The most expensive fossil-fuel power plant ever built in the U.S. could soon get a financial lifeline thanks to President-elect Donald Trump, who has signaled interest in clean-coal initiatives as a way to preserve mining jobs.
Buoyed by Mr. Trump’s enthusiasm for the U.S. coal industry, several congressional proposals seek to boost tax breaks for facilities that can capture carbon dioxide, a greenhouse gas that is a byproduct of fossil-fuel combustion. The biggest winner—at least initially—could be Southern Co.’s Kemper County, Miss., power plant, a facility designed to capture about 65% of its carbon-dioxide emissions and sell it to oil companies, which use it to help extract crude from wells.
Construction and technology snafus have doubled the cost of the Kemper project since it was approved in 2010, to nearly $7 billion. The power plant is scheduled to achieve full commercial operation early next year.
One proponent of the expanded tax credits, Democratic Sen. Heidi Heitkamp of North Dakota, met this month with Mr. Trump to discuss “a realistic path forward for coal.” Sen. Heitkamp said while first-of-a-kind projects such as Kemper are often problematic, the economic impact of clean coal use is too important to ignore, adding the bill she is co-sponsoring offers a “meaningful tax credit without breaking the bank.”
Atlanta-based Southern owns Mississippi Power Co., which is building the clean-coal project, and stands to reap a windfall of between $695 million and $4.5 billion if any number of legislative measures get passed, according to a calculation by Friends of the Earth....
Three proposals that could be debated in congress in coming months aim to increase tax breaks for capturing carbon dioxide and reusing it. Southern Co. Chief Executive Tom Fanning, who was in Washington recently to talk with lawmakers, said legislation permanently extending federal tax subsidies would be most helpful to clean-coal projects.
One of the bills, filed by Republican Rep. Mike Conaway of Texas, seeks to raise subsidies and continue them indefinitely rather than have them expire once 75 million metric tons of carbon dioxide have been captured, a milestone under the current law that is expected to be reached by 2019.
The bill supported by Sens. Heitkamp and Sheldon Whitehouse, a Democrat from Rhode Island, would triple the current tax credit of $10 a ton of carbon emissions captured and used in enhanced oil recovery to $35 a ton for the first 12 years a plant operates. Republican Mitch McConnell, the Senate Majority Leader, also is a co-sponsor and has attracted support across the aisle. Sen. McConnell’s office declined to comment.
A third measure by Sen. Heitkamp, a Senate amendment, provides a slightly lower subsidy to carbon emissions captured for enhanced oil recovery. North Dakota is a major producer of oil, gas and coal and Sen. Heitkamp from 2001 to 2012 was a director of Dakota Gasification Co., which has been making a synthetic natural gas from coal since the 1980s....
Once sequestered, up to three million tons of carbon dioxide each year will be moved from Kemper to old oil fields through a pipeline. The emissions can be reinjected into oil wells, where it helps loosen deposits to flow to the surface.
Brett Wingo, a former project manager for the plant, has been a harsh critic of Kemper and said the tax proposals amount to “a federal bailout of a failed project.”
Mr. Wingo left Mississippi Power last February in a dispute over the utility’s lack of disclosure to shareholders and regulators. He predicted Kemper wouldn’t make its year-end completion target, missing out on $250 million in depreciation expenses this year.Rest of article.
The fools will probably pass the bailout.