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Dec 09

Christa Marshall, E&E reporter
Published: Wednesday, December 9, 2015

A major project in Texas that would capture the majority of CO2 emissions from a large coal plant took a step forward yesterday with the signing of a contract considered key to its completion.

In Beijing, officials with Summit Power Group LLC — which is planning to build the Texas Clean Energy Project near Odessa, Texas — announced the contract with China Huanqiu Contracting & Engineering Corp. and SNC-Lavalin Engineers & Constructors Inc. (SNC-Lavalin). It was considered a needed step for the project to move to financial closing and came as both Capitol Hill lawmakers and environmental groups urged U.S. negotiators at international climate talks in Paris to pledge more support for CCS technology.

The contract covers the engineering, procurement and construction of the carbon capture and chemical elements of the planned plant, which if built would grab more than 90 percent of the CO2 emissions while producing 400 megawatts of power. The carbon capture unit is expected to be integrated with equipment from Siemens that would power the plant, Summit Power said.

In September, the company said it planned to move forward with the proposal, despite having to forgo more than $100 million in Department of Energy funds because of a federal deadline (ClimateWire, Sept. 23). Laura Miller, Texas director of projects for Summit Power, said yesterday that there is now a spring 2016 target date for financial closing, “with a groundbreaking shortly thereafter.”

“We see great potential for the principles of the Texas Clean Energy Project to reduce carbon emissions in the U.S. and around the world,” said Neil Bruce, CEO of SNC-Lavalin, an engineering and construction firm based in Montreal, Canada.

Along with Southern Co.’s under-construction Kemper plant in Mississippi, the Texas Clean Energy Project is one of a handful of Department of Energy-backed initiatives to try and demonstrate CCS on coal generators at scale. Outside of SaskPower’s Boundary Dam project in Canada, the technology has not been demonstrated yet at scale on coal-fired power plants, leading to sharp criticism of CCS generally from segments of the environmental community.

The Texas initiative received more than $450 million as part of DOE’s Clean Coal Power Initiative (CCPI) and also received $811 million in federal tax credits available to coal projects that generate more than 400 megawatts to power and capture at least 65 percent of their CO2.

‘An interesting business model’

In a recent interview, John Thompson, director of the fossil transition project at the Clean Air Task Force, called it distinctive in part because it has “an interesting business model,” where the CO2 capture process will create multiple byproducts like urea for sale.

The Summit Power announcement came as both Capitol Hill lawmakers and environmental groups pushed for CCS to gain greater policy support at the Paris climate negotiations and beyond.

In a letter yesterday, Sens. Heidi Heitkamp (D-N.D.) and Sheldon Whitehouse (D-R.I.) urged Secretary of State John Kerry and Energy Secretary Ernest Moniz to include carbon capture utilization and storage in any final agreement at the 21st Conference of the Parties to the U.N. Framework Convention on Climate Change. Specifically, they called for a carveout for the technology in the Green Climate Fund and recognition of its climate mitigation potential in updates to climate targets, or intended nationally determined contributions (INDCs), from the United States and other nations.

“We also recognize that Congress can play a role in facilitating international cooperation so as to maximize our finite RD&D budget for CCUS, reduce duplicative efforts and spur the financing of demonstration projects,” Heitkamp and Whitehouse wrote. “To this end, we request that you return from COP 21 with specific legislative recommendations.” Heitkamp — along with Sen. Joe Manchin (D-W.Va.) and others — has been an advocate for the technology on Capitol Hill, introducing legislation to boost its prospects (Greenwire, Nov. 19).

Separately, the Environmental NGO Network on Carbon Capture & Storage — which includes the Clean Air Task Force, the World Resources Institute, the Natural Resources Defense Council and other groups — released a report at the Paris climate negotiations yesterday outlining the technology’s progress since 2012 and urging greater government support for it — including through knowledge sharing between wealthy and developing countries.

“CCS is not just about coal,” said Dave Hawkins, director of the climate program at the Natural Resources Defense Council. “It is also applicable to natural gas-fired power generation and to key industrial sectors such as cement.”

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Dec 08

BEIJING, China and HOUSTON,  Texas, USA – December 8, 2015 – Summit Power Group, LLC (Summit) today announced a major step toward financing and construction  of the Texas Clean Energy Project (TCEP). A large commercial power and chemicals project near Odessa, Texas, TCEP will capture more than 90 percent of its CO2  emissions from coal while producing 400MW of clean power and enough urea to reduce annual U.S. imports by more than 10 percent. The captured CO2 will be permanently sequestered geologically in West Texas oilfields.

At an event today in Beijing, Summit signed the engineering, procurement and construction (EPC) contract with China Huanqiu Contracting & Engineering Corp. (HQC) and SNC-Lavalin Engineers & Constructors Inc. (SNC- Lavalin). The contract covers engineering, procurement, construction, commissioning, and performance testing of the chemical and carbon capture block for the project, which will be integrated with a Siemens combined cycle power block. Siemens, which has its global Oil and Gas Headquarters based in Houston, is also expected to supply the coal gasification equipment for the chemical block.

HQC, a wholly owned subsidiary of China National Petroleum Corporation, is a leading engineering and construction  management  firm,  operating  in nearly  20 countries,  that has completed  more than  17 major  EPC contracts  for chemical  and power-oriented  gasification  complexes.  “HQC  is excited  to work  with Summit  and SNC-Lavalin to pursue this project, which is a leading example of the clean, low carbon use of domestic coal for the production  of chemicals  and power,”  said Wang  Xinge,  CEO  of HQC.  “In particular,  we look forward  to partnering with SNC-Lavalin in implementing such an important project.”

SNC-Lavalin and HQC have entered into a consortium agreement for the project. SNC-Lavalin’s major responsibilities  include  engineering  and  procurement  for  the  balance  of  plant  activities outside  the  licensed technology  areas as well as construction  for the entire chemical block portion of the project. SNC-Lavalin  is a world-leading  engineering  and construction  group with offices in over 50 countries,  including  the USA and its Houston  office,  which  will  lead  the  project  on SNC-Lavalin’s  behalf.  Its 40,000  employees  provide  EPC  and related services to clients in power, oil and gas, mining and metallurgy and infrastructure. “We see great potential for the principles of the Texas Clean Energy Project to reduce carbon emissions in the U.S. and around the world,” said  Neil Bruce,  CEO  of  SNC-Lavalin.  “SNC-Lavalin  has  been  active  in  carbon  capture  for  years  and  has implemented real-world deployment of these technologies, including retrofitting power facilities. Partnering with HQC and Summit provides a great opportunity for SNC-Lavalin.”

TCEP is a leading carbon capture, utilization and storage (CCUS) project for the U.S. Department of Energy, which  has awarded  TCEP  more than $450MM  as part of the Office  of Fossil Energy (FE) Clean Coal Power Initiative (CCPI). The project is also the recipient of $811MM in investment tax credits (ITCs) under section 48A of the Internal Revenue Code, awarded to qualifying advanced coal projects that generate at least 400MW of power and capture a minimum of 65 percent of their CO2.

The signing comes 16 months after HQC and Summit launched an effort to improve the design of the project  with a goal of reducing project costs, which rose sharply in 2013 as a result of soaring Texas labor rates due to the oil and gas boom. With the completion of updated engineering work and the addition of SNC-Lavalin to the team, this contract brings that effort to a successful conclusion. TCEP’s financial closing is targeted for spring 2016.

“The U.S. and China have a shared opportunity and responsibility to develop and deploy solutions that help the world transition to lower carbon energy,” said Summit CEO Jason Crew. “TCEP will demonstrate that through thoughtful  design, proven technologies,  and best practices.  Sino-U.S.  cooperation  not only delivers  low carbon power and chemicals but also supports economic growth and thousands of jobs in both countries. We are excited to work with HQC and SNC-Lavalin, and grateful to the U.S. Department of Energy for its continued support. We look forward to achieving financing soon and commencing construction shortly thereafter.”


Sep 29

Christa Marshall, E&E reporter
Published: Wednesday, September 23, 2015

Developers of a major carbon capture project planned in Texas say they are moving forward with their coal initiative, despite having to forgo more than $100 million in Department of Energy funds because of a deadline this month.

Summit Power Group’s Texas Clean Energy Project — which envisions a coal plant near Odessa, Texas, capturing and storing more than 90 percent of its CO2 — is expected to miss a Sept. 30 deadline to commit stimulus funds allocated by the 2009 American Recovery and Reinvestment Act. That means that $104 million will have to be returned to the U.S. Treasury by DOE, according to Laura Miller, Texas director of projects for Summit Power. However, the project will move ahead with help from grants, debt and private equity, including $487 million in new investment tax credits (ITCs) that the Department of Energy helped obtain from the Internal Revenue Service earlier this year, Miller said.

“The federal government’s recent actions to support our project though other means — such as recommending to the IRS that we get additional investment tax credits — reinforce its strong support for both [carbon capture, use and storage] technology and for TCEP. We have a project that is stronger financially than it was six months ago. We are just doing what is necessary and taking the time to do it right,” Miller said in an email.

Summit Power is hoping to achieve financial closing by year’s end, which could allow a groundbreaking in 2016, she said.

The Texas Clean Energy Project is one of a handful of DOE-funded projects envisioning the capture of the majority of the carbon dioxide from a large-scale coal plant. One of those projects, FutureGen 2.0, was scrapped in February, increasing speculation that other proposals might face a similar fate this year with the September deadline looming.

Hydrogen Energy California — another big planned project — lost its Recovery Act funding this summer (Greenwire, July 10).

Along with Summit’s TCEP, there are two other commercial-scale CCS projects on coal plants moving forward in the United States — Southern Co.’s Kemper County project in Mississippi and NRG Energy Inc.’s Petra Nova project in Texas. Both Kemper and Petra Nova are under construction and expected to be the first large-scale coal power plants with CO2 capture ever to be operational in the United States.
Projects rely on using CO2 for enhanced oil recovery

All three projects rely on enhanced oil recovery to cover the high costs associated with CO2 capture. In the more than $2.5 billion Summit project’s case, captured CO2 is expected to be injected underground in the West Texas Permian Basin.

Gasified coal would be used to generate 200 megawatts of electrical power from the plant and produce commercial byproducts from the coal gasification process, including urea for fertilizer. Summit Power’s decision was first reported by the Odessa American after an Odessa Chamber of Commerce event last week, where Miller disclosed that the project has a new long-term agreement with United Suppliers to buy its urea.

John Thompson, director of the fossil transition project at the Clean Air Task Force, said the Summit project is distinctive in part because it has “an interesting business model,” where the CO2 capture process will create multiple byproducts for sale. The contractors behind it also have guaranteed the price and will pay the difference if things go over budget, indicating they have high confidence in the technology, he said.

“It erodes the view this isn’t ready for prime time,” he said. While coal plants are not being built in the United States, it’s important to perfect capture technology because of heavy coal use in places like China and India, he said.

For Summit Power to break ground, construction contracts need to be signed to secure needed debt and equity to reach financial closing, Miller said. “Intense negotiations” occurred all summer among three lead contractors in three countries and generated positive momentum, she said. “We continue to push forward on the negotiations and are laser focused on getting a project we can actually build, for the cost we expect,” she said.

The Export-Import Bank of China is the project’s sole debt provider, an agreement forged three years ago (ClimateWire, Sept. 13, 2012). The Texas Clean Energy Project was awarded $450 million in government funds, most of which was not stimulus funding and has not been lost. The ITC funds — which Miller first disclosed at the Odessa Chamber of Commerce last week — would be available after construction begins. In addition to the $487 million, the project also received $324 million in tax credits in 2013, according to Miller.

Sep 29

By Darius Dixon

09/29/2015 05:00AM EDT

The Energy Department is poised to send about $2.48 billion in unspent stimulus funds back to the Treasury this week, and just four stalled carbon-capture and sequestration grants account for more than half of that figure.

The refunds amount to a small portion of the $31.8 billion sent to DOE in the massive 2009 stimulus law, but they are emblematic of the struggles “clean coal” has faced in recent years. Of the money that DOE is returning, $1.27 billion had been set aside for carbon-capture projects that failed to win agency approval because of cost overruns, tricky negotiations and lengthy regulatory hurdles.

The elimination of government support does not necessarily mean all the projects are dead, although for the controversial FutureGen project that was first proposed under President George W. Bush, it is the second time that its government lifeline has been cut.

In total, the funds to be returned add up to more than a third of the $3.4 billion in stimulus money directed to the fossil energy office at DOE. Overall, DOE received more than all but five other federal agencies from the Recovery Act.

“I think that when DOE was looking to fund these projects they were hoping that it could be market-wide. What has emerged is that CCS has been a really niche application in areas where there’s enhanced oil recovery,” said Cheryl Wilson, an energy policy analyst with Bloomberg Intelligence, referring to the process of pumping carbon dioxide into oil wells to stimulate production.

And the coal industry views DOE’s efforts to promote CCS as stymied by barriers against coal-fired power that have erected by other agencies, such as EPA’s climate rules.

“For all intents and purposes, the Clean Power Plan is a plan to push renewables at the expense of everything else,” said Laura Sheehan, a spokeswoman for the industry-backed American Coalition for Clean Coal Electricity. “It’s a real case of the administration talking out both sides of its mouth. You have the DOE doing one thing and the administration doing the polar opposite.”

DOE’s authority to spend that money expires with the end of the 2015 fiscal year on Wednesday, and the four projects – in Louisiana, Illinois, Texas and California – simply won’t meet necessary milestones in time.

The rest of the $1.21 billion in unspent DOE funds come from about 8,000 other projects, including renewables, other fossil energy endeavors, grid modernization and Cold War nuclear cleanup work. Those projects have already wrapped up or broke ground, the agency says, and some of the refunds were under $100.

While some stimulus-born programs will live on, such as loan authority for DOE’s quasi-independent Western Area Power Administration, the new fiscal year will spell the end of federal funding for a wide range of government ventures, including rural broadband efforts.

DOE points out that it funded four other carbon-capture utilization and storage projects that met their deadlines. For example, there’s NRG’s 240-megawatt Petra Nova project, which broke ground last fall and used $163 million of the $167 million in stimulus funds DOE made available.

“DOE’s return of these [American Recovery and Reinvestment Act] funds to Treasury is a reflection of the significant challenges faced by businesses that are introducing innovative, early-stage energy technologies to markets and not a negative reflection on the readiness of [carbon-capture utilization and storage] technologies,” DOE spokesman Bartlett Jackson said in an email. The agency said it’s committed to advancing the technology knowing that fossil fuels will be in use around the world, particularly developing nations, for years to come.

The biggest challenges to CCS, Wilson said, have been low oil and natural gas prices. Cheap oil has dampened interest in using carbon dioxide for enhanced oil recovery – which makes CCS significantly more cost-effective. And cheap gas has shifted utilities’ attention away from coal.

“CCS with coal isn’t completely off the table anywhere but it’s not the obvious economic option for any utility,” Wilson said.

Even at NRG, the success of Petra Nova has not led to plans for additional carbon-capture projects. NRG chief David Crane told investors earlier this month that the technology “obviously does not currently make economic sense at $30 to $40 a barrel.”

The four fossil projects that lost the DOE funding had already received about $477 million in total, and environmentalists like Ben Schreiber, climate and energy program director for Friends of the Earth, argue that that’s “money that’s being diverted away from reducing the cost curve on renewable energy and getting us where we need to be on battery storage.”

Nevertheless, DOE believes that even the projects that might not survive have provided useful lessons.

“All of these large projects are difficult to pull off. … They take time and there are many, many stakeholders involved, and the financial circumstances of the world change, and the cost of capital changes and the cost of labor changes,” said one senior DOE official with intimate knowledge of the fossil programs. “All of these things add delay but when you’ve got this hard deadline, eventually you just hit up against the clock.”

The Lake Charles project in Louisiana, which DOE agreed to support in 2009, ended up being one of its biggest stimulus shortcomings. The facility was supposed to convert petroleum coke into synthetic gas for methanol, hydrogen and other products, while also capturing carbon dioxide that would be pumped into depleted oilfields to enhance their production.

DOE agreed to put up $261 million of the project’s $436 million price tag, but the agency’s primary industry partner, Leucadia Energy, LLC, backed out last fall, citing “the likely ultimate cost of completion” – aka a ballooning price tag. DOE only spent about 5 percent of its money, so $249 million will be going back to Treasury this week.

While DOE does not decide whether any of project developers should throw in the towel, the loss of millions of dollars in stimulus funds can put some of them into a tailspin.

FutureGen, perhaps the best known and most frustrating advanced coal project in the country, was initially pitched by former President Bush, who later spiked the project. The Obama administration brought it back as slimmed-down FutureGen “2.0.”

Slightly more than $1 billion from the stimulus was earmarked for the estimated $1.68 billion project to retrofit a coal-fired power plant in Illinois to capture and store at least 90 percent of its carbon dioxide emissions. DOE spent $200 million on the project before its industry backers in the FutureGen Industrial Alliance ran into delays from “factors including legal challenges and its inability to secure necessary financing,” according to DOE’s inspector general.

That meant FutureGen 2.0 would miss key milestones, and the DOE decided in January to end its funding and return $795 million in unspent money to Treasury – its largest single refund. And without that large pot of money, the project has basically flat-lined. Despite the collapse in federal support, a DOE webpage for the project says it “provided tangible benefits and valuable information” to advance carbon capture research.

While the loss of stimulus money can seem like pulling the rug out from under a project, some developers are better equipped to handle the shortfall than those behind FutureGen.

Summit Power Group is still on track to complete its Texas Clean Energy Project, a 400-megawatt coal plant that aims to capture 90 percent of its carbon for use in enhanced oil recovery, despite missing out on $104 million from DOE.

DOE had set aside $211 million from the stimulus for Summit, and about half will not be spent. But the federal support made up less than 10 percent of the project’s total estimated $2.4 billion cost, and Summit has all of its permits and contracts, including deals to sell its CO2, its power generation and its production of an organic compound called urea.

“It’s hard to not call that a setback,” the DOE official said of Summit losing $104 million, “but these people have a lot of very strong fundamentals.”

Summit still remains eligible for other DOE support and federal tax credits. It received $239 million in DOE Clean Coal Power Initiative grants, and could tap another $313 million in Section 48A Treasury Department tax credits, federal incentives for power plants that demonstrate carbon, capture and sequestration technologies.

Another project known as Hydrogen Energy California, which would turn coal and petroleum coke into hydrogen for a power station while capturing the CO2, has seen its struggles fall somewhere between those of Summit and FutureGen.

HECA, as it’s called, was slated to get up to $275 million in stimulus funds – $122 million of which has gone unspent (another $133 million was coming from DOE’s clean coal initiative and $103 million in potential tax credits).

Its costs jumped to $4 billion from the original 2009 estimate of $2.8 billion, according to a summary by the DOE IG. It has offtake agreements for some of its power, but it still lacks a buyer for its CO2. California regulators also have not granted all its necessary permits and approvals, and the project has run into opposition from environmentalists led by the Sierra Club, which urged the state’s public utility commission to kill it earlier this year. The group cited the expected loss of DOE stimulus funds to bolster its case.

Rather than terminating HECA’s application, in July CPUC required project developers to hit a separate set of milestones to demonstrate that the process is “not indefinite,” including documentation of a sequestration agreement.

“We subsidize solar, we subsidize wind and we’ve tried to, in a different way, subsidize CCS,” Wilson said. “CCS is just a lot more expensive and technologically challenging and very location-specific. It’s a very challenging environment to build a CCS project and I don’t think that it’s going to get any less challenging.”

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Jul 14

By Celinda Hawkins
July 10, 2014

A memorandum of understanding signed this week in Bejing, China, between U.S. and Chinese officials, brings the Texas Clean Energy Project closer to fruition when the two countries agreed that Summit Power Group will begin a partnership with a Chinese company to share information on the clean coal technology to reduce greenhouse gases worldwide.

In one of the memos of understanding signed Wednesday in Bejing, China’s Huaneng Clean Energy Research Institute, a subsidiary of state-owned power company China Huaneng, and Washington-based Summit Power Group agreed to share information on clean coal power generation technology and enhanced oil recovery techniques.

The 400 megawatt TCEP plant, which has been in development for about four years, is a coal-based power plant that will be located on a 600-acre site in Penwell; and it turns coal into syngas to make electricity, and is designed to capture 90 percent of the carbon dioxide it produces.

“Today’s signing represents the best kind of clean energy cooperation between the U.S. and China: a commercial project involving excellent companies supported by governments,” said Julio Friedmann, deputy assistant secretary for clean coal for the U.S. Department of Energy, at the signing ceremony.

Summit officials feel that the agreements show the U.S. government’s confidence in getting the TCEP built and that ground breaking on the project, expected to create up to 2,000 jobs during construction would be a year from now if the updated schedule keeps.

“This is the first time in our project that the U.S. and Chinese governments have come out together publicly in support of our project in particular and what we are trying to accomplish environmentally with Chinese companies,” said Laura Miller, project manager for Summit Power Group. “I think this will bring a lot of tailwind to getting all the work done. We have made it clear we have to move very quickly. All of our partners, including the City of Odessa and Ector County, have been waiting patiently. There is a great sense of urgency now about getting the project done and for those reasons I’m optimistic.”

Summit will be working with Huaneng’sGreenGen , the cleanest coal-based plant in China and one that also uses gasification technology, to collaborate on how to reduce carbon emissions.

“The significance of that is that the U.S. and China believe that unless we work together to reduce carbon emissions we are not going to solve the problem on a worldwide level because we are the two biggest emitters of carbon,” said Miller . “It is a big honor to be selected by the U.S. government to partner with China on this issue.”

In addition to the partnership, the Chinese will also be learning about how to use the technology for enhanced oil recovery and Summit will learn about the gasification process, Miller said.

Plus, Summit will be sharing information from the TCEP on carbon capture equipment, which the Chinese company plans to use for enhanced oil recovery.

In total, there were eight agreements, which involve companies and research institutions, that were signed during the Sixth Annual U.S. and China Economic Dialogue in Beijing this week ahead of a two-day visit to China by top Obama administration officials including Secretary of State John Kerry, Treasury Secretary Jack Lew and Energy Secretary Ernest Moniz, according to a report in Reuters, Wednesday.

“TCEP is an American project that will create products and jobs for the U.S. market using U.S. construction workers,” said Summit Power Group President and CEO Eric Redman in an email Thursday. “But it is a project of global importance and its design and financing are truly international, drawing upon U.S., German, French, and other entities, including key engineering and financing participants from China, where similar projects have already been built.”

“This week in Beijing has provided an opportunity for both the U.S. and Chinese governments to reaffirm their determination to work with one another and TCEP’s international team to assure that TCEP gets financed and built,” Redman continued. “At the same time, the international team of engineers is working here this week to cut the project’s cost, shorten its construction schedule, and boost its attraction to investors and lenders. It has been the most encouraging week of meetings in the project’s history. We are all energized and optimistic of success.”

Since the initial Summit plans were proposed, the price tag for the project has gone from an estimated $2.2 billion to the current figure of $3.5 billion because of increases in labor and materials costs, a figure released a year ago. Miller said the new partner, HQC, which will play a lead role in the project with Siemens Corp. has completed a study refiguring the costs of the project including labor and the most recent estimate being $2.5 billion.

“The cost had been significantly higher than that when the pricing was refreshed last summer, which is why we brought on HQC as the lead contractor,” Miller said.

The German companies Siemens, which is supplying the gasifiers, and Linde, which will supply the chemical block that removes the CO2 are still involved, as well as Sinopec, the Chinese company that signed to build the infrastructure. However, HQC is taking the lead role in the project, over Sinopec.

“Siemens has made improvements to its gasifier and combustion turbine equipment, and HQC will be able to take advantage of that in its review of the previous engineering and design work that has been done – which we feel confident will result in cost reductions. HQC and Summit and Siemens already kicked off this work together,” Miller explained. “HQC and Summit and Siemens already kicked off this work together. The status of Sinopec (who was initially involved) is not determined but they are no longer the lead. If they HQC and Siemens come together on the cost estimates that can be financed then they will be the two companies that will build the project. “

On Tuesday the Odessa City Council approved an amended contract with Summit essentially returning $5 million initially given to the project for job creation. But the funds will be made available once the project is up and running.

In May, Miller met with Odessa city leaders to give them an update on the project, which included a conference call with Friedmann. The TCEP has made some major milestones in the past five years, including securing $450 million in federal funding from the Clean Coal Power Initiative, $600 million in federal tax breaks, financing through a Chinese bank and long term contracts for the sale of electricity, CO2, urea, sulfuric acid, and argon gas, but there will be challenges in the future.

HQC, which is headquartered in Beijing and a subsidiary of China National Petroleum Corporation (CNPC), has performed consultation, engineering, construction and EPC contracting for over 2,000 cross-industry, large- and medium-scale domestic and overseas projects for more than 50 years. It has abundant experience in ethylene, polypropylene, LNG and chemical fertilizer plants in 30 provinces, cities and autonomous regions across China and nearly 20 countries and regions in Southeast Asia, Western Europe, and the United States. For the TCEP project, HQC has retained Technip, a publicly traded French company that provides project management, engineering and construction services for the oil and gas industry in 48 countries.

Jul 11

July 9, 2014
By Valerie Volcovici

The United States and China on Tuesday signed eight partnership pacts to cut greenhouse gases that will bring the world’s two biggest carbon emitters closer together on climate policy, but fundamental differences between the two sides remain.

Consensus between the United States and China will be a crucial part of any new global climate pact to replace the 1997 Kyoto Protocol, but they have long struggled to come to an agreement on how the costs of cutting greenhouse gases should be distributed among rich and poor nations.

Speaking in Beijing during the latest round of the U.S.-China Strategic and Economic Dialogue, U.S. Secretary of State John Kerry said on Wednesday that the two sides remained committed to “close dialogue” on climate change negotiations.

“The significance of these two nations coming together can’t be understated.  We are working hard to find a solution together that can have an impact on the rest of the world.”

The deals, which involve companies and research bodies, were signed in Beijing ahead of a two-day visit to China by top Obama administration officials, including Kerry, Treasury Secretary Jack Lew and Energy Secretary Ernest Moniz.

The signing was attended by Xie Zhenhua, vice chairman of China’s influential economic planner, the National Development and Reform Commission (NDRC), Todd Stern, the lead U.S. climate treaty negotiator at the U.S. State Department, Obama adviser John Podesta and Lee Zak, director of the U.S. Trade and Development Agency.

In one of the memoranda of understanding (MOUs), China’s Huaneng Clean Energy Research Institute, a subsidiary of state-owned power company China Huaneng and Washington-based Summit Power Group agreed to share information on clean coal power generation technology.

Huaneng is part of a Chinese consortium operating a 400-MW pilot integrated gasification combined cycle plant in Tianjin.

Under the pact, Huaneng will share information with Summit Power, which is expected to soon break ground on a similar project in Texas after it secures engineering and procurement support from Petrochina and Chinese engineering firm Huanqiu Contracting and Engineering.

The MOU is expected to be signed on Wednesday in Beijing.

Summit, in turn, will share information and technology for recovering oil from captured carbon.

“This (pact) accelerates sharing of information on carbon capture and storage for power,” said Julio Friedmann, deputy assistant Secretary for Clean Coal for the U.S. Department of Energy.

The partnership will be a boon to both countries, said Laura Miller, a former mayor of Dallas who now manages the Texas Clean Energy Project.

“We will be sharing expertise, years of development experience and non-proprietary technology on both projects, all while making giant steps forward for the world’s environment,” she said in an interview.

Another project partners West Virginia University with Yanchang Petroleum on an industrialized demonstration of ultra-cleaning technology in northern Shaanxi province.

The University of Kentucky, another coal state university, will partner with Shanxi Coal International Energy Group and Air Products and Chemicals Inc on a project feasibility study for a 350MW supercritical coal-fired power plant that can capture 2 million tonnes of CO2 a year.


At a news briefing in the Chinese capital on Wednesday, the NDRC’s Xie welcomed the closer partnership of the world’s top two CO2 emitters, but said more was needed in areas such as technological cooperation.

“Developing countries are most concerned that they get funds and technological support from developed countries,” he said. “On this issue, we are still having great difficulties and we have to put forth more effort.”

China has led the way in trying to persuade developed countries to set up financing mechanisms to help poorer nations cut emissions and adapt to climate change.

The issue remains a major stumbling-block in talks on a new global accord, with the United States and others reluctant to commit funds.

Stern, the U.S. climate negotiator, said the United States didn’t disagree with China that there should be a differentiation in responsibilities between developing and developed countries, but that using old definitions for those labels established in 1992 was a sticking point.

“I’ve had long and detailed conversations on this subject with vice chairman Xie and others,” he said. “We don’t quarrel with the basic concept.”

Xie told Chinese media on Tuesday that wider two-way talks would include a special high-level meeting on climate change, focused on discussing domestic and international policies and possible cooperation.

The U.S. delegation is in China for the sixth round of the U.S.-China Strategic and Economic Dialogue, which are high-level meetings on cooperation in areas from security to agriculture.

(Additional reporting by Lesley Wroughton, Kathy Chen and David Stanway in Beijing; Editing by Ros Krasny, Clarence Fernandez and Jeremy Laurence)


Jun 02
May 28, 2014
By  Lorne Matalon

New EPA rules aimed at cutting carbon emissions are expected to be unveiled June 2nd. Coal generates nearly half of this country’s electricity and is the largest source of air pollution.

The new rules are expected to spur the use of clean coal technology. At least that’s the hope of both the coal industry and some environmental groups.

Although the term “clean coal” seems like an oxymoron to some people, the expression refers to the best way known currently to use a product that’s plentiful in the United States and relatively cheap. Some analysts believe the United States has coal reserves that will last for 250-300 years.

There are two planned “clean coal” plants in the U.S. that will both sequester harmful CO2 and generate electricity. One is in Kemper, Mississippi, the other is in west Texas.

The Texas project will be located on a 600 acre piece of empty land in Penwell, a onetime oil town in the 1930s near the geographic center of the Permian Basin of west Texas.

Today Penwell is a deserted piece of flatland beside a major interstate highway. That highway didn’t even exist when the town was created to service the oil industry.

Abandoned oil tanks lie in an empty field. Wind whistles through a fence and the rumble of nearby Interstate 10 is constant.

The directors of a plan known as the Texas Clean Energy Project say a coal-fired power plant will be built here over the next four years. It’s a plant some people say can be an environmental game changer.

“I am in favor of building electric power plants that capture their carbon,” says former Dallas mayor Laura Miller.

As mayor, she was decidedly not in favor of expanding coal’s footprint in the energy grid.

In 2007 Miller was one of the leaders of a coalition of Texas cities that successfully derailed plans by the energy company TXU to build 11 coal-fired plants in Texas.

Fast forward to 2014. Miller now heads up the 3.5 billion dollar Texas Clean Energy Project which, despite the name, is all about making electricity from coal.

But not the old way, as Miller explained.

“Traditional coal plants take a lump of coal, put a match to it and it burns up a smokestack,” Miller explains. “And you desperately try to pull off sulphur, mercury, grit off the coal emissions.

The new twist sounds simple enough but it’s expensive, turning coal into gas.

“21st century coal takes coal and puts it in a large receptacle called a gasifier and you add a little pure oxygen and you heat it up to 3000 degrees Fahrenheit and you make a gas out of the lump of coal.”

Miller says that’s what marks this technology.

“By putting it into a gaseous form,” Miller continued,” you’re much more able to pull out the bad stuff including carbon dioxide.”The technology is called Carbon Capture and Storage, or CCS.

Eight industrial facilities in the United States — none of them power plants — use this technology right now.

With CCS, captured carbon dioxide is buried in the ground, theoretically permanently.

What’s new is that these projects will be the first to use coal gasification and carbon capture technologies together to make electricity. Project supporters say that process will create the cleanest coal plants in the world.

A major Texas utility has agreed to buy captured CO2 from the project to make electricity. And CO2 will also used to extract oil here in the Permian Basin, the country’s highest producing oilfield. The captured carbon will be specifically used for enhanced oil recovery.

Carbon gas is injected into the ground reducing the viscosity, or the thickness or gooiness of crude oil, which eases the crude’s flow to recovery wells.

The operation also produces by-products like fertilizer and even baking soda.

As hopeful as that might sound, critics charge that any use of CCS will slow the country’s migration to renewables like wind and solar.

But several major environmental groups, historical foes of coal, support the project.

Inside Energy spoke with Tim Profeta, Director of the Nicholas Institute for Environmental Solutions at Duke University.

“It’s very difficult to perceive a future where we are not using fossil fuels for energy for decades into the future,” says Profeta.

“It’s also difficult to foresee that we can address our problem of climate change if we do not capture the carbon from those fossil sources.”

He said that CCS technology represents a timely, calculated albeit expensive roll of the dice.

“Any new technology brings along risks of, will it perform and how much exactly will it cost?” he posited.

Profeta put CCS in general and the Texas project in particular in context.

“By putting this capture technology on the ground we’re narrowing the risks around its future deployment. And it’s very important to do the first one.”

The EPA won’t force existing plants to adopt CCS. But by mandating emission reductions, the agency hopes to create a regulatory landscape where the technology is adopted as new plants are built, making CCS cost effective over time.

The Environmental Defense Fund’s Jim Marston, who helped shape California’s carbon cap-and-trade program, says CCS is also critical for emerging energy-hungry economies.

“The real opportunity for growth is actually in India and China where they’re continuing to build new coal plants,” he says.

“We could clean up their plants. And we need to do that very quickly because China is now surpassing the U.S. as the number one emitter of carbon dioxide.”

In fact, China’s already in this game. China’s Export-Import Bank has agreed to lend the Texas project $2.5 billion dollars, marking its largest foreign investment in the technology.

Changing the U.S. power infrastructure is like stopping a guided-missile cruiser. It can’t be done quickly.

That’s why supporters of the Texas project say the technology is important right now even if it implies the longterm continued use of coal.


Inside Energy (IE) is powerful reporting about what powers America. It is a collaborative journalism initiative among public media with roots in Colorado, Wyoming and North Dakota and growing to include other states. IE was launched with a two-year, $1.4 million startup grant from the Corporation for Public Broadcasting. IE pursues ongoing and sustaining partnership funding through individuals, foundations, corporations, businesses and organizations that share an interest in the national and local energy discussion.


Jun 02
Summit Power Project Manager Laura Miller addresses members of the Odessa Development Corporation in December at its meeting at city hall.

OA file photo
Summit Power Project Manager Laura Miller addresses members of the Odessa Development Corporation in December at its meeting at city hall.

May 31, 2014
By Celinda Hawkins

The Texas Clean Energy Project is still a go even though Summit Power officials are requesting yet another extension, which will provide time to realign the project and reevaluate costs.

So far, the project has been in development for four years, and now company officials are hopeful another year will help bring the project to financial closing and eventual construction.

On Thursday, Laura Miller, project manager for Summit Power, met with Odessa city leaders to give an update on the TCEP, a coal-fired power plant, to be located on a 600-acre site in Penwell, and designed to capture 90 percent of the carbon dioxide it produces. During the past four years, the price tag for the project has gone from an estimated $2.2 billion to the current figure of $3.5 billion due to increases in labor and materials costs.

During a conference call at the Thursday meeting, Julio Friedmann, Deputy Assistant Secretary for Clean Coal with the DOE, explained the delays and the importance of the project to the DOE.

During the call Thursday Friedmann updated the group of about a dozen city leaders and stressed the importance of the project and told them that the DOE needs the project to happen. But, Miller explained that he stressed that the difficulty of a project of this magnitude often includes unforeseen obstacles. But the DOE remains committed he said.

“The Department of Energy is committed to the Texas Clean Energy Project, part of the U.S. Department of Energy’s portfolio of major clean coal demonstration projects,” Friedmann said in an email Friday.

Miller made sure the DOE participated in the meeting to give an update.

“I wanted Odessa leaders to hear from Washington that this is an extremely important project not only for Odessa but for the whole country,” Miller said.

“This was an excellent opportunity for the community to hear how important this project is to the Department of Energy,” said Odessa City Manager Richard Morton. “It bolstered our confidence and desire to move forward with the project and it is important to the country because the DOE is behind it.”

State Rep. Tryon Lewis (R-Odessa) said he was glad to hear that the DOE is placing a high priority on the project.

“It was very good to hear just how much of a priority that the department of energy is placing on this project,” Lewis said. “They have not given up on this project — far from it. The delays are expected in a project that is this big.”

Guy Andrews, economic development director for the Odessa Chamber of Commerce, said he is still optimistic that the project will break ground and that the technology is invaluable once it is developed.

“It has a lot of value in our country especially since it is new technology that will be duplicated once the initial plant is built,” Andrews said. “In talking to the DOE, I understand why this takes so long — it has a lot of moving parts and there are all kinds of things that can transpire.”

The meeting preceded the Monday release of a report by the Environmental Protection Agency which is expected to announce new stringent restrictions on coal-fired power plants. The report  says the new regulations will ultimately increase electricity costs, costs jobs and be a drag on economic growth.

In December, the city council and the Odessa Development Corporation agreed to an extension with a June 30 deadline on a $5 million jobs grant and a contract on the 600 acres given to Summit by the ODC.

The council and ODC are set to consider a year-long extension for both items and will put the extensions up for a vote next month, Miller said.

Morton thought sure the council would support the extensions requests.

“While locally, we can put some deadlines on them, and we have, and they continue to show progress on extending the local deadlines,” Morton said. “I would assume that the council will continue to support the project — there is no reason not to.”

Miller added that Summit is requesting an extension from the DOE and is renegotiating the contract for the sale of electricity to the City of San Antonio.

Financial closing for the project is now set for June 2015 with groundbreaking to follow.

Moving forward, Miller said the DOE is on track to make sure Summit is keeping up with milestones.

The TCEP has made some major milestones in the past five years, including securing $450 million in federal funding from the Clean Coal Power Initiative, $600 million in federal tax breaks, financing through a Chinese bank and longterm contracts for the sale of electricity, CO2, urea, sulfuric acid, and argon gas, there will be challenges in the future.

“There are still significant challenges in the future, as Summit Power works to find a way to reduce the extremely high labor costs that prevented the project from having a financial closing and groundbreaking in late 2014,” Miller said.

And so the next step is shaving costs, Miller said.

“We need to cut hundreds of millions in costs,” Miller said during an interview Thursday. “We need to streamline the project.”

Over the next year, the companies will reevaluate costs to see where cuts can be made.

Plans call for the 400-megawatt plant for the hiring of 1,500 to 2,000 workers for the build out of the plant.

Miller said the plan now is to go from three contractors to one. The German companies Siemens, which is supplying the gasifiers, and Linde, which will supply the chemical block that removes the CO2 are still involved, as well as Sinopec, the Chinese company that signed to build the infrastructure. Miller said another as yet unnamed company in China will take Sinopec’s place at the table.

Still, the hope from community leaders is that the TCEP will make it to the finish line.

“I do think that the project is viable,” Lewis said. “Any time that you get into something that is groundbreaking technology and (involves) huge money, things can happen. It is an enormous and important project and I think the prospects are good.”

Morton agreed.

“This would be a great thing for Odessa and the Permian Basin,” Morton said. “It will be a great demonstration project for the environment.”

May 31

June 3, 2014
By Donald Munsch

Americans and people around the world on Friday will remember the 70th anniversary of the heroic deeds of the Allies’ invasion of Normandy, which helped turned the tide of World War II.

U.S. Rep. Mike Conaway (11th District) will be at the site in France this week to witness the anniversary of the event.

Conaway dropped by the OA offices Monday afternoon to discuss his attendance at the D-Day anniversary event as well as other subjects in Washington, D.C., including legislation and the upcoming Congressional Baseball Game between Republicans and Democrats at Nationals Park, the home of the Washington Nationals major league team.

Earlier Monday, Conaway toured a limestone quarry north of Garden City and dropped by Odessa High School to pick up an OHS jersey for the baseball game on June 25. The game raises money for local charities. (Conaway is a Permian graduate, incidentally.)

Conway will as part of an official delegation at the cemetery at Colleville-sur-Mer, overlooking the bluffs at Omaha Beach.

On Monday came news that the Obama administration released a plan aimed at cutting carbon dioxide emissions from power plants by nearly a third by 2030, according to an Associated Press story. The story stated, though, that the plan “delays the deadline for some states to begin complying until long after President Barack Obama leaves office.” The plan intends to give the U.S. “more leverage to prod other countries to act when negotiations on a new international treaty resume next year. Under the plan, carbon emissions are to be reduced 30 percent from 2005 levels, in what would amount to one of the most significant U.S. actions on global warming,” AP reports.

Conaway said he didn’t think the yet-to-be-built Summit plant, a coal-fired power plant, in Penwell would be adversely affected.

“I don’t know anything directly on Summit, other than if the goal is to reduce it by 30 percent and you’ve got a plant that takes 90 percent off the table, then clearly it should be a positive for Summit,” Conaway said.

For businesses attached to the coal industry, it means higher costs for manufacturing, Conaway said. Consequently, it will make American manufacturing less competitive and will drive jobs overseas that shouldn’t go overseas, he said.

He said the Environmental Protection Agency has to go through administrative procedures to implement this action.

“My guess is that Republicans in the House will push back on this pretty hard,” he said.

Conaway’s opinion on other matters:

The exchange of Army Sgt. Bowe Bergdahl for five Taliban prisoners at Guantanamo:

“That was a mistake,” Conaway said. “We’re all happy to get Sgt. Bergdahl home, but it came at way too high a price, in my view. Those guys are bad, bad people. While they may not be able to leave Qatar for a year, they will be in direct communication with all the thugs in Pakistan and Afghanistan. We’ve had them incommunicado. They’ve not been a part of the fight since we took them off the battle field. Now they will be.”

He said the exchange becomes a propaganda victory for the five terrorists and demonstrates that Obama will negotiate with terrorists. Plus, it sets a poor precedent for what could happen in the future with other prisoners, he said.

Candidates for presidents in 2016:

Conaway said he hopes the GOP will select someone based on previous executive experience and not so much on the person’s ability to give a speech. Conaway doesn’t think the Democrats’ nominee will be Hillary Rodham Clinton because of various issues, such as her health and age. But he is not sure which person they would pick if it is not Clinton.

“The Dems have a very thin bench in this regard,” he said.

He thinks both major parties will select nominees from the late 40/early 50s bracket.

Veterans Health Administration scandal:

Conaway said the situation at the VA should be interpreted as a test study that government health care — or “socialized medicine” or a single-payer system — doesn’t work. He said the House passed a bill that would give the VA secretary the ability to fire senior executive status personnel, who can’t be fired now.

“If I want to put somebody in the slot, to fix the VA, they’ve got to have all the tools,” Conaway said. “Personnel is the big tool they’ve to have to be able to move things around.”

He said having resources is not the problem at the VA, as the issue centers on administrative problems.

On other matters, the House will focus appropriation bills this summer, as lawmakers have done three of the 12 bills on tap, Conaway said.


Mar 29

New York Times
March 15, 2013

Sometime this summer, in Odessa, Tex., the Summit Power Group plans to break ground on a $2.5 billion coal gasification power plant. Summit has named this the Texas Clean Energy Project. With good reason.

Part of the promise of this power plant is its use of gasified coal; because the gasification process doesn’t burn the coal, it makes for far cleaner energy than a traditional coal-fired plant.

But another reason this plant — and a handful of similar plants — has such enormous potential is that it will capture some 90 percent of the facility’s already reduced carbon emissions. Some of those carbon emissions will be used to make fertilizer. The rest will be sold to the oil industry, which will push it into the ground, as part of a process called enhanced oil recovery.

Let us count the potential benefits if plants like this became commonplace. Currently, some 40 percent of carbon emissions come from power plants. The carbon-capture process Summit will employ “is the only technology that can reduce CO2 emissions from existing, stationary sources by up to 90 percent,” said Judi Greenwald of the Center for Climate and Energy Solutions. To put it another way, this technology could be a climate-saver.

Second: Environmentalists could call off their war against the coal industry, thus saving tens of thousands of jobs, as climate-destroying coal-fired plants were replaced by clean coal gasification plants. Third: Gas-fired power plants, which already emit 50 percent less carbon than coal-fired plants, could become even cleaner if they included the carbon-capture technology. Fourth: Using carbon emissions to recover previously ungettable oil has the potential to unlock vast untapped American reserves. Last year, ExxonMobil reported that enhanced oil recovery would allow it to extend the life of a single oil field in West Texas by 20 years.

Fifth: China. Too often, American environmentalists ignore the reality that the Chinese are far more concerned with economic growth than climate change. (And who can blame them? All they want is what we already have.) The Chinese are relentlessly building coal-fired power plants, which Western environmentalists couldn’t stop even if they tried. But if power plants like Summit’s — which will turn CO2 into profitable products — were to gain momentum, that would likely catch China’s attention. A reduction of carbon emissions from Chinese power plants would do far more to help reverse climate change than — dare I say it? — blocking the Keystone XL oil pipeline.

The Summit executive most closely associated with the Texas Clean Energy Project is Laura Miller. Her environmental credentials are unimpeachable. As the mayor of Dallas in 2006, Miller founded the Texas Clean Air Cities Coalition to fight a plan by TXU Energy, a big power company, to build 11 new coal-fired plants. During a trip to Europe, she saw both coal gasification and carbon-capture technologies being used. When she left the mayor’s office, she signed up with Summit and became a passionate advocate of the Odessa plant. Eric Redman, the president and chief executive of Summit Power, describes her as “the public face of the project.” (As a young man, by the way, Redman wrote one of the classic works about Congress, “The Dance of Legislation.” It’s still worth reading.)

So who could possibly be against coal gasification and carbon capture? Ratepayers, for one, mainly because carbon-capture technology is so expensive. In 2011, American Electric Power, or A.E.P., canceled a big carbon-capture project, in part because it was clear that state regulators were not going to allow the company to pass on the additional costs to its customers.

To help make the project economically viable, the Texas Clean Energy Project is getting a $450 million grant from the Department of Energy. (Absurdly, the Internal Revenue Service is requiring Summit to pay taxes on the federal grant, which means that a third of it will go right back to the government.) But if the plant proves successful — as I believe it will — and others replicate it, the costs will inevitably come down, and federal help won’t likely be needed.

And the other opponent? None other than Bill McKibben, Mr. “Stop Keystone” himself. When I e-mailed him to ask whether he supported carbon-capture for enhanced oil recovery, he replied that if carbon were sent back into the ground “the worst possible thing to do with it is to get more oil above ground.” He continued, “It’s time to keep oil in the earth, not to mention gas and coal.”

To me, at least, his answer suggests that his crusade has blinded him to the real problem. The enemy is not fossil fuels; it is the damage that is done because of the way we use fossil fuels. If we can find a way to create clean energy from fossil fuels, then they can become (as they used to say) part of the solution instead of part of the problem.

Thankfully, Laura Miller and Eric Redman understand that, even if Bill McKibben doesn’t.