Karen Elias

Lock Haven

The decision by the new administration to freeze billions of dollars in clean energy funding has cast uncertainty over the nearly $2 billion KeyState complex proposed for Clinton County, a project that’s unlikely to happen without a massive influx of government subsidies. This puts the financial life of the project, which includes multiple, complex — and expensive — operations, very much in question.

The future of petrochemical projects, in general, is uncertain in Pennsylvania. In the past several years, the Nacero synthetic fuels project planned for Luzerne County has been postponed indefinitely, and the Encina plastics incineration plant, proposed for Northumberland County, has been cancelled.

The KeyState project, designed to produce hydrogen from fracked methane, is part of what was originally conceived as an extensive, multi-state hydrogen buildout called ARCH2, but it appears that the ARCH2 Hub may now be falling apart. Along with uncertain funding, the hub’s partners (including Chemours, TC Energy, CNX, Marathon Oil, and First Mode) have begun dropping out. CNX, which was partnering with KeyState to build an aviation fuel project at the Pittsburgh Airport, has abandoned those plans as well.

KeyState’s future is not only dependent on outside funding but also on the promise of an ever-expanding hydrogen market. Uncertainty reigns here as well, as the market has stalled. It does not bode well that Nikola, the hydrogen truck manufacturer that KeyState was depending upon as a market resource, recently declared bankruptcy and is selling its assets at auction.

Perry Babb, KeyState’s CEO, has promised that his project will bring hundreds of jobs and renewed opportunities to our region. But it’s significant that local economic benefits, in places where similar capital-intensive petrochemical projects have been situated, have been disappointing, at best, with those counties experiencing losses in jobs, population, and number of businesses.

KeyState is a project that may never get off the ground. Babb’s original plans have been modified, adding delays and further costs. Perhaps it’s time to go back to the drawing board and find a business for Clinton County that will actually improve the economy and enhance our quality of life.