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California Suspends Syngas Carbon Capture Project For Six Months

A clean fuels engineering dream to produce a commercial-scale synthetic gas (syngas) from petroleum waste products and capture carbon in the heart of California's oilfields remains far from a reality after state energy officials Tuesday agreed to suspend the project for six months.

Rejecting calls to terminate the 390 MW Hydrogen Energy California (HECA) syngas power plant project, the California Energy Commission (CEC) agreed with company officials to suspend work on the six-year on-again, off-again proposal to buy time to find a purchaser for the carbon dioxide (CO2) byproduct.

In granting the suspension rather than terminating the regulatory process, the CEC set a number of milestones that HECA has to meet by Jan. 6. Failure to meet any of the milestones could result in the project application’s termination. The milestones include executing a CO2 purchase agreement, a carbon capture and storage (CCS), and transportation agreement, developing a list of commercial products to be produced at the Kern County site, verifying in writing that the intended products meet local county general plan and zoning requirements, and fulfilling all the outstanding data requests from various parties in the CEC case.

The project, if completed, would capture up to 90% of the CO2 produced in syngas production from petroleum coke and coal. Through an agreement with Occidental Petroleum Corp. (Oxy) spinoff California Resources Corp. (CRC), HECA is to transport the CO2 via pipeline to the nearby Elk Hills oilfield where it would be injected as part of CRC's enhanced oil recovery operations.

In 2009 the HECA consortium set 2015 as the startup date (see Daily GPIFeb.29, 2009). The project was approved for research and demonstration purposes, but it has languished, and earlier this year there were calls to pull the plug (see Daily GPIMarch 11).

Opponents cited the Obama administration's cancellation of the showcase CCS project in Illinois (see Daily GPI, Feb. 4).

HECA's project has been struggling since its agreement with Oxy began to unravel two years ago, and since then, Oxy has spun off CRC and relocated to Houston (see Daily GPIDec. 2, 2014).

"In 2013, terms of the agreement with Oxy changed, and [HECA] began seeking other buyers for the CO2 and a new sequestration agreement," a CEC spokesperson said. "No buyer had been found by March this year when the Sierra Club, HECA neighbors, and the Association of Irritated Residents filed a motion [with the CEC] to terminate the revised application for the project, alleging the applicant had not exercised due diligence in pursue of the application."

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