May 5 - McClatchy-Tribune Regional News - Dave Montgomery Fort Worth Star-Telegram, Texas


The House tentatively approved legislation Monday by Rep. Phil King, R-Weatherford to grant up to $300 million in tax breaks to companies developing clean-coal technology to generate electricity.

King said HB 469 would make Texas a pioneer in the development of clean-coal power generation, with companies agreeing to capture at least 70 percent of the carbon dioxide they produce.

The first three completed qualifying plants would each be eligible for tax credits of up to $100 million. But they wouldn't be able to claim the credits until after the plants began operation and met the requirements for capturing carbon dioxide.

Environmentalists, while still opposed to the use of coal to generate electricity, say the clean-coal technology is far superior to old-style coal-fired plants that emit pollutants into the atmosphere.

"If we're going to do this, let's make sure it's the cleanest possible," said Cyrus Reed, conservation director of the Lone Star chapter of the Sierra Club.

Rep. Sylvester Turner, D-Houston, expressed support of clean-coal technology but assailed the proposed tax credits as "big government helping big business." Granting each company $100 million in credits, he said, would further reduce revenue from the state's underperforming business tax.

King countered that any loss of revenue would be quickly offset by economic gains from clean-coal technology. The plants, he said, would be multibillion-dollar operations with the potential to add economic benefits to the state.

Captured carbon dioxide would be diverted into underground formations and could be used to help extract hard-to-get oil from older wells. At least 4 billion to 5 billion barrels of oil could be recovered by injecting captured carbon dioxide, according to the Bureau of Economic Geology at the University of Texas at Austin.

The bill would extend tax incentives to producers that use the captured carbon dioxide for enhanced oil recovery.

Although environmentalists helped to influence modifications in the bill, they aren't completely happy. Some groups say that technology exists to capture at least 90 percent of carbon dioxide emissions and contend that a 70 percent standard is too low.

Several plants are hoping to jump-start clean-coal technology in Texas. Summit Power Group, based in Washington state, is developing a 600-acre site near Odessa in West Texas that it hopes to make operational by early 2014. Tenaska Inc., headquartered in Nebraska, has acquired 2,400 acres near Sweetwater for a planned clean-coal site.

Other companies exploring plants include Hunton Energy, NRG Energy and ConocoPhillips, all of Houston.

The bill, as amended, would embrace several types of clean-coal technology, including the use of gasified coal and other methods that are less acceptable to environmentalists.

DAVE MONTGOMERY, 512-476-4294

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