| SAN FRANCISCO, July 15
SAN FRANCISCO, July 15 NRG Energy and
Japan's JX Nippon on Tuesday announced plans to
capture carbon emissions from a Texas coal plant and use the
pollution to boost oil production at an aging field, the latest
attempt to bring to life a troubled technology seen as a key to
combating climate change.
When completed in 2016, the Petra Nova Carbon Capture
Project will trap 1.6 million tons of carbon annually from one
unit of NRG's WA Parish power plant and pipe it 82 miles (132
km) to the West Ranch Oil Field.
There it will be injected underground to help stimulate oil
production, and revenue, for NRG and JX Nippon, which each hold
a 25 percent interest in the field.
Oil production at the field is expected to rise from 500
barrels per day to more than 15,000 barrels per day as a result.
Money from the sale of the oil will eventually pay off the $1
billion price tag for installing the carbon capture equipment,
the companies said.
"While the electrical generation business is working to
control our carbon emissions, carbon is incredibly important to
the oil industry for continuing production at mature oil
fields," said Arun Banskota, president of Petra Nova project.
"We are building a model that is a win-win for both
industries, providing the CO2 that the oil industries needs and
the revenue the generating companies need to make projects like
this economic," he said.
The widespread deployment of carbon capture and
sequestration (CCS) technology is viewed as essential to
stopping runaway climate change, but the high price of CCS
projects coupled with the lack of a national carbon price have
made it difficult for power companies to justify the investment.
U.S. federal funds for CCS projects, which were instrumental
in getting Petra Nova off the ground, are drying up. Meanwhile
the U.S. Department of Energy's troubled FutureGen CCS project
is on its second iteration but has yet to capture a single ton
But with natural underground sources of carbon dwindling,
the oil industry in Texas is willing to pay $30 to $40 per ton
of carbon dioxide, a price that could spur CCS projects in the
future, said John Thompson of the Clean Air Task Force.
Thompson said projects like Petra Nova transform CCS from a
technology that simply mitigates climate change to one that also
generates energy, a much more lucrative enterprise.
"Every joule that is used at the power plant to capture and
compress that CO2 creates 3 to 4 joules of new energy from oil
that would be otherwise unrecoverable," he said.
He said projects like Petra Nova are also critical because
they bring together engineering expertise and financing from
Asia and the United States.
The technology at the project was developed by Japan's
Mitsubishi Heavy Industries and Kansai Electric Power
An even more ambitious CCS project proposed by Summit Power
for a new Texas power plant recently received a pledge
for financing from China.
The project had stalled due to cost overruns but was brought
back to life after the China Huanqiu Contracting & Engineering
Corporation (HQC), an affiliate of China National Petroleum
Corporation, agreed to provide money for it.
Like Petra Nova, Summit's Texas Clean Energy Project will
use the carbon it captures to pump oil when it is completed.
Thompson said multinational collaboration is critical to the
evolution of CCS.
"The beauty is it creates the possibility for CCS projects
on both sides of the Pacific, which really speeds the effort to
address global warming globally."
(Editing by Eric Walsh)