CLIMATE:

Southern Co. pulls out of Ala. CCS project

Southern Co. has withdrawn from a large-scale carbon capture and storage project at an Alabama coal-fired power plant, expressing concern about the financial commitment needed to launch the $700 million initiative.

The demonstration project at Southern's Plant Barry was slated to receive $295 million in federal stimulus funding through the Energy Department's Clean Coal Power Initiative.

The project's goal was to capture 1 million metric tons of carbon dioxide annually from a 160-megawatt flue gas stream and pump it deep into underground rock formations nearby for permanent storage (E&ENews PM, Dec. 4, 2009).

Southern cited project costs, a tight timeline to secure funding and ongoing company investments in other carbon capture and storage, or CCS, initiatives as reason for its pullout. DOE would have provided $295 million, but Southern would have been responsible for the rest. The company had estimated total costs to top out at about $700 million.

"It's really about the efficient deployment of resources," Southern spokesman Steve Higginbottom said. "Really, we felt it was in the best interest of our customers and shareholders to not move forward with the expanded CCS project at Plant Barry."

He added, "The current economic conditions also factored into the decision."

Southern also recently left the FutureGen Alliance, which aims to build a commercial-scale coal-fired power plant to capture 60 percent of its CO2 emissions. DOE has promised more than $1 billion in federal funding for that project, but it will likely need as much as $600 million in industry support to get off the ground (Greenwire, June 25, 2009).

But Southern is planning to continue investing in CCS projects at Plant Barry and other sites, Higginbottom said. For example, he said, the four-year demonstration partnership with DOE's Southeast Regional Carbon Sequestration Partnership scheduled to begin in 2011 is still on track. That project -- the flagship of the Southeast regional partnership -- plans to capture 150,000 tons of CO2 annually from Plant Barry and inject it into a nearby saline aquifer.

"We are committed to advancing CCS and other clean coal technologies," Higginbottom said.

The company will also continue managing the National Carbon Capture Center -- a public-private partnership with DOE, Southern, the Electric Power Research Institute, and a handful of other utilities -- which should begin operating this year at another site in Alabama.

President Obama recently announced the creation of an interagency task force with a goal of shepherding five to 10 commercial CCS demonstrations by 2016. But DOE says the pullout by Southern won't affect that goal. The department is searching for a replacement project to receive Clean Coal Power Initiative funds and hopes to make a decision soon, an agency spokeswoman said.

Enhanced oil recovery project launches

Separately, a CO2 injection test at the Citronelle oil field in Alabama -- a potential sequestration site for the large-scale Plant Barry project -- has officially launched, DOE announced today.

The project will study the effects of injecting 7,500 tons of CO2 into the aging oil field to determine its potential for enhancing oil recovery and remaining permanently stored.

Injection of CO2 into depleted oil reservoirs has helped recover 1.5 billion barrels of oil from mature fields, DOE says, but the technology has not been widely deployed. And some estimate that nearly 400 billion barrels remains trapped underground in mature oil fields around the country.

The Citronelle field could contain an additional 64 million barrels of oil, according to a recent study. And the south Alabama oil field also has unique geology that scientists have said could be ideal for permanent storage of CO2.

The test is scheduled to last for five months and is a partnership among DOE, Southern, Denbury Resources and several regional universities.

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