Louisiana in line for $603 million grant for direct air capture hub; could create 2,300 jobs

BY ROBERT STEWART | Staff writer  www.nola.com

Louisiana will receive up to $603 million in Department of Energy grant funding to create a direct air capture hub in Calcasieu Parish that is expected to generate about 2,300 total jobs, federal officials said.

Dubbed Project Cypress, the direct air capture hub will attempt to pull more than 1 million tons of carbon dioxide annually directly from the atmosphere and sequester it deep underground, according to the Department of Energy.

Ohio-based Battelle will be the project owner and will partner with Climeworks Corp. and Heirloom Carbon Technologies Inc. to develop the sequestration technology. Gulf Coast Sequestration will transport the carbon dioxide and bury it deep within Calcasieu Parish land owned by Stream Companies. Both Gulf Coast Sequestration and Stream Companies are led by W. Gray Stream.

Lewis Von Thaer, president and CEO of Battelle, said in a conference call with reporters that Project Cypress will initially buy clean energy from local utilities to power the complex before potentially adding its own renewable energy sources in the future.

The exact total Louisiana will receive from the feds is still under negotiation, and a project timeline is unclear, though officials said in-person community briefings will happen in September. Project Cypress has already received an initial $50 million from the Department of Energy to begin development, according to U.S. Sen. Bill Cassidy, R-Louisiana.

Cassidy said Louisiana’s potential $603 million win would be the largest single award from the Infrastructure Investment and Jobs Act, the trillion-dollar bipartisan infrastructure bill that he helped usher into law in 2021.

“Carbon capture opens a new era of energy and manufacturing dominance for Louisiana. It is the future of job creation and economic development for our state,” Cassidy said in a statement. “It’s for this reason that I wrote the original the Direct Air Capture Hub program and ensured its inclusion in the infrastructure bill.”

Louisiana’s grant is one of two projects to receive upward of $1.2 billion in Department of Energy funding for direct air capture efforts. The other is the South Texas DAC Hub in Kleberg County, Texas, being developed by 1PointFive, a subsidiary of Oxy and its partners Carbon Engineering Ltd. and Worley. That project is also expected to sequester up to 1 million tons of carbon dioxide annually and will create 2,500 jobs.

The two projects are the first to receive direct air capture grant awards through the bipartisan infrastructure law. Mitch Landrieu, a White House senior adviser and infrastructure coordinator, said more funding is on the way to create four regional direct air capture hubs in the U.S.

“These projects are trailblazers in the network of large-scale carbon removal sites that we’re building out in order to address the pollution that is jeopardizing public health and endangering ecosystems across the globe,” Landrieu, a former New Orleans mayor, said in the conference call.

The combined 2 million tons of carbon dioxide is equivalent to the annual emissions of roughly 445,000 gasoline-powered cars, according to Department of Energy estimates.

The Department of Energy said the $1.2 billion represents the world’s largest investment in engineering carbon removal, and each hub will eventually remove more than 250 times more carbon dioxide than any existing direct air capture facility.

LSU is also getting nearly $3 million from the Department of Energy for the Pelican-Gulf Coast Carbon Removal Project, a collaborative with the University of Houston and Shell that is researching other direct air capture hub opportunities in Louisiana. That project award was one of 19 carbon removal projects to receive smaller totals from the department.

The Department of Energy announcement is another step in Louisiana’s reliance on carbon dioxide sequestration in an effort to reduce the state’s greenhouse gas output. Louisiana is a rare state where most of its carbon emissions are generated by industry instead of transportation.

Similar to carbon capture — a process by which greenhouse gas emissions at industrial plants are trapped onsite and then buried underground — direct air capture aims to remove carbon dioxide directly out of the atmosphere via chemical reactions.

U.S. Energy Secretary Jennifer Granholm likened the direct air capture technology to “giant vacuums that can suck decades of old carbon pollution straight out of the sky.”

“If we deploy this at scale, this technology can help us make serious headway toward our net-zero emissions goals while we are still focused on deploying, deploying, deploying more clean energy at the same time,” Granholm said in the conference call.

Though the technologies are comparable in their goals, so far carbon capture has generated much more momentum — and controversy — in Louisiana. Gov. John Bel Edwards admitted during the conference call that Louisiana’s climate action plan frequently mentions carbon capture but hardly addresses direct air capture.

“As Mitch Landrieu would say, this is a big dose of lagniappe,” Edwards said.

However, Edwards said Louisiana is still a “worthwhile target for investment” in carbon removal technologies, given the state’s penchant for being among the top five worst states for greenhouse gas emissions.

“This, combined with our unique geology, our pipeline density and our experience in complex petrochemical manufacturing streams make Louisiana the best suited state to address capturing carbon, either at industrial facilities or from the atmosphere, and then sequestering deep below the Earth’s surface both permanently and safely,” Edwards said.