Proposed facility would capture carbon dioxide

By New Jersey Star-Ledger


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Some scientists call it a hope for reducing the industrial greenhouse gases blamed for global warming; skeptics say it is the new frontier of dumping.

''Carbon capture and sequestration'' is an emerging — critics say unproven — technology that takes carbon dioxide or CO2 that normally would spew from industrial smokestacks and pumps it deep into the earth. Once there, it is, ostensibly, trapped forever — unless something goes wrong.

The dialogue over the carbon sequestration worst-case scenario has come out of the laboratory and into New Jersey's backyard with a plan to link the technology for the first time to a large, commercial electric plant proposed in Linden.

Last month, Linden planners received designs for a $5 billion project called ''PurGen.'' It is a 500 megawatt, coal-fueled facility using a 100-mile, underground pipeline to push as much as 10 million tons of CO2 annually — emissions from the new plant and eventually neighboring industrial operations — to a point 70 miles off the coast and about 2,200 yards beneath the Atlantic Ocean.

The proposal took on greater significance last week, when the Environmental Protection Agency declared CO2 and other greenhouse gases a public health danger — triggering a regulatory process that may drastically restrict emissions from existing and new power and industrial plants.

Critics question the viability of piping CO2 under the ocean floor in a heavily traveled area and say the state should instead pursue windmill and solar technology. Proponents argue the plant will provide a reliable source of energy without spewing pollutants into the air.

''With New Jersey importing about a third of its electrical energy, the 500 megawatts coming from this plant will reduce the state's reliance on power that comes predominantly from uncontrolled dirty coal plants out of state... while also addressing New Jersey's environmental challenges,'' said Bradley Campbell, the lawyer spearheading the project.

A former commissioner of the state Department of Environmental Protection now in private practice, Campbell was hired to steer SCS Engineers of Massachusetts through the maze of local, state and federal approvals needed for the project. The plant is slated for a former DuPont chemical site along the Arthur Kill, with the pipeline running under Raritan Bay to the ocean.

Frank Smith and Jim Croyle, two principals of SCS, said their commercial energy plant will be the ''first of its kind in the world'' to link carbon capture with another so-called ''clean energy'' process known as coal gasification or Integrated Gasification Combined Cycle technology.

''But if you look at each component to be included in the plant, they are each well-established, standard and tried technologies. Gasification has been around since the early 1930s, and sequestration since the 1970s,'' Smith said.

The five coal plants already generating electricity in New Jersey burn coal, creating a toxic by-product known as fly ash. PurGen's gasification process heats coal with pressured oxygen and steam. Gas is formed, and the process also allows PurGen to offset higher operating costs by selling ammonia, hydrogen and other by-products, Croyle said.

Oil companies already sequester CO2 deep underground at dozens of locations around the world, although not to control greenhouse emissions. They inject CO2 into oil reservoirs to force every last oil drop to the surface.

One of the first commercial operations to sequester CO2 was in Norway. Statoil of Norway, faced with a CO2 byproduct from its natural gas operation, has been piping nearly a million tons of carbon emissions annually into a sandstone aquifer about 1,100 yards beneath the North Sea.

But some activist groups insist carbon sequestration has yet to be used by a large coal-fueled energy plant, and the potential impacts of storing large amounts under an ocean bed are still unknown.

''The sequestration of carbon dioxide in the ocean and its possible impacts are not well understood, so this represents a large experiment with a part of the environment that is already in bad shape ecologically,'' said Tim Dillingham of the American Littoral Society, a national group of scientists, naturalists and environmentalists based in New Jersey.

''The ocean has quickly become the new dumping ground for energy — for siting industrial facilities and now industrial waste,'' he added.

''Why do they think the carbon will be held there for centuries?'' asked Jeff Tittel of the New Jersey Sierra Club. ''No one knows. No one can say for sure. This is a gamble. We'd be better off investing in wind, solar and energy efficiency.''

Researchers at Princeton, Harvard and Stanford universities, however, advocate sequestration technology, with some testifying before public agencies. The Natural Resources Defense Council and Clean Air Task Force also is urging exploration of carbon capture.

The Union of Concerned Scientists, usually on the side of activists, is cautious in its assessment.

''We're agnostic on its long-term contribution as an energy source because we don't have any long-term demonstrations. We don't have many carbon sequestration operations linked to coal facilities, and we don't have anything on a large commercial scale,'' said Barbara Freese, co-author of the UCS's 2008 report, ''Coal Power in a Warming World.''

The North Sea operation, she noted, involves a million tons of CO2 annually. The average coal plant generates 4 million tons annually, and PurGen anticipates generating nearly 5 million tons a year from its plant.

The UCS also contends sequestration must overcome potential challenges of contaminating ground water, seismic events and leakage — slow leaks that send CO2 back into the air and fast leaks that kill. Activists such as Greenpeace often cite a 1986 natural release of CO2 from Lake Nyos, a volcanic crater lake in Cameroon, that left about 1,700 people dead from asphyxiation.

The U.S. Department of Energy's National Energy Technology Laboratory concluded such catastrophic releases ''are virtually nonexistent for geologic sequestration,'' and geologists called it absurd to compare operations such as those planned by PurGen to the natural disaster at Lake Nyos.

''You have a mile of impermeable clay on top of the sandstone. The really big earthquake in Sumatra caused a rupture that was about 10 meters. We're talking about sequestering the CO2 under at least 2,000 meters of clay. It's not possible to have an earthquake to fracture that,'' said professor Daniel Schrag of the Harvard University Laboratory for Geo-chemical Oceanography, who has reviewed the project.

''I am as green as green gets. But I'm not like groups like Greenpeace, which is saying we can take care of all our energy demands with wind and solar,'' Schrag added.

Coal also remains the cheapest source of electrical energy in the nation. The Department of Energy estimates the United States has enough natural reserves to meet energy needs for another 250 years.

''Coal is like heroin — cheap, plentiful and addictive, but very dangerous and to get it they take down mountains along with square-miles of trees, adding to the carbon output and environmental damage,'' said Tittel of the Sierra Club, arguing projects like PurGen continue the nation's reliance on fossil fuels.

The proposal is too new to gauge local resistance, but initial response appears to be concerns based on the mistaken notion that PurGen would be a traditional, smokestack-belching coal plant, said Linden Mayor Richard Gerbounka, adding, ''It is our job to educate local residents.''

Approvals on the project may take months, but Gerbounka said an information campaign starts tomorrow night with a meeting at Trembley Point, the residential neighborhood closest to the PurGen site.

Trembley Point is more than a mile from the PurGen site and separated by the New Jersey Turnpike, which bisects the city. The site itself is brownfields redevelopment and surrounded by other heavy industry or abandoned factories.

''I'm excited about the project. I think it will be beneficial to the city of Linden, the state of New Jersey and the nation,'' Gerbounka said. ''It helps wean us off Middle East oil, and hopefully the technology is there to do the project as they say it can be done.''

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European gas prices fall to pre-Ukraine war level

European Gas Prices hit pre-invasion lows as LNG inflows, EU storage gains, and softer oil markets ease the energy crisis, while recession risks, windfall taxes, and ExxonMobil's challenge shape demand and policy.

 

Key Points

European gas prices reflect supply, LNG inflows, storage, and policy, shaping energy costs for households and industry.

✅ Month-ahead hit €76.78/MWh, rebounding to €85.50/MWh.

✅ EU storage 83.2% filled; autumn peak exceeded 95%.

✅ Demand tempered by recession risks; LNG inflows offset Russian cuts.

 

European gas prices have dipped to a level last seen before Russia launched its invasion of Ukraine in February, after warmer weather across the continent eased concerns over shortages and as coal demand dropped across Europe during winter.

The month-ahead European gas future contract dropped as low as €76.78 per megawatt hour on Wednesday, the lowest level in 10 months, amid EU talks on gas price cap strategies that could shape markets, before closing higher at €83.70, according to Refinitiv, a data company.

The invasion roiled global energy markets, serving as a wake-up call to ditch fossil fuels for policymakers, and forced European countries, including industrial powerhouse Germany, to look for alternative suppliers to those funding the Kremlin. Europe had continued to rely on Russian gas even after its 2014 annexation of Crimea and support for separatists in eastern Ukraine.

On Tuesday 83.2% of EU gas storage was filled, data from industry body Gas Infrastructure Europe showed. The EU in May set a target of filling 80% of its gas storage capacity by the start of November to prepare for winter, and weighed emergency electricity measures to curb prices as needed. It hit that target in August, and by mid-November it had peaked at more than 95%.

Gas prices bounced further off the 10-month low on Thursday to reach €85.50 per megawatt hour.

Europe has several months of domestic heating demand ahead, and some industry bosses believe energy shortages could also be a problem next winter, with a worst energy nightmare still possible if supplies tighten. However, traders have also had to weigh the effects of recessions expected in several big European economies, which could dent energy demand.

UK gas prices have also dropped back from their highs earlier this year, and forecasts suggest UK energy bills to drop in April. The day-ahead gas price closed at 155p per therm on Wednesday, compared with 200p/therm at the start of 2022, and more than 500p/therm in August.

Europe’s response to the prospect of gas shortages also included campaigns to reduce energy use – a strategy belatedly adopted by the UK – and windfall taxes on energy companies to help raise revenues for governments, many of which have started expensive subsidies to cushion the impact of high energy prices for households and consumers. Energy companies have enjoyed huge profits at the expense of businesses and households this year, as EU inflation accelerated, but costs remained much the same.

However, the US oil company ExxonMobil on Wednesday launched a legal challenge against EU plans for a windfall tax on oil companies, according to filings by its German and Dutch subsidiaries at the European general court in Luxembourg. ExxonMobil argued that the windfall tax would be “counter-productive” because it said it would result in lower investment in fossil fuel extraction, and that the EU did not have the legal jurisdiction to impose it.

ExxonMobil’s move has prompted anger among European politicians. A message posted on the Twitter account of Paolo Gentiloni, the EU’s commissioner for the economy, on Thursday stated: “Fairness and solidarity, even for corporate giants. #Exxon.”

Oil prices are significantly lower than they were before the start of Russia’s invasion, and only marginally above where they were at the start of 2022. Brent crude oil futures traded at $100 a barrel on 28 February, but were at $81.84 on Thursday.

Oil prices dropped by 1.7% on Thursday. Prices had risen from 12-month lows in early December as traders hoped for increased demand from China after it relaxed its coronavirus restrictions. However, Covid-19 infection numbers are thought to have surged in the country, prompting the US to require travellers from China to show a negative test for the disease and tempering expectations for a rapid increase in oil demand.

 

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Mercury in $3 billion takeover bid for Tilt Renewables

Mercury Energy Tilt Renewables acquisition signals a trans-Tasman energy push as PowAR and Mercury split assets via a scheme of arrangement, offering $7.80 per share and a $2.96b valuation across Australia and New Zealand.

 

Key Points

A PowAR-Mercury deal to buy Tilt Renewables, splitting Australian and New Zealand assets via a court-approved scheme.

✅ $7.80 per share, valuing Tilt at $2.96b

✅ PowAR takes AU assets; Mercury gets NZ business

✅ Infratil and Mercury to vote for the scheme

 

Mercury Energy and an Australian partner appear to have won the race to buy Tilt Renewables, an Australasian wind farm developer which was spun out of TrustPower, bidding almost $3 billion, amid wider utility consolidation such as the Peterborough Distribution sale to Hydro One.

Yesterday Tilt Renewables announced that it had entered a scheme implementation agreement under which it was proposed that PowAR would acquire its Australian business and Mercury would acquire the New Zealand business, mirroring cross-border approvals where U.S. antitrust clearance shaped Hydro One's bid for Avista.

Conducted through a scheme of arrangement, Tilt shareholders will be offered $7.80 a share, valuing Tilt at $2.96b.

Yesterday morning shares in Tilt opened about 18 per cent up at $7.65, though regulatory outcomes can swing valuations as seen when Hydro One-Avista reconsideration of a U.S. order came into play.

In early December Infratil, which owns around two thirds of Tilt's shares, announced it was undertaking a review of its investment after receiving approaches, with investor sentiment sensitive to governance shifts as when Hydro One shares fell after leadership changes in Ontario.

According to a report in the Australian Financial Review, the transtasman bid beat out other parties including ASX-listed APA Group, Canadian pension fund CDPQ and Australian fund manager Infrastructure Capital Group, as Canadian investors like Ontario Teachers' Plan pursue similar infrastructure deals.

“This compelling acquisition proposal is a result of Tilt Renewables’ constant focus on delivering long-term value for shareholders and the board is pleased that, with these new owners, the transition to renewables in Australia and New Zealand will continue to accelerate,” Tilt’s chairman Bruce Harker said.

Comparable community-led clean energy partnerships, such as initiatives with British Columbia First Nations highlighted in clean-energy generation, underscore the broader momentum.

Just prior to the announcement, Tilt shares had been trading for less than $4. Such repricing reflects how utilities can face perceived uncertainties, as one investor argued too many unknowns at the time.

Mercury is already Tilt’s second largest shareholder, at just under 20 per cent. Both Infratil and Mercury have agreed to vote in favour of the scheme. The deal values Tilt’s New Zealand business at $770m, however the value of Mercury’s existing shareholding is around $585m, meaning the company will increase debt by around $185m.

 

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Iran supplying 40% of Iraq’s need for electricity

Iran Electricity Exports to Iraq address power shortages and blackouts, supplying 1,200-1,500 MW and gas for 2,500 MW, amid sanctions, aging grid losses, rising peak demand, and TAVANIR plans to expand cross-border energy capacity.

 

Key Points

Energy flows from Iran supply Iraq with 1,200-1,500 MW plus gas yielding 2,500 MW, easing shortages and blackouts.

✅ 1,200-1,500 MW direct power; gas adds 2,500 MW generation

✅ Iraq exempt on Iranian gas, but faces US pressure

✅ Aging grid loses 25%; $30B upgrades needed

 

“Iran exports 1,200 megawatts to 1,500 megawatts of electricity to Iraq per day, reflecting broader regional power trade dynamics, as Iraq is dealing with severe power shortages and frequent blackouts,” Hamid Hosseini said.

As he added, Iran also exports 37 million to 38 million cubic meters of gas to the country, much of it used in combined-cycle power plants to save energy and boost generation.

On September 11, Iraq’s electricity minister, Luay al Khateeb, said the country needs Iranian gas to generate electricity for the next three or four years, as energy cooperation discussions continue between Baghdad and Tehran.

Iraq was exempted from sanctions concerning Iranian gas imports; however, the U.S. has been pressing all countries to stop trading with Tehran.

Iraq's population has been protesting to authorities over power cuts. Iran exports 1,200 megawatts of direct power supplies and its gas is converted into 2,500 MW of electricity. According to al Khateeb, the current capacity is 18,000 MW, with peak demand of 25,000 MW possible during the hot summer months when consumption surges, a figure that rises every year.

Any upgrades would need investment of at least $30 billion, with grid rehabilitation efforts underway to modernize infrastructure, as the grid is 50 years old and loses 25 percent of its capacity due to Isis attacks.

In late July, Managing Director of Gharb (West) Regional Electricity Company Ali Asadi said Iran has high capacity and potential to export electricity up to twofold of the current capacity to neighboring Iraq, as it eyes transmitting electricity to Europe to serve as a regional hub as well.

He pointed to the new strategy of Iran Power Generation, Transmission & Distribution Management Company (TAVANIR) for increasing electricity export to neighboring Iraq and reiterated, “the country enjoys high potential to export 1,200 megawatts electricity to neighboring Iraq,” while Iraq is also exploring nuclear power plants to tackle electricity shortages.

 

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Russia to triple electricity supplies to China

Amur-Heihe ETL Power Supply Tripling will expand Russia-China electricity exports, extending 750 MW DC full-load hours to stabilize northeast China grids amid coal shortages, peak demand spikes, and cross-border energy security concerns.

 

Key Points

Russia will triple electricity via Amur-Heihe ETL, boosting 750 MW DC operations to relieve shortages in northeast China.

✅ 500 kV converter station increases full-load hours from 5 to 16

✅ Supports Heilongjiang, Liaoning, and Jilin grids amid coal shortfall

✅ Cross-border 750 MW DC link enhances reliability, peak demand coverage

 

Russia will triple electricity supplies via the Amur-Heihe electric transmission line (ETL) starting October 1, China Central Television has reported, a move seen within broader shifts in China's electricity sector by observers.

"Starting October 1, the overhead convertor substation of 500 kW (750 MW DC) will increase its daily time of operation with full loading from 5 to 16 hours per day," the TV channel said.

"This measure will make it possible to dramatically ease the situation with the electricity supply," the report said. Electricity from this converting station is used in three northeastern provinces of China - Heilongjiang, Liaoning and Jilin, while regional markets are strained as India rations coal supplies amid surging demand today. In 29 years, Russia supplied over 30 bln kilowatt hours of electricity, according to the channel.

The Amur-Heihe overhead transnational power line was constructed for increasing electricity exports to China, where projections see electricity to meet 60% of energy use by 2060 according to Shell. It was commissioned in 2012. Its maximum capacity is 750 MW.

China’s Jiemian News reported on September 27 that, amid nationwide power cuts affecting grids, 20 regions were limited in electricity supplies to a various extent due to the ongoing coal deficit. In particular, in China’s northeastern provinces, restrictions on power consumption were imposed not only on industrial enterprises, but also on households, as well as on office premises, raising concerns for U.S. solar supply chains among downstream manufacturers.

Later, China’s financial media Zhongxin Jingwei noted that the coal deficit had been triggered by price hikes brought on by tightened national environmental standards and efforts to reduce coal power production across the country. Reduced coal imports amid disruptions in the work of foreign suppliers due to the coronavirus pandemic was an additional reason, and earlier power demand drops as factories shuttered compounded imbalances.
 

 

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Hydro One stock has too much political risk to recommend, Industrial Alliance says

Hydro One Avista merger faces regulatory scrutiny in Washington, Oregon, and Idaho, as political risk outweighs defensive utilities fundamentals like stable cash flow, rate base growth, EPS outlook, and a near 5% dividend yield.

 

Key Points

A planned Hydro One-Avista acquisition awaiting key state approvals amid elevated political and regulatory risk.

✅ Hold rating, $24 price target, 28.1% implied return

✅ EPS forecast: $1.27 in 2018; $1.38 in 2019

✅ Defensive utility: stable cash flow, 4-6% rate base growth

 

A seemingly positive development for Hydro One is overshadowed by ongoing political and regulatory risk, as seen after the CEO and board ouster, Industrial Alliance Securities analyst Jeremy Rosenfield says.

On October 4, staff from the Washington Utilities and Transportation Commission filed updated testimony in support of the merger of Hydro One and natural gas distributor Avista, which had previously received U.S. antitrust clearance from federal authorities.

The merger, which was announced in July of 2017 has received the green light from federal and key states, with Washington, Oregon and Idaho being exceptions, though the companies would later seek reconsideration from U.S. regulators in the process.

But Rosenfield says even though decisions from Oregon and Idaho are expected by December, there are still too many unknowns about Hydro One to recommend investors jump into the stock.

 

Hydro One stock defensive but risky

“We continue to view Hydro One as a fundamentally defensive investment, underpinned by (1) stable earnings and cash flows from its regulated utility businesses (2) healthy organic rate base and earning growth (4-6%/year through 2022) and (3) an attractive dividend (~5% yield, 70-80% target payout),” the analyst says. “In the meantime, and ahead of key regulatory approvals in the AVA transaction, we continue to see heightened political/regulatory risk as an overhand on the stock, outweighing Hydro One’s fundamentals in the near term.”

In a research update to clients today, Rosenfield maintained his “Hold” rating and one year price target of $24.00 on Hydro One, implying a return of 28.1 per cent at the time of publication.

Rosenfield thinks Hydro One will generate EPS of $1.27 per share in fiscal 2018, even though its Q2 profit plunged 23% as electricity revenue fell. He expects that number will improve to EPS of $1.38 a share the following year.

 

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Coalition pursues extra $7.25B for DOE nuclear cleanup, job creation

DOE Environmental Management Funding Boost seeks $7.25B to accelerate nuclear cleanup, upgrade Savannah River Site infrastructure, create jobs, and support small businesses, echoing ARRA 2009 results and expediting DOE EM waste remediation nationwide.

 

Key Points

A proposed $7.25B stimulus for DOE's EM to accelerate nuclear cleanup, modernize infrastructure, and create jobs.

✅ $7.25B one-time stimulus for DOE EM cleanup and infrastructure.

✅ Targets Savannah River Site; supports jobs and small businesses.

✅ Builds on ARRA 2009; accelerates nuclear waste remediation.

 

A bloc of local governments and nuclear industry, nuclear innovation efforts, labor and community groups are pressing Congress to provide a one-time multibillion-dollar boost to the U.S. Department of Energy Office of Environmental Management, the remediation-focused Savannah River Site landlord.

The organizations and officials -- including Citizens For Nuclear Technology Awareness Executive Director Jim Marra and Savannah River Site Community Reuse Organization President and CEO Rick McLeod -- sent a letter Friday to U.S. House and Senate leadership "strongly" supporting a $7.25 billion funding injection, even as ACORE challenges coal and nuclear subsidies in separate regulatory proceedings, arguing it "will help reignite the national economy," help revive small businesses and create thousands of new jobs despite the novel coronavirus crisis.

More than 30 million Americans have filed unemployment claims in the past two months, with additional clean energy job losses reported, too. Hundreds of thousands of claims have been filed in South Carolina since mid-March, compounding issues like unpaid utility bills in neighboring states.

The requested money could, too, speed Environmental Management's nuclear waste cleanup missions and be used to fix ailing infrastructure and strengthen energy security for rural communities nationwide -- some of which dates back to the Cold War -- at sites across the country. That's a "rare" opportunity, reads the letter, which prominently features the Energy Communities Alliance logo and its chairman's signature.

Similar funding programs, like what was done with the 2009 American Recovery and Reinvestment Act and recent clean energy funding initiatives, have been successful.

At the time, amid a staggering economic downturn nationwide, Environmental Management contractors "hired over 20,000 new workers," putting them "to work to reduce the overall cleanup complex footprint by 688 square miles while strengthening local economies," the Friday letter reads.

The Energy Department's cleanup office estimates the $6 billion investment years ago reduced its environmental liability by $13 billion, according to a 2012 report.

Such a leap forward, the coalition believes, is repeatable, a view reflected in current plans to revitalize coal communities with clean energy projects across the country.

"We are confident that DOE can successfully manage increased funding and leverage it for future economic development as it has in the past," the letter states. It continues: "We take pride in working together to support jobs and development of infrastructure and work that make our country stronger and assists us to recover from the impacts of COVID-19."

As of Monday afternoon, 8,942 cases of COVID-19, the disease caused by the novel coronavirus, have been logged in South Carolina. Aiken County is home to 155 of those cases.

 

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