TCEP In the News
End-of-session action passes legislation encouraging clean-coal plant at Penwell
Midland Reporter-Telegram - June 7, 2009
by Mella McEwen
Midland Reporter-Telegram
Published: Sunday, June 7, 2009 1:12 AM CDT
With last minute hurdles cleared as the session came to a close, the Texas Legislature has laid the foundation for a $1.6 billion clean coal power plant to be built near Penwell.
The Texas Clean Energy Project would be built by Summit Power Group of Bainbridge Island, Wash., at the site of the proposed FutureGen project. It is expected to create about 1,200 construction jobs and 120 full-time jobs. It would use the latest Integrated gasification combined cycle technology to capture high amounts of carbon dioxide before they are emitted into the atmosphere and provide much of that CO2 to area oil and gas producers for enhanced oil recovery projects.
"We are extremely pleased that our bill passed and grateful to State Sen. Kel Seliger and State Rep. Tryon Lewis for their strong local support of the bill and our project," said Laura Miller, Summit's director of projects in Texas. She added that State Rep. Phil King was the other lead sponsor of the legislation. Seliger and King authored House Bill 469 and shepherded it through the session. Senate Bill 2111 was authored by Sen. Kip Averitt and Rep. Rick Hardcastle but was stalled by disputes over other legislation at the end of the session. Elements of SB 2111 were attached to HB 469 and the bill now awaits Gov. Rick Perry's signature.
"We now look to Washington and a positive response from Energy Secretary Steven Chu to the request made by our Texas Congressional delegation and more than 100 Texas legislators for a federal loan to begin construction of this project," Miller continued. She said, due to the deterioration in the economy since the project's beginnings, the company is seeking federal funding through the government's American Recovery and Reinvestment Act. This act included $3.4 billion in funding for investment in pioneering clean coal technology.
There were compromises made to the legislation due to amendments being added in the final days of the session, Miller acknowledged. "Some of the financial language added on in the Senate really hurt the project, and another amendment upset the environmentalists, understandably as it would have expedited the processing of the water permits for these plants, which is not a good idea. Luckily the lieutenant governor worked the compromises that needed to be made. So we are very grateful to him for his support of the bill and his wanting to see it pass."
Lt. Gov. David Dewhurst stated, "Texas leads the nation when it comes to energy innovation, and legislation passed by the Senate this past session will ensure that we continue to lead in developing clean, reliable energy sources for our citizens and businesses. This legislation also benefits our economy by making Texas more competitive for investment dollars and good-paying jobs."
Although the plant would be set in Ector County, Midland -- and the entire area -- will benefit, noted Mike Hatley, vice president of economic development with the Midland Chamber of Commerce.
"We were very supportive of FutureGen, and everything we've learned from our friends in Odessa is that this is as good or better," he said.
The Midland Development Corp., he said, had agreed to put up some funds toward the FutureGen project and may again. "As this progresses, we'll support it to the level we'll receive a benefit."
The plant, Hatley said, will benefit Midland International Airport and Midland and he pointed out that contractors throughout the Permian Basin will benefit from work constructing the facility.
Local supporters expect the plant to draw international attention as it will be an example of leading-edge clean coal technology. Hatley agreed with that expectation, saying "all eyes are on clean coal."
He added that "this administration especially would like to see environmentally sound power generation."
Mella McEwen can be reached at casell@mrt.com.
Breakout Box:
Key elements of clean coal-related legislation passed by the Texas Legislature this year.
- Creates a two-tier incentive package for clean coal projects in the state. Projects that capture at least 50 percent of their carbon dioxide (CO2) emissions are eligible for sales tax exemptions for the equipment that captures, transports, and stores the CO2. There is also more leeway for local taxing authorities to defer taxes in the early years of a project's development. The first three projects that can achieve a 70 percent carbon capture rate will qualify for an additional bonus of a $100 million franchise tax credit for each project.
- Provides a 75 percent, 30-year severance tax exemption for oil recovered using CO2 captured from a man-made emission source, expected to play a key role in attracting the first carbon capture projects to Texas to take advantage of opportunities for enhanced oil recovery using CO2.
- Amendments to HB 469 condition all of these incentives on a project's ability to meet stringent air emission standards for nitrogen oxides, sulfur dioxide, particulate matter, and mercury. These standards set the environmental standards bar higher for incentives than any other state or national incentive program.
- HB 1796 sets in motion an offshore carbon repository program. The bill also establishes a grant program for new emission-reducing technology, including clean coal technology and carbon capture and sequestration projects. The funding for this grant program was included in the Texas Commission on Environmental Quality budget in the general appropriations act (SB 1).
- HB 3676 extends the Texas Economic Development Act until December 31, 2014, enabling local school districts more tax freedom to attract major projects.
- HB 3896 extends for 10 years the authority of cities, counties, and other taxing jurisdictions and gives them more freedom to attract major economic developments, including major energy projects.
- HB 1387 resolves the regulatory oversight of CO2 capture and storage between the Railroad Commission of Texas and the Texas Commission on Environmental Quality
Source: Clean Coal Technology Foundation of Texas
Copyright © 2009 -
© 2010 - All Rights Reserved
