Texas Clean Energy Company files for Bankruptcy

: Chris Lee Law Firm

  Filed under: Bankruptcy

clean energyThe 600 acres near Odessa, Texas that was reserved for the Texas Clean Energy Project will hopefully be available for new projects soon, as the previous plans to develop a new coal plant there has been scrapped. Last month, the company backing the project designed to capture carbon emissions, Summit Texas Clean Energy, LLC filed for Chapter 7 Texas bankruptcy. In bankruptcy forms submitted to the U.S. courts for Bankruptcy in Texas, the company owes nearly $46.8 million with only $175,000 in assets. Because Summit filed Chapter 7 bankruptcy, it is a clear indicator that they will have a bankruptcy trustee sell the company’s remaining assets and close up shop for good.

Decline of Summit Texas Clean Energy, LLC

The decline of Summit Texas Clean Energy, LLC began when the Department of Energy yanked its funding for the project in 2016. The company decided that that best play would be to remove its power generation capabilities and focus instead on producing more fertilizer and urea, but by then DOE was no longer viewing the project as viable and voiced its concerns about the cost of the project. Six months later the Department of Energy ended its agreement with Summit altogether.

Department of Energy and Carbon Capture

The story of Summit Texas Clean Energy, LLC and its subsequent Chapter 7 bankruptcy filing is a testament to how difficult it is to develop new coal plants that capture carbon emissions. The project would have been a technological demonstration that would capture burning emissions in a commercially viable way, an area that the DOE has worked to establish in other areas in a few other projects. Many of these other projects saw the DOE pause or pull support as well.

Because the City of Odessa’s Development Corporation (ODC) had reserved the land for the Summit project, they are currently exploring the need to hire a bankruptcy attorney, as they are worried that the Chapter 7 bankruptcy filing may pull the land for the project into the assets of the company to be liquidated to satisfy the Summit’s debts.

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