Utility Instructed To Fund Participation in Carbon Capture Venture

If you're new here, you may want to subscribe to our or .

| Sourced From |

The California Public Utilities Commission (CPUC) today told Southern California Edison Company (SCE) that it would have to fund its own participation in a pilot project to create hydrogen and sequester carbon emissions from petroleum coke–an oil refinery by-producet.

SCE, which is a unit of Edison International (NYSE: EIX), had requested permission to recover the $30 million cost from ratepayers. CPUC told the company it could track its spending for possible reimbursement in the future.

The project is a joint venture between BP Plc (NYSE: BP) and Rio Tinto (NYSE: RTP)–global oil and mining companies respectively. The companies want to build the first utility scale U.S. power plant to convert petroleum coke into hydrogen, which will be burned to make electricity. Carbon dioxide emissions from the conversion process would be pumped into the Occidental Petroleum oilfields to increase oil production and sequester the gas.

The BP/Rio Tinto joint venture said this would cut 90% of the associated CO2 emissions, or roughly 2 million tons a year. They hope to begin construction of the 390-megawatt (MW) power plant in 2011 and finish it in 2014, according to the website of Hydrogen Energy International.

Currently California oil refiners ship petroleum coke to China where it is burned at power plants, releasing CO2 into the air.

An SCE spokesman said the utility is considering the Commision’s decision, according to a Reuters report.

CPUC President Michael R. Peevey said he was encouraged by the utility’s interest in the project. “If California’s utilities work together, the costs and risks of this and other carbon capture projects can be shared broadly so that the benefits can be realized by all Californians. If shown to be technically feasible and commercially reasonable, the HECA facility, and potentially other generation utilizing carbon capture technology, will be resources that will advance California’s move towards reduced greenhouse gas emissions while producing reliable power.”