California commission staff lays out issues in HECA coal project review

The myriad issues to be addressed during a California Energy Commission (CEC) review of the Hydrogen Energy California LLC (HECA) coal gasification project include issues with how to handle sequestration of CO2 produced by the project.

Commission staff on July 11 filed with the commission a July 10 report on the issues, identified so far, that need to be addressed. These issues have been identified as a result of staff’s discussions with federal, state, and local agencies reviewing a recently-revised project plan. The company first filed a plan with the commission in 2008, but, after a change of ownership, a revamped plan was filed on May 2. In 2011, Hydrogen Energy California LLC was acquired from the previous owners by SCS Energy California LLC.

The applicant intends to construct and operate an integrated gasification combined cycle facility in Kern County. It would gasify blends of 75% western coal and 25% petroleum coke from California refineries to produce hydrogen to fuel a combustion turbine operating in combined-cycle mode. The amended project incorporates a proposed manufacturing complex that would produce urea in both liquid and pellet form, and other byproducts for agricultural and manufacturing uses.

For power generation, a Mitsubishi Heavy Industries MHI 501GAC CT combustion turbine has been selected. The combined cycle power block would generate about 405 MW of gross power and would provide a nominal 300 MW of electricity to the grid. The gasification block would also capture about 90% of the carbon from the raw syngas at steady-state operation, which would be transported to the Elk Hills Oil Field for enhanced oil recovery (EOR) and sequestration. Due to the complex gasification and CO2 sequestration process, there is a larger than usual parasitic load, the CEC staff report noted.

Other agencies to be involved in CO2 pipeline permitting

Siting of a power plant is clearly within commission authority. “Staff believes that the CO2 pipeline extending from the HECA facility to the enhanced oil recovery (EOR) processing facility clearly falls within the definition of related facility and, thus, is subject to the Energy Commission’s jurisdiction and permitting authority,” the report said. “The Energy Commission is obligated to analyze the potential environmental impacts of Occidental Petroleum’s CO2 EOR activities as they clearly fall within the ‘whole of the action’ of the proposed project pursuant to the California Environmental Quality Act (CEQA). … Staff will also need to work closely with the permitting agencies to ensure that any recommended mitigation measures are applied to these activities or, alternatively, condition the HECA project to ensure that such mitigation occurs. It remains to be seen whether this approach will provide enough assurances to allow staff to conclude that the project will successfully sequester the necessary quantity of CO2.”

The state Division of Oil, Gas, and Geothermal Resources (DOGGR), will be implementing the federal Underground Injection Control program and providing Occidental Petroleum with the necessary project approval for the injection well. Even though DOGGR will not be permitting the sequestration aspect of Occidental Petroleum’s EOR proposal, these wells and the underlying permits are integral to staff’s analysis of whether the project can sequester its CO2. Occidental Petroleum has not yet indicated when it intends to file a permit application.

“DOGGR has informed staff that, once a permit application is determined to be complete, it would need anywhere between three to four months and one to two years to approve a project, depending upon the complexity of the proposal and the responsiveness of the applicant in providing additional needed information,” the report said. “Therefore, it is important that Occidental Petroleum file its application with DOGGR as soon as possible. Staff does not believe that it will be able to reach any conclusions with regard to the project’s sequestration proposal unless the DOGGR permit is at or near completion. In addition, staff is concerned that since DOGGR has indicated they do not have jurisdiction for the sequestration component of the EOR project, staff will be responsible for permitting this element.”

Sequestration on the scale proposed for this project has not been done in the United States. Nationwide experience in implementing permanent sequestration is very limited. Staff said it does not have the necessary technical expertise in house to develop and implement this program and will largely rely on consultants.

Staff said it has identified potential air quality or greenhouse gas issues that could cause compliance issues with state law or delay the Energy Commission review process.

  • Secondary Emission Impacts – The applicant has proposed two options for coal delivery – unit train alone, and a train-truck hybrid option. In either case, the project would require a large number of truck and train trips for feedstock (fuel) delivery and for transporting byproducts. “The significance of these regional emission impacts from this potentially large secondary emission source is unclear,” staff said. “Additionally, the assumptions used for train emissions may significantly underestimate the train shipping emissions by estimating engine sizes that are too small and by using unrealistic engine emissions control (engine tier) assumptions.”
  • Greenhouse Gas Emission Impacts – Staff has not yet performed a greenhouse gas (GHG) emission analysis for this type of project. Although the project, as proposed, is designed to reduce power plant operational GHG emissions through CO2 capture and sequestration, it is unclear how to consider fuel transportation-related GHG emissions. Additionally, staff said it will need to carefully evaluate the certainty of the project achieving sequestration through EOR.
  • PSD Permitting/Determination of Compliance Schedule – The San Joaquin Valley Air Pollution Control District is in the process of obtaining State Implementation Plan (SIP) delegation of Prevention of Significant Deterioration (PSD) permitting from the U.S. Environmental Protection Agency. EPA published a proposed approval of the District’s portion of the SIP in the June 1 Federal Register. 
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.