DOE's First Advanced Fossil Fuel Loan Guarantee Commitment Awarded to Methanol Plant with Carbon Capture

The Department of Energy’s (DOE’s) first loan guarantee under an $8 billion solicitation for advanced fossil energy projects may go to a methanol production facility in Lake Charles, La., that will employ carbon capture technology for enhanced oil recovery.

The DOE said in a statement on December 21 that it offered a conditional commitment to guarantee loans of up to $2 billion to help build the facility. If built, the facility will be the world’s first methanol production facility to use carbon capture technology. It would also be the first facility in the U.S. to derive methanol from petroleum coke (petcoke), which is a byproduct of oil refining.

The proposed plant will produce methanol, hydrogen, and other industrial gases and chemical products using petcoke as a feedstock. It proposes to capture 77% of carbon dioxide from the petcoke gasification plant. The gas will then be compressed and transported to oilfields in Texas for enhanced oil recovery.

The DOE’s solicitation issued in December 2013 under Title XVII of the Energy Policy Act of 2005 sought applications for loan guarantees to finance U.S. projects that “employ innovative and advanced fossil energy technologies that reduce, or sequester anthropogenic emission of greenhouse gases.”

According to Energy Secretary Ernest Moniz, the conditional commitment represents a “major milestone” in the DOE’s efforts to scale up carbon capture utilization and sequestration.

Along with the advanced fossil energy projects solicitation, the DOE’s Loan Programs Office has solicitations open for advanced nuclear energy projects ($12.5 billion) and renewable energy and energy efficient projects ($4 billion).

—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)