Pacificorp may have buyer for its Dave Johnston plant

: Coal
19/03/25

A prospective buyer has emerged for PacifiCorp's Dave Johnston coal-fired power plant if the utility chooses to sell it.

Glenrock Petroleum has said it would be interested in purchasing the 762MW plant and equipping unit 4 with carbon capture and sequestration (CCS) technology to use for enhanced oil recovery at a nearby field. Company chief executive Terry Manning declined to give specifics on the potential acquisition, citing a non-disclosure agreement it has with PacifiCorp.

The company is set to retire the facility at the end of 2027, but produced a report in December suggesting that closing at least part of the Johnston plant before then could make economic sense. PacifiCorp is scheduled to submit an updated integrated resource plan in August and said it was premature to discuss the possibility of selling the plant.

But, a new bill signed by governor Mark Gordon (R) this month means PacifiCorp might have to find a buyer for the Johnston plant. The law requires all generators after 2022 to attempt to sell their coal plants before retiring them. Otherwise, power producers will not be able to pass on the costs of building new generation assets to their customers.

Glenrock wants to be the buyer. Manning, who founded the company in 2016, first approached former Wyoming governor Matt Mead (R) in summer 2017, around the time PacifiCorp released its plan to possibly retire the Johnston plant, about the possibility of using CO2 from coal plants for enhanced oil recovery. He has met with other legislators since then.

"There was a confluence of events and circumstances in Wyoming: cheap Powder River basin coal, low-cost power, power plants that were coming to the end of their economically convenient life, and the fact that there were sequestration sights in proximity to these power plant," Manning said in an interview with Argus.

Glenrock would use carbon captured from Johnston's 330MW unit 4 to extract oil from reserves it holds in Converse County, where the power plant is located. The majority of the 44,000 acres of conventional producing mineral leases Glenrock holds have tertiary reserves that require enhanced oil recovery to be mined.

Manning estimates that Glenrock could extract 14,000 b/d using CO2 from the Johnston plant on the company's reserves. He sees potential in PacifiCorp's Wyodak and Jim Bridger coal-fired plants as well.

Glenrock would used the same technology to retrofit Johnston unit 4 as was used at NRG Energy's Petra Nova station near Houston, Texas, and estimates it would cost $430mn-$470mn. The entire project would cost $850mn, Manning said. And, the break-even price of oil production is estimated at $55-$60/b.

PacifiCorp also has expressed some interest in retrofitting the Johnston plant. The company issued a request for proposals in 2018 for "parties that can demonstrate viable technical and commercial and financial proposals to explore the feasibility of carbon capture for the coal-fired power plants with the potential of enhanced recovery in northeast Wyoming," PacifiCorp said.

Glenrock was among the three proposals selected by PacifiCorp and the only upstream oil producer. The two other companies selected would operate a different part of the value chain.

Manning says there have been favorable preliminary talks with potential financiers for Glenrock's proposed purchase, but first PacifiCorp needs to unveil its integrated resource plan before any sort of financing can be committed.

The extension of the 45Q tax credit signed into law by President Donald Trump last year should help projects like Glenrock's secure funding. It allows certain projects using CO2 for enhanced oil recovery to recoup $35/metric tonne. With a capture rate of 55pc, the Dave Johnston CCUS facility would capture 1.26mn t of CO2 every year.

"If you have a tax credit, Bank of America, JP Morgan Chase, several others have indicated over the history of the tax credit business that they have an appetite to get involved," Manning said.

Glenrock has looked at contracting Mitsubishi, which was responsible for the Petra Nova plant in Houston, to design and build the facility.

"That way we have no engagement risk, we have no design risk, we have no engineering risk and we have no implementation risks because they have figured it out," Manning said.

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24/12/20

US government agencies set to shut down

Washington, 20 December (Argus) — US federal agencies would have to furlough millions of workers and curtail permitting and regulatory services if no agreement is reached by Friday at 11:59pm ET to extend funding for the government. US president-elect Donald Trump and his allies — including Tesla chief executive Elon Musk — on 18 December upended a spending deal US House of Representatives speaker Mike Johnson (R-Louisiana) had negotiated with Democratic lawmakers in the House and the Senate. Trump endorsed an alternative proposal that Johnson put together, but that measure failed in a 174-235 vote late on Thursday, with 38 Republicans and nearly every Democrat voting against it. Trump via social media today indicated he would not push for a new funding bill. "If there is going to be a shutdown of government, let it begin now, under the Biden Administration, not after January 20th, under 'TRUMP,'" he wrote. There was little to indicate as of Friday morning that Trump, Republican congressional leadership and lawmakers were negotiating in earnest to avert a shutdown. The House Republican conference is due to meet in the afternoon to weigh its next steps. President Joe Biden said he would support the first funding deal that Johnson negotiated with the Democratic lawmakers. "Republicans are doing the bidding of their billionaire benefactors at the expense of hardworking Americans," the White House said. Any agreement on funding the government will have to secure the approval of the House Republican leadership and all factions of the Republican majority in the House, who appear to be looking for cues from Trump and Musk on how to proceed. Any deal would then require the support of at least 60 House Democrats to clear the procedural barriers, before it reaches the Senate where the Democrats hold a majority. The same factors will be in play even if the shutdown extends into early 2025. The Republicans are set to take the majority in the Senate when new Congress meets on 3 January. But their House majority will be even slimmer, at 219-215, requiring cooperation of Democratic lawmakers and the Biden administration. What happens when the government shuts down? Some agencies are able to continue operations in the event of a funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy, which includes the Energy Information Administration and its critical energy data provision services, expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. The Interior Department's shutdown contingency plan calls for the Bureau of Land Management (BLM) to furlough 4,900 out of its nearly 10,000 employees. BLM, which is responsible for permitting oil, gas and coal activities on the US federal land, would cease nearly all functions other than law enforcement and emergency response. Interior's Bureau of Safety and Environmental Enforcement, which oversees offshore leases, would continue permitting activities but would furlough 60pc of its staff after its funding lapses. The US Bureau of Ocean Energy Management will keep processing some oil and gas exploration plans with an on-call group of 40 exempted personnel, such as time-sensitive actions related to ongoing work. The shutdown also affects multiple other regulatory and permitting functions across other government agencies, including the Departments of Agriculture, Transportation and Treasury. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump backs new deal to avoid shutdown: Update

24/12/19

Trump backs new deal to avoid shutdown: Update

Adds updates throughout Washington, 19 December (Argus) — US president-elect Donald Trump is offering his support for a rewritten spending bill that would avoid a government shutdown but leave out a provision authorizing year-round 15pc ethanol gasoline (E15) sales. The bill — which Republicans rewrote today after Trump attacked an earlier bipartisan agreement — would avoid a government shutdown starting Saturday, deliver agricultural aid and provide disaster relief. Trump said the bill was a "very good deal" that would also include a two-year suspension of the "very unnecessary" ceiling on federal debt, until 30 January 2027. "All Republicans, and even the Democrats, should do what is best for our Country, and vote 'YES' for this Bill, TONIGHT!" Trump wrote in a social media post. Passing the bill would require support from Democrats, who are still reeling after Trump and his allies — including Tesla chief executive Elon Musk — upended a spending deal they had spent weeks negotiating with US House speaker Mike Johnson (R-Louisiana). Democrats have not yet said if they would vote against the new agreement. "We are prepared to move forward with the bipartisan agreement that we thought was negotiated in good faith with House Republicans," House minority leader Hakeem Jeffries (D-New York) said earlier today. That earlier deal would have kept the government funded through 14 March, in addition to providing a one-year extension to the farm bill, $100bn in disaster relief and $10bn in aid for farmers. The bill would also provide a waiver that would avoid a looming ban on summertime sales of E15 across much of the US. Ethanol industry officials said they would urge lawmakers to vote against any package without the E15 provision. "Pulling E15 out of the bill makes absolutely no sense and is an insult to America's farmers and renewable fuel producers," Renewable Fuels Association chief executive Geoff Cooper said. If no agreement is reached by Friday at 11:59pm ET, federal agencies would have to furlough millions of workers and curtail services, although some agencies are able to continue operations in the event of a short-term funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Congress passes waterways bill

24/12/19

US Congress passes waterways bill

Houston, 19 December (Argus) — The US Senate has passed a bipartisan waterways infrastructure bill, providing a framework for further investment in the country's waterways system. The waterways bill, also known as the Water Resources and Development Act (WRDA), was approved by the Senate in a 97-1 vote on 18 December after clearing the US House of Representatives on 10 December. The WRDA's next stop is the desk of President Joe Biden, who is expected to sign the bill. The WRDA has been passed every two years, authorizing the US Army Corps of Engineers (Corps) to undertake waterways infrastructure and navigation projects. Funding for individual projects must still be approved by Congress. Several agriculture-based groups voiced their support for the bill, saying it will improve transit for agricultural products on US waterways. The bill also shifts the funding of waterways projects to 75pc from the federal government and 25pc from the Inland Waterways Trust Fund instead of the previous 65-35pc split. "Increasing the general fund portion of the cost-share structure will promote much needed investment for inland navigation projects, as well as provide confidence to the industry that much needed maintenance and modernization of our inland waterway system will happen," Fertilizer Institute president Corey Rosenbusch said. The bill includes a provision to assist with the damaged Wilson Lock along the Tennessee River in Alabama. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Reliability drives New Zealand power mix: Minister

24/12/19

Reliability drives New Zealand power mix: Minister

Sydney, 19 December (Argus) — New Zealand's conservative coalition government wants to ensure reliable generation, whether that is from coal, oil, gas, or geothermal resources, the country's resources minister Shane Jones told Argus this week. Jones was also clear about the need to draw a distinction between "the expectations on [a] small, open trading nation like [New Zealand] not to use coal and the major hope[s] and needs of the average New Zealander for affordable power, reliable power." "If [reliable power] comes from coal, that's the mix and the menu for the future," he added. Jones argued that existing renewable power sources cannot exclusively provide for New Zealand's energy needs. He instead suggested that his government is interested in promoting alternative power sources such as oil, gas and geothermal, through investments and policy changes. New Zealand's coal-fired power generation surged between July-September, according to the New Zealand's Ministry of Business Innovation and Employment (MBIE). Coal rose to 8pc of total generation from 3pc a year earlier, following a drop in hydroelectric power production. The country burned 363,513t of coal over those months, more than tripling its use for power generation purposes compared to the same period last year. Oil, gas Jones has taken steps to boost the country's oil sector since taking office in late 2023, following the coalition's victory over the centre-left Labour party. The minister introduced the Crown Minerals Amendment Bill in June, a piece of legislation that he described as being "aimed at increasing investor confidence in petroleum exploration and development." Jones told Argus that under the previous government, "people who may have been willing to [make] investment[s] and bring patient capital concluded that New Zealand was no longer available as a destination for oil and gas and this has resulted in a diminution in [oil] investment." The Crown Minerals Amendment Bill will overturn a 2018 ban on offshore oil exploration, which was introduced while Jones was serving in an earlier Labour-led coalition government. New Zealand's oil sector increased its annual well spending from NZ$110mn ($63.2mn) in 2018 to NZ$403mn, in the years following the ban in 2018. The total number of active oil permits in the country has plunged from 56 to 37 over the same period, MBIE data show. New Zealand likely houses at least 223.5bn m³ of undiscovered, offshore gas reserves; 249mn bl of undiscovered, offshore oil reserves; and 177mn bl of undiscovered, offshore NGL reserves, mostly scattered around the North Island, according to US Geological Survey (USGS) estimates in 2022. The country's discovered, recoverable reserves are at between 38.3mn-52.7mn bl of oil; 29.4bn-39.8bn m³ of gas; and between 1.2mn–1.4mn t of LPG as of 1 January 2024, according to the MBIE. Besides restarting oil exploration, the Crown Minerals Amendment Bill also seeks to change permitting processes to drive capital into the sector. Permits are currently allocated through a competitive tender process, Jones told Argus this week. The government wants "the flexibility to use alternative processes to match investor interest in the most efficient and effective way by allowing the option of using non-tender methods." MBIE has indicated that the government may start using ‘priority in time' tenders, which allocates permits to the first eligible projects that apply for them, once the bill passes. But the Crown Minerals Amendment Bill does not specify how the government will manage non-competitive tenders. The government is also not using the Crown Minerals Amendment Bill to "specifically intervene in coal mining operations" in New Zealand, Jones said. But coal demand will fall "in the event that [the government is] able to expand the supply of indigenous gas," he noted. Geothermal The government's energy strategy also appears to involve doubling down on domestic geothermal generation, which is New Zealand's second most common source of power. Geothermal generators produced 2,363GWh of power between July-September, accounting for 20.5pc of total generation, in line with historical averages, according to MBIE data. New Zealand's government seems to be trying to push that share up. The government in early December decided to allocate up to NZ$60mn of public infrastructure funding to research for deep, geothermal energy production. The work will focus on drilling geothermal wells up to 6km deep, nearly twice the depth of standard wells. Jones told Argus that New Zealand officials are currently in Japan, discussing supercritical geothermal generation opportunities with engineers and scientists. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Western Australia's near-term gas supply rises: Aemo

24/12/19

Western Australia's near-term gas supply rises: Aemo

Sydney, 19 December (Argus) — The short term supply outlook for Western Australia's (WA) gas market has improved, but gaps in the next decade need to be addressed, according to an Aemo annual report. The near-term gas supply is stronger than last year's outlook, with supply now forecast to exceed consumption through to 2027 on increased flows from LNG projects and declining near-term consumption, according to the 2024 Western Australia Gas Statement of Opportunities (GSOO) paper from the Australian Energy Market Operator (Aemo). Ample gas supply is expected because of increased flows from Wheatstone and Pluto LNG projects and new supply including forecast volumes from 2026 onwards from Woodside's Scarborough project and Strike's 87 TJ/d (2.3mn m³/d) West Erregulla plant . But demand is weak on the back of the shutdown of several nickel mines for maintenance in 2024 and the closure of the 2.2mn t/yr Kwinana alumina refinery announced in January. Aemo's 10-year outlook to 2035 now forecasts surplus gas until 2028, when some gas users will reopen projects. It also forecasts a less steep shortfall in the 2030s, with 2033 supply now 13pc below demand, down from the 27pc decrease in the 2023 GSOO. New gas supply will still be needed as WA plans to close its state-owned fleet of coal-fired power stations, but increasing renewable generation will shift gas usage in the power grid to a firming capacity, with gas-fired power demand tipped to increase in the early 2030s but stabilise at present levels of about 190 TJ/d by 2040. But uncertainty remains about the future of coal in the WA grid. The 416MW Bluewaters coal-fired plant, owned by Japanese firms Kansai Electric and Sumitomo, is expected to retire by 2030-31 but may be forced to close earlier because its supplier, the 2mn t/yr Griffin coal mine , cannot guarantee deliveries beyond October 2026. This will increase gas demand. The WA state government reversed a blanket ban on exporting onshore gas as LNG in September after a parliamentary inquiry into the state's domestic gas policy prompted by concerns from major gas users such as fertilizer manufacturers and metals refiners. Developers are now permitted to export 20pc of production as LNG until 2031 to boost upstream investment in the prospective Perth basin. By Tom Major WA gas supply and demand 2024-34 (TJ/d) 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Potential gas supply 1,143 1,190 1,121 1,207 1,192 1,412 1,335 1,301 1,214 1,173 1,144 Gas demand 1,119 1,069 1,082 1,154 1,354 1,342 1,357 1,378 1,371 1,343 1,336 Difference (% ± of demand) 2 11 4 5 -12 5 -2 -6 -12 -13 -14 Source: Aemo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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