It could take up to $2 billion and the next six years, but engineers at Southern California Edison Co. (SCE) think it is realistic to hope that a consortium by 2015 can turn petroleum refinery waste into an integrated gas combined-cycle (IGCC) power plant with carbon capture storage in nearby oil fields. But SCE’s project manager, Mark Nelson, told NGI the first step is to complete a feasibility study.
If they pull it off, it could be the first plant in North America to commercially capture and store carbon, its backers contend. The utility has a mandate from the California Public Utilities Commission (CPUC) to spend at least $30 million with an initial study.
Much, if not all, of the optimism is riding on an ongoing feasibility study that will take one to two years to complete, Nelson said. “These are large, complex projects and the feasibility study is very important.”
In February the CPUC ordered SCE to begin a three-phase demonstration effort among major utilities and the oil and gas industry. The project includes BP, Occidental Petroleum and mining giant Rio Tinto, along with SCE and presumably the other major California utilities eventually (see Daily GPI, Feb. 23). BP and Rio Tinto have formed Hydrogen Energy International as a joint venture to participate in the project.
Only after the ongoing feasibility assessment is complete will SCE and any other utilities that choose to join the effort have “enough technical and cost information to determine technical feasibility and commercial reasonableness,” Nelson said. “With the[current global] recession, costs of materials are still volatile, so the feasibility study is the key to decision making.”
Nelson said any further CPUC action or power purchase deals from SCE and other utility participants are likely to occur in the 2010-11 time frame.
Under the current plans, this project would be the first of its kind, but technology is not really the problem. It is more a challenge of integrating available technology together for the first time and on a scale that has never been done, Nelson said.
“This is the only U.S…plant with plans for active sequestration,” Nelson said. “This one already has the carbon capture and storage. All the rest of the projects in the United States are ‘capture-ready,’ which means they have the plumbing, but don’t have a capture plan in place yet.
“The individual pieces of the technology are available, but nobody has integrated them all together yet, especially on a commercial scale. That is really the challenge to put them all together and to put them together at scale.”
Called the Hydrogen Energy California study, feasibility work will evaluate an IGCC plant that would use petroleum coke residue from 12 of the state’s oil refineries that is now shipped to Asian markets where it is burned and emits greenhouse gas emissions, contributing to global warming.
Thus CPUC President Michael Peevey has touted this project as removing “California’s dirty little secret” of exporting a coal-equivalent fuel that could support up to 1,500 MW of clean electric generation when transformed. Peevey said it is well known that about 20% of the state’s current power supplies comes from coal-fired generation located in other western states, but few are aware of the refinery byproduct, which is just as much of an issue in a global climate change context.
“Most people don’t know that we make a lot of ‘coal’ in California,” Peevey said. “We make it in a dozen of our oil refineries. Petroleum coke, or ‘Petco’, is California’s home-made coal, the residue from producing gasoline and other products. In the industry, it is called the ‘bottom of the barrel’ and it is the chemical equivalent of coal.”
Aside from some supplies of Petco that are used in cement plants in California, 90% of the refinery residue is sold to Asian markets. Instead of shipping those supplies, SCE’s joint research project seeks to prove the feasibility of keeping the supplies in the state, gasifying them and using the hydrogen produced in the process to power an electric generation plant, while capturing and storing the bulk of the carbon emissions.
The proposed plant would be located somewhere in the southern end of the oil-rich San Joaquin Valley around Bakersfield and its carbon would be shipped to Occidental’s Elk Hills production fields for use in enhanced oil recovery.
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