Texas congressmen are not happy with the Department of Energy’s proposal to reallocate $240 million of funding for the Texas Clean Energy Project under the Clean Coal Power Initiative (CCPI) to new, smaller demonstrations of innovative clean coal technology. Secretary of Energy Ernest Moniz heard a lot about the project during a Tuesday hearing of the House Science, Space, and Technology Committee concerning DOE’s fiscal 2017 budget request.
“It’s hard to understand how [TCEP] doesn’t meet the administration’s clean energy standards,” panel Chairman Lamar Smith (R-Texas) said.
Summit Power Group is developing TCEP, a 400-megawatt coal integrated gasification combined cycle facility, located outside of Odessa, Texas, that will incorporate carbon capture and storage. The project is forecast to cost $2.5 billion in total and to begin operations in 2019.
TCEP is designed to capture 90 percent of its carbon dioxide emissions which will be used for enhanced oil recovery in the West Texas Permian Basin and production of urea fertilizer and other marketable chemicals. The facility would be among the first in the world to use a poly-generation business model, allowing the plant to produce and sell electricity, and to provide captured CO2 for use in enhanced oil recovery, urea fertilizer, and other chemicals, resulting in multiple revenue streams for Summit.
This is not the first time DOE has cut TCEP funding. The project was to receive $450 million in total funding from the department. Of that, $211 million was awarded under the American Recovery and Reinvestment Act. DOE returned $104 million of the ARRA funding to the Treasury Department on Sept. 30, 2015, because it was not spent by the statutory deadline. The $240 repurposed in the FY2017 budget request was the last of TCEP’s DOE funding.
TCEP could still get its funding back if it meets a number of DOE milestones before May, most notably reaching financial close.
Smith was backed up by colleagues on both sides of the aisle. “Isn’t this just the sort of project that is exactly what the administration promised would be the result of Mission Innovation,” Rep. Brian Babin (R-Texas) said. Rep. Marc Veasey (D-Texas) also chimed in with support for the project.
Even Rep. Zoe Lofgren, a Democrat from California, a state with no stake in the project, voiced dismay over the funding cut. “[TCEP] appears to have a great deal of potential for developing and deploying carbon capture technologies that could be key to meeting our and the world’s climate targets,” she said.
Smith later suggested that additional funding for the project could be found elsewhere in the department’s budget, allowing both TCEP and the new pilot-scale projects DOE seeks to fund to come to fruition. “It seems to me that … with all the agreement we have on the necessity for research and development in certain areas, that the department might be able to take another look at that project and find some additional funds. We’re just talking about several million dollars on a yearly basis, and I hope the secretary would consider doing that,” Smith said.
Moniz, while noting the department believes TCEP is a good project, explained that after several years of supporting the endeavor, the CCPI program decided it was time to step back. “The trouble is they have been unable to meet many of their key milestones,” Moniz said. “[CCPI] asked for a financial plan, it’s not forthcoming, and the program finally decided it was time to move on. … So, I think this has been an ongoing longstanding discussion, and the fact of the matter is, critical milestones are way overdue and are still not met.”
The TCEP team remains optimistic that it can meet its milestones and potentially have its funding reinstated. “Our project has a lot of momentum and has reached a number of significant milestones recently, including the signing of all our construction contracts. We are currently in discussions with potential equity investors, and working toward a mid-year financial closing,” a TCEP spokesman told GHG Daily Wednesday by email. “Under that schedule, any 2017 budget proposal that might take effect on October 1 of this year should not affect our timetable. DOE has approved an extension to our CCPI Cooperative Agreement, and we are hopeful that it will approve our final budget request to get us to financial closing.”
