During Texas visit, Rick Perry touts Houston-area carbon capture system

THOMPSONS — In his first public appearance in Texas since being sworn in as U.S. energy secretary, former Gov. Rick Perry on Thursday heaped praise on a new, first-of-its-kind energy project that captures climate-altering emissions from the state’s largest coal plant and uses them to boost production in a flagging oilfield.  

Perry said the $1 billion project, called Petra Nova — the recipient of a $190 million U.S. Department of Energy grant awarded under the Obama administration — is an “example of how investments in clean technology can lead to increased development of conventional sources of energy.” He also said it’s an example of why environmental protection doesn’t have to come at the expense of economic prosperity and energy security.

“The president has made it very clear to me that he does not just want the U.S. to be energy independent; he wants America to be energy dominant, and today’s opening is just another step and another example of that becoming a reality,” said Perry, standing in a white canopy tent positioned in front of the recently completed carbon capture system — a tall, steel tower and tank covered in a maze of pipes and stairs.

U.S. and Japanese flags were affixed at the top.

The project — a joint venture of two Houston-based companies, NRG Energy and Hilcorp Energy, and Japanese oil company JX Nippon — removes 90 percent of the carbon dioxide produced by one of the coal-fired units at NRG’s Parish coal plant, 30 miles southwest of Houston. It is then piped more than 80 miles away to a legacy oilfield in South Texas operated by Hilcorp. There, it’s being pumped down old wells to increase production — a long-used method known as “enhanced oil recovery.”

While Petra Nova — Latin for “new rock” — will capture only 10 percent of Parish’s overall carbon dioxide emissions, it’s the first carbon capture system in the United States to be built at an existing coal-fired power plant and only the second in the world. Company officials and energy experts say the project is significant because it shows carbon capture technology is possible on a commercial scale.

Climate scientists, environmentalists and others concerned about climate change have held up the technology — around for decades, but slow to catch on — as a crucial but underutilized way to slash earth-warming greenhouse gas emissions from coal plants and other industrial facilities.

But it’s recently become a bipartisan issue in that it’s also a way to prolong the life and relevancy of aging coal plants. Coal power has steadily lost market share to natural gas and renewables in recent years — in Texas and across the United States.

Reviving the coal industry has been a focal point for President Trump, who has emphasized so-called “clean coal.” The term is an umbrella one — criticized by coal opponents who say there is no such thing — but it refers to methods that remove not only soot but also carbon dioxide.

As the climate-doubting commander-in-chief moves to dismantle Obama-era environmental regulations, some see carbon capture technology as one of the only ways to curb global warming in the coming years. 

As Texas governor, Perry also advocated for the clean coal concept, setting up a clean-coal technology council in 2002 and signing a bill with tax incentives for clean-coal plants in 2009.

But with high costs and limited incentives, carbon capture technology has been slow to catch on, with many projects across the country struggling to get off the ground.

Petra Nova stands in stark contrast to beleaguered projects like one in Kemper, Mississippi, in that it was delivered on time and on budget — a point company officials repeatedly made at Thursday’s ribbon cutting ceremony.

A small contingent of local, state and federal elected officials were in attendance, including Gov. Greg Abbott, who focused on the project’s benefits to the oil industry.

“The greenhouse gases that scientists complain is a byproduct of energy production is now being corralled by innovation in Texas,” he said. “The reviled CO2 is being captured and put to use doing what Texans know best how to do, and that is to produce even more energy from our oilfields.”

While considered a success story, Petra Nova has faced its share of challenges.

NRG began planning the project back in 2009 — Obama’s first year in office — when there were wide expectations of a carbon tax and oil prices hadn’t yet tanked. It broke ground in mid-2014 just as oil prices collapsed and casted doubt on the profitability of the project. (To ensure its viability, NRG and Nippon bought half a stake in Hilcorp’s oilfield and is using drilling proceeds to pay for it.)

Company officials say they’ll break even on the project at current oil prices — about $50 per barrel — but want to wait to see where things trend before pursing any additional projects.

Rice University professor Daniel Cohan, who tours Parish with his students every year, said Petra Nova is an important demonstration of the feasibility of carbon capture and “expanding the realm of what’s possible.” But he said whether it can be emulated is questionable.

“Right now, we don’t have any policies that put any value on carbon,” he said. NRG and Nippon are “able to get a value for their carbon because of a very unique deal they negotiated with an oilfield,” he said. “Elsewhere “it wouldn’t come close to making financial sense in the absence of a hefty carbon tax or subsidies.”

Perry, who had just returned Wednesday night from a meeting of G7 energy ministers in Rome, didn’t go into detail Thursday about what the Trump administration might do with regard to carbon capture technology. But he came off as bullish while also defending the U.S. delegation’s decision at that meeting to balk at a statement supporting the Paris climate accord because the Trump administration is still reviewing climate policy and emissions regulations.

“I think the solutions to many of the challenges that we have in the world today are displayed behind me,” he said, referring to the Petra Nova system.

Trump “knows that for us to succeed in growing our economy and improving our environment, we need energy policies that are smart and designed for the innovation era that we live in, and that was my message to my G7 colleagues,” he added. “It’s important for them to hear that the American people are telling us to promote energy policy that puts America and our allies first.”

Read the Tribune's related coverage:

• With Trump having tapped Perry to head the department of energy, here's a closer look at the energy legacy of the state's longest-serving governor. 
• Since leaving office in 2007, former Dallas Mayor Laura Miller has been championing "clean coal" technology, but these days plans for a West Texas gasification plant appear to be on life support. 

Disclosure: Rice University has been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.