Sinopec Investing In Texas Clean Energy

http://online.wsj.com/article/SB10000872396390444042704577589092360345550.html?mod=WSJ_hp_LEFTWhatsNewsCollection

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"An invasion of armies can be resisted, but not an invasion of ideas." (Victor Hugo)
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According to wsj.com, a Chinese group that includes Sinopec is in advanced talks to put up to $1 billion in a Texas clean energy project. This would be one of the biggest investments by a Chinese company in the U.S. power sector. Sinopec would do this (together with Chinese banks) by acquiring an equity stake in and provide financing to the roughly $2.5 billion Texas Energy Project. The project has already secured $450 million in grants from the U.S. Department of Energy, in addition to tax benefits. It also has the necessary permits and contracts, including a contract with San Antonio to buy its electricity for 25 years.

This project is about sequestering carbon dioxide from coal plants. As the coal is burned, carbon dioxide is trapped through one of several processes. Then it is stored underground and piped for use in oil recovery and other industrial uses.

Sinopec is looking to build "favor" in the U.S. as it aggressively acquires energy reserves. At the same time, Chinese oil-industry officials "...remain wary that Chinese energy investment in the U.S. will be criticized, especially following a deal by Sinopec rival Cnooc Ltd for Canada's Nexen inc. that includes some Gulf of Mexico properties."

To me, this is good news on several fronts. I have the impression that the U.S. EPA is on a mission to shut down coal-fired power plants in Texas. Elizabeth Souder pointed out in a July Dallas Morning News article that Luminant is being accused by the EPA of violating the Clean Air Act at two of the company's coal-fired power plants. Now, I'm just guessing that those Washington bureaucrats don't have to worry about "interrupted power" here in Texas when it's 100 degrees. But we do.

Fortunately, a different U.S. government department has come up with a way to support a Texas project to reduce carbon emissions: The Texas Energy Project. And China has come up with a way to spend money on that project in order to show good intent as its companies look to buy oil reserves.

Elizabeth Souder went on to point out in another article that same day that Panda Power managed to get "rare financing" for a natural gas-fired power plant that will ease concerns about the "lights going out in Texas." According to Souder, "The company expects the plant to begin making electricity in 2014, just as Texas' tight power supply problem becomes acute. State electricity regulators included the Panda plant in forecasts of future power supply, but it is comforting for a planned plant to actually get financing."

Maybe there's hope for coal plants and electric power in Texas because gas and oil are plentiful again.