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Energy Commission Staff Recommends Killing Application For $4 Billion South Valley Hydrogen Plant

December 22,2015-

A 7-year-old plan to make hydrogen from petroleum coke in Kern County with a $4 billion dollar price tag may still be under study by the US Department of Energy but staff at the California Energy Commission(CEC) who must approve the project – have lost patience.

HECA 2  2015-12-22 at 11.53.00 AMThe controversial project, Hydrogen Energy of California (HECA) has already received some $286 million in federal support to study the idea that would have sequestered CO2 from burning petroleum coke to make the hydrogen.The plant would have made 1 million tons of fertilizer each year the proponent,SCS Energy said.

On December 15 the staff of the CEC recommended the agency terminate the application as soon as early January when a deadline to move forward or not was to expire. Staff suggested SCS had not resolved key issues such as where the CO2 would go- when they were supposed to.“It is reasonable to estimate that a well-defined, complete project will not be forth coming until 2017 or even 2018.”

“ HECA has not met the requirements, and will not be able to meet the requirements of the July 3, 2015 Committee Order. Staff recommends that the project be terminated rather than continue to be held in suspense.”

It will be up to the board of the state energy commission to make a decision.

The company who is proposing the project says delays associated with the finalization of the CO2 off-take agreement are key.  As of. December 2015, HECA proposed buying its own CO2 and burying it directly into the rocks below its site. If this were to go ahead it would eliminate the need for a”off-take” agreement which is one of the main reasons for the project delay. Occidental Petroleum had previously agreed to buy the CO2.

The CEC staff report noted that “HECA also set forth a plan to perform extensive site characterization and site specific geological analysis from January 2016-December 2016 to assess the viability of the project site to sequester and store CO2.” The CEC staff says once the company completes the study to sequester the CO2 they could re-apply for new permit but that this seems several years away.

The Sierra Club had opposed the project citing air emissions and water issues. They pointed to the “ enormous pollution that 350 daily truckloads of coal would have brought to Kern County.”

HECA 1 2015-12-22 at 11.52.15 AM

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