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Home > News & Annoucements > Clean energy plant may boost oil recovery06.09.2008 The Bakersfield Californian
Oil giant BP and Rio Tinto, one the world’s largest mining companies, plan to spend nearly $2 billion to build a clean energy plant in Kern County that will bury greenhouse gas emissions in nearby oilfields. Initially planned to be built in Carson in Los Angeles County, the project is now being proposed near Taft, next door to Occidental Petroleum’s Elk Hills oilfield. The plant would create enough power to supply 150,000 homes using technology that converts coal and petroleum coke — know as synthetic coal — to hydrogen. Petroleum coke from California refineries would be the plant’s primary feedstock. The dirty, carbon-rich fuel is what’s left after a barrel of crude has been refined into other products. Most is now sold to other countries where it’s burned as fuel in furnaces with few pollution controls. Up to 90 percent of the new plant’s carbon dioxide would be captured and sold to Occidental, where it could be injected it into the ground for enhanced oil recovery operations, according to Tiffany Rau, a spokeswoman for Hydrogen Energy, the joint-venture company formed by BP and Rio Tinto. Once in the ground, the CO2 stays there, meaning it will never enter the atmosphere. “We see a sense of urgency here in terms of climate change,” Rau said. “This project basically takes a fossil fuel and makes a clean product.” Climate change experts have identified such “carbon capture and storage” technologies as a key solution for reducing carbon output from major sources like power plants, cement factories and refineries. And with abundant oilfields, open space and the state’s demand for cleaner energy sources, many see Kern County as poised to play a major role in these emerging projects. “I think this is a story about opportunity,” said Lorelei Oviatt, a Kern County Planning Department division chief. “We have the infrastructure and the space to do this. And finally we have people saying, ‘Let’s do it.’” Hydrogen Energy’s project is the second power plant proposed for Kern County that will capture and store carbon. Last month, Rancho Cordova-based Clean Energy Systems proposed a smaller power plant about 20 miles north of Bakersfield. That project is partially funded with a $65 million Department of Energy grant and will serve in the beginning as a test project to determine how well carbon is stored in certain geological formations. After that, Clean Energy Systems plans to also sell its carbon dioxide to oilfields. Hydrogen Energy’s project near Taft is about five times bigger, however, and carries more investment. And so far, it’s been hailed locally as a promising prospect for clean energy, new jobs and the environment. “The economic impact is pretty amazing,” said Kern Economic Development Corp. President Richard Chapman, who receives about a call a day from companies wanting to build alternative energy sources in Kern County. Most never come to fruition but “the good thing is, this is BP and Rio Tinto and they're companies with pretty deep pockets,” Chapman said. “Frankly, a lot of these green and renewable energy projects are going to have to be funded by the big players.” Hydrogen Energy’s plant is expected to create at least 100 permanent jobs along with about 1,000 construction jobs over the three years the plant is built. Following an 18-month regulatory approval, the company hopes to begin construction in 2010. A reliable supply of carbon dioxide for nearby oilfields is also a win for the oil supply and consumers, according to Joe Sparano, president of the Sacramento-based industry trade group Western States Petroleum Association. Officials with Occidental Petroleum deferred comment on plans to buy CO2 from the plant to Hydrogen Energy but Sparano said the oil producer is one of the most experienced at using CO2 in oil recovery. CO2 injection has been used for decades along with steam to help coax stubborn deposits of thick oil from the ground that won’t budge using normal recovery methods. According to Sparano, while normal extraction methods will generally recover up to 30 percent of oil in a reservoir, the use of CO2 can push production up to 50 percent or more. But it’s been an expensive option up to this point, he said. “The irony of all this is, we used to buy food-grade crayon dioxide that would otherwise be used for carbonation of soft drinks,” Sparano said. The potential for storing CO2 in California oilfields offers immense opportunities to stem climate change while boosting oil recovery, according to Sparano. Citing Department of Energy statistics, Sparano estimates that California oilfields could store up to 1 billion tons of carbon dioxide, enough to meet the state’s greenhouse gas reduction goals several times over. That much CO2 could potentially extract an additional 57 billion barrels “stranded” oil in California, more than double the current estimate of all recoverable U.S. crude oil, Sparano said. Hydrogen Energy must still tackle a few hurdles before the project becomes a reality. Regulatory approval from the California Energy is expected to get under way in coming months and should take about 18 months to complete. |
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