The carbon capture bonanza in Louisiana appears to be gaining even more steam.
Carbon capture cheerleaders earned a victory late Thursday when the Environmental Protection Agency announced it would hand over regulatory control of carbon dioxide injection wells to the Louisiana Department of Natural Resources. Officials say local control will speed up the approval process by shifting reviews to state staffers who are more qualified to do the job.
Before the announcement, questions surrounded the future of the rapidly proliferating industry here. Gov.-elect Jeff Landry, a staunch fossil fuel supporter, had previously criticized carbon-neutral policies as “extremely destructive on the economy.”
However, Landry issued a statement Thursday hailing the EPA decision as a “significant milestone in our state’s economic development.”
“This approval has positioned Louisiana to become the nation’s leader in safely storing carbon dioxide, contributing to nationwide emissions reduction and bringing new jobs and innovation to our state,” Landry said in a statement posted on X, formerly Twitter. “As Governor, I am committed to overseeing the seamless implementation of this program for the benefit of Louisiana's citizens and our nation.”
Louisiana already has the most proposed carbon capture projects of any state. Of the 61 pending EPA applications for Class VI wells — the well type used to inject carbon dioxide underground — 22 of them reside in Louisiana, double the next closest state, California.
Given the EPA move, along with Landry’s preliminary backing and new federal subsidies, even more carbon capture projects could be coming, industry analysts and environmental activists agreed.
That’s to the delight of industry advocates, who have hailed carbon capture as a necessary emissions reducer that will keep the state’s economy and energy sector afloat, and to the chagrin of environmental organizations, who don’t believe state regulators have the resources, experience or will to keep well operators in line.
“The combination of Louisiana being such a concentrated CO2 emitter and the public money, the incentives that are coming down for this, there’s just a run essentially happening on carbon injection wells in Louisiana,” said Jane Patton, a New Orleans resident and U.S. fossil economy campaign manager for the Center for International Environmental Law.
From federal to local
Industry advocates and environmental leaders have been squaring off for years over carbon capture, the burgeoning technology that strips carbon dioxide from industrial emissions and buries it about a mile underground.
The fight for primacy, or regulatory control of Class VI wells, has been no different.
Louisiana first asked the EPA in September 2021 to become the third state, after North Dakota and Wyoming, to earn Class VI well primacy. The EPA hosted a public hearing in Baton Rouge in June where people from both sides of the aisle showed up en masse. In addition, 45,000 comments were submitted online, the majority of which were “overwhelmingly opposed” to Louisiana’s right to primacy, Patton said.
“That is of concern to me, that the federal government went through a process where they took public comment, they received an overwhelming amount of comments saying ‘don’t do this,’ and they rushed to do it anyway,” said Patton.
Now that the transfer has been approved, the EPA and DNR will spend the next month or so ironing out the logistics of shifting 22 existing Class VI well applications from federal to state oversight, DNR spokesman Patrick Courreges said.
Even more applications are likely, said Greg Upton, interim executive director of LSU’s Center for Energy Studies. He said primacy will give state regulators more control over approval timings and will make it easier for local companies to reach regulators.
“You’ve got the folks that filed for the EPA permits, but you’ve got other folks that’ll tell you anecdotally that they were waiting for the primacy decision to come out before they filed in order to file with the state in lieu of the EPA,” he said.
A swath of fossil fuel advocates celebrated the primacy win for Louisiana.
Gifford Briggs, the American Petroleum Institute’s Gulf Coast Region director, said it will “empower” Louisiana to be an energy leader. Will Green, president and CEO of the Louisiana Association of Business and Industry, deemed it a “new era of technology and innovation.”
Tommy Faucheux, president of the Louisiana Mid-Continent Oil and Gas Association, said the move puts Louisiana on a prosperous economic path, years ahead of other energy-driven states.
“We are on the verge of a new golden age of energy production and all that comes with it — new jobs, more state revenue, and a stronger economy,” Faucheux said in a statement.
‘No faith in DNR’
Faucheux’s take is backed by Louisiana Economic Development’s latest annual report, which says the $14.3 billion worth of energy transition announcements in the state this year should create 11,517 jobs.
However, Patton questioned those projections, saying the totals are mostly skewed toward temporary construction jobs while offering few permanent positions. She also argued that lucrative carbon sequestration tax credits from the Inflation Reduction Act will siphon funds from public services toward an unproven technology.
Patton added that DNR has “no experience” in managing Class VI wells even though the applications are seemingly being fast-tracked.
“We have been hearing a lot more hype around the carbon injection projects coming down to Louisiana,” Patton said. “What I think this is going to mean for the people and the communities of Louisiana is a whole lot more risk.”
Beverly Wright, executive director of the Deep South Center for Environmental Justice, said her coalition plans to apply as much scrutiny to the EPA as it will to DNR given that the federal agency made the choice to relinquish control.
Noting she has “no faith in DNR” to properly regulate the injection wells, Wright said she would push for the EPA to revoke primacy should issues arise with state oversight.
“Just a slap on the hand will not do. A small fine will not,” Wright said. “Revocation is what will be necessary if they don’t follow the guidance.”
Courreges, the DNR spokesman, argued the agency has evolved to a point where it can properly handle the Class VI wells.
The state has hired seven new staffers dedicated solely to well reviews. He said the state will have a better ratio of staffers than the EPA’s Region 6, which covers Louisiana and four other states.
Courreges also said the state’s rules will be more stringent than the EPA’s. For example, Louisiana won’t allow carbon sequestration in salt caverns and will require further details on any and all existing subsurface wells on a potential sequestration property.
“Anybody who’s lived a few decades knows Louisiana has a history of when things weren’t done the way they should be,” he said. “Most of our staff has come up in a time where we’re dealing with the aftershocks of that, cleaning up the messes that got made back when there were no regulations or the science wasn’t as good or any number of circumstances. We’re not looking to pass those kinds of problems on to the next generation that takes over regulation.”