California suspends HECA project proceeding for six months

The committee at the California Energy Commission reviewing the Hydrogen Energy California LLC coal gasification project on July 3 rejected a request from environmental groups that this proceeding be terminated, and also granted a company request to suspend this proceeding for six months.

The March 3 motion to terminate the Application for Certification (AFC) proceeding for the Hydrogen Energy California (HECA) Project was filed by Sierra Club, HECA Neighbors and the Association of Irritated Residents.

The sole basis for termination of an AFC under California Code of Regulations is the applicant’s failure to pursue the AFC with diligence. In opposing the motion, the applicant set forth, in a sworn declaration, details of its activities during the period from November 2013 to March 2015.

“There is no reason for the Committee to disbelieve the sworn declaration,” said the July 3 ruling. “The sworn declaration establishes that Occidental of Elk Hills decided to change the terms of its CO2 off-take agreement through no fault of Applicant, and that since then Applicant has been unable to secure a revised agreement with Occidental of Elk Hills. The sworn declaration further establishes that Applicant has sought alternative sites for carbon sequestration while continuing to try to work out an agreement with Occidental of Elk Hills and its successor, California Resources Corporation.

“The Committee finds that the facts set forth in Applicant’s declaration demonstrate that Applicant has acted with diligence in this case. Upon learning of potential changes in its agreement with Occidental of Elk Hills, Applicant proceeded to work with Occidental of Elk Hills to develop a revised agreement, and to work to secure an alternative CO2 off-take agreement and carbon sequestration site. These facts establish that Applicant acted with the attention and care legally expected under the circumstances.”

The same environmental groups opposed the six-month suspension this proceeding, saying that this AFC proceeding is already several years old and that it is unfair to have the uncertainty of a pending AFC hanging over the heads of the landowners and residents in the vicinity of the proposed site.

Said the July 3 committee decision: “The proposed project is, according to the Amended AFC, intended to demonstrate the commercial viability of carbon capture and sequestration by injecting the CO2 into older oil field wells, facilitating enhanced oil recovery. The fact that the location for carbon capture and sequestration is now unknown is a major setback to the Applicant. If a new location is to be used, full environmental analysis of that site will have to be performed. Such analysis will likely add significant amounts of time to the already unusually long review process in this case. In order to ensure that the duration of the HECA AFC proceeding is not indefinite, the Committee finds it necessary to require certain milestones be achieved by Applicant during any suspension period. Failure to achieve those milestones may be deemed evidence of a lack of diligence on the part of Applicant.”

The committee ruled that the six-month period will commence on July 6 and end on Jan. 6, 2016. No later than the end of the suspension period, applicant will file a report to the committee that includes:

  • Documentation of an executed CO2 off-take and carbon sequestration agreement, for a site that is both feasible and available for such use;
  • A letter dated June 18, 2015, from the Kern County Planning and Community Development Department, sets forth the county’s position that the project is not authorized under current land use designations to operate a chemical production facility at the proposed site. HECA needs to provide an up-to-date listing of any and all commercial products proposed to be produced by the project. In addition, applicant shall provide a written discussion of whether or not, and why, the production of each such commercial product is or is not in compliance with Kern County’s General Plan and zoning ordinance;
  • Completed responses to all presently outstanding data requests from the parties. To the extent that any such outstanding data requests are no longer applicable due to changes in the HECA project since issuance of the data requests, Applicant shall provide a discussion of what changes to the project render the data requests inapplicable. To the extent possible, Applicant shall modify the inapplicable data requests so that they apply to the changes in the project and respond to those modified data requests.

In the event of non-compliance with these conditions, the committee may move to terminate the AFC proceeding.

The project, as proposed, would gasify blends of petroleum coke (25%) and coal (75%) to produce hydrogen to fuel a combustion turbine operating in combined cycle mode. The gasification component would produce 180 million standard cubic feet per day (MMSCFD) of hydrogen to feed a 400 MW (gross), 288 MW (net) plant. The gasification component would also capture approximately 130 MMSCFD of CO2 (or approximately 90% at steady-state operation), which would be transported and used for enhanced oil recovery and sequestration (storage) in the Elk Hills Oil Field Unit. The HECA project would also produce approximately 1 million tons of fertilizer for domestic use.

The project would be located near Tupman in western Kern County, California, seven miles west of the city limit of Bakersfield.

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.