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Texas land commissioner questions merits of offshore wind

Texas Land Commissioner Dawn Buckingham said the Biden administration's decision to continue with the offshore wind lease auction off the coast of Texas was a "folly."

Texas Land Commissioner Dawn Buckingham has sent a letter to the Bureau of Ocean Energy Management calling for a proposed offshore wind auction for submerged land off the coast of Texas to be reconsidered.

In the letter, Buckingham says her position as Commisioner of the General Land Office gives her power over state-owned submerged lands where transmission lines to shore from the offshore facility would run, and that she sees a significant number of concerns before a wind lessee “is permitted to cross state-owned submerged land.”

She refers to the offshore wind auction as part of the Biden administration’s “continued efforts to force-feed the American people failed ‘green’ policies.”

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Waste-to-methanol developer adds global projects director

Los Angeles-based WasteFuel has hired a former engineering and project director from Johnson Matthey.

WasteFuel, a next-generation waste-to-fuels company, announced today that Johan Fritz, former Johnson Matthey Project and Engineering Director, will serve as the company’s Global Projects Director, effective May 1, 2024, according to a news release.

Fritz will oversee WasteFuel’s project development team and work alongside key partners to advance the company’s projects and accelerate WasteFuel’s efforts to produce green methanol at scale.

He brings over 25 years of experience leading multi-disciplinary teams across all project stages including concept design, FEED, detail design and execution in many places around the world including in the US, UK, China, India, EU, Africa and South America.

As the Project and Engineering Director at global chemical and sustainable technology company, Johnson Matthey, Johan was responsible for projects enabling net zero targets, managed the capex delivery of global projects, played a hands-on role in execution, and built and oversaw cross-stakeholder teams. His previous roles include Project Management Lead at leading oilfield services provider SLB Asset Consulting Services, where he provided Engineering Procurement and Construction (EPC) support for global clients; and Senior Manager at international integrated energy and chemicals company, Sasol E&P.

Johan holds a postgraduate degree from the University of Pretoria and studied chemical engineering at the Vaal University of Technology. He is a Member of the Association of Project Managers (MAPM), and is a certified Project Management Professional (PMI).

“I am looking forward to working alongside the WasteFuel team to build projects that will decarbonize shipping and reduce waste at this significant time for the company and the environment,” said Johan Fritz, Global Projects Director of WasteFuel. “The opportunity to be a part of the company’s growth and to bring their green methanol production to scale is extremely exciting.”

“Johan’s experience executing global energy projects adds critical expertise to WasteFuel’s existing project management and leadership teams as we work to accelerate the development of our projects around the world,” said Trevor Neilson, Co-founder, Chairman and CEO of WasteFuel.

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DOE awards $130m for CCUS projects

The US DOE has announced $131m for 33 research and development projects to advance the wide-scale deployment of carbon management.

The U.S. Department of Energy (DOE) has announced $131m for 33 research and development projects to advance the wide-scale deployment of carbon management technologies to reduce carbon dioxide (CO2) pollution, according to a news release yesterday.

The projects will address technical challenges of capturing CO2 from power plants and industrial facilities or directly from the atmosphere and assess potential CO2 storage sites, increasing the number of sites progressing toward commercial operations. Expanding commercial CO2 storage capacity and related carbon management industries will provide economic opportunities for communities and workers, helping to deliver on President Biden’s goal of equitably achieving net-zero greenhouse gas emissions by 2050.

DOE is investing $38m in 22 projects awarded under the “Carbon Management” funding opportunity that will develop technologies to capture CO2 from utility and industrial sources or directly from the atmosphere and transport it either for permanent geologic storage or for conversion into valuable products such as fuels and chemicals. Projects will examine commercial viability and technical gaps, while also examining environmental and community impacts of the technologies.  Selected carbon dioxide removal projects will support the cost and performance goals of DOE’s Carbon Negative Shot initiative, which calls for innovation in pathways that will capture CO2 from the atmosphere and permanently store it at meaningful scales for less than $100/net metric ton of CO2-equivalent. CO2 storage projects announced today under this FOA will look specifically at assessing potential resources for mineral carbon storage—where the CO2 becomes permanently stored as a solid mineral through a chemical reaction. A detailed list of the selected carbon management projects can be found here.

DOE is investing $93m in 11 projects awarded under the “CarbonSAFE: Phase II – Storage Complex Feasibility” funding opportunity that will improve procedures to safely, efficiently, and affordably assess onshore and offshore CO2 project sites within a storage complex at a commercial scale. Projects were selected under DOE’s Carbon Storage Assurance Facility Enterprise (CarbonSAFE) initiative, which focuses on developing geologic storage sites with potential to cumulatively store 50 or more million metric tons of CO2. A detailed list of the selected CarbonSAFE projects announced today can be found here.

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Drax Group reaches carbon removal deal for US projects

The deal, which will occur over a five-year period starting in 2030, is linked to Drax’s planned deployment of bioenergy with carbon capture facilities in the US.

Carbon removals and renewable energy company Drax Group today announced a new carbon removals deal with Karbon-X, a leading environmental company.

Karbon-X will purchase carbon dioxide removals (CDR) credits from Drax representing 25,000 metric tons of permanently stored carbon at $350 per tonne under the terms of the agreement.

The deal, which will occur over a five-year period starting in 2030, is linked to Drax’s planned deployment of carbon negative BECCS in the United States, according to a news release.

“We’re excited to work with organizations like Karbon-X that understand the importance of investing in high-value carbon removals today,” said Laurie Fitzmaurice, President, Carbon Removals at Drax. “The CDR market, which is already maturing at a rapid pace, is expected to experience a supply crunch within the next decade as companies and countries approach their deadlines for carbon reduction targets.”

The agreement with Karbon-X is the latest in a string of previously announced carbon removals memorandums of understanding that have included Respira and C-Zero. Drax also launched a new independent business unit earlier this year that is focused on becoming the global leader in large-scale carbon removals. This business unit will oversee the development and construction of Drax’s new-build BECCS plants in the US and internationally, and it will work with a coalition of strategic partners to focus on an ambitious goal of removing at least 6 Mt of CO2 per year from the atmosphere.

BECCS is a carbon removal technology that uses sustainably sourced biomass to generate renewable energy while permanently sequestering the carbon underground. Measuring the impact of these high-quality carbon removals is more straightforward when compared with other solutions like nature-based removals, resulting in high demand, according to the company.

“This agreement with Karbon-X represents another major step forward in delivering BECCS by Drax in the United States to help meet this growing demand to decarbonize our planet,” said Fitzmaurice.

Karbon-X intends to sell the credits it purchases from Drax on the voluntary carbon market, enabling individuals and organizations to achieve their own emissions reduction targets. It follows a stringent set of guidelines to ensure it selects only high-quality projects and providers, like BECCS by Drax.

As companies, industries, and countries increasingly look to engineered carbon removals to ensure they can meet their climate commitments, CDRs from carbon negative BECCS are becoming an integral piece of this market. Through BECCS, carbon removals are quantifiable and auditable, resulting in a higher quality credit. This separates BECCS-derived CDRs from carbon offsets, allowing organizations to have greater trust in the impact of their investments, according to the release.

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Exclusive: North Dakota blue ammonia project kicking off FEED study

Catalyst Midstream is set to launch a FEED study for a 1 million ton blue ammonia facility in Berthold, North Dakota, with expected offtake in the Asia-Pacific marketplace. The project has not been previously announced or reported.

Catalyst Midstream is set to launch a FEED study for a blue ammonia facility in North Dakota that will produce over 1 million tons per year for export.

The project, which has not been reported previously, applied for a $10m North Dakota Clean Sustainable Energy Authority grant for the construction of a blue ammonia facility in Berthold, North Dakota. That’s in addition to $37.5m it requested from the North Dakota Development Fund’s Fertilizer Facility Loan Fund in September 2023.

The facility would be capable of producing 1,080,000 tons/year, using approximately 120,000 mcf gas/day.

Total project cost, according to the grant application, would be $960m.

As of September 2023, Catalyst Midstream was under contract to purchase a 330-acre rail loading facility for the project and had invested $15m in key project asset purchase and early project design work.

In February 2024, Catalyst Midstream employed Windom Peak Corporation to design, construct and operate the 2.4 million tonne per year CO2 sequestration part of the project.

Catalyst Midstream is owned by Edward Neibauer, who has been in project development in the oil and gas industry for several decades. When reached for comment, Neibauer noted the project would soon be kicking off a FEED study.

He added that the project was nearing agreements with offtakers in the Asia-Pacific marketplace, and that he expects to raise debt and equity to fund construction of the facility.

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exclusive

How hydrogen from nuclear power shows pitfalls of ‘additionality’

An interview with the Nuclear Energy Institute’s Director of Markets and Policy Benton Arnett.

Tax credits for low-carbon hydrogen production in the Inflation Reduction Act represent one of the climate law’s most ambitious timelines for implementation, with the provision taking effect late last year. That means low-carbon hydrogen producers can, in theory, already begin applying for tax credits of up to $3 per kilogram, depending on the emissions intensity of production.

However, IRS guidelines for clean hydrogen production have yet to be issued, and industry groups, environmentalists, and scientists are taking sides in a debate over whether the tax credits should require hydrogen made via electrolysis to be powered exclusively with new sources of zero-carbon electricity, a concept known as “additionality.”

In a February letter, a coalition of environmental groups and aspiring hydrogen producers expressed concern to the IRS that guidelines for 45V clean hydrogen production tax credit implementation would not be sufficiently rigorous, especially when it comes to grid-connected electrolyzers. Citing research from Princeton University, the group argued that grid-powered electrolyzers siphon off renewable generation capacity, requiring the grid to be backfilled by fossil power and thus producing twice the carbon emissions that natural gas-derived hydrogen emits currently.

(The group, which includes the National Resources Defense Council, Intersect Power, and EDF Renewables, among others, also argues in favor of hourly tracking, which they say would better guarantee energy used for electrolysis comes from clean sources, and deliverability, requiring renewable power to be sourced from within a reasonable geographic distance. In February, the European Commission issued a directive phasing in, over a number of years, rules for additionality, hourly tracking, and deliverability.)

Benton Arnett, director of markets and policy for the Washington, DC-based Nuclear Energy Institute, a nuclear industry trade association, does not believe the concept of additionality was part of Congress’s intent when the body crafted the Inflation Reduction Act. For one, he notes, the text of the 45V provision for clean hydrogen production includes specific prescriptions for the carbon intensity of hydrogen production as well as for the analysis of life-cycle emissions, but says nothing about additionality.

“When you get legislative text, you don’t usually have prescriptions on carbon intensities for the different levels of subsidies,” he said. “You don’t usually have specifications on what life-cycle analysis model to use – and yet all of that is included in the 45V text. Clearly [additionality] is not something that was intended by Congress.”

Reading further into the law, section 45V contains precise language allowing renewable electricity used for the production of hydrogen to also claim renewable energy tax credits, or “stacking” of tax credits. Further, the statute includes a subsection spelling out that producers of nuclear power used to make clean hydrogen can also avail themselves of the 45U tax credit for zero-emission nuclear energy production.

“It’s really hard for me to think of a scenario where the drafters of the IRA would have included a provision allowing existing nuclear assets to claim 45V production tax credits and also be thinking that additionality is something that would be applied,” Arnett said.

Text of the IRA

The NEI emphasized these provisions in a letter to Treasury and IRS officials last month, noting that, “given the ability to stack tax credits for existing sources with section 45V, the timing of when the section 45V credit was made available” – December 31, 2022 – “and congressional support for leveraging existing nuclear plants to produce hydrogen, it is clear Congress intended for existing facilities to be eligible to supply electricity for clean hydrogen production.”

Arnett adds that the debate around additionally ignores the fact that not all power generation assets are created equal. Nuclear facilities, in particular, given the regulatory and capital demands, do not fit within a model of additionality geared toward new renewable energy capacity. (Hydrogen developers have also proposed to use existing hydropower sources for projects in the Pacific Northwest and Northeast.)

This year, the NEI conducted a survey of its 19 member companies representing 80 nuclear facilities in the US. The survey found that 57% of the facilities are considering generation of carbon-free hydrogen. Meanwhile, the US Department of Energy’s hydrogen hubs grant program requires that one hub produce hydrogen from nuclear sources; and the DOE has teamed up with several utilities to demonstrate hydrogen production at nuclear power plants, including Constellation’s Nine Mile Point Power Station, Energy Harbor’s Davis-Besse Nuclear Power Station, Xcel Energy’s Prairie Island Nuclear Generating Plant, and Arizona Public Service’s Palo Verde Generating Station.

“We’re worried that if [additionality] goes into effect it’s going to remove a valuable asset for producing hydrogen from the system, and it’s really going to slow down penetration of hydrogen into the market,” Arnett said.

As for the research underlying arguments in favor of additionality, Arnett says that it appears to take the 45V provision in a vacuum, without considering some of the larger changes that are taking shape in US electricity markets. For one, the research, which argues that electrolyzers would absorb renewable capacity and require fossil-based generation to backfill to meet demand, assumes that natural gas generation will continue to be the marginal producer on the electrical grid.

“One of the shortcomings of that is that the IRA has hundreds of billions of dollars of incentives aimed at changing that very dynamic. The whole goal of the IRA is that marginal additions of power are carbon-free,” he said, noting incentives for clean electricity production tax credits, investment tax credits, supply chain buildouts, and loan program office support for all of these projects.

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exclusive

Midwestern SAF developer in capital raise

A municipal solid waste solutions firm based in the midwestern US is undergoing a $30m capital raise ahead of its first SAF project with plans to launch another raise late this year or early next.

Illinois Clean Fuels, the municipal solid waste solutions firm in Deerfield, Illinois, has mandated two advisors to run a capital raise, according to two sources familiar with the matter.

Chabina Energy Partners and Weild & Co. are assisting on the process, which the company plans to have finished by October, the sources said.

The equity will be put toward six recovery facilities to supply feedstock for an unannounced project located in the Chicagoland region, one of the sources said. Following two years or so of engineering and permitting, that project should enter construction.

In December or early 1Q24 ICF plans to launch another equity raise for development capital.

ICF, Chabina and Weild & Co. declined to comment.

Illinois Clean Fuels has a synthetic fuel plant under development that will convert municipal solid waste into sustainable aviation fuel in combination with carbon capture and storage, according to its website.

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