Considering Congress’ approval of the Inflation Reduction Act last year with its emphasis on non-polluting jet fuel and aviation fuel, Nacero Inc. has switched gears from using natural gas to make clean gasoline to powering airplanes from the same source.
Nacero Chief Operating Officer Hal Bouknight said from Houston Monday that the $7-billion to $10-billion plant will still be at the oilfield ghost town of Penwell 15 miles west of Odessa off I-20.
Bouknight said there were two reasons for the change. “No. 1, we did a market survey and clean gasoline wasn’t on anybody’s radar,” he said.
“No. 2, the IRA bill provides incentives for hydrogen vehicles, electric vehicles and low carbon or sustainable jet fuel and aviation fuel.
“Incentives increase the profitability of your project.”
Asked if his company had been having trouble getting the necessary financing to make clean gasoline, Bouknight said, “No, it was a business decision.
“The model has improved by making this switch.”
Bouknight said the project will still require 3,500 construction workers who will be hired from throughout Texas and New Mexico.
He said Nacero has bought a section of land on 640 acres at Penwell and has options on three more sections.
Bouknight said his company has not entirely given up on its clean gasoline plan and may return to it at some point in the future and that it has developed the technology to manufacture that as well as low carbon jet fuel and aviation fuel.
He said the plan is to build six “trains,” or sets of equipment to produce the fuel, and to power the plant with renewable energy under the contract it signed last year with NextEra Energy Resources of Juno Beach, Fla., which has more than 20 wind and solar farms around the state.
Bouknight said the clean permit that was issued last year by the Texas Commission on Environmental Quality will remain applicable.
Nacero Community Relations Director Wesley Burnett of Odessa said Monday that the plant will need a billion cubic feet of natural gas per day.
Acknowledging that the proposal had been met with local skepticism because the past years’ clean coal gassification projects of FutureGen and Summit Power didn’t pan out, Burnett said, “We have had to overcome some of that because of those particular projects and we will get started with the construction as soon as we can.
“We want this for Ector County and Odessa and for all of Texas and the nation.”
Burnett said the clean gasoline plan was to make 100,000 barrels a day, but the production of clean jet fuel and aviation fuel here will be less than that. “It will be a significant part of the market,” he said.
Burnett said the project’s sizable funding will be a combination of federal money and commercial sources.
“We will have a lot of private equity in this project,” he said. “A big focus of our government and the airline industry is to get this going and we know how to do it.”
