forest system. DCNR has also asserted the need for extensive evaluation of

other pollutants into the air and groundwater, posing significant risks and potential challenges

(Source: Global CCS Institute) Note: For KeyState to Zero, carbon would be stored onsite.

Frontier Natural Resources is the partner company listed on the project proposal. A small

company incorporated in 2014 and based in Bellefonte, PA, Frontier owns leases on the land

where the project is located. Despite limited drilling activity, Frontier has been issued multiple

violations by the Department of Environmental Protection (DEP) for each of their four wells;

these violations were considered outstanding as of 2021.

Subsidies for Carbon Capture and Sequestration (CCS)

In recent years, carbon capture and sequestration has been embraced by state and federal

selection of seven regional hydrogen hubs to enter negotiations to finalize project details and

the potential to be awarded funding. KeyState to Zero is listed as a project under the

Appalachian Hydrogen HUB (ARCH2) that would span Pennsylvania, Ohio, and West Virginia.

The August 2022 Inflation Reduction Act also offers generous tax credit incentives to CCS

projects, including an expansion of the 45Q tax credit that incentivizes carbon capture and gives

projects a seven year window to begin construction.

Unproven and Costly Technologies

There are many unknowns with the KeyState to Zero project. The combination of blue hydrogen

with diesel exhaust treatment and ammonia production has not been shown to be commercially

viable. There is one proposed facility similar in nature to KeyState to Zero slated to be built in

Louisiana at a cost of $4.6 billion. In addition, it is also clear that the economic outlook for blue

hydrogen projects is increasingly coming under greater scrutiny.