CNX Applauds Hydrogen Hub Funding Announcement and Stresses Need for Clear 45V Hydrogen Production Tax Credit Guidance

Rhea-AI Summary

CNX supports hydrogen hub funding for Adams Fork project

Positive

• CNX provides low carbon intensity feedstock and carbon capture services for the Adams Fork project, the largest clean ammonia facility in the US
• The project is expected to support 2,000 construction jobs and generate tax revenues for Mingo County

Negative

• Waiting for implementation guidance on hydrogen production tax credit provision (45V)

PITTSBURGH, Oct. 13, 2023 /PRNewswire/ -- In response to today's U.S. Department of Energy announcement regarding hydrogen hub funding, CNX (NYSE: CNX) President and CEO Nick Deiuliis issued the following statement:

"CNX is pleased to provide ultra-low carbon intensity feedstock and carbon capture and sequestration services for the Adams Fork project, an anchor project in the recently approved ARCH2 hydrogen hub application. With today's announcement, the U.S. Department of Energy has recognized the vital importance of ARCH2 and Adams Fork in improving our nation's energy security. The Adams Fork project is expected to be the largest clean ammonia facility in the United States, once completed and is expected to support jobs and economic investment in an economically disadvantaged community in the heart of Appalachia. While we applaud the funding announcement and inclusion of ARCH2 in the award, we are eagerly awaiting implementation guidance regarding the related hydrogen production tax credit (45V) provision of the Inflation Reduction Act (IRA). The Adams Fork project, and other such potential projects throughout the broader Appalachian region, will substantially benefit from implementation of 45V that adheres to the original intent of the law. The intent of the hydrogen production provision of the IRA was to incentivize the creation of low carbon intensity hydrogen, reduce emissions, enhance U.S. energy security, and create jobs and economic activity in energy communities. This project squarely aligns with those objectives. We are monitoring development of the 45V guidance very closely and are hopeful that Washington will follow the intent of the law and help us make this important West Virginia project, and others like it, a reality."       

Adams Fork Clean Ammonia Project Background
The Adams Fork Energy clean ammonia project, jointly developed by Adams Fork Energy, LLC and the Flandreau Santee Sioux Tribe, is expected to have initial annual ammonia production capacity of 2,160,000 metric tons, with optional additional production capacity. Project developers have entered into a strategic partnership with CNX, one of the lowest carbon intensive natural gas producers in the lowest emissions basin in the United States, to provide fuel and carbon sequestration services. The project is expected to support 2,000 well-paying construction jobs, including pipefitters and electrical workers, as well as generate significant tax revenues and capital investment for underserved Mingo County in Southern West Virginia. The planned facility is also located on a reclaimed coal mining site near Gilbert Creek, WV, further aligning the project with the White House's Justice40 Initiative. Adams Fork has received significant federal, state, and local bipartisan support, and is expected to displace more than 2.7 million metric tons per year of CO2 equivalent or more than 580,000 gasoline-powered passenger vehicles driven annually. By sourcing local low carbon intensity Appalachian natural gas as feedstock and installing carbon capture technology, Adams Fork Energy will have an ultra-low carbon intensity profile. Ammonia has been identified as one of the most efficient hydrogen carriers and also results in zero carbon emissions when combusted. It is primarily used in agriculture as a fertilizer, but other applications include heating and power generation, refrigerant, water purification, and in manufacturing plastics, textiles, and pesticides.

What They're Saying
"The Inflation Reduction Act and Bipartisan Infrastructure Law continue to deliver for West Virginia. Today's announcement of plans for a clean ammonia production facility in Mingo County will help ensure the Mountain State continues to be a leader in American energy innovation and support good paying, West Virginia energy jobs. This project, planned for a reclaimed coal mining site near Gilbert Creek, honors our legacy as America's energy powerhouse while keeping an eye on the future as we work to bring an Appalachian Regional Clean Hydrogen Hub to West Virginia. I applaud the cooperation it took to bring this project to Mingo County and look forward to seeing the benefits it brings to the community, economy, and our energy security," said Senator Joe Manchin (D-WV).

"Since I've been Governor, it has been my top priority to ensure Southern West Virginia has the resources to grow economically, and that is why this announcement brings me so much joy," West Virginia Governor Jim Justice said. "I'm incredibly proud that the Adams Fork Energy plant will become the largest clean ammonia facility in the country.

I'm confident they will be a champion in this emerging field and help our Southern West Virginia communities flourish for decades to come. It's a testament to the great things that can be accomplished when we all work together to build a brighter future for all West Virginians, while never forgetting our hard-working coal miners and the hard work they do every day."

"Adams Fork Energy is a transformational manufacturing investment for Southern West Virginia," said Francis Sacr, Special Advisor to the President of Adams Fork Energy. "Thanks to leadership in Washington through the Bipartisan Infrastructure Law and the Inflation Reduction Act, we're excited to advance our clean ammonia production facility that will create family-sustaining local jobs while boosting available supply of clean ammonia, a critical component to sustainable food production and achieving a lower-carbon energy future."

"With a total of 56.2 million acres of trust land held by the 576 federally recognized tribes across the United States, the preservation of land through best agricultural practices is key to sustainability," FSST President Anthony Reider said. "The Flandreau Santee Sioux Tribe depends heavily on its agricultural resources on and off its Reservation to provide programing for tribal members and to supplement the barebones federal funding it receives. The decreasing availability of ammonia has created sharp increases in costs, thereby impacting the agricultural economy. The Tribe is hopeful to utilize a substantial portion of the Adams Fork Energy ammonia as fertilizer for its own land and for other United States Tribes. The advancement of this project will provide a critical economic benefit to Tribal nations. However, we need assurance from the federal government they will support projects using all resources – including low carbon intensity natural gas feedstock – for Adams Fork to become a reality."

About CNX Resources
CNX Resources Corporation (NYSE: CNX) is unique. We are a premier, ultra-low carbon intensive natural gas development, production, midstream, and technology company centered in Appalachia, one of the most energy abundant regions in the world. With the benefit of a 159-year regional legacy, substantial asset base, leading core operational competencies, technology development and innovation, and astute capital allocation methodologies, we responsibly develop our resources and deploy free cash flow to create long-term per share value for our shareholders, employees, and the communities where we operate. As of December 31, 2022, CNX had 9.81 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information is available at www.cnx.com.

Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and any other protections afforded under applicable federal securities laws for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income, and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond our control. Specific factors that could cause future actual results to differ materially from the forward-looking statements are described in detail under the captions "Forward-Looking Statements" and "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC"), as supplemented by our quarterly reports on Form 10-Q filed in 2023, and any subsequent reports filed with the SEC.

Those risk factors discuss, among other matters, pricing volatility or pricing decline for natural gas and natural gas liquids; local, regional and national economic conditions and the impact those conditions may have on our customers; the impact of events beyond our control, including a global or domestic health crisis; dependence on gathering, processing and transportation facilities and other midstream facilities owned by others; conditions in the oil and gas industry; our current long-term debt obligations and the terms of the agreements that govern that debt; strategic determinations, including the allocation of capital and other resources to strategic opportunities; cyber-incidents targeting our systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers; and changes in safety, health, environmental and other regulations.

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SOURCE CNX Resources Corporation

FAQ

What is the Adams Fork project?

The Adams Fork project is the largest clean ammonia facility in the US, expected to have an initial annual ammonia production capacity of 2,160,000 metric tons.

Who is involved in the project?

The project is jointly developed by Adams Fork Energy, LLC and the Flandreau Santee Sioux Tribe, with a strategic partnership with CNX.

How many jobs will the project create?

The project is expected to support 2,000 construction jobs.

What is the expected impact on emissions?

The project is expected to displace more than 2.7 million metric tons per year of CO2 equivalent.

What is the importance of the hydrogen production tax credit provision (45V)?

The project is awaiting implementation guidance on 45V, which would incentivize the creation of low carbon intensity hydrogen and support projects like Adams Fork.