US Energy Department offers $2B loan to Lake Charles Methanol
WASHINGTON — The US Department of Energy offered a conditional commitment to guarantee loans of up to $2 billion to Lake Charles Methanol, LLC to construct the world’s first methanol production facility to employ carbon capture technology in Lake Charles, Louisiana. The captured carbon would be utilized for enhanced oil recovery (EOR) in Texas. This project would represent the first loan guarantee made under the Advanced Fossil Energy Project solicitation issued by the Department’s Loan Programs Office (LPO).
If constructed, the project would also be the first petroleum coke (petcoke) to methanol facility in the US. According to the DOE, by using petcoke as the feedstock and employing carbon capture at the project, the proposed project will reduce emissions of carbon dioxide that would otherwise be released.
“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,” said US Secretary of Energy Ernest Moniz. “The Department’s Loan Programs Office has received more than 70 applications to its current solicitations for almost $50 billion in loans and loan guarantees, which can allow projects to leverage additional private dollars for major infrastructure projects that will create thousands of good-paying American jobs and generate cleaner energy in the future.”
Overall, Lake Charles Methanol anticipates a $3.8 billion infrastructure investment for the project and create an expected 1,000 construction jobs and 200 permanent jobs in Louisiana. The project will also create roughly 300 jobs in Texas for EOR activities.
Gov. John Bel Edwards of the State of Louisiana said, “DOE’s decision to issue a conditional commitment of up to $2 billion to Lake Charles Methanol proves that Louisiana is a great place to do business and that Louisiana has a promising future in clean energy projects. 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.”
The proposed plant will produce methanol, hydrogen, and other industrial gases and chemical products. The carbon dioxide captured from the petcoke gasification plant will be compressed for commercial pipeline transport. The captured carbon dioxide will be transported to oil fields in Texas for EOR, resulting in sequestration of 4.2 million metric tons of carbon dioxide annually.
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