American Oil and Gas Reporter - June 2024 - 37

Aside from HB 581 and SB 349, Barr
says, the general assembly did not take
up any proposals that pertained specifically
to oil and gas. " It was a pretty quiet legislative
session dealing with energy, " he
summarizes. " I did not see much at the
legislature that either was positive or negative
for oil and gas. "
Moreover, he adds, KOGA continues
to enjoy strong working relationships
with both the legislature and Governor
Beshear's administration. " The legislature's
two energy committees are chaired by
long-term friends of the industry, and
when we come before those committees,
we typically are well received, respected
and our voice is heard, " Barr describes.
" We also work well with the governor's
administration. Getting along with a Democratic
administration when Republicans
have overwhelming majorities in both
chambers can mean walking a fine line,
but Ryan and our membership have done
a good job developing relationships in
both places. "
Carbon Sequestration
According to Barr, the Oil and Gas
Workgroup is exploring the development
of enabling legislation regarding carbon
sequestration, which the workgroup hopes
to draft in time for the 2025 Kentucky
General Assembly. " The first draft borrows
from some of the best things we see from
other states that have passed legislation, "
he relates. " We also have looked at our
existing oil and gas regulations and borrowed
some of the concepts from that,
especially our state's time-tested forced
pooling provisions. "
One goal for this legislation is to obtain
regulatory primacy from the U.S.
Environmental Protection Agency, which
would allow state regulators to handle
permitting for Class VI injection wells,
the ones for storing carbon. Barr says
state regulators will likely evaluate permits
more efficiently than EPA and be
more cognizant of carbon sequestration's
local benefits.
" Coal generates 70% of Kentucky's
electricity, and we think we will have
support from the utilities, the coal industry,
as well as the bourbon distillery and automotive
industries, " he comments. " We
think there is a future for (natural gasbased)
blue hydrogen, which will benefit
the oil and gas industry. Clearly, if that
happens, carbon issues must be addressed. "
But primacy is only part of the equation,
he adds. " Regulations and statutes must
be developed for permitting and other
aspects of carbon sequestration that fall
to the state, " Barr notes. " EPA cannot
issue a drilling permit in Kentucky for a
carbon sequestration well, and there must
According to KOGA Executive
Director Ryan Watts, two bills
got most of KOGA's attention in
the 2024 Kentucky Legislature:
· HB 581 prohibits subdivisions
from banning new gasoline
fueling stations.
· SB 349 forms an energy commission
to study Kentucky's energy
policy and the future decommissioning
of the state's power plants.
Watts says the impetus for HB
581 originates in some local Kentucky
governments' bans on gasoline
fueling stations. " Areas such
as Lexington and Louisville have
been discriminating against gasoline, "
he recounts.
" Coal generates 70% of Kentucky's
electricity, and we think
we will have support from the
utilities, the coal industry, as well
as the bourbon distillery and automotive
industries, " he comments.
" We think there is a future for
(natural gas-based) blue hydrogen,
which will benefit the oil and gas
industry. Clearly, if that happens,
carbon issues must be addressed. "
But primacy is only part of the
equation, he adds. " Regulations
and statutes must be developed
for permitting and other aspects
of carbon sequestration that fall
to the state, " Barr notes. " EPA
cannot issue a drilling permit in
Kentucky for a carbon sequestration
well, and there must be standards
on how to do that. Pooling
also is a state regulatory issue. "
Barr says the workgroup is
taking a two-step approach. " The
first step will be to draft a bill to
deal with the regulatory aspects
that fall to the state, " he explains.
be standards on how to do that. Pooling
also is a state regulatory issue. "
Barr says the workgroup is taking a
two-step approach. " The first step will
be to draft a bill to deal with the regulatory
aspects that fall to the state, " he explains.
" The implementation piece to seek primacy
simply parrots many sections in
the federal act, and so there is not a lot of
debate there. "
Two Conventions
Addressing carbon sequestration in
Kentucky's laws and securing regulatory
primacy are necessary prerequisites to
creating a market for blue hydrogen,
which is derived from ethane or methane,
Cate says. " That is a ground-floor topic
imperative for people looking to develop
blue hydrogen, " he insists.
Other pertinent topics related to blue
hydrogen will be under discussion at the
Second Annual Kentucky H2 Summit,
June 26 at the Campbell House. KOGA's
annual meeting will be held the next day
at the same venue. " KOGA members receive
a highly discounted rate for the hydrogen
summit, " Watts mentions. " We
have confirmed that the keynote speaker
will be Brad Crabtree, the assistant secretary
for the U.S. Department of Energy's
Office of Fossil Energy and Carbon Management,
and we have just received confirmation
that Governor Andy Beshear
also will speak at the summit. "
" It will be interesting to see an organization
such as KOGA bring in production
companies from out of state, as well as
international fuel-cell manufacturers, and
others, all because they believe in blue
hydrogen and want to have a forum to
continue that discussion, " Cate says. " I
think the event will sell out again. We will
cover everything from production, transportation
and consumption to regulatory
policy and reform around blue hydrogen. "
It is gratifying that the 2023 conference
was not an isolated, one-off event, he
adds. " I am truly proud of it, " Cate affirms.
" We have industry subject matter experts
coming in who have never been to Kentucky
to create that forum and dialogue for utilities,
producers, industrial users and regulators.
I hope it differentiates Kentucky
and places us ahead of the curve. "
The annual meeting on June 27 will
cover a host of other topics, Watts says,
with planned events including a market
outlook, a property tax assessment seminar
and an update from the Kentucky Division
of Oil and Gas.
" It will be similar to previous events, "
Watts confirms. " And, of course, it also
will include the opportunity for plenty of
networking, which is one of everyone's
favorite parts. "
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JUNE 2024 37
American Oil and Gas Reporter - June 2024

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