08-08-2022

Southern Rock Energy proposes next generation refinery

A “next generation” oil refinery powered by blue hydrogen could be developed in a small town outside Victoria, according to an application for a tax break from Bloomington ISD.

The $5.6 billion project proposed by El Campo-based Prairie Energy Partners, a subsidiary of Southern Rock Energy Partners, would create 423 jobs and have a capacity of 250,000 barrels per day.

If built, the facility would be the first new refinery in the U.S. in more than 40 years. Despite high gas prices and a shortage of refining capacity, energy insiders such as Chevron CEO Mike Wirth and industry analysts have expressed skepticism about whether a new refinery could achieve the necessary financing and regulatory approvals.

Environmental regulation, rising concerns about climate change and local opposition have made it far more difficult – and costly – to build a refinery. Meridian Energy has struggled since 2015 to launch a small 50,000 barrel per day refinery in North Dakota after facing environmental challenges and difficulty finding financing. Seven years later, the project remains stalled. (A company spokesman said Meridian remains committed to building it).

"Any new refinery project seems unlikely to me," said Rob Smith, director of global fuel retail at S&P Global, noting a large refinery would be costly, difficult to finance and hard to permit.

Still, Southern Rock aims to differentiate the project enough to gain more traction.The project proposed by Southern Rock would refine light, sweet crude into cleaner-burning gasoline, ultra-low sulfur diesel and bunker fuel. It would also use carbon capture to create blue hydrogen onsite and use it to power heating units. The facility's wastewater would be recycled, combining it with renewable power made onsite by a 150 megawatt-per-hour peaking plant to make green hydrogen.

“The refinery operations of the proposed project will reduce and eliminate carbon dioxide (CO2), volatile organic compounds (VOCs), and greenhouse gas (GHG) emissions by at least 95 percent in comparison to traditional Gulf Coast refineries,” the company said.

Courtesy - https://www.houstonchronicle.com/business/energy/article/Southern-Rock-Energy-proposes-5-6B-next-17359136.php