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Permalink Reply by Skip Peel - Mineral Consultant on January 24, 2023 at 11:12

Betting big on carbon capture

Climate change concerns were once seen as a threat to Louisiana industry, but now the petrochemical sector, positioning itself as part of the solution, is investing heavily on ‘low carbon solutions.’

By  David Jacobs - October 10, 2022 businessreport.com

  For decades, mounting concerns about climate change and the growing scientific consensus that carbon dioxide emissions contribute to a warming planet were seen as existential threats to Louisiana industry. But in recent years, industry has sought to portray itself as part of the solution.

ExxonMobil, to name only one prominent example, has gone from allegedly burying its own climate change research and lobbying against emissions reductions to creating an entirely new business division focused on “low carbon solutions.” The corporation’s facilities in Baton Rouge as well as in the rest of the world are on the clock to come up with greenhouse gas reduction plans by the end of this year, and carbon capture may be one of the most important tools.

The company has committed $15 billion for lower-emission initiatives over the next five years.

“There’s going to be massive investment,” says Stephanie Cargile, ExxonMobil’s Baton Rouge public affairs manager. “I certainly want Louisiana to be a part of it.”

Put very simply, carbon capture refers to putting the carbon that industrial processes emit underground so it can’t escape into the atmosphere, then either leaving it there or using it to make other products. Depending on who you’re listening to, the technology is either a classic win-win, boosting Louisiana’s economy while saving the planet, or a costly boondoggle that distracts from potential remedies that might actually work.

“Many in the industry believe that Louisiana could be the leader when it comes to carbon capture technology,” says Tommy Faucheux, president of the Louisiana Mid-Continent Oil & Gas Association.

Carbon capture projects can help companies meet carbon-reduction goals—their own and their customers’—while reinvesting in their facilities, he says. It could allow companies across the petrochemical sector to remain viable well into the transition to a lower-carbon future. So the return on those investments, while hard to quantify today, will include the retention of existing jobs and the creation of new ones, Faucheux says.

“This is the new wave of industrial investment,” he says. “The entire industry is working to decarbonize.”

More than $20 billion in potential projects that could create 1,600 jobs in the transitional energy sector are either planned or being considered for the Capital Region, says Russell Richardson, senior vice president for business development with the Baton Rouge Area Chamber. Most would include a carbon capture element.

Louisiana is becoming a center for proposed carbon capture projects because the state has some of the best geologic conditions to sequester carbon dioxide, the pipeline infrastructure to transport it, and an industrial sector that produces tons of it, says Samuel Bentley, the geologist who is vice president at LSU’s Office of Research and Economic Development.

“It’s not about tree hugging,” he says. “The big drive for most of these companies is pure economics. That transcends politics.”

Supporters of the drive to carve out a leadership role for Louisiana in a lower-carbon future certainly hope it transcends politics. Gov. John Bel Edwards has established a Climate Initiatives Task Force charged with helping to put the state on the path to net-zero carbon emissions by 2050. Edwards’ leadership is another reason companies are planning carbon capture investments in Louisiana, but chances are the next governor will have different priorities.

Risks and rewards

Rob Verchick is a professor of environmental law at Loyola University New Orleans who served as deputy associate administrator for policy at the Environmental Protection Agency during the Obama administration. Now a member of the governor’s climate task force, he says carbon capture and storage will at best play a marginal role in reducing the state’s carbon emissions.

The Biden administration, using funding authorized by the recent bipartisan federal infrastructure law, plans to spend $2.6 billion on carbon capture demonstration projects and regional pipeline networks to transport CO2 for permanent storage or conversion into other end uses such as construction materials. Verchick argues that such subsidies squander money that would be better spent replacing fossil fuels, thus delaying the transition to renewable energy.

“A better choice, I think, would be a rapid shift toward energy efficiency and renewable energy sources in both industrial and nonindustrial sectors of the economy,” he says by email.

While most proposed carbon capture projects are still in the planning stage, close to a dozen have been attempted, all of which fail to remove as much carbon as promised, says Monique Harden, assistant director of law and policy with the Deep South Center for Environmental Justice.

“They can’t be brought to scale,” she says.

Risks include groundwater contamination, ruptured pipelines and human-made tremors caused by the buildup of pressure underground, skeptics warn. Carbon dioxide still could leak into the atmosphere, and if it’s made into other products, those eventually will degrade; either defeats the stated purpose.

Harden says it can cost $85 per metric ton to capture and store carbon underground and that companies are proposing projects to sequester 5 million tons, with taxpayers being asked to subsidize much of the cost.

“We’re looking at astronomical amounts of money,” she says.

The EPA currently has sole permitting authority on permanent carbon sequestration projects in Louisiana, though the state Department of Natural Resources has requested the ability to be the primary regulator. State rules would be more stringent than the current EPA baseline, DNR spokesperson Patrick Courreges says.

“Our staff has more experience and knowledge about our state’s unique geology and how that would impact injection activities, because Louisiana’s geology is what they specialize in every day,” he adds.

In September, the Livingston Parish Council voted unanimously to impose a yearlong moratorium on the injection wells used in carbon capture, despite not having the legal authority to stop them. Residents attending the council meeting reportedly cited a carbon dioxide pipeline near Satartia, Mississippi, that ruptured, leaving 49 people hospitalized and forcing about 300 to evacuate.

“We’re trying everything we can,” says Jeff Ard, who chairs the council.

At least two carbon capture projects that would affect the parish are being considered, but council members say the companies involved haven’t done enough to explain the potential benefits and downsides. If nothing else, the council’s move serves to get their attention.

Air Products, for example, has announced plans for a $4.5 billion “blue hydrogen” complex in Ascension Parish that calls for carbon dioxide injection wells across neighboring parishes. While Ascension would get the tax dollars and most of the jobs, Livingston gets only risk, Ard says.

At the very least, companies should pay the parish money that can be socked away to address potential environmental issues in the future, he argues.

“If you’re going to force it on us, we should at least get something out of it,” Ard says. 

 

 

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