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Planned Texas power plant to sell CO2 for enhanced oil recovery
Greenwire - October 26, 2009

Michael Burnham, E&E senior reporter

Blue Source LLC said today that it will market almost 3 million tons of carbon dioxide captured at a coal power plant slated for West Texas.

Summit Texas Clean Energy LLC, a subsidiary of Bainbridge, Wash.-based Summit Power Group Inc., aims to begin construction of the 400-megawatt power plant next year near the city of Odessa. The power plant, which is slated for full operation in 2013, would use what is known as an integrated gasification combined cycle (IGCC) process to gasify coal and capture about 90 percent of the fossil fuel's CO2, Summit officials claim.

Salt Lake City-based Blue Source plans to sell the CO2 -- the main heat-trapping gas that contributes to global warming -- to petroleum producers to pressurize oil fields and enhance recovery in West Texas' Permian Basin. Alternatively, Blue Source plans to inject the CO2 into underground saline formations for long-term storage.

About 1.5 billion cubic feet a day of CO2 -- most of it from Colorado's McElmo Dome and other naturally occurring sources in the region -- is used to enhance oil recovery in the Permian Basin, which sits beneath parts of southeastern New Mexico and the Texas Panhandle, said Russell Martin, Blue Source's executive vice president.

Martin said he is confident his company will be able to sell all of the CO2 captured from the power plant over its projected 30 years of operation.

"The natural sources of CO2 in the area are at just about capacity," Martin added. "There are producers in the area who are wanting additional CO2."

Earlier this month, Blue Source, Goldman Sachs Group Inc. and CE2 Carbon Capital LLC completed a more than $12 million carbon offset transaction -- the largest deal of its kind in North America.

The offsets originate from Blue Source's portfolio of emission reduction projects, which also include sequestering CO2 in forests and capturing methane from landfills and coal mines. Goldman Sachs helped structure and market the deal, and CE2 Carbon Capital was the buyer (Greenwire, Oct. 12).

The offsets deal is not linked to today's announcement, Martin said.