Oil at each end, clean power in the middle

Proposed California plant would combine gasification and carbon sequestration

BY ERIC LIDJI FOR GREENING OF OIL

Cleaner electricity can come from renewable wind and solar, from technological improvements to non-renewable oil and gas, or from creative mixtures of the two. The latter is the concept behind a new power plant being proposed in southern California.

Hydrogen Energy California LLC wants to build a power plant near Bakersfield that would put 250 megawatts of “low carbon” electricity into the grid. The source of that electricity is hydrogen, our simplest element.

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Hydrogen Energy California, or HECA, is a joint venture between BP Alternative Energy North America and Rio Tinto Hydrogen Energy. True to those resource extraction roots, the company’s process starts and ends with oil production.

The so-called HECA plant will gasify petroleum coke, turning it into hydrogen for generation and carbon dioxide to boost recovery rates at an aging oil field nearby. 

Estimated cost of the plant is more than $2 billion, but the venture hopes to complete permitting next year and start generating power in 2015.

Old technologies finally combined

Every power plant needs a feedstock, and the feedstock for HECA would be petroleum coke.

Petroleum coke, or pet coke, is a byproduct of oil refining. It’s a solid coal-like material left behind when crude oil is distilled to produce gasoline, diesel and jet fuel.

By adding oxygen and extreme heat, HECA can break down pet coke’s hydrocarbons and produce hydrogen and carbon dioxide. The hydrogen powers the turbines, but the process leaves a lot of carbon dioxide sitting around.

Rather than pump that CO2 into the atmosphere, HECA would send it via pipeline to the nearby Occidental Petroleum-operated Elk Hills oil field, where it would be used to increase oil production.

This process isn’t revolutionary; gasification and carbon sequestration are both proven technologies. The difference is the mix: they’ve never before been combined in a power plant, HECA said.

Triple benefits

Buying pet coke keeps a domestic energy source from going overseas; gasifying it and using the hydrogen as fuel creates low carbon electricity; sequestering the carbon dioxide keeps it out of the air and brings in more oil from existing wells.

Putting more hydrogen-based power into the grid helps California meet its clean energy goals, including specific mandates to increase hydrogen use.

At 250 pounds per megawatt hour, the estimated carbon dioxide emissions from the HECA plant would be about a third of those from the California portfolio average.

HECA said the sequestration aspect would reduce carbon dioxide emissions by 90 percent, keeping 2 million tons out of the atmosphere each year.

Putting that carbon dioxide into the aging Elk Hills oil field, instead of simply storing it an unused reservoir, could improve recovery rates at the field by 10 to 15 percent over the next 20 years.

Elk Hills is a good prospect for enhanced oil recovery. It’s nearly a century old and already has produced the equivalent of more than 2 billion barrels of oil. Not only is the aging field ripe for improved recovery techniques, but the effort will be that much more effective because geologists already understand the field’s reservoir.

Increased recovery reduces the need for new wells at Elk Hills, which means less of an environmental impact and likely less cost to the field owner.

While carbon is usually the main focus in any environmental discussion, HECA is also touting its conservation of valuable water. The plant would treat brackish ground water on site rather than draw on local fresh water sources in the surrounding agricultural area. The plant would also recycle much of its wastewater on site.

Major challenges

HECA’s unique combination of technologies also creates challenges.

The plant is sort of a middleman—buying carbon in one form from one source, selling it in another form to another source, and making clean electricity in the process. So it relies on its partners to keep the plant economically and environmentally competitive.

Securing petroleum coke shouldn’t be too difficult. California has the third largest refining capacity in the country.

As for sequestering carbon dioxide, the HECA business model depends on Elk Hills, at least for now. When the field is depleted, or when oil production is no longer economic, HECA would need to find a new buyer. But the company is only considering a 20-year life cycle for now and expects no problems. The reservoir can hold hundreds of years of carbon dioxide, the company said.

Plant a ‘bridge solution’ for California

A carbon market in the United States could eliminate that risk, but either way HECA doesn’t see its dependence on Elk Hills as a major problem. The HECA plant would be a “bridge solution” for California—a way to add a clean supply of base load power to the local grid until a better technology comes around.

A more immediate concern about sequestration comes from government.

The California Department of Oil, Gas and Geothermal Resources doesn’t believe it has the authority to permit oil field activities that permanently sequester carbon.

HECA, on the other hand, argues that California agencies have the authority to permit carbon sequestration under the U.S. Environmental Protection Agency’s Underground Injection Control Program.

Without a resolution to the permitting issue, the California Energy Commission worries there would be no guarantee HECA would permanently store its carbon dioxide, and therefore no guarantee the project would meet the greenhouse gas emissions requirements of the California Environmental Quality Act. HECA is currently working with state policymakers to find consensus and get the permitting timetable back on track.

Federal support

The federal government is behind the project in a major way.

Last September, the U.S. Department of Energy gave HECA $308 million in stimulus money to fund a demonstration project for the plant, which would generate 250 MW of electricity from a blend of 75 percent western bituminous coal and 25 percent petroleum coke.

The grant comes from the Clean Coal Power Initiative administered through the National Energy Technology Laboratory. While HECA isn’t promoting coal as a feedstock, the DOE demonstration would prove the plant could generate clean electricity from coal.

HECA expects its power to eventually compete on price with renewable energy technologies in California. Meanwhile, it says the federal grant “made [HECA] possible” by helping to avoid the risks that carbon capture projects can face in early development.

Links of interest

Hydrogen Energy California

Occidental Petroleum’s Elk Hills oil field

The California Hydrogen Blueprint Plan

California Energy Commission docket on HECA plant

 

Contact Eric Lidji at ericlidji@mac.com