CHPS of Insight Episode 11: Navigating Carbon Capture in Louisiana | Challenges and Opportunities

In recent years, carbon capture and sequestration (CCS) has emerged as a crucial component in the fight against climate change. As one of America’s foremost states in carbon capture capabilities, Louisiana is uniquely positioned to lead the way. However, in order to reach CCS’s max potential, stakeholders must navigate the intricate landscape of policies, community engagement, and technological advancements.

In a recent podcast episode of CHPS Of Insight, host Chris White discussed these topics with Colleen Jarrott, Senior Counsel at Clark Hill, and Ray Cheatham, Energy and Critical Infrastructure Market Leader for Onterris. Their insightful conversation aimed to help stakeholders understand the opportunities and challenges facing carbon capture initiatives in Louisiana.

The Historical Context and Current Landscape

How did this all start? Colleen Jarrott provided an overview of carbon capture’s development in Louisiana, tracing its legislative roots back to 2009 with the Louisiana Geologic Sequestration of Carbon Dioxide Act.

”But nobody really heard much about it until about 2020,” said Jarrott, “and that’s when people, their ears started to perk up again, and people started to become interested in carbon capture and the economic opportunities that were there with it.”

The 2020 resurgence was driven by revisions and amendments concerning eminent domain, when operators used it as a way of obtaining pore space in the subsurface to put carbon dioxide and have it reside there permanently.

Ray Cheatham highlighted that despite the promising framework, recent litigation and social pushback have created significant hurdles, putting several projects on hold.

“A lot of projects are still in the queue,” said Cheatham, “but people can’t sit on money forever, and many times they don’t do the large investment till they actually get the permit in hand, then go through formal FID.”

Opportunities for Economic and Environmental Benefits

Carbon capture projects offer significant opportunities for economic growth and environmental benefits in Louisiana, particularly in rural parishes. These initiatives not only promise substantial job creation but also enhance local revenue streams, contributing to community development. The presence of oil and gas expertise in the state presents a unique advantage for transitioning to carbon capture, as noted by both Jarrott and Cheatham.

”Some of these parishes are in extremely rural areas where job opportunities aren’t necessarily plentiful,” said Jarrott. “But this would be the kind of project where you could employ hundreds of people at a carbon capture facility.”

Challenges and Community Engagement

Despite these opportunities, community opposition remains a formidable barrier. Concerns about the safety of these projects, potential environmental impact, and a lack of trust have fueled resistance in several parishes. Jarrott emphasized the importance of building trust and engaging with community stakeholders early in the project development phase.

“I  think it’s always important when dealing with community stakeholders to get in there early and to develop a level of trust with them,” said Jarrott. “Do the things that you say you’re gonna do when you’re gonna do them.”

Cheatham emphasized that clear and honest communication channels can help alleviate fears and garner support.

”Early and well-thought-through community engagement is critical to make sure the community understands what you’re doing,” said Cheatham. “Make sure you’re aligning community benefit plans with what’s meaningful to the community and then just clear communication.”

The Role of Legislation and Policy

Legislative action is critical in shaping the future of carbon capture in Louisiana. Jarrott and Cheatham both stressed the need for legal frameworks that address eminent domain, pore space leases, and safety requirements. Recent legislative sessions have seen numerous bills introduced, reflecting the contentious nature of this issue. However, the path forward will require balancing community concerns with the state’s economic and environmental aspirations.

“ This is really Louisiana’s moment,” said Jarrott. “We have the right geology, we have the right workforce. We’ve got the right administration in place. And we’ve got the right people at the Louisiana Department of Conservation and Energy that are analyzing the Class VI well permits and making sure that all of these projects are meeting, not only the regulatory requirements, but also the safety requirements that are needed in order to move forward.”

Looking Forward: The Crystal Ball Predictions

When asked about the future, Jarrott and Cheatham were cautiously optimistic. They argue that lifting the current moratorium on new carbon capture projects would be a significant step forward. As projects begin to demonstrate safe and sustainable operations, community opposition may wane, allowing Louisiana to capitalize on its natural resources and strategic position.

Best Practices for Stakeholders

To successfully navigate this evolving landscape, Jarrott and Cheatham suggest several best practices for stakeholders:

1. Develop comprehensive and flexible pore space leases.
2. Engage proactively with communities to build trust and understanding.
3. Cultivate strong relationships with regulatory bodies to ensure smooth project approvals.

Conclusion

Louisiana stands at a crossroads in the realm of carbon capture and sequestration, with considerable potential to lead the nation in this vital technology. The insights shared by Colleen Jarrott and Ray Cheatham underline the necessity of strategic legislative action, robust community engagement, and the utilization of existing oil and gas expertise.

As the state continues to tackle the multifaceted challenges ahead, maintaining an open dialogue and fostering cooperation among all stakeholders will be essential to realizing the benefits of carbon capture for both the environment and the local economy.

 

This podcast is intended for general informational purposes only and does not constitute legal or financial advice or a solicitation to provide legal services. The information in this podcast is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Listeners should not act upon this information without seeking professional legal counsel. The views and opinions expressed in the podcast represent those of the individual speaker only and are not necessarily the views of Clark Hill PLC.