- Associated Press - Wednesday, September 24, 2014

SALT LAKE CITY (AP) - A proposed $1.5 billion energy storage site in rural Utah that is part of a larger, ambitious clean energy initiative would be an economic boon to the state and could potentially make the area a hub for similar projects, state officials said Wednesday.

The Millard County facility about 130 miles southwest of Salt Lake City would be a lynchpin in an $8 billion power project that would start with turbines on a huge wind farm in Wyoming and end with enough electricity for over 1 million households in Southern California.

In Utah, they would build four vertical caverns that go one-quarter of a mile deep into the earth in a compressed air energy storage system, according to plans released this week by four companies trying to make the proposal into a reality in the next decade.

The project faces several hurdles, including years of regulatory reviews. It also would depend on making agreements to sell the power that would be essential to secure financing to build it.

If it comes to fruition, the project could have as much as a $3.5 billion economic impact for Utah, factoring in the construction of the facility and construction of parts of a 525-mile electric transmission line cutting across several Western states, said Jeffrey Barrett, assistant director of the Utah Office of Energy Development.

Val Hale, executive director of the Utah Governor’s Office of Economic Development, said that kind of an impact would be transformational for Millard County, home to 13,000 residents and known for its dairy farms and coal-powered plant that generates electricity for Los Angeles County.

“Anytime you have a project of that magnitude, especially in rural Utah, it would huge,” Hale said. “It would be one of the biggest projects in rural Utah in years.”

The storage facility would be near the largest city in the county: Delta City, home to 3,500 residents. The small city is located nearby a reservoir popular for recreation and close to a World War II Japanese internment camp.

Gayle Bunker, a lifelong resident and mayor of Delta, said he doesn’t know any of the details but said he sees only positives in Magnum Energy building more power storage facilities in the area.

The project would bring significant tax revenue and likely create dozens of jobs - enough to be significant for the sparsely populate county, Barrett said.

“But what’s really valuable about it is this: It provides an interconnection point right there at Delta, and it provides a great opportunity to development more renewable energy around that site,” Barrett said. “It would likely be solar.”

Magnum has already built two caverns in an underground salt deposit at the site that are being used to store propane and butane. For this project, they would be starting from scratch, carving out four new caverns.

If and when the project is green-lit, it would still take years to construct the caverns and to get all the state permits necessary.

The enormous underground salt deposit is an unusual geological feature onshore in the U.S, said Magnum spokesman Rob Webster. The petroleum industry has excavated similar deposits under the Gulf of Mexico to store natural gas, he said.

“We just have found a very rare salt, geographically, that can be developed much like the Gulf caverns,” Webster said. “We’ve always envisioned an energy hub at this location just because the salt is there, and its proximity to electric infrastructure that’s literally across the highway at the Intermountain power plant.”

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Associated Press writer Mead Gruver in Cheyenne, Wyoming, contributed to this report.

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