Department of Energy June 19, 2012 – Federal Register Recent Federal Regulation Documents

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 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\