What’s Going On?
Across the nation, utilities are ditching expensive, dirty coal and shifting towards a cleaner, more affordable portfolio. Now, the San Juan Generating Station is finally following suit, and is scheduled to shut down in 2022. After decades of pollution and adverse health impacts levied by the plant onto workers and local communities, the shuttering of San Juan would finally mean cleaner, healthier air for our communities
Unfortunately, that future is at risk. A new company, Enchant Energy, wants to keep San Juan open for business- a move that would both continue a legacy of contamination and prevent New Mexico communities from participating in energy transition.
A Half-Baked Scheme
In early 2019, inexperienced duo Jason Selch and Lawrence Heller founded the company Enchant Energy Corporation (Enchant)and convinced the City of Farmington that they could keep San Juan Generating Station open with speculative carbon capture technology. Enchant is effectively proposing to dig up sequestered carbon in coal seams, only to burn it and then attempt to (less efficiently) recapture and rebury it. It’s not hard to see how the environment, and our community, loses with the project.
Right now, the San Juan Generating Station is scheduled to shut down in 2022. Keeping the plant open means continuing a legacy of contamination. After decades of pollution and adverse health impacts levied onto local communities and workers, the shuttering of San Juan would finally mean cleaner, healthier air for our communities. Keeping the plant open means continuing this legacy of contamination with what would effectively be nothing more than a carbon dioxide manufacturing facility.
It is time for the Four Corners to transition away from its historic dependence on fossil fuels and move towards a more sustainable energy economy so we can protect the natural resources of the region and preserve the health of its residents for decades to come.
False Hope for the Community
The proposal by Enchant disingenuously peddles unproven technology and sells the deceitful promise of a resuscitated coal economy in the Four Corners. Our communities are presented with a short window for transition and, at a time when our elected officials should be focusing on realistic and sustainable options for the future, the opportunity costs of blindly following the status quo are immense.
Northwest New Mexico is missing out on the chance to participate in energy transition because communities have been blinded by false hope of jobs and economic boon being promised by Enchant. Instead of being strung along by empty promises from Enchant, our community and its workers deserve the truth. And the truth is that Enchant Energy still lacks financing for its project, lacks power purchase agreements, lacks a buyer for the CO2 it plans to produce, lacks any guarantee of transmission or water rights, and has yet to deliver any sort of concrete plan that involves a realistic timeline.
A project of this scale has never been completed. There are only two other coal plants retrofitted with carbon capture technology in the world, and San Juan Generating Station produces more than 800 MW of power than those other two retrofitted plants.
Utilities all over the nation and region are committing to divesting from coal. California, one of the largest markets in the West, left San Juan Generating Station years ago for just this reason. Enchant Energy has no customers for the electricity it produces, and it’s unlikely that it will be able to find buyers for its power. Enchant’s only customer is themselves for the parasitic load (almost 30%) needed to run the equipment to capture CO2 at the plant.
Enchant doesn’t own the transmission capacity necessary to sell the power. Public Service Company of New Mexico (PNM) owns the transmission lines associated with San Juan Generating Station and has hinted that they plan on retaining ownership.
The current owners of San Juan Generating Station have not approved any transfer of the plant’s ownership to Enchant. Last time ownership was renegotiated, it was a multi-year process.
Enchant still has yet to find committed buyer for the CO2 they produce. There are countless sources for CO2 that are not speculative and will likely be lower cost, leaving Enchant with a product they won’t be able to sell.
Enchant lacks the financing for their scheme. The project will cost billions of dollars and hinges on the successful reception of federal 45Q tax credits, which only are awarded post-production. That means Enchant will have to ask investors to dole out billions of dollars to fund a project that is still extremely speculative.
No Project Design
Project design remains in flux. The original intent was to pipeline CO2 derived from San Juan Generating Station to the Permian Basin for enhanced oil recovery but Enchant has now shifted to consideration of carbon sequestration. The project will effectively dig up coal (carbon), burn the coal to create CO2 and then attempt to capture the CO2 in order to rebury it in the ground.
The design is still undefined and Enchant has yet to enter the vast permitting process that will be required for this massive project.
The Bottom Line
Enchant’s scheme to retrofit San Juan Generating Station with carbon capture is a loss, loss, loss.
It’s a loss for the environment, a loss for our community & a loss for all of the workers and entities being promised jobs and financial benefits by the project. SJCA and our partners have been actively combating the disinformation surrounding this project since its inception so that Northwest New Mexico can meaningfully participate in a just transition towards a renewable energy economy.
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