$350 million grant goes to coal project

December 05, 2009
Elizabeth SouderĀ 
Dallas Morning News, TX

A West Texas coal gasification power plant led by former Dallas Mayor Laura Miller has won a $350 million federal grant. The coal plant was proposed by Summit Power, based in Washington state, for the former oil boomtown of Penwell, near Odessa. The company plans to build a plant that turns coal into gas rather than burns it, cutting down on pollution. Summit will include equipment to gather carbon dioxide emissions.

Penwell is now a collection of rusting oil derricks. The site offers the opportunity to sell carbon dioxide from the power plant to oil companies to boost production in aging wells nearby.

“The federal government’s speed and efficiency in awarding these grants just three months after receiving the applications will allow us to break ground on our project a year from now, and that means job creation starts today,” Miller said in an e-mail.

The Department of Energy awarded two other grants on Friday to pay for collecting and containing carbon dioxide produced by coal plants. One grant went to American Electric Power Inc.’s coal plant in West Virginia and the other to Southern Co., which will retrofit a coal plant in Alabama to collect the greenhouse gas.

Energy Department spokeswoman Stephanie Mueller said money for the three grants, which total $979 million, comes from both the department’s budget and stimulus funding.

Originally, officials in Odessa had proposed Penwell as a site for the federally funded FutureGen clean coal demonstration plant but lost to Mattoon, Ill.

Summit Power later proposed building a commercial plant at the site. The 400-megawatt plant would capture 90 percent of carbon dioxide emissions.

Miller, a director of projects for Summit, said the new plant will cost about $1.75 billion. She said the company will complete the project in late 2014.

Summit will file an application for an air permit with the Texas Commission on Environmental Quality in the next few weeks, she said.

(c) Copyright, 2009, The Dallas Morning News