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Proposed Penwell power plant gathers more public support
Midland Reporter Telegram - November 2, 2009

By Mella McEwen

Oil Editor

Published: Monday, November 2, 2009 11:54 PM CST

Letters of support have been coming in to boost Summit Power Group’s efforts to build a power plant at Penwell. Company officials plan to proceed with the plant pending receipt of a grant under the Department of Energy’s Clean Coal Power Initiative’s Round 3. A decision on the application is expected sometime this month.

Laura Miller, Summit’s Director of Projects for Texas, said a letter of support from Union Pacific Railroad Chairman Jim Young for the Texas Clean Energy Project to be built where the federal FutureGen project would have been sited “is yet another sign that we are widely seen as the most promising clean coal plant in America.”

Another show of support came from an agreement Summit signed with Blue Source, an emissions reduction project developer, to market nearly 3 million tons of carbon dioxide expected to be captured annually by the plant at Penwell. Under the agreement, Blue Source will market both TCEP’s captured CO2 and the resulting greenhouse gas emissions reductions. Blue Source will oversee the monitoring and verification of the geological sequestration of the project’s CO2 in Permian Basin oil fields.

Summit’s Texas Clean Energy Project (TCEP), dubbed a “NowGen” plant by national environmental group the Clean Air Task Force, will be a new 400 megawatt coal gasification plant that begins construction in 2010. It is a first-of-a-kind integrated gasification combined cycle (IGCC) project designed to achieve an industry-leading 90 percent capture rate. The related carbon capture and storage efforts, which Blue Source will manage, will primarily focus on meeting the robust demand for reliable sources of CO2 for use in enhanced oil recovery (EOR) in the Permian Basin. The project’s location will also allow the alternative CCS technique of CO2 injection into deep saline formations, if national carbon policies ultimately favor that technique.

“We believe this project, and its ability to capture 90 percent of its carbon emissions, has enormous national and global significance,” said Blue Source Executive Vice-President Russell Martin in a statement. “This project has significant potential as a model in the voluntary emissions reduction market. We anticipate tremendous demand from oil producers to purchase the captured CO2, and we are confident of our ability to sell it all. We will, of course, preserve other CCS options as well.”

“The development of a NowGen project like this is a clear sign of confidence from industry leaders that it is time for new coal-fueled plants in Texas to capture and sequester their carbon and to do so predictably, safely and economically,” said Miller. “We are extremely pleased that Blue Source is our ally for handling and marketing the CO2 that our project will capture for commercial use in the West Texas oil fields.”

She added that having companies like Blue Source and Union Pacific back the project, along with recent public support from the National Resources Defense Council (NRDC) and the Clean Air Task Force “puts us in an unusual league of greens and businesses all backing us.”

Hoxie Smith, director of Midland College’s Petroleum Professional Development Center and a member of the task force that tried to bring FutureGen to the Permian Basin, commented that “I am very encouraged with the recent support letters that Summit has received from the Natural Resources Defense Council and the Clean Air Task Force. Summit has done a superb job interacting with environmental advocates and keeping them engaged in the process. Most proposed coal projects, clean or otherwise, are butting heads with environmental activists; not so with the Summit project.

“Summit’s efforts are leaving no stone unturned. The DOE application grant winners for the Clean Coal Power Initiative’s Round 3 will be announced sometime in November, and I am encouraged that the merit of Summit’s Texas Clean Energy Project will secure a grant,” he continued.

Smith added, “It would be remiss not to mention the huge role that Congressman Mike Conaway is playing in supporting the Summit project in Washington, D.C. And, that State Sen. Kel Seliger, along with State Rep. Tryon Lewis and former Texas Speaker of the House Tom Craddick, were instrumental in getting favorable state legislation passed to support the project.”

Mella McEwen can be reached at mmcewen@mrt.com.