Abby L. Harvey
GHG Monitor
12/18/2015
California Energy Commission (CEC) staff this week called for termination of the application for certification of the Hydrogen Energy California (HECA) project. The project’s developer, SCS Energy, in mid-July received a six-month extension to obtain its certification, essentially suspending the project. Certification by the CEC is necessary for the project to be licensed under the California Environmental Quality Act. According to the new staff filing, however, the project will not be able to meet the requirements of that suspension.
“The HECA project should not continue on a limited suspension, but should be terminated and required to file a new AFC when the Applicant has a complete project,” the new document says. The HECA project, as initially planned, would be a new-build, pre-combustion 390-megawatt integrated gasification combined cycle CCUS project.
The suspension order required that SCS meet informational milestones before the end of the suspension period on Jan. 6, 2016. To meet these requirements, SCS would need to provide the commission with documentation of an executed CO2 off-take and carbon sequestration agreement with a partner, for a site that is both feasible and available for such use, the document says. The staff goes on to state that these requirements are unlikely to be met by the deadline.
SCS Energy appears largely unfazed by the document. “What we have here is a staff recommendation. More information will be forthcoming, including a hearing, and ultimately the Commission is the decision-maker. I believe the additional information we present prior to and at the hearing will answer the staff’s concerns about the present state of the project, which we believe is well defined,” SCS Energy CEO Jim Croyle told GHG Monitor by email this week.
The HECA project has experienced significant delays, largely as a result of the spinoff of Occidental Petroleum’s California operations. SCS had been in the process of signing an off-take agreement, under which Occidental Petroleum would purchase HECA’s captured CO2 for use in enhanced oil recovery, when the company announced the spinoff in February 2014. At that time, it appeared the newly formed California Resources Corp. (CRC) would continue to work with HECA to develop an agreement. However, due to reported “internal issues” at CRC, these discussions have fallen off.
HECA began looking into storage-only options in December 2014 with the help of scientists at the Lawrence Berkeley National Laboratory, as well as the West Coast Regional Carbon Sequestration Partnership (WESTCARB). As of early June 2015, SCS had decided to pursue the project without EOR, at least initially.
Restructuring the project with pure storage as opposed to EOR requires different permitting through the Environmental Protection Agency. If SCS were to apply for CO2 sequestration permitting immediately, it would still take too long for the project to meet the informational requirement of the state suspension order, the staff report says. “Given that HECA has estimated the full year of 2016 to perform the work required for the extensive site characterization, coupled with the EPA 12 to 18 month review, it is reasonable to expect that a project application with a complete project description would not be ready for filing with the Commission until sometime in 2017 or even 2018,” the document says.