U.S. Pulls Funding for Troubled Texas CCS Project

The U.S. Department of Energy has suspended funding for a troubled carbon capture and storage (CCS) project in Texas, after its inspector general raised concern last month about Summit Texas Clean Energy’s ability to make the effort work.

DOE is asking Congress to pull US$240 million in Clean Coal Initiative grants out of the project next fiscal year, withhold an $11 million advance on those funds, and allocate the money to other research and development efforts.

“Due to Summit’s inability to obtain the required commercial debt and equity project financing and the adverse effect of changing energy markets on the demand for coal-based power plants, we are concerned about the viability of the Project and the Department’s continued involvement,” the inspector general warned.

“Although construction of the plant was originally planned for completion in June 2014, the Project remains in the project definition phase. Additionally, we found that the Department had taken actions that increased its financial risk in the Project.”

The project would capture two million tons of CO2 per year from a coal gasification plant for deep burial underground.

“In its response to the audit, the department said it would not spend any additional money unless the company finalizes engineering and construction contracts, and secures debt and equity to cover the building costs by May 13,” InsideClimate News reports. That day, “the DOE said it had extended this deadline by seven weeks, a move that it said did not commit the agency to spending any more money.”

Summit and its Congressional backers—including Rep. Lamar Smith (R-TX), the climate-denying chair of the House Science, Space, and Technology Committee—are pushing back against the budget cut. “TCEP is not stalled. It is advancing and still attracting private capital,” wrote Summit CEO Jason Crew in a letter to Smith. “Withholding the $11 million is not a prudent step at this point in the development process. It is an action that…will very likely terminate the development process.”

U.S. climate and energy organizations lined up on both sides of the DOE decision. The Clean Air Task Force, NRDC, Great Plains Institute, Center for Climate and Energy Solutions, and Third Way wrote that it would be “unfortunate if the project fails, both for the loss of the substantial taxpayer dollars already provided to the project, and for the loss of an important opportunity to add a significant project employing a high level of carbon capture for power and chemical processes.”

Friends of the Earth, Taxpayers for Common Sense, and the R Street Institute said it was time to let the project go. “Wasting our tax dollars on projects like the Texas boondoggle is not the answer to the climate crisis,” Friends of the Earth campaigner Lukas Ross said in a release. “[Energy] Secretary [Ernest] Moniz needs to pull the plug before this false solution gets more of our money.”