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EPA Steps Closer to Allowing Louisiana to Regulate Carbon Capture



By Mark Ballard

May 1, 2023 - The Environmental Protection Agency began taking public comment Friday on a plan to let Louisiana regulate carbon capture injection wells, which have been touted as a way to combat climate change. 

Carbon capture, which allows industrial plants to store carbon underground instead of emitting it into the air, is a cornerstone in the Biden administration’s efforts to lower the emissions that cause global warming. The federal government has put up billions of dollars in incentives to grow the carbon capture industry; companies in Louisiana’s river parishes have already begun pursuing it.

Supporters say the method will create jobs and help lower the state's pollution levels. 

“Capturing and storing carbon is the next phase of job creation and economic development in Louisiana,” U.S. Sen. Bill Cassidy, R-Baton Rouge, said Friday.

However, critics, who include residents of Louisiana parishes where the first carbon capture projects have been proposed, fear the projects will harm the environment, and say the storage method has not been tested. 

“Carbon capture is unproven but aspirational,” said environmentalist Russel Honoré, the retired U.S. Army general whose group is called the Green Army. “We don’t know what’s going to happen when we put this carbon underground. …People in Louisiana, and I’ve been to a dozen meetings on this, are fearful of this.”

After 60 days of public comment, the EPA is free to accept the Louisiana Department of Natural Resources request to take over the permitting and regulation of so-called Class VI wells. The wells would store carbon into or above deep rock formations. 

The EPA is organizing a hearing for June 15 in Baton Rouge. 

EPA Region 6 Administrator Earthea Nance, of Dallas, said Friday that Louisiana's proposal would help leverage technologies to reduce pollution. “As we work to finalize this proposal, EPA will seek and consider public feedback and continue to prioritize protections for our most vulnerable communities while ensuring they have a meaningful seat at the table," Nance added.

The EPA also said it has developed specific rules to ensure the protection of underground drinking water in rock formations where carbon is injected. 

"I feel that we are very much on the same page (with the EPA) when it comes to deploying Carbon Capture and Sequestration technology and processes safely and responsibly," Gov. John Bel Edwards said Friday. "Our Louisiana Office of Conservation injection and mining staff have worked very well with Region 6 staff over the past several years in crafting regulations that meet the EPA’s high standards for protection of our environment and our people, with particular attention to our most vulnerable communities.”

The head of the Baton Rouge-based Louisiana Oil & Gas Association, which represents energy production companies, praised the announcement in a statement. 

“Far too often, we see these important projects stalled due to the slow grind of federal bureaucracy, while the operators wait in limbo,” Mike Moncla said. “Louisiana’s Department of Natural Resources and Office of Conservation know our state’s geology better than the federal government does." 

Shifting permitting authority to the states would shorten the amount of time to permit carbon capture projects. The EPA reviews a state’s carbon sequestration policies, procedures and technologies before allowing a state to take control of regulation. The EPA is reviewing more than 30 underground carbon storage projects, some dating to 2020.

Only Wyoming and North Dakota have been cleared to permit carbon projects on their own. 

Cassidy said given the amount of private sector interest and public sector money, the burgeoning carbon capture industry will be located in states that can approve the necessary permits in a matter of months instead of years.

“Implementing EPA standards gives us an edge over other states and protects the environment,” Cassidy said.

It also positions Louisiana to access federal funding for carbon capture incentive funding in the Infrastructure Investment and Jobs Act, he added. That act includes $5.1 billion for developing carbon capture technology; $9 billion for demonstration projects that support the development of key energy technologies, including a project launched by the University of Louisiana at Lafayette; and $3.5 billion for carbon removal hubs.

The EPA was acting on the Louisiana Department of Natural Resources’ April 2021 application. 

The department expects to spend $345,000 to operate the new program during the first year, and $1.1 million in the second year, with annual adjustments in future years, according to that application. But Patrick Courreges, communications director for the department, said the first-year cost could actually be as much as $3.2 million, since as many as 20 different companies have already indicated interest in developing carbon capture wells.

“EPA has had more applications filed in the past two years than we anticipated at the time our primacy application was drafted in mid-2021, and we know there are more projects planned than have filed with EPA – so the current budget request recognizes the potential backlog,” Courreges said. “Also, it was initially anticipated that the first year would be less reviewing applications and more setting up the program, based on the possibility primacy might have been granted by early 2022.”

The program would be paid for with a combination of federal grant money available from EPA for carbon sequestration regulatory programs, with new fees charged applicants and eventually sequestration well operators, and with the state budget. Annual state regulatory fees not to exceed $50,000 per site annually, one-time application fees, and an annual fee based on the tonnage of carbon stored will be deposited in a new Louisiana Carbon Dioxide Geologic Storage Trust Fund, along with the federal grant money, to pay the major costs of the program.

The state estimates the average tonnage fee per site will be $416,667 a year. It expects the program to become self-sufficient in the second year of its operation.