Department of Energy offers conditional commitment for first loan guarantee under Advanced Fossil Energy Project
The U.S. Department of Energy offered a conditional commitment to Lake Charles Methanol, LLC this week for the first loan guarantee under the Advanced Fossil Energy Project.
The commitment guarantees loans of up to $2 billion for the construction of the world’s first methanol production facility
that will employ carbon capture technology. The facility will also be the first petroleum coke (petcoke) to methanol project
in the United States. Petcoke is a byproduct of the oil refining process.
The plant will be located in Lake Charles, Louisiana while the captured carbon will be used for enhanced oil recovery
(EOR) in Texas. The project is expected to create 1,000 construction jobs, 200 permanent jobs, and 300 EOR jobs in Texas.
“This conditional commitment represents a major milestone in the Department’s efforts to scale up carbon capture utilization and sequestration and continue American leadership in advanced fossil energy technologies,” U.S. Secretary of Energy Ernest Moniz said.
The proposed plant will produce methanol, hydrogen, and other industrial gases and chemical products. By using petcoke as feedstock and employing carbon capture, the proposed plant will reduce carbon dioxide emissions that would be released otherwise. The captured carbon dioxide will be compressed for commercial pipeline transport and transported to Texas oil fields for EOR.
“This project demonstrates how government and private enterprise can work together to support energy technologies that improve the environment while creating new jobs and economic development,” Louisiana Gov. John Bel Edwards said.
The Department of Energy will continue to monitor the project and negotiate a final agreement before officially guaranteeing the loan.
