The termination of a nearly $50 million federal carbon capture grant for work at Gillette's Dry Fork Station power plant won’t kill the project, say insiders tracking CO2 capture efforts across Wyoming.
"It doesn't kill it, but it certainly doesn't help," said Katherine Zimmerman, decarbonization director for the Americas at Wood, which provides operations services at the Wyoming Integrated Test Center (ITC) where the canceled project was slated to operate.
The ITC is connected to Dry Fork Station and uses flue gas from the plant to test and develop CO2 capture technology.
The firm leading the large-scale carbon capture demonstration project is Colorado-based TDA Research.
TDA Research received one of the 24 awards terminated by U.S. Energy Secretary Chris Wright on May 30, eliminating more than $3.7 billion in taxpayer money overall.
The canceled project would have built one of the world's largest carbon capture systems, capable of capturing 158,000 metric tons of CO2 annually, equivalent to the emissions of 35,000 gasoline-powered cars.
But Zimmerman sees opportunity in the void left by the federal funding withdrawal.
"The whole project cost is not one of the massive ones, like some of the other ones that were canceled by DOE," she said. "So, as long as the project makes good sense, which we would say it likely does if it got DOE funding, you have a pretty good case for why your project is unique and special.
“Those would be likely targets for other people to come in for investment."
The cancellation affects subsequent phases of the TDA Research pilot project, which had already received $5 million in August for its first phase covering detailed planning.
Zimmerman compared the situation to an investor dropping out, leaving it to those involved to evaluate their options going forward.
"Just like if you had two corporations partnered on a project and one pulled out, the other would have a choice of either funding the project by themselves and continuing or going for other investors," she said. "So I think there's an opening for investment firms that want to come in and finance these projects."
Staying Course
Basin Electric Power Cooperative, which provides physical space for the Integrated Test Center at Dry Fork, indicated it remains committed to carbon capture advancement despite the federal funding cuts.
"While policies and projects may change, our approach remains centered on delivering reliable and affordable power and advancing technology for future demand," the utility told Cowboy State Daily in a statement.
The cooperative emphasized its extensive experience in the field.
"Basin Electric has more than 20 years of experience in carbon dioxide capture through its subsidiary, Dakota Gas, and the Great Plains Synfuels Plant,” the company said. “As of December 2024, the Synfuels Plant had captured 47 million metric tons of CO2 for enhanced oil recovery.
"The cooperative model depends on thoughtful, long-term planning. New and emerging technologies like carbon capture deserve consideration as strategic resources.”
Disappointing News
John Wright, chief technology officer at TDA Research, expressed disappointment about the canceled grant, but said that international interest in carbon capture technology remains strong.
"This was a major project," Wright told Cowboy State Daily. "I don't see anything like this happening again soon" from the federal government.
However, Wright said the company continues working with private companies and international partners.
"Outside of the U.S, the appetite for this hasn't changed," he said, though he warned the cancellation "will slow the development of the technology in this country."
The TDA technology was designed to test a sorbent-based post-combustion carbon capture system using flue gas from both coal and natural gas power plants. Wright noted the technology "is approaching the stage where it's not just R&D. It could really be done."
Investment Landscape
Responding to news of the lost grant funding, Holly Krutka, executive director of the School of Energy Resources at the University of Wyoming, maintained an optimistic outlook.
She highlighted Wyoming’s favorable regulatory framework and pointed to several privately funded carbon capture, utilization and storage (CCUS) projects.
"Exxon's LaBarge/Shute Creek CCUS project is one of the largest in the world and existed long before there was government support of any kind for CCUS," Krutka said.
Despite the TDA Research project cancellation, the Wyoming Integrated Test Center continues operations with multiple tenants.
Basin Electric confirmed it anticipates continued collaboration "with developers and researchers on emerging CO2 related technologies."
Christine Reed, director of outreach at University of Wyoming’s Energy Innovation Center, said the facility "remains open for current tenants to test their capture technologies, and can still accept applications from other capture developers to utilize the facility in the future."
The center currently hosts Kawasaki Heavy Industries, Membrane Technology & Research, Gas Technology Institute, and Colorado State University, all testing various carbon capture technologies using flue gas from the Dry Fork Station.
Wyoming's Strategy
The state continues advancing several major carbon storage projects with significant private and public investment.
The Sweetwater Storage Hub, led by Frontier Carbon Solutions, received Wyoming's first three Class VI injection well permits and has secured more than $50 million in combined DOE and private funding.
Reed also noted that Tallgrass is developing a commercial-scale CO2 sequestration hub in southeastern Wyoming, demonstrating continued private sector interest in the state's carbon capture potential.
Krutka acknowledged that cost remains a challenge for power plant carbon capture but emphasized the importance of continued research.
"We don't have many more examples because the cost of capture from other sources, like power plants, remains too high even though Wyoming could use more CO2 for enhanced oil recovery if it was available at a lower price," she said.
Looking ahead, Krutka suggested carbon capture technology might be essential for Wyoming's energy future.
"We may need CCUS technologies to protect our fossil fuel fleet over the long term," she explained. "Then if regulations require CCUS, which certainly could happen in the future, the technology will be ready for Wyoming's energy customers."
David Madison can be reached at david@cowboystatedaily.com.
