The DOE announced the names of the projects selected to receive funding for carbon capture and sequestration projects. The funding is from the American Recovery and Reinvestment Act.

ConocoPhillips received approximately $3,000,000 for its project to capture and sequester CO2. The project is part of its petcoke-based 683-megawatt IGCC power plant adjacent to its existing refinery in Sweeny, Texas. Its projected that 85% of the CO2 from the process stream will be captured and sequestered.

Leucadia Energy received funding for two projects: the Lake Charles Cogeneration project received approximately $540,000 and the Mississippi Gasification received approximately $840,000. The Lake Charles Cogenertion project convert petcoke-to-chemicals (methanol) project to be located near Lake Charles, La. The Mississippi Gasification
facility will gasify petcoke and produce substitute natural gas (SNG).

Both Leucadia projects will transport compressed CO2 for enhanced oil recovery in Texas oil fields via the Denbury Green Line pipeline system.

The remaining Recovery Act funding will be awarded to the most promising projects during a competitive phase two selection process.

Texas Representative Phil King introduced a bill in the Texas legislature that will provide franchise tax credit of up to $100 million for a coal gasification plant that meets certain requirements. It’s common for states to provide tax credits or abatements to attract large, industrial investments that will benefit the local economy. The construction of a coal gasification plant will pay off with benefits that far outweigh the $100 million in franchise credits.

To qualify a coal gasification plant must generate a minimum of 200 megawatts, use integrated combined cycle technology, and be capable of capturing and sequestering at least 60% of the CO2. There must be reasonable evidence that the CO2 will be sequestered for 500 years.

In addition to the gasification plant owner getting a $100 million franchise tax credit, any oil developer that purchases the CO2 will get a tax incentive. It is a common practice to inject CO2 into mature oil fields to improve field production.

Sunflower Electric Power Corporation is seeking an air permit for construction of a pulverized coal technology power plant in Kansas. The Kansas Division of Health and Enviroment (KDHE) would not approve the application for the air permit on the grounds that it did not evaluate the effect of CO2 emissions. The KDHE Secretary Roderick Bremby made a decision that the CO2 emissions should be considered a hazardous pollutant contrary to EPA guidelines. Secretary Roderick Bremby speaking House Select Committee on Energy and Global Warming said “The U.S. Supreme Court’s decision in Massachusetts v. EPA was a key consideration in making the Sunflower Electric decision.” He summarized “The most critical challenge facing the states is policy uncertainty at the federal level.”

The Sunflower skirmish has become a major battle ground. Sunflower Power issued a press release stating that the KDHE Secretary illegally used his authority to withhold the air permit. Peabody Coal entered the fray and provided $200,000 funding for an advertising campaign in favor of the pulverized coal fired power plants.

Sunflower filed a lawsuit in district court against KDHE and the court ruled in Sunflower’s favor. The district court dismissed the case. This means that the case can go directly to the Kansas Supreme CourtK without having to go through the appeals process. Sunflower executives are pleased that the case was dismissed by the District Court so it can be heard by the Supreme Court if the court chooses.

The Sierra Club filed a lawsuit to stop the plant saying that a environmental impact study should be first conducted. The Federal government attempted to have the Sierra Club lawsuit dismissed. However, a State District judge ruled against the Federal government and denied the dismissal of the lawsuit.

Governor Sebelius supports the KDHE decision and is in talks with Sunflower regarding a negotiated settlement. Perhaps logic will prevail and Sunflower will build a coal gasification plant and include CO2 capture for enhanced oil recovery.

The Supreme Court ruled 5-4 that carbon dioxide is an air pollutant and the Environmental Protection Agency (EPA) must regulate CO2 emissions.

For many years, the EPA maintained its position that CO2 was not an air pollutant, because its there in the air we breath and, therefore, the EPA could not regulate CO2 under the guidelines of the Clean Air Act.

Thirteen states, California, Connecticutt, Illinois, Rhode Island, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Vermont and Washington along with the cities of Baltimore, New York and Washington DC joined in a lawsuit against the EPA to require that CO2 emissions be considered when reviewing air permits. After four years, the Supreme Court ruled against the EPA and struck down the EPA’s ruling that it didn’t have any power to regulate CO2.