Dive Brief:

• The U.S. Department of Energy has conditionally earmarked $2 billion in loan guarantees to Lake Charles Methanol LLC, for development of the world’s first methanol production facility to employ carbon capture technology, the Washington Post reports. 
• Located in Louisiana, the methanol plant would produce industrial gasses as well as captured carbon for use in enhanced oil recovery (EOR) in Texas.
• The federal government has shown an increasing interest in carbon capture technology; the Lake Charles plant is the first loan guarantee made under the DOE's Advanced Fossil Energy Project solicitation.

Dive Insight:

Despite the shift towards renewable energy and carbon-free technologies, the federal government is continuing to show keen interest in technologies allowing for the capture and storage of carbon. And increasingly, underground storage is the direction technologies are moving, particularly when paired with other uses for carbon dioxide.

The "conditional commitment" is a major step for DOE, according to U.S. Secretary of Energy Ernest Moniz. The agency's Loan Programs Office has received more than 70 applications to its current solicitations, he said, for almost $50 billion in loans and loan guarantees. Support from the government can allow projects to "leverage additional private dollars for major infrastructure projects," he said in a statement, ultimately  creating jobs and generating cleaner energy.

The Lake Charles plant would produce methanol, hydrogen, and other industrial gases and chemical products. CO2 captured from a petcoke gasification plant will be compressed for commercial pipeline transport, DOE said, and transported to oil fields in Texas. The project is expected to result in sequestration of 4.2 million metric tons of carbon dioxide annually, and reduces greenhouse gas emissions by 36% compared to typical methanol facilities.

Petcoke is a byproduct from oil refining, and methanol is widely-used used to produce paints and plastics, furniture and more. Overall, the project will capture almost 80% of all carbon dioxide produced by the facility.

Louisiana Gov. John Bel Edwards (D) said the project shows his state "has a promising future in clean energy project," and proves government and private enterprise can work together to "support energy technologies that improve the environment while creating new jobs and economic development.”

Smaller in scale, in November DOE announced it would direct $44 million towards research into carbon storage, part of the agency's initiative to reduce carbon dioxide emissions from fossil fuels. The agency selected more than a dozen storage projects to receive the funds, aiming to address research gaps that get in the way fo carbon capture development.