Penwell clean coal power plant supporters await response to stimulus fund request

April 22, 2009
Mella McEwen
Midland Reporter-Telegram

President Barack Obama’s vision of clean energy could take root in the Permian Basin if local officials as well as their counterparts in Austin and Washington, D.C. have their way.

Summit Power Group of Bainbridge Island, Wash. wants to build the $1.6 billion Texas Clean Energy Project near Penwell on the site of the proposed FutureGen plant. The proposed plant would use the latest integrated gasification combined cycle technology to capture high amounts of carbon dioxide before they are emitted into the atmosphere and providing much of that CO2 to area oil and gas producers for enhanced oil recovery projects.
“I’m real excited,” said Hoxie Smith, director of Midland College’s Petroleum Professional Development Center. “We’ve been working on this so long.”

The project, Smith noted, has drawn the support of the Midland and Odessa city councils and chambers of commerce along with state Representatives Tom Craddick and Tryon Lewis, State Sen. Kel Seliger up to Lieutenant Governor David Dewhurst, U.S. Rep. Mike Conaway and Senators Kay Bailey Hutchison and John Cornyn. Other supporters include Railroad Commissioner Michael Williams, State Rep. Rafael Anchia, Public Utilities Commission Chairman Barry Smitherman and Dr. Scott Tinker with the Bureau of Economic Geology.

“Texas is a proven leader in energy research, significantly reducing coal plant emissions over the past decade. We must continue that leadership by moving forward with work on clean-coal technology that could make Texas the first state with fully operational, large-scale plants that capture at least 60-percent of the carbon dioxide they produce. That will provide Texans with reliable, clean energy while attracting more energy research dollars and jobs to our state,” stated Dewhurst.

Smith said the project would create 1,200 construction jobs and 120 full-time, well-paying jobs that Laura Miller, Summit’s Director of Projects in Texas, estimated would pay from $60,000 to $120,000 a year.

Giving the project a possible boost is the federal government’s $3.4 billion in funding for investment in pioneering clean coal technology through the American Recovery and Reinvestment Act.

Miller said letters requesting stimulus funds, accompanied by letters of support from Dewhurst, Speaker of the House Joe Strauss and Williams, which contained about 100 signatures, have been received by Energy Secretary Steven Chu. She added Sen. Hutchison is seeking a meeting with the secretary to discuss the project.

“On the state front, a House Bill offering financial incentives for the first three IGCC plants with at least a 70 percent carbon capture rate” is expected to exit the House Calendar Committee the end of this week. The bill was written by Lewis, Anchia, Mark Strama and Phil King. A similar bill has been sent to the state Senate Finance Committee, where Seliger hopes to have it out, also by the end of the week.

“We’re lucky we’ve got all the hearings early, so it won’t get lost at the end of the session and we run out of time,” Miller said. “We’re pretty optimistic we can get the bill passed by the end of the month.”

Supporters of the bill hope to sit with Secretary Chu and explain why the Penwell project — along with the Mattoon, Ill. site chosen in December 2007 by the FutureGen Alliance — should be funded, she said. The difference is, she said, the Penwell project wouldn’t require 78 percent financing. In fact, she said, it wouldn’t need stimulus funds at all if the capital markets hadn’t collapsed last year.

Smith said the project is a commercial project ready to go and using technology that is proven and warranted, as opposed to the FutureGen project which was designed to be a possible venture to prove there is such a thing as clean coal technology.

As supporters wait for a response from the government, Miller said “we’re cautiously optimistic. All the pieces are moving together.”

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