The City of Farmington and Enchant Energy wish to respond to Claudia Risner and Rep. Abbas Akhil’s guest column regarding the upsides and downsides of adding carbon capture at the San Juan Generating Station. There are many points upon which we agree:
• San Juan Generating Station will continue power plant and coal mining jobs in a region that desperately needs high paying jobs. In addition, a successful project will maintain the tax revenues for area schools especially the Central Consolidated School District that serves students mostly from the Navajo Nation.
• The New Mexico Energy Transition Act has little to do directly with the oil and gas industry in New Mexico. The Energy Transition Act addresses electric generation in New Mexico, something the City of Farmington has a clear interest in addressing.
• The City of Farmington is working to acquire the remaining interest in the San Juan Generating Station from PNM and the plant’s other current and prior owners in 2022 and, to continue operating until 2035 and possibly beyond.
• Regarding the risk of the $1.4 billion required for carbon capture, all of this risk is on the investors in the project. The City of Farmington and the State of New Mexico bear none of this risk.
There are a few important points on which we strongly disagree:
• We disagree that the technology to be used in this project has not been successfully proven in the Petra Nova plant. This plant is a technological success according to engineers and technology providers working on the San Juan Generating Station carbon capture project as documented by a Department of Energy report filed by NRG, the owner of Petra Nova. Petra Nova has recently suspended carbon capture due to market conditions in the oil and gas industry. However, Petra Nova does not operate with the benefit of the 45Q tax credits that the U.S. Congress specifically designed to provide greater economic benefits and stability to carbon capture operation in coming years.
• We also strongly disagree with the assessment of the upsides and downsides of the project. The Energy Transition Act provisions do not eliminate the need for significant amounts of reliable and reasonably priced electricity since the use of wind and solar along with batteries is simply not ready technologically to maintain a reliable electric system at the scale needed today. During the transition to lower carbon electricity, some combination of nuclear, natural gas and coal-fired generation will be necessary.
• We disagree with the arbitrary assessment that during this transition, that coal-fired generation with carbon capture at San Juan Generating Station is somehow not worth the effort. With carbon capture, San Juan Generating Station will produce electricity that has 70% less carbon dioxide emissions than combined cycle natural gas generation and 80% less carbon dioxide emissions than gas-fired peaking generation. The economics of adding carbon capture technology is dramatically enhanced by Internal Revenue Service Section 45Q tax credits for carbon capture. These tax credits were enacted by bipartisan legislation in Washington that acknowledged the need for reliable energy with carbon capture.
San Juan Generating Station with carbon capture is an economically and technologically viable project that fully supports the aspirations of New Mexico’s Energy Transition Act.
Environmental organizations across the world are increasingly coming to the conclusion that wind, solar and batteries alone will not be enough to reduce global carbon dioxide emissions; carbon capture in many forms will be required. The San Juan Generating Station project with carbon capture is a great next step for the Four Corners region, the State of New Mexico, and by showing the way for carbon capture, the world.
Furthermore, this project is a testament to the power of American innovation. It will reinvigorate New Mexico’s economy by responsibly using an abundant energy source, it will help keep hard-working families in New Mexico, and it will save over 1,500 jobs associated with San Juan Generating.