06/11/2010

News / Secretary Chu Announces Nearly $1 Billion Public-Private Investment in Industrial Carbon Capture and Storage

Three projects will create jobs, reduce carbon emissions, and increase domestic oil production by 10 million barrels of oil per year

Washington, D.C. - U.S. Energy Secretary Steven Chu today announced that three projects have been selected to receive up to $612 million from the American Recovery and Reinvestment Act - matched by $368 million in private funding - to demonstrate large-scale carbon capture and storage from industrial sources.

The projects - located in Texas, Illinois, and Louisiana - were initially selected in October 2009 for phase one research and development grants. Following successful completion of their Phase 1 activities, these three projects were identified as the most promising industrial CCS projects through a competitive process and will now enter into Phase 2 with additional funding to begin design, construction, and operation.

Today's project selections are aimed at testing large-scale industrial carbon capture and storage, an important step in moving CCS technology toward eventual commercial deployment. The Obama Administration has made a goal of developing cost-effective deployment of CCS within 10 years, with an objective of bringing 5 to 10 commercial demonstration projects online by 2016.

"Capturing carbon emissions and storing them underground is a crucial technology as we build a clean energy future and address the threat of climate change," said Secretary Chu. "These investments will create jobs and help ensure that America can lead the world in the clean energy economy."

Projects announced today include large-scale industrial carbon capture and storage projects that capture carbon dioxide emissions from industrial sources - - and store the carbon dioxide in either a deep saline formation or via enhanced oil recovery. The selections announced today are expected to capture and store 6.5 million tons of CO2 per year- the equivalent of removing nearly one million cars off the road- and increase domestic production of oil by more than 10 million barrels per year by the end of the demonstration period in September 2015.

Phase 2 of these projects includes $612 million in Recovery Act funding and $368 million in private sector cost-sharing for a total investment of $980 million. The projects will be managed by the Department of Energy's National Energy Technology Laboratory.

Potential additional applications for funding of large-scale industrial carbon capture and storage projects are pending further review.

Phase II Large-scale Industrial Carbon Capture and Storage Selections:

* Leucadia Energy, LLC (Lake Charles, LA)-Leucadia and Denbury Onshore LLC will capture and sequester 4.5 million tons of CO2 per year from a new methanol plant in Lake Charles, LA. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield, starting in April 2014. The project team includes Leucadia Energy, Denbury, General Electric, Haldor Topsoe, Black & Veatch, Turner Industries, and the University of Texas Bureau of Economic Geology. (DOE share: $260 million)
* Air Products & Chemicals, Inc. (Port Arthur, TX)-Air Products will partner with Denbury Onshore LLC to capture and sequester one million tons of CO2 per year from existing steam-methane reformers in Port Arthur, Texas, starting in November 2012. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield. The project team includes Air Products & Chemicals, Denbury Onshore LLC, the University of Texas Bureau of Economic Geology, and Valero Energy Corporation. (DOE share: $253 million)
* Archer Daniels Midland Corporation (Decatur, Ill.)-The project will capture and sequester one million tons of CO2 per year from an existing ethanol plant in Illinois, starting in August 2012. The CO2 will be sequestered in the Mt. Simon Sandstone, a well-characterized saline reservoir located about one mile from the plant. The project team includes Archer Daniels Midland, Schlumberger Carbon Services, and the Illinois State Geological Survey. (DOE share: $99 million)

http://www.energy.gov/news/9065.htm

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