A preliminary analysis released last Friday by state and federal energy officials has recast doubts about the future of a $4 billion project that involves what would be California’s first commercial carbon capture and storage (CCS) facility slated for the state’s oil patch in the southern end of the central valley west of Bakersfield.

The staffs of the California Energy Commission (CEC) and the U.S. Department of Energy (DOE) in a preliminary analysis and draft environmental impact statement (DEIS) concluded that the Hydrogen Energy California (HECA) project has “significant, and for the most part, unresolved issues.” The two agencies said they will hold public workshops on the long-standing project in August in the Bakersfield area.

Dating back to the middle of the last decade, HECA was dormant for a number of years and was revived only earlier this year under a small, privately held Massachusetts-based developer (see Daily GPI, Feb. 12).

The CEC must ultimately approve the project, which DOE is committed to help fund following state approval to move ahead.

In the preliminary assessment and DEIS, the state and federal agencies identified 15 technical sections with either “significant unmitigated impacts, noncompliance with applicable laws, ordinances, regulations and standards,” or other outstanding issues. These questions include the project’s impacts on air quality, biological resources, land use, traffic/transportation and waste management, among others.

Slated to take up to four years to build, the project is now targeted for an April 2018 start-up, assuming final CEC approval early next year.

HECA proposes to use a 453-acre portion of a 1,106-acre private agricultural site to gasify coal and petroleum coke to produce hydrogen-rich synthetic gas fuel for use in producing electricity and fertilizer, along with capturing 90% of the carbon dioxide (CO2) produced and putting it to use as part of enhanced oil recovery (EOR) in the nearby Elk Hills oilfield. It would include an integrated gasification combined cycle (IGCC) power generation plant.

Originally proposed as a collaboration among units of BP plc, Rio Tinto and Southern California Edison Co., HECA was sold two years ago to a Concord, MA-based small privately held independent power producer, SCS Energy LLC (see Daily GPI, May 31, 2011).

In the latest preliminary assessment, there was no alternative project identified that would eliminate HECA’s potential significant environmental impacts. It was noted, however, that eliminating the fertilizer plant “would lessen impacts in a number of environmental issue areas.”

CEC and DOE staff will continue to look at alternatives, and they are expected to be included in the final preliminary assessment and final EIS as required by both the California and federal environmental protection acts.

The developer, SCS Energy, has made it clear in the past that the fertilizer component of the project helps make it economically viable. SCS intends to integrate electricity generation with urea production in a way that allows the facility to use the hydrogen produced from solid fuel IGCC to generate electricity, urea or both depending on market demand.

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