Economics

Because of its importance to the U.S. as an alternative energy project of the future, HECA is co-funded by the U.S. Department of Energy’s Office of Fossil Energy, and administered by the National Energy Technology Laboratory. The project is supported in part by a $408 million competitive grant that was awarded to HECA in recognition of its importance in addressing the issue of climate change while providing many local and regional benefits.

The project has broad economic benefits: thousands of high quality jobs during construction; several hundred full-time jobs when fully operational; increased domestic oil production; electricity for 160,000 homes; a much needed local source of low-carbon fertilizer; new tax revenues; and other economic benefits for California and the region.

HECA’s operation will create $52 million in annual labor income and $239 million in total annual economic impact to Kern County.

While HECA will cost more to build than conventional facilities due to the additional investment and operating costs of carbon capture and storage, the plant’s additional economic benefits will make it competitive in the energy and manufacturing industries.

One major benefit is the production of a much needed local source of low-carbon fertilizer. At a time when the manufacturing industry is in decline and there is an increasing dependence on imports, HECA’s multi-purpose operation will produce about 1 million tons per year of low-carbon fertilizer, thereby increasing competition and lowering transportation costs.

In addition, the carbon dioxide that is captured will allow enhanced oil recovery (EOR) at a nearby oil field, thereby enabling the production of an additional 5 million barrels of domestic oil per year.

Taken together, these benefits will generate additional tax revenues for local and state governments, enhancing California’s energy supply and significantly reduce dependence on foreign imports.