Release Date: July 9, 2012

DOE Advances Innovative CCS Polygeneration Plant Through NEPA Process

Power Plant Will Produce Clean Power, Increase Domestic Oil Production

Washington, D.C. — The U.S. Department of Energy (DOE) and the California Energy Commission (CEC) are working together to advance an innovative carbon capture and storage (CCS) plant simultaneously through the federal National Environmental Policy Act (NEPA) review and a complementary California Energy Quality Act process.

Part of DOE’s Clean Coal Power Initiative (CCPI), the new "polygeneration" plant will incorporate CCS as well as utilize CO₂ for enhanced oil recovery. Hydrogen Energy California (HECA), which is owned by SCS Energy LLC, is developing and designing the new plant, whose polygeneration process will demonstrate the co-production of fertilizer and hydrogen-based electric power.

The HECA project offers multiple benefits: it furthers California’s low carbon power policies, will replace imported fertilizer with domestically-produced fertilizer, and adds to domestic oil production. The polygeneration plant will comprise an advanced integrated gasification combined cycle (IGCC) power plant, which will convert coal fuel into hydrogen to generate enough power to support 160,000 homes, and a chemical plant that will produce nitrogen-based fertilizers. The plant will also capture more than 90 percent of the CO₂, which means that the fertilizer and power produced by the project will have a significantly smaller carbon footprint than those produced by conventional facilities, including those using natural gas.

Approximately 2.6 million tons per year of CO₂ will be transported via pipeline to Occidental Petroleum’s Elk Hills Oil Field, located less than 4 miles away. With oil fields as the CO₂ injection site, HECA will enable oil production to be increased, while storing CO₂. Michael Peevey, President of the California Public Utilities Commission, has said: "They have developed an innovative business model that improves the economic viability of the project. HECA intends to ramp up the facility to produce more electricity during peak hours of need in order to maximize the energy and capacity value of the plant. This is an example of the kind of creative thinking we will need to solve the climate crisis."

"The HECA project underscores the significance of Carbon Capture, Utilization, and Storage—the creative combination of business drivers and environmental responsibility.　 It demonstrates how carbon capture technology will help us fully develop and use our vast domestic energy resources in a sustainable way.　 And, by utilizing the captured CO₂ for enhanced oil recovery, the project provides significant economic and job creation benefits" said Chuck McConnell, DOE’s Assistant Secretary for Fossil Energy.

Still other benefits will be realized from the new concept plant:

• The plant will preserve California’s limited fresh water resources by using non-potable water for its power production needs.
• The plant will use petroleum coke that is currently being burned overseas without the benefit of CO₂ capture.

The project will create more than 2,000 construction jobs over 3 years and approximately 100 permanent operational positions.

CCPI is a cost-shared collaboration between the federal government and private industry to increase investment in low-emission coal technology by demonstrating advanced coal-based power generation technologies prior to commercial deployment. The estimated capital cost for the project is approximately $4 billion. The DOE cost-share is limited to $408 million, or approximately 10 percent of the total project costs. The project consists of three phases: Project Definition (Phase I), Design and Construction (Phase II), and Demonstration (Phase III). Plant operation and sequestration of CO₂ in the Elk Hills Oil Field will commence in 2017. The project is being administered by DOE’s Office of Fossil Energy and National Energy Technology Laboratory.

The continued progress of the project marks a major step toward commercialization of a clean technology that enables use of vast domestic fossil energy resources, while providing an innovative and economical route to reducing greenhouse gas emissions.