Amended Notice of Intent Modifying the Scope of the Environmental Impact Statement for the Hydrogen Energy California's Integrated Gasification Combined Cycle Project, Kern County, CA, 36519-36524 [2012-14867]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 77, Number 118 (Tuesday, June 19, 2012)]
[Notices]
[Pages 36519-36524]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14867]


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DEPARTMENT OF ENERGY


Amended Notice of Intent Modifying the Scope of the Environmental 
Impact Statement for the Hydrogen Energy California's Integrated 
Gasification Combined Cycle Project, Kern County, CA

AGENCY: Department of Energy, DoE.

ACTION: Amended Notice of Intent and Notice of Potential Floodplain and 
Wetlands Involvement.

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SUMMARY: The U.S. Department of Energy (DOE or the Department) is 
publishing this Amended Notice of Intent to inform the public of 
changes in the scope of an ongoing environmental impact statement 
(EIS). In this EIS, DOE will assess the potential environmental impacts 
of a project proposed by Hydrogen Energy California, LLC, (HECA) 
pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 
U.S.C. 4321 et seq.), the Council on Environmental Quality's NEPA 
regulations (40 CFR Parts 1500-1508), and DOE's NEPA regulations (10 
CFR Part 1021). DOE's proposed action is to provide financial 
assistance for the construction and operation of HECA's project, which 
would produce and sell electricity, carbon dioxide and fertilizer. DOE 
selected this project for an award of financial assistance through a 
competitive process under the Clean Coal Power Initiative (CCPI) 
program. This Amended Notice of Intent provides information about 
changes to the project's design, HECA's ownership, and DOE's plans for 
completing the NEPA process that occurred after publication of the 
original Notice of Intent (NOI) in the Federal Register on April 6, 
2010 (75 FR 17397-401). HECA's project would demonstrate integrated 
gasification combined cycle (IGCC) technology with carbon capture in a 
new electricity generating plant in Kern County, California. The plant 
would use a blend of 75 percent coal and 25 percent petroleum coke 
(petcoke) and would capture, sell and sequester carbon dioxide on a 
commercial scale. It would also produce

[[Page 36520]]

and sell fertilizer and other nitrogenous compounds.
    The project would gasify the coal and petcoke to produce synthesis 
gas (syngas), which would then be purified to produce a hydrogen-rich 
fuel for a combustion turbine that would generate electricity while 
minimizing emissions of sulfur dioxide, nitrogen oxides, mercury, and 
particulates compared to conventional coal-fired power plants. In 
addition, the project would achieve a carbon dioxide (CO2) 
capture efficiency of approximately 90 percent at steady-state 
operation. The captured CO2 would be compressed and 
transported via pipeline to the adjacent Elk Hills Oil Field (owned and 
operated by Occidental of Elk Hills, Inc. (OEHI)) for injection into 
deep underground oil reservoirs for enhanced oil recovery (EOR), 
resulting in geologic sequestration.
    The EIS will inform DOE's decision on whether to provide financial 
assistance under its CCPI Program to HECA's project, which has an 
estimated capital cost of $4 billion. DOE's financial assistance (or 
``cost share'') would be limited to $408 million, about 10 percent of 
the project's total cost. DOE's financial assistance is also limited to 
certain aspects of the power and manufacturing plants, carbon capture, 
and sequestration. The EIS will evaluate the potential impacts of DOE's 
proposed action, the project proposed by HECA and any connected 
actions, and reasonable alternatives to DOE's proposed action. The 
purposes of this Amended Notice of Intent are to: (1) Inform the public 
about DOE's proposed action and HECA's proposed project, including 
information on features of the project that have changed since 
publication of the first NOI; (2) describe how DOE intends to 
coordinate its NEPA review with the California Energy Commission's 
process for deciding whether to certify the project; (3) solicit 
comments for DOE's consideration regarding the scope and content of the 
EIS; (4) invite those agencies with jurisdiction by law or special 
expertise to be cooperating agencies in preparation of the EIS; and (5) 
provide notice that the proposed project may involve potential impacts 
to floodplains and wetlands.
    DOE does not have regulatory jurisdiction over the HECA project. 
Its decisions are limited to whether and under what circumstances it 
would provide financial assistance to the project. There are a number 
of state and federal agencies that do have regulatory authority over 
the project; one of them is the California Energy Commission (CEC), 
which is responsible for power plant licensing under the Warren-Alquist 
Act (Cal. Pub. Res. Code Sec.  25500 et seq.). This licensing process 
(referred to as ``certification'') is established by California law and 
will consider all relevant environmental aspects of HECA's proposed 
project. Under state law, the certification process fulfills the 
requirements of the California Environmental Quality Act (CEQA; Cal. 
Pub. Res. Code Sec.  21000 et seq.). CEC will hold public meetings, 
issue a final staff assessment, conduct evidentiary hearings, and issue 
a decision based on the hearing record, which will include the CEC's 
and other parties' assessments. The CEC conducts an independent 
analysis of the proposed project and prepares an assessment of its 
potential environmental impacts, potential conditions of certification 
(e.g. mitigation measures), and reasonable alternatives. The CEC also 
consults with interested Native American tribes and local, regional, 
state, and federal agencies, and will coordinate its environmental 
review with other agencies, including the California Department of 
Conservation, Division of Oil, Gas and Geothermal Resources (DOGGR). 
Pursuant to California law and a grant of primacy from the United 
States Environmental Protection Agency regarding Class II wells under 
section 1425 of the Safe Drinking Water Act, DOGGR has responsibility 
for permitting EOR injection and extraction wells and will separately 
permit the OEHI EOR project. DOGGR will coordinate with the CEC.\1\
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    \1\ DOE anticipates that, pursuant to Cal. Pub. Res. Code Sec.  
21000 et seq., California agencies will impose mitigation measures 
to address potential impacts and project design elements to verify 
the sequestration of CO2 injected for EOR.
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    DOE intends to coordinate its NEPA review of the HECA project with 
the environmental review conducted by the CEC as lead agency under 
CEQA. DOE will work closely with the Commission throughout its 
regulatory processes in order to integrate the NEPA and CEQA processes 
in an efficient and expeditious manner. It is likely that DOE and the 
CEC will issue joint documents comprising DOE's NEPA analyses and CEC's 
environmental and other analyses conducted for its certification 
process.

DATES: DOE and CEC will hold a joint meeting on July 12, 2012 at the 
Elk Hills Elementary School, 501 Kern Street, Tupman, CA 93276. For 
CEC, this meeting will constitute its Site Visit and Informational 
Hearing, which provide an opportunity for members of the community in 
the project vicinity to obtain information about the project, to offer 
comments, and to view the project site. Anyone may present oral 
comments at the Informational Hearing and no advance notice is needed. 
HECA LLC (referred to as the Applicant in the certification process) 
will explain its plans for developing the project and the related 
facilities and the CEC will explain the licensing process and its role 
in reviewing the amended Application for Certification. More 
information about the site visit, informational hearing and the CEC's 
certification process for this project can be found at https://www.energy.ca.gov/sitingcases/hydrogen_energy/. The CEC 
docket number for this project is 08-AFC-08A.
    For DOE, this joint meeting will constitute the public scoping 
meeting for DOE's NEPA review. The purpose of the scoping process is to 
establish the alternatives, potential environmental impacts, and other 
issues DOE should analyze in the EIS. Individuals, businesses, 
government agencies, and other entities may submit comments via 
letters, facsimiles, emails and telephone calls (see ADDRESSES below) 
to DOE regarding the alternatives, impacts and issues DOE should 
consider in its EIS. The public is also invited to attend the scoping 
meeting and present oral comments and suggestions on these topics. DOE 
will accept comments on the scope of the EIS until July 27, 2012; it 
will consider comments submitted after this date to the extent 
practicable. Additional information about DOE's NEPA review of this 
project can be found at https://www.netl.doe.gov/publications/others/nepa/.
    The CEC and DOE will provide more information about the joint 
meeting at a later date through their Web sites, mailings and public 
notices. The Site Visit will start at the Elk Hills Elementary School 
at 5:00 p.m. PDT; buses will take anyone wishing to visit the site from 
the school to the site and then return them to the school by 6:00 p.m. 
for the start of the Informational Hearing and Public Scoping Meeting. 
You need not participate in the site visit to participate in the 
hearing and scoping meeting. The hearing and meeting will start with 
presentations by the CEC's hearing officer, the Applicant, CEC staff, 
DOE, and others. A period for questions and comments will begin after 
these presentations.

ADDRESSES: Written comments on the scope of the EIS and requests to 
participate in the public scoping meeting should be addressed to: Mr. 
Fred Pozzuto, U.S. Department of Energy, National Energy Technology 
Laboratory, 3610 Collins Ferry Road,

[[Page 36521]]

P.O. Box 880, Morgantown, WV 26507. Individuals who would like to 
provide oral or electronic comments should contact Mr. Pozzuto directly 
by telephone: 304-285-5219; toll-free number: 1-866-269-6493; fax: 412-
386-6127; or electronic mail: heca.eis@netl.doe.gov.

FOR FURTHER INFORMATION CONTACT: For information about this project or 
to receive a copy of the draft EIS when it is issued, contact Mr. 
Pozzuto as described above. For general information on the DOE NEPA 
process, contact Ms. Carol M. Borgstrom, Director, Office of NEPA 
Policy and Compliance (GC-54), U.S. Department of Energy, 1000 
Independence Avenue SW., Washington, DC 20585-0103; telephone: 202-586-
4600; fax: 202-586-7031; or leave a toll-free message at 1-800-472-
2756.

SUPPLEMENTARY INFORMATION: 

Background

    Since the early 1970s, DOE and its predecessor agencies have 
pursued research and development programs that include large, 
technically complex projects in pursuit of innovation in a wide variety 
of coal technologies through the proof-of-concept stage. However, 
helping a technology reach the proof-of-concept stage does not ensure 
its continued development or commercialization. Before a technology can 
be considered seriously for commercialization, it must be demonstrated 
at a sufficient scale to prove its reliability and economically 
competitive performance. The financial risk associated with such large-
scale demonstration projects is often too high for the private sector 
to assume in the absence of strong incentives.
    The CCPI program was established in 2002 as a government and 
private sector partnership to implement the recommendation in President 
Bush's National Energy Policy to increase investment in clean coal 
technology. Through cooperative agreements with its private sector 
partners, the program advances clean coal technologies to 
commercialization; these technologies often involve combustion 
improvements, control systems advances, gasifier design, pollution 
reduction (including greenhouse gas reduction), efficiency increases, 
fuel processing, and others.
    The Congress established criteria for projects receiving financial 
assistance under this program in Title IV of the Energy Policy Act of 
2005 (Pub. L.109-58) (EPACT 2005). Under this statute, CCPI projects 
must ``advance efficiency, environmental performance, and cost 
competitiveness well beyond the level of technologies that are in 
commercial service'' (Pub. L. 109-58, Sec.  402(a)). In February 2009, 
the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5, 123 
Stat. 115 (Feb. 17, 2009)) (ARRA) appropriated $3.4 billion to DOE for 
``Fossil Energy Research and Development;'' the Department intends to 
use a significant portion of these funds to provide financial 
assistance to CCPI projects.
    The CCPI program selects projects for its government-private sector 
partnerships through an open and competitive process. Potential private 
sector partners may include developers of technologies, utilities and 
other energy producers, service corporations, research and development 
firms, software developers, academia and others. DOE issues funding 
opportunity announcements that specify the types of projects it is 
seeking, and invites submission of applications. Applications are 
reviewed according to the criteria specified in the funding opportunity 
announcement; these criteria include technical, financial, 
environmental, and other considerations. DOE selects the projects that 
demonstrate the most promise when evaluated against these criteria, and 
enters into a cooperative agreement with the applicant. These 
agreements set out the project's objectives, the obligations of the 
parties, and other features of the partnership. Applicants must agree 
to provide at least 50 percent of their project's cost; for most CCPI 
projects, the applicant's cost share is much greater.
    To date the CCPI program has conducted three rounds of 
solicitations and project selections. The first round sought projects 
that would demonstrate advanced technologies for power generation and 
improvements in plant efficiency, economics, and environmental 
performance. Round 2 requested applications for projects that would 
demonstrate improved mercury controls and gasification technology. 
Round 3, which DOE conducted in two phases, sought projects that would 
demonstrate advanced coal-based electricity generating technologies 
which capture and sequester (or put to beneficial use) carbon dioxide 
emissions. DOE's overarching goal for Round 3 projects was to 
demonstrate technologies at commercial scale in a commercial setting 
that would: (1) Operate at 90 percent capture efficiency for 
CO2; (2) make progress towards capture and sequestration at 
less than a 10 percent increase in the cost of electricity for 
gasification systems and a less than 35 percent increase for combustion 
and oxycombustion systems; and (3) make progress toward capture and 
sequestration of 50 percent of the facility's CO2 output at 
a scale sufficient to evaluate the full impacts of carbon capture 
technology on a generating plant's operations, economics and 
performance. The HECA project was one of two selected in the first 
phase of Round 3. DOE entered into a cooperative agreement with HECA on 
September 30, 2009, and began the NEPA process. HECA continued to seek 
the regulatory authorizations needed for the project, including 
certification by the CEC and environmental permits from federal, state 
and other agencies.
    On September 2, 2011, SCS Energy California LLC (SCS Energy) 
acquired HECA from BP Alternative Energy North America Inc., and Rio 
Tinto Hydrogen Energy LLC. Because SCS Energy intended to make several 
modifications to the project--including the addition of fertilizer 
production capabilities--the NEPA and regulatory processes were 
suspended until HECA submitted an Amended Application for Certification 
(AFC) to the CEC on May 2, 2012.

Purpose and Need for DOE Action

    The purpose and need for DOE action--providing limited financial 
assistance to HECA's project--remain the same after the change in 
HECA's ownership: To advance DOE's CCPI program by funding projects 
that have the best chance of achieving the program's objective as 
established by the Congress. The objective of the CCPI program is the 
commercialization of clean coal technologies that improve efficiency, 
environmental performance, and cost competitiveness well beyond those 
of technologies that are currently in commercial service.

Site of the Project Proposed by HECA

    The location of the project remains the same with only minor 
changes in the size of the project site. HECA would construct its 
electricity and fertilizer production facility on a site currently used 
for agriculture in Kern County, California. The 1,106 acre site (453 
acres of which would be used for the project and 653 acres for a 
controlled buffer area) is in south-central California near the 
unincorporated community of Tupman, approximately 7 miles west of the 
city of Bakersfield. The site's topography is characterized by 
relatively flat, low-lying terrain that slopes very gently from 
southeast to northwest. The site and surrounding areas are used for 
agricultural purposes, including cultivation of cotton, alfalfa, and 
onions.

[[Page 36522]]

    HECA modified the project's design to better meet market demands. 
This new design resulted in changes to the project's plot plan and 
footprint within the site (including the addition of the fertilizer 
manufacturing plant and the possible addition of a rail loop), but as 
mentioned above, the size of the site and buffer areas remain nearly 
unchanged. Unless otherwise noted below, the design is not appreciably 
different from that set out in the previous NOI and regulatory filings. 
The basic components and attributes of the project that remain 
unchanged include:
     The use of IGCC technology, the basic components of which 
are feedstock delivery, handling, and storage; gasification unit; sour 
gas shift, low temperature gas cooling, and mercury removal units; acid 
gas removal unit; sulfur recovery and tail gas compression; 
CO2 compression; and combined cycle power block equipment;
     The project's location;
     Capture of 90 percent of the CO2 generated by 
the facility;
     Transportation of the CO2 to the Elk Hills Oil 
Field for use in EOR and resulting sequestration;
     Advanced air emissions controls;
     Use of brackish water (supplied by the Buena Vista Water 
Storage District); and
     Zero liquid discharge.
    There are some modifications to the project:
     The project will include an integrated manufacturing plant 
producing approximately 1 million tons per year of nitrogenous 
compounds such as urea, urea ammonium nitrate (UAN) and anhydrous 
ammonia to be used in agricultural, transportation and industrial 
applications.
     A single Mitsubishi Heavy Industries' (MHI) oxygen-blown 
dry feed gasifier and an MHI 501 GAC\(copyright)\ combustion turbine 
will be used. The original project planned to use three gasifiers from 
a different manufacturer.
     While most of the captured CO2 (about 87 
percent of the amount captured) would continue to be used for EOR at 
the nearby Elk Hills Oil Field, about 13 percent of the captured 
CO2 would be beneficially used to produce urea. The project 
would provide approximately 3 million tons per year for EOR, rather 
than the approximately 2 million tons anticipated under the previous 
design as a result of the change in the gasifier the project now 
intends to use. The resulting increase in hydrogen production accounts 
for the additional 1 million tons of CO2 per year when the 
project was originally envisioned.
     The facility would use a blend of 75 percent coal and 25 
percent petcoke as fuel throughout the life of the facility 
(previously, HECA planned to use this fuel blend only during the 
demonstration phase of operation).
     Natural gas would be used for start-up, shut down and 
equipment outages only, not for routine operation of the turbine as 
originally planned. A natural gas interconnection would be made to an 
existing PG&E pipeline approximately 13 miles north of the site, rather 
than the eight miles originally estimated.
     Potable water would be delivered to the project site from 
a new West Kern Water District facility located less than one mile away 
via a new water pipeline, rather than the 7 miles originally 
anticipated.
     An approximately 2-mile electrical transmission line, 
rather than the 8-mile line originally anticipated, would connect with 
a future PG&E switching station east of the project site.
     HECA is considering two alternatives for coal 
transportation to the site: Alternative 1 would involve a new 
approximately 5-mile railroad spur that would connect the site to the 
existing San Joaquin Railroad Buttonwillow line; alternative 2 would 
involve the previously proposed truck transport of the coal from an 
existing transloading facility.

Proposed Generating Plant

    The HECA project would demonstrate IGCC and carbon capture 
technology on a commercial scale in a new power plant consisting of a 
single gasifier with gas cleanup systems, a gas combustion turbine, a 
heat recovery steam generator, a steam turbine, and associated 
facilities.
    The plant proposed by HECA would gasify coal and petcoke to produce 
syngas, which would then be processed and purified to produce a 
hydrogen-rich fuel. The hydrogen would be used to drive the gas 
combustion turbine. Hot exhaust gas from the gas combustion turbine 
would generate steam from water in the heat recovery steam generator to 
drive the steam turbine; both turbines would generate electricity. At 
full capacity, the plant is expected to use about 4,580 short tons of 
coal and about 1,140 short tons of petcoke per day (about 162 million 
short tons and 400,000 short tons per year, respectively).
    Combined, the gas combustion and steam turbines would have the 
capacity to generate 405 MW gross (approximately 300 MW nominal) of 
low-carbon electricity, slightly more than the 390 MW gross and 288 MW 
net originally anticipated. This combined-cycle approach of using gas 
and steam turbines in tandem increases the amount of electricity that 
can be generated from the feedstock.
    The plant would include a system capable of capturing about 90 
percent of the CO2 generated during steady-state operation. 
Most of the captured CO2 would be used for EOR at the Elk 
Hills Field, located approximately three miles southwest of the 
project's location. This use of captured CO2 would result in 
the sequestration of more than 3 million tons per year. Some of the 
captured CO2 would be beneficially used to manufacture urea 
rather than for EOR.
    The proposed plant would minimize sulfur dioxide, nitrogen oxides, 
mercury, and particulate emissions as compared to conventional coal-
fired power plants. The project would incorporate state-of-the-art 
emissions controls that reflect or exceed Best Available Control 
Technology to reduce air emissions. The actual removals are expected to 
be similar to those stated in the original NOI.
    Solids generated by the gasifier would be accumulated onsite and 
made available for appropriate recycling or beneficial use, and if 
these options are not available, disposed of in accordance with 
applicable laws. Unlike the gasifiers that HECA originally planned to 
use, the MHI gasifier does not produce solids with fuel value, and 
therefore solids would not be returned to the gasification process as 
HECA had originally planned.
    In addition to the gasifier and turbines, the power plant's 
equipment would include stacks, a mechanical-draft cooling tower, 
syngas cleanup facilities, and particulate filtration systems. The 
height of the tallest proposed structure would be approximately 305 
feet above ground rather than 260 feet as originally proposed. The 
plant would also require systems for feedstock handling and storage, as 
well as on-site roads, administration buildings, water and wastewater 
treatment systems, and management facilities for handling gasification 
solids.

Proposed Fertilizer Production Facilities

    A portion of the clean hydrogen-rich fuel would be used as a 
feedstock for the ammonia synthesis unit, which would have a capacity 
of 2,000 short tons per day. The ammonia is used as an intermediate for 
the production of urea. The project is designed so that it can sell 
urea, ammonia, and perhaps other nitrogenous compounds.

[[Page 36523]]

    The project's urea production unit would use pastillation 
technology, which converts urea melt into high quality urea pastilles 
(small solid pellets of urea). The unit would have a capacity of about 
1,700 short tons per day. The urea, along with other intermediates 
produced by the plant, could also be used by the urea ammonia nitrate 
unit to produce 1,500 short tons per day of UAN.

Proposed Linear Facilities

    Linear facilities are the pipelines, electrical lines and rail 
lines used to transport materials and power to and from the plant. The 
source of process water for the plant would be brackish groundwater 
supplied by the Buena Vista Water Storage District; approximately 4,600 
gallons per minute (average annual basis) would be required for cooling 
water makeup, steam cycle makeup, and other processes. The process 
water pipeline would be approximately 15 miles in length. Potable water 
for drinking and sanitary use would be supplied by the West Kern Water 
District. The potable water line would be approximately 1 mile in 
length. The project would recycle water and would incorporate zero 
liquid discharge (ZLD) technology for process and other wastewater from 
plant operations. Therefore, there would be no industrial wastewater 
discharge. Sanitary wastewater would be disposed of in an onsite leach 
field (e.g., a septic system) in accordance with applicable law.
    HECA would connect to the PG&E Midway Substation via a 230 kV 
Midway-Wheeler Ridge transmission line and a new PG&E switching 
station. A 230 kV, single pole, double circuit capacity transmission 
line would be built to provide transmission service for the plant's 
electricity output. The line would be approximately 2 miles in length.
    An approximately 13-mile natural gas supply pipeline would connect 
with an existing PG&E pipeline north of the project site, and an 
approximately 3-mile CO2 pipeline extending from the site to 
the Elk Hills Oil Field would be used to transport the CO2 
for use in EOR and resulting geologic sequestration. HECA has proposed 
two alternatives for coal transportation to the site: alternative 1 
would involve an approximately 5-mile new industrial railroad spur that 
would connect the site to the existing San Joaquin Railroad 
Buttonwillow line; alternative 2 would involve the previously proposed 
27-mile route for truck transport of the coal from an existing 
transloading facility.

Proposed Use of CO2 for EOR and Sequestration

    The project would result in the sequestration of about three 
million tons of CO2 per year, rather than the two million 
tons originally proposed, during the demonstration phase that would be 
funded in part by DOE. HECA anticipates this rate of sequestration 
would continue for the operational life of the power plant. The 
captured CO2 would be compressed and transported via 
pipeline to the Elk Hills Oil Field approximately 3 miles from the 
power plant. The CO2 would enhance domestic oil production, 
contributing to the nation's energy security. An additional small 
amount of the CO2 produced by the facility would be used to 
manufacture urea.
    The EOR process involves the injection and reinjection of 
CO2 to reduce the viscosity and enhance other properties of 
trapped oil in order to facilitate its flow through the reservoir, 
improving extraction. During EOR operations, the pore space left by the 
extracted oil is occupied by the injected CO2, sequestering 
it in the geologic formation. EOR operations would be monitored to 
ensure the injected CO2 remains in the formation.

Proposed Project Schedule

    The project proposed by HECA includes engineering and design, 
permitting of the plant and associated facilities, equipment 
procurement, construction, startup, operations, and demonstration of 
the IGCC technology and CO2 sequestration through use in EOR 
operations. HECA anticipates that it would take about four years to 
construct, commission, and commence operation of the plant. It plans to 
start construction by June 2013 and commence commercial operation by 
September 2017. This schedule is contingent upon HECA receiving the 
necessary regulatory authorizations (which would be preceded by the 
hearings and other events mandated by the regulatory agencies' 
procedures) and upon DOE deciding to provide financial assistance for 
the construction and demonstration phases of the project (a decision 
that would occur after completion of the EIS).

Connected and Cumulative Actions

    Under the cooperative agreement between DOE and HECA, DOE would 
share the costs of the gasifier, syngas cleanup systems, combustion 
turbine, steam generator, steam turbine, fertilizer production 
facilities, supporting facilities and infrastructure, and a 
demonstration phase in which the project would use captured 
CO2 for EOR.\2\ Under this agreement, DOE would not share in 
the cost of the air separation unit, CO2 EOR and 
sequestration facilities, or certain other facilities. Accordingly, the 
EIS will evaluate the potential impacts of these aspects of HECA's 
project as connected actions.
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    \2\ Because of the requirements of California law, DOE expects 
that the HECA project would continue sequestering CO2 
throughout the operational life of the plant.
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    DOE will also analyze the cumulative impacts of both the proposed 
project and any connected actions. The cumulative impacts analysis will 
include analysis of greenhouse gas emissions and global warming, other 
air emissions, and other incremental impacts that, when added to past, 
present, and reasonably foreseeable impacts, may have significant 
effects on the human environment.

Alternatives

    NEPA requires that an EIS evaluate the range of reasonable 
alternatives to an agency's proposed action. The range of reasonable 
alternatives encompasses those alternatives that would satisfy the 
underlying purpose and need for agency action. The purpose and need for 
DOE action--providing limited financial assistance to the HECA IGCC 
project--are to advance the CCPI program by selecting projects that 
have the best chance of achieving the program's objective as 
established by the Congress: the commercialization of clean coal 
technologies that advance efficiency, environmental performance, and 
cost competitiveness well beyond the level of technologies that are 
currently in service. DOE's purpose and need, as well as the range of 
reasonable alternatives, will differ from those of the CEC.
    DOE's NEPA regulations include a process for identifying and 
analyzing reasonable alternatives in the context of providing financial 
assistance through a competitive selection of projects proposed by 
entities outside the federal government. The range of reasonable 
alternatives in competitions for grants, loans and other financial 
support is defined in large part by the range of responsive proposals 
DOE receives. Unlike projects undertaken by DOE itself, the Department 
cannot mandate what outside entities propose, where they propose to do 
it, or how they propose to do it beyond establishing requirements in 
the funding opportunity announcement that further the program's 
objectives. DOE's decision is limited to selecting among the

[[Page 36524]]

applications submitted by project sponsors that meet CCPI's goals.
    Recognizing that the range of reasonable alternatives in the 
context of financial assistance and contracting is in large part 
determined by the number and nature of the proposals submitted, section 
216 of DOE's NEPA regulations requires the Department to prepare an 
``environmental critique'' that assesses the environmental impacts and 
issues relating to each of the proposals that the DOE selecting 
official considers for an award. See 10 CFR 1021.216. This official 
considers these impacts and issues, along with other aspects of the 
proposals (such as technical merit and financial ability) and the 
program's objectives, in making awards. DOE prepared a critique of the 
proposals that were deemed suitable for selection in this round of 
awards for the CCPI program.
    Once DOE selects a project for an award, the range of reasonable 
alternatives becomes the project as proposed by the applicant, any 
alternatives still under consideration by the applicant or that are 
reasonable within the confines of the project as proposed (e.g., the 
particular location of the generating plant on the 1,106-acre site or 
the rights-of-way (ROWs) for linear facilities), and a no action 
alternative. Regarding the no action alternative, DOE assumes for 
purposes of the EIS that, if it were to decide to withhold financial 
assistance from the project, the project would not proceed. DOE 
currently plans to analyze the project as proposed by HECA (with and 
without any mitigating conditions that DOE or the CEC may identify as 
reasonable and appropriate); alternatives to HECA's proposal that it is 
still considering (e.g., the ROWs for linear facilities); and the no 
action alternative.
    As noted above, DOE will analyze any ``project-specific'' 
alternatives that HECA is still considering such as the coal delivery 
alternatives, and other reasonable alternatives that may be suggested 
during the scoping period. HECA is no longer considering other project-
specific alternatives identified in the original NOI (i.e., the 
location of the facility within the site boundaries, alternative routes 
for the process water supply pipeline, CO2 pipeline and 
transmission line).
    Under the no action alternative, DOE would not provide funding to 
HECA. In the absence of financial assistance from DOE, HECA could 
reasonably pursue two options. It could build the project without DOE 
funding; the impacts of this option would be essentially the same as 
those of DOE's proposed action. Or, HECA could choose not to pursue its 
project, and there would be no impacts from the project. This option 
would not contribute to the goal of the CCPI program, which is to 
accelerate commercial deployment of advanced coal technologies that 
provide the United States with clean, reliable, and affordable energy. 
However, as required by NEPA, DOE analyzes this option as the no action 
alternative in order to have a meaningful comparison between the 
impacts of DOE providing financial assistance and withholding that 
assistance.
    Alternatives considered by HECA in developing its proposed project 
will be discussed in the EIS. Differences between DOE's range of 
reasonable alternatives and those considered by the CEC will also be 
delineated. HECA analyzed several alternative sites and determined that 
the only reasonable site alternative was its proposed site based on, 
among other things, the presence or absence of sensitive resources; the 
availability of land; and the site's proximity to the brackish 
groundwater supply, to electric transmission and natural gas 
facilities, and to a CO2 storage reservoir.\3\ The EIS will 
describe HECA's site selection process. However, DOE does not plan to 
analyze in detail the alternatives sites considered by HECA because 
HECA is no longer considering these sites, they were not part of HECA's 
proposal, and therefore they are no longer reasonable alternatives.
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    \3\ HECA initially selected another site; it subsequently 
decided to move the project when it discovered the existence of 
sensitive biological resources at the initial site.
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Floodplains and Wetlands

    The footprint of the proposed IGCC and manufacturing facility and 
carbon capture facility would not affect any wetlands or floodplains. 
Wetland and floodplain impacts, if any, from the construction of 
pipelines would be avoided by the use of horizontal directional 
drilling. In the event that the EIS identifies that wetlands or 
floodplains on the surface would be affected by the project (including 
its linear facilities) or connected actions, DOE will prepare a 
floodplain and wetland assessment in accordance with its regulations at 
10 CFR Part 1022 and include the assessment in the EIS.

Preliminary Identification of Environmental Issues

    The original NOI contained a preliminary list and description of 
potential environmental issues (75 FR 17397-401); the list of issues 
would remain the same for the project as modified after SCS Energy's 
acquisition of HECA. The list includes those impacts and resource areas 
typically addressed in an EIS for a project of this type: Atmospheric 
resources; water resources; infrastructure and land use; solid waste; 
visual resources; floodplains and wetlands; ecological resources; 
safety and health; construction-related impacts; community impacts; 
cultural and archaeological resources; threatened and endangered 
species; \4\ and cumulative effects. Currently, no threatened or 
endangered species have been identified at the proposed plant site; 
three listed plant species and nine listed wildlife species (rather 
than the eight as stated in the original NOI) have the potential to 
occur in the ROWs of the linear facilities.
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    \4\ No threatened or endangered species have been identified at 
the proposed plant site; three listed plant species and nine listed 
wildlife species (rather than the eight as stated in the original 
NOI) have the potential to occur in the ROWs of the linear 
facilities.
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    Additions to or deletions from the list may occur as a result of 
this scoping process. The level of analysis of issues in the EIS will 
be in accordance with their level of importance. The most detailed 
analyses are likely to focus on potential impacts to air, water, and 
ecological resources.

    Issued in Pittsburgh, PA, this 12th day of June 2012.
Anthony V. Cugini,
Director, National Energy Technology Laboratory.
[FR Doc. 2012-14867 Filed 6-18-12; 8:45 am]
BILLING CODE 6450-01-P