Legalectric

Here’s a real DOH! which could have been avoided, but DOE through several administrations keep throwing good money after bad for carbon capture and storage pipedream:

The ill-fated Petra Nova CCS project: NRG Energy throws in the towel

NRG’s Petra Nova project $$$:

Short version? FAIL! From the article:

Following this FAIL, the understatement of the century, from the article:

Yet CCS is a big part of the latest federal energy efforts. It’s also a huge boondoggle for not just outfits like NRC, but for certain “non-profits” like Great Plains Institute:

And check out these salaries:

Great Plains Institute helped push coal gasification, for extreme amounts of money…

Great Plains Institute – is Joyce getting their $$ worth?

January 18th, 2007

… but that pales in comparison for the dollars for this recent round of “carbon capture” promotional funding. Unreal…

Once more with feeling — carbon capture is not real, is not workable, is a waste of $$ and effort.

Summit Carbon Solutions, LLC is looking to build billions in pipelines, ostensibly to ship CO2 out of state.

Here’s another map, from the “Presentation-Materials” below — look how far into Minnesota it goes from the south, and even from the west:

Yeah, right. Great idea… NOT! Whether it gets built or not, for sure they’re working to get federal grants and loans! Here’s their plan, the handout and presentation from recent Iowa meetings, and after the Iowa meetings, it’s open season, they can file a project proposal with the Iowa Utilities Board at any time:

I fired off this missive to the Iowa Utilities Board:

To look at the IUB’s Summit Carbon Solutions pipeline docket, go HERE, and in that press release, click on the link for Docket No. HLP-2021-0001 and click on the left side the “FILINGS” and there you’ll find a LOT to read! These two studies are among the filings — issues and risks are not new, but here’s a few new studies, newer than what we had back in the Mesaba Project days:

I cannot believe that anyone would regard this as a feasible concept, but what with the millions being shoveled at toadies like Great Plains Institute to promote CO2 capture and storage (nevermind it just isn’t a thing), it’s no surprise:

I guess they can’t read:

We learned a LOT about CO2 capture and storage during the years of Excelsior Energy’s Mesaba Project. CO2 capture is absurdly expensive to capture even a little CO2, and most cannot be captured. And then what? For the Mesaba project, the “plan” they offered captured a tiny amount and then took it to the plant gate — and then what? Who knows, nothing further was disclosed other than a map showing allegedly suitable sites, but no, there was nothing real. This map:

Their plan? Read it and guffaw, snort, hoot and holler:

And Excelsior Energy’s press release:

And check this, about CO2 leaks:

Some other info:

Now remember, when we’re talking about Carbon Capture and Sequestration, there are three distinct parts:

1) Capture (this has been focus of industry studies)

2) Transport

– $60k/inch/mile = $1,080,000/mi for 18″ pipe

– Repressurization stations along the way

3) Sequestration ($3-10/ton, per Sally M. Benson)

And this is all old news:

CO2 pipelines? It’s a red herring!

Do we really need to go through this again??

And some more old news:

Economic Modeling of Carbon Capture and Sequestration Technology

Hydro & Geological Monitoring of CO2 Sequestration Pilot

Electricity without CO2 – Assessing the Costs of CO2 Capture and Sequestration

Geologic Carbon Dioxide Sequestration – Site Evaluation to Implementaion

Yes, we know it doesn’t work. Learned that in stopping the Mesaba Project:

IGCC – Pipedreams of Green and Clean

There were IGCC – coal gasification – plants proposed all over the country, and they fell, one by one.  Some not fast enough, the Kemper project, in today’s Guardian, is an example of protracted misrepresentations to keep that money coming in to fund the scam:

The best thing that came from the failed Mesaba Project was the information about the technology that hadn’t been disclosed before.  We were able to use this information all over the country to stop these plants, and stop this one before Minnesotans were utterly and hopelessly screwed as they were in Mississippi with Southern’s Kemper and Indiana with Duke’s Edwardsport. Read the rest of this entry »

After this election, there are so many things to be concerned about, so many reasons to be utterly horrified… a Muslim database, Trump’s fraud trial to begin November 28th, promise of mass deportations, sharp increase in hate crimes, assaults and threats on the street and in the schools (and online, oh my!).  Trump’s “100 Days” plan was out in October, and has many points, full of words to decode, including a ‘clean coal’ reference, showing he’s clueless, just clueless:

Trump’s Contract with the American voter — the First 100 Days

In the 2nd and 3rd debate, Trump used those two words that have deep meaning to me, “clean coal,” because of Excelsior Energy’s Mesaba Project here in Minnesota, and because of the NRG proposed IGCC plant in Delaware, both of which were defeated after a long protracted fight.  There is no such thing as ‘clean coal.”

Coal gasification is one thing that my coal-plant designing Mechanical Engineer father and I had some bonding moments over, going over EPRI coal gasification reports from the 80s and the Mesaba application…  And I had the pleasure of meeting and working alongside my father’s boss’s son, who is also an engineer, formerly with NSP/Xcel, who knew what a bad idea coal gasification is.  Oh yeah, we who fought these projects have learned a lot about coal gasification, “carbon capture and storage,” and will not go there again (see Legalectric and CAMP – Citizens Against the Mesaba Project sites for more info).  We know it doesn’t work.  And experience with the few projects that did go forward, what a mess, cost overruns beyond the wildest SWAG estimate, inability to get the plant running…  Trump, don’t even think about it:

IGCC – Pipedreams of Green & Clean

IGCC, coal gasification, is nothing new.  And despite its long history, it’s a history of failure, failure to live up to promises, failure to operate as a workable technology, and failure to produce electricity at a marketable cost, failure to produce electricity at all!  On top of that, it’s often touted as being available with “CO2 capture and storage” which it is not.  That’s a flat out lie.  Check this old Legalectric post:

More on Carbon Capture Pipedream

A key to this promotion is massive subsidies from state and federal sources, and selection of locations desperate for economic jump-start, so desperate that they’ll bite on a project this absurd, places like Minnesota’s Iron Range, or southern Indiana, or Mississippi.  The financing scam was put together at Harvard, and this blueprint has been used for all of these IGCC projects:

Harvard I – 3 Party Covenant

That, coupled with massive payments to “environmental” organizations to promote coal gasification, and they were off to the races.

Joyce Foundation PROMOTES coal gasification

Doris Duke Charitable Foundation & IGCC – WHY???

VP-elect Mike Pence should know all about coal gasification, he’s from Indiana.  Indiana is coal generation central, and has had a couple of IGCC projects planned, construction started, and built.  Indiana’s Wabash Valley plant is a perfect example, a small IGCC plant that was built, and after it was “completed,” took 22 on-site engineers to keep it running, now and then, at a greatly reduced capacity.

Wabash River Final Technical Report (it was “routinely” in violation of its water permit for selenium, cyanide and arsenic)

When they tried to sell the Wabash Valley plant recently, of course no one wanted it:

Wabash Valley coal gasification plant closing!

And another Indiana plant, with huge cost overruns that never started operating:

Rockport coal gasification plant dies – Indianapolis Star

Coal News: $2.8B coal gasification plant in Indiana canceled

And then there’s Edwardsport IGCC plant, also in Indiana, what a disaster:

Edwardsport plant not at promised capacity

Settlement won’t be the last word on controversial Indiana coal plant

Duke Energy Edwardsport Plant Settlement Expanded

The original settlement in September was a response to the plant’s rising operating costs while failing to meet performance expectations.

In the new agreement, Duke Energy agrees not to charge customers for $87.5 million of the operating costs of the Edwardsport plant, $2.5 million more than the original agreement.

And note that problems with Edwardsport tie in to similar problems with the Kemper IGCC plant in Mississippi:

Indiana ‘cease fire’ could provide a model for Mississippi regulators

Yes, in Mississippi, the Kemper IGCC plant is proving to be a problem, and yes, folks, note the Obama promotion of IGCC — after all, Obama is from Illinois, a coal state, and had lots of support from coal lobbyists.  Check this detailed NY Times article:

Piles of Dirty Secrets Behind a Model “Clean Coal’ project: Mississippi project, a centerpiece of President Obama’s climate plan, has been plagued by problems that managers tried to conceal, and by cost overruns and questions of who will pay.

The sense of hope is fading fast, however. The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational.

The plant and its owner, Southern Company, are the focus of a Securities and Exchange Commission investigation, and ratepayers, alleging fraud, are suing the company. Members of Congress have described the project as more boondoggle than boon. The mismanagement is particularly egregious, they say, given the urgent need to rein in the largest source of dangerous emissions around the world: coal plants.

Trump, just don’t.

For years and years, I represented mncoalgasplant.com opposing this wretched boondoggle of a pipe-dream of “clean” and “green.”

IGCC – Pipedreams of Green and Clean

The project lingers on, on life-support, and pulling the plug is long overdue.

The good news is that the Duluth News Tribune is finally paying attention, and looking into the financial irregularities.  Duluth News articles are here, and next will be some responses.

It started with an article in Duluth News Tribune, first in a series, the second below:

Published August 21, 2011, 09:40 AM

 

Millions in public money spent, but Iron Range power plant still just a dream

DNT investigation, part 1 of 2: When Excelsior Energy launched its ambitious, clean energy project in 2001, the company touted it as a way to bring much-needed jobs and investment to the Iron Range. But after nearly a decade and receiving more than $40 million in public money, Excelsior has little to show.

By: Peter Passi, Duluth News Tribune

When Excelsior Energy launched its ambitious, clean energy project in 2001, the company touted it as a way to bring much-needed jobs and investment to the Iron Range at a time when local residents were still stinging from the closure of LTV Steel Mining Co. The innovative, state-of-the-art coal gasification plant also would enable the nation to more effectively tap domestic coal reserves with minimal harm to the environment.

But after nearly a decade and receiving more than $40 million in public money, Excelsior has little to show. While significant work has gone into developing site plans and engineering work and garnering permits, the company has yet to move a shovelful of dirt to build its would-be 2,000-megawatt, $2.1 billion power plant.

And despite receiving virtually all of its backing from the public trough, the company’s spending records, including its officers’ paychecks, remain under wraps.

“At the end of the day, this is a project that has not hired one full-time worker on the Iron Range. Only lawyers, lobbyists and professional meeting attenders have gotten jobs,” said Rep. Tom Anzelc, D-Balsam Township, the only Iron Range legislator who has opposed the project. “And it has all been financed by the public.”

Behind the delay

Heading Excelsior are two seasoned energy professionals: Tom Micheletti, a Hibbing native and former Northern States Power executive, and his wife, Julie Jorgensen, former CEO of CogenAmerica and VP of NRG Energy Inc.

Supporting them is another Iron Range legislator, Sen. Tom Bakk, D-Cook, who argues that cleaner ways of turning abundant domestic supplies of coal into electricity are greatly needed.

Bakk blames the development’s delay on Xcel Energy’s refusal to do business with Excelsior, with the established energy company intimating that power from the new plant could be too expensive and could drive up customer rates.

“There was clear legislative intent that Xcel would purchase their power, but Xcel has been unwilling to enter an agreement,” Bakk said. “Without an out-take agreement, the project has not been bankable.”

Excelsior has made repeated efforts to persuade the Minnesota Public Utilities Commission to compel Xcel to buy its power, but has so far been unsuccessful.

Micheletti, who serves jointly with his wife as Excelsior Energy’s president and CEO, also said the project has suffered from unfortunate timing and the effects of a recession.

“Hardly anything is being built right now,” said Micheletti. “Load growth has come to a standstill, so there’s not a great deal of need for new facilities right now.”

Regulatory uncertainties facing the power industry have further complicated the plant’s outlook, Micheletti said, though he added that tougher regulation could help the project if it leads to the shutdown of older, dirtier coal-burning power plants or a shift away from nuclear energy.

Yet Micheletti said he’s stopped making predictions as to when Excelsior will build its first plant.

“It bothers me that, given the current economic situation, we’re not where we thought we’d be,” he said. “By now, 3,000 people would be working on the site if things had gone the way we thought.”

Public funding

From the start, Excelsior has relied primarily on public support, according to a 2008 audit by the Minnesota Office of the Legislative Auditor. The agency noted that excluding a small sum of private seed money, “the company initially relied mainly on Iron Range Resources loans for many basic costs it needed to operate, such as office space, desks and computers.”

In 2001, Excelsior borrowed $1.5 million from the Iron Range Resources and Rehabilitation Board. Additional loans have brought that company’s IRRRB debt to $9.5 million

In August 2010, Excelsior was to begin repayment of its IRRRB loans, but the agency extended the timeline to 2017, in light of project delays.

The company also received $10 million in state aid through the Minnesota Public Utility Commission’s Renewable Development Fund, despite objections from environmental groups about spending such funds on a plant designed to run on fossil fuel.

The U.S. Department of Energy contributed another $22 million, intended to cover half of the preliminary design costs.

The only public record of private equity in Excelsior occurred at its inception, when Micheletti and Jorgensen made a combined investment of $60,000.

Shuttered windows

Tracing where all Excelsior’s public money went and how it has been used is not easily accomplished, particularly after state lawmakers voted to restrict public access to Excelsior’s financial statements. Before 2008, reports the company is required to submit to the IRRRB as part of its loan agreement had been publicly available.

But that year, the Minnesota Legislature changed the state law, with a conference committee inserting language into an omnibus tax bill to classify financial disclosures made to the IRRRB.

Bakk, a member of that committee and also of the IRRRB’s board of directors, told the News Tribune he had no recollection of inserting the language and suggested the IRRRB itself may have requested the change.

Sheryl Kochevar, an IRRRB spokeswoman, confirmed that, justifying it to say the agency’s aid recipients should have “privacy protections that are similar to those a business would expect and receive when it is dealing with a bank.”

Kochevar said the IRRRB must approve all its loans and investments in a public meeting. After that, however, she said the agency will not disclose “nonpublic data about the business that it uses to monitor and protect its loan to or investment in the business.”

Bakk defended the IRRRB’s rationale, saying that if the agency required total transparency of the companies it assists, some might shun its aid, causing the Range to miss out on potential economic development opportunities.

But there is nothing stopping Excelsior itself from disclosing what it does with the public money it receives. Micheletti, however, refused to release that information.

“We do not and have never disclosed confidential private financial information, so that subject is off limits,” he told the News Tribune.

Charlotte Neigh, co-chair of Citizens Against the Mesaba Project, a group opposed to the plant, said the Legislature’s secrecy provision came on the heels of a complaint her group made about some of Excelsior’s uses of IRRRB funds that touched off an examination by the Office of the Legislative Auditor.

The auditors found Excelsior had indeed used some IRRRB loan funds for inappropriate purposes, including lobbying. The company subsequently was required to repay $40,161.

Anzelc contends that any entity that has received so much public assistance ought to be more forthright about how it has spent taxpayer money.

“I believe they should tell us exactly what they’ve done with all the public dollars they have secured,” he said.

Limited view

Even when Excelsior’s financial reports to the IRRRB were still public, they sometimes provided scant detail.

A 2004 letter to the IRRRB Board of Directors from Freeberg & Freeberg Certified Public Accountants acknowledged gaps in Excelsior’s reporting.

“Management has elected to omit substantially all of the disclosures and the statements of cash flows and retained earnings required by generally accepted accounting principles,” the report said.

Still, the reports provided a limited view into how the company was spending its funds. As of the end of 2006 — the last year for which financial reports are public — Excelsior had spent $9.6 million on engineering and site development, $8.2 million on permits and regulatory work, $6.9 million on commercial, financial and administrative services and $7.9 million on in-house staff and consulting expenses since the project’s inception.

Some of these expenses were in the form of unpaid bills to be settled at a later date. A significant portion of that debt was owed to the husband-and-wife team at Excelsior’s core.

State funds from the IRRRB and the Renewable Development Fund could not be used to compensate Micheletti and Jorgensen. Even though they could not collect paychecks for the first several years of Excelsior’s existence, Micheletti’s and Jorgensen’s salaries were carried on the company’s books with the understanding that payments would be made when appropriate funds became available.

According to records, in 2001, the two drew a combined $125,000 in deferred pay. In August 2002, the deferred annual salary of each was increased to $250,000, or $500,000 for the pair. In 2003, they each received another $50,000 raise, bringing their combined annual pay to $600,000, where it remained through 2006, at the last time of public disclosure.

The first indication that Excelsior actually cut paychecks for Micheletti and Jorgensen can be found in 2006, when Department of Energy funds became available for the project. As of 2005, Excelsior owed the pair $2.49 million jointly. In 2006, that debt was reduced by $600,000.

Micheletti’s and Jorgensen’s deferred annual salaries totaled $600,000 each of the previous three years. And unless the co-presidents took a cut, Excelsior actually would have had to pay them $1.2 million in 2006 to reduce their total deferred pay by $600,000 in a single year.

How much more pay Micheletti and Jorgensen have received since 2006 has not been publicly disclosed.

Micheletti refused the News Tribune’s request to disclose how much Excelsior has paid its officers, saying, “As I have indicated to you many times before, our company, like all others, does not disclose confidential information, including confidential financial information.”

 

Part II of the Duluth News Tribune series on Excelsior Energy:

Published August 22, 2011, 12:30 AM

Iron Range energy project seeks lifeline in more funding, new fuel source

Despite receiving more than $40 million in federal and state government money, Excelsior Energy risks running out of gas if it cannot attract additional investment from the public or private sector soon.

By: Peter Passi, Duluth News Tribune

* EARLIER: Millions in public money spent, but Iron Range power plant still just a dream

Despite receiving more than $40 million in federal and state government money, Excelsior Energy risks running out of gas if it cannot attract additional investment from the public or private sector soon.

Gone are state funds, including:

# About $9.5 million in loans it received from the Iron Range Resources and Rehabilitation Board, and

# $10 million from the Minnesota Renewable Development Fund.

Soon, Excelsior will burn through the more than $22 million in federal funding the Department of Energy earmarked to help develop its clean coal project on the Iron Range, according to financial records obtained through the Freedom of Information Act and analyzed by the News Tribune.

Those records show that as of Sept. 30, 2010, Excelsior had only about $1.9 million in unobligated DOE funds still available. The company had already spent more than 90 percent of the federal funding approved for project development.

And at what was then the company’s expenditure rate — consuming an average of $418,000 in grant funding per quarter in 2010 — Excelsior would exhaust the last of its federal aid before the end of this calendar year.

Tom Micheletti, Excelsior’s co-president and CEO, refused to discuss how much money the company has left or where it will turn next. Yet his confidence remained intact.

“We’ve got staying power to see our way through this,” he said.

Rep. Tom Anzelc, D-Balsam Township, said he expects Excelsior will turn again to the IRRRB for more support. But IRRRB Commissioner Tony Sertich said there have been no discussions about providing aid to Excelsior beyond the loans that it already has received.

“I don’t anticipate any further request from them,” he said. “We’re watching to see what happens next, just like everyone else.”

Refueling

Unable to move ahead with plans to build a $2.1 billion power plant that would run on gasified coal, Excelsior received authorization from the Minnesota Legislature this past session to proceed initially with a plant fueled by natural gas.

Sen. Tom Bakk, D-Cook, supported Excelsior’s request.

“I think that if we allow Excelsior to start as a natural gas plant, it substantially increases the chance that it (the coal plant) will be built,” he said.

Bakk noted that a natural gas-fueled plant would rely on pre-existing rather than relatively untested technology.

“There’s much less risk from an investor standpoint,” he said.

Anzelc was the only Iron Range legislator to oppose the idea of allowing Excelsior to shift gears and build a natural gas plant instead of one running on gasified coal. He sees the change of plans as a last-ditch effort to throw Excelsior a lifeline.

“The majority of the Range delegation and the governor believe that this is the only way to get any of the $9.5 million in IRRRB funds back. You need to have an actual project that has permits and is constructed. You need a real company that makes a profit,” he said.

Nevertheless, as hard as it may be to accept the loss, Anzelc contends that walking away from Excelsior is the responsible thing to do.

At present, natural gas prices are comparatively low, making it a competitive fuel for power generation, said Julie Jorgensen, Excelsior’s co-president and CEO. Still, Excelsior needs to consider the long-term price outlook for both gas and coal, and Micheletti said the company is weighing its options.

“Do we go slow on one and faster with the other or vice-versa?” he asked. “Or do we proceed with both at once?”

Micheletti estimates a couple of 600-megawatt natural gas-powered units could be built for about $900 million. That’s less than half the anticipated cost of Excelsior’s proposed gasified coal plant. Also, permits for natural gas-fired generators are typically easier to obtain than for coal-burning plants.

One roadblock is that Department of Energy money earmarked for “clean coal” technology probably could not be used to help develop a natural gas plant, Micheletti said. Regardless, he said, Excelsior is in a unique position to push a power plant along quickly.

“Right now, we have the only viable new site for an energy plant in the Midwest because of all the work we’ve done,” he said.

But Anzelc said Excelsior still lacks one essential: a customer.

“To my knowledge, no on in the power business is supportive of this project,” he said.

Search for customers

While Micheletti said he could not discuss specifics because of confidentiality concerns, he said Excelsior is in active talks with potential customers. He said the company will push ahead with a project only when markets justify the investment.

“A lot of companies went bankrupt building on spec. We’re not going to build without a customer,” he said.

Pat Mullen, Minnesota Power’s vice president of marketing and public affairs, isn’t surprised that Excelsior is looking at alternatives to its plan for a gasified coal plant.

“Their original project was way too expensive, and it didn’t get any traction,” he said. “We didn’t want it and neither did Xcel.”

Xcel and Minnesota Power objected to the project, warning that it would drive up their customers’ rates.

Excelsior sought to compel Xcel to buy power from its plant through a power purchase agreement, but the Public Utilities Commission refused.

Even the revamped natural gas plant plan could be a tough sell, however.

Minnesota Power spokeswoman Amy Rutledge said her company has been diversifying its energy portfolio to meet a state mandate that 25 percent of its power come from renewable sources by 2025. The company recently signed a deal to purchase another 250 megawatts of power from Manitoba Hydro in 2020. But new fossil fuel energy is not in Minnesota Power’s plans.

“We’ve looked at the energy needs of our customers,” Rutledge said, “and it is clear we have no need for additional power from Excelsior.”

Xcel Energy has plans to retire two coal-burning units at its Black Dog plant in Burnsville, Minn., and replace them with natural gas units. To obtain permits for that project, the company was required to seek alternative proposals to supply 435 megawatts of power by 2016 or 2017.

But the July deadline has come and gone, and Patti Nystuen, an Xcel spokeswoman, said Excelsior did not submit a proposal and Xcel anticipates no need for additional generation.

Minnesota Power’s Mullen described what he considers “a flat market” for power generation,

But he’s not counting Excelsior out.

“You have to give them credit for their tenacity,” Mullen said.