HECA, CALIF. OFFICIALS WORK TO HASH OUT ENVIRONMENTAL ISSUES

Karen Frantz
GHG Monitor
11/22/13

SCS Energy’s Hydrogen Energy California project and the California Energy Commission are still facing disagreements over air quality calculations and other issues as the CEC is gathering information in preparation for its final staff assessment and environmental impact statement, it was revealed at a new round of public workshops and a committee conference held by the CEC this week and last. Although HECA officials indicated they were hopeful for an FSA in early 2014 for the $4 billion, 390 MW integrated gasification combined cycle (IGCC) facility planned for a greenfield site near Bakersfield, a CEC staff attorney, Lisa DeCarlo, said the end of the first quarter may be more realistic. “It’s hard to pin down a date at this point considering that there are significant outstanding technical areas that we still need to grapple with,” she said.

One area of contention remains air quality greenhouse gas emission compliance calculations under California’s Senate Bill 1368, which “limits long-term investments in baseload generation by the state’s utilities to power plants that meet an emissions performance standard,” according to the CEC. Although Michael Carroll, an attorney with Latham & Watkins who represents HECA, said there had been progress at one of the public workshop sessions in working out some issues, he said some other issues remain “a little bit in the weeds.” “I think at this point everybody agrees that the project complies with the [emission performance standards],” he said. “So nobody’s suggesting that the power from the project wouldn’t meet the emissions performance standard under SB 1368. The question is how far below the standard is the project.” He said that while CEC staff said that all is needed is for HECA to comply with the standards, disagreement still remained over how and whether an exact figure should be determined. “Our view is that just meeting the standard isn’t really good enough for us,” he said. “We’d like to have the determination of exactly what the number is. So that’s why we’ve been pressing so hard on what we think the appropriate methodology is for evaluating this project under SB 1368.”

CEC staff said that it was difficult to pin down those numbers because it was unclear how to parse out which portions of the facility’s emissions should be attributed to the energy production side or elsewhere—a point Carroll appeared to agree on. “I think largely the question boils down to allocating between the various [components] of the project,” he said. “So whereas in a traditional natural gas fired project you’re doing one thing, producing electricity. So that the fuel is coming in essentially ready to go and they’re combusting the fuel and producing electricity. At this project we’re doing a lot of things. We’re essentially manufacturing our fuel on site, we’re producing fertilizer on site. We are producing CO2 on site. So there are a lot of components to this project and our view is that not all of the emissions associated with those various components are relevant to the EPS. So the EPS is focused on what are the CO2 emissions associated with electricity production. Not what are the CO2 emissions associated with fuel production or fertilizer production or anything else.” 

Other areas of dispute

HECA and CEC also covered other issues that are still under contention, with groundwater concerns being one. Although HECA argued that the water it would use is brackish and its participation in a brackish groundwater remediation program would have beneficial impacts on the environment,  CEC said the amount of water that would be used—7,500 acre feet from a basin that the CEC said is already in overdraft—is a “serious concern.” Other issues included the number of trucks that would travel to and from the site and their potential impact on historic resources and outstanding issues regarding the oilfield site operated by Occidental Petroleum Corp., the project’s CO2 offtaker.

A representative from the Sierra Club also spoke at the committee conference, saying that air quality continues to be the group’s primary concern. “We continue to believe that the air quality conditions do not comply with the Clean Air Act or the local rules,” the representative said. She also commented on the group’s concerns about the potential for a CO2 well blow out at the oilfield site. She pointed to a well blow out at an EOR operation in Louisiana. “I don’t recall how many days they were uncontrolled but there were recorded deaths of deer and other animals. So it’s a pretty large blowout going on for a while,” she said.