Abby L. Harvey
GHG Monitor
3/6/2015
A group of environmental organizations, led by the Sierra Club, filed a formal request this week with the California Energy Resources Conservation and Development Commission for the termination of Hydrogen Energy California’s (HECA) application for certification. The HECA project, should it go forward, will be a new-build, pre-combustion 390 MW integrated gasification combined cycle CCUS project. The environmental groups have charged, though, that the project’s owner, SCS Energy California LLC, has not been actively pursuing the project. “For the last 18 months, the applicant and owner, SCS Energy California LLC (SCS), has failed to provide staff with a CO2 contract between SCS and the Elk Hills oil field owner, and other critical information. SCS has also closed its local information office, failed to update its website, and, in stark contrast to its past media presence, refused to respond to any request for public comment. SCS’ last status report, filed over ten months ago, failed to report a single informational update on the project,” the groups wrote in their request.
The groups went on to state, “SCS’ actions – more pointedly, lack of actions –demonstrate that it is not pursuing the HECA project with due diligence, and the Commission should therefore terminate the proceeding. In the alternative, the Commission should issue an order to the applicant to show cause why the proceeding should not be terminated.” Representatives from HECA did not respond to requests for comment this week.
Groups Note Lack of Sequestration Contract
The environmental groups said the project is unable to move forward, in part, because it has been unable to develop a contract for the sequestration of its captured C02. “HECA’s carbon dioxide must be sequestered for the project to be viable for at least three reasons: 1) to comply with state and federal greenhouse gas regulations; 2) to receive essential federal funding; and 3) CO2 sales revenue is a necessary component of the project’s financial viability,” the filing states. However, the groups said HECA has been unable to develop a contract with the Elk Hills oil field, where it had been hoped the CO2 would be used for enhanced oil recovery. This is due in part to the spin-off of Occidental Petroleum’s California operations last year. The company had been working to develop a contract with Occidental Petroleum (Oxy) before Oxy announced early last year the spin-off.
ARRA Funding May be Pulled
The filing also notes that HECA will likely miss the September spending deadline for $275 million awarded to the project under the American Recovery and Reinvestment Act. It has been hinted by DOE that the project may suffer a similar fate to the FutureGen 2.0 project from which ARRA funding was suspended earlier this year due to the project’s foreseen inability to meet the spending deadline. Addressing DOE statements that HECA’s ARRA funding may be next on the chopping block, HECA CEO James Croyle said during the Global CCS Institute’s Americas Forum that the potential suspension of their ARRA funding was of little importance to HECA. “We do not need ARRA funds to make this project economically viable,” Croyle said at the event last month.
