After a four-year process, on December 28, 2023, the EPA signed a final rule that grants the state of Louisiana authority, known as primacy, for the permitting, compliance, and enforcement of Class VI (carbon sequestration) wells as part of the Underground Injection Control Program (UIC). The rule will likely facilitate carbon capture and storage (CCS) in Louisiana.
What is carbon capture?
The process of carbon dioxide (CO2) sequestration uses injection wells to store CO2 deep belowground under confining layers such as shales that prevent upward migration of what’s injected. Regulations for these permits involve the thickness of the confining layers, potential for horizontal migration, appropriate well construction, monitoring requirements, and financial security requirements, among other issues.
This capture and sequestration process “is viewed as one way to lower the industrial sector’s outsized contribution to climate change, on top of running more efficiently, electrifying more processes and turning to alternative fuels like hydrogen,” reports WWNO. “In Louisiana, two-thirds of the state’s greenhouse gas emissions come from heavy industry.”
UIC permitting
Under the Safe Drinking Water Act (SDWA), the EPA developed stringent federal requirements for injecting CO2 that protect public health by ensuring injection wells don’t contaminate underground sources of drinking water. These UIC regulations mandate the use of several measures to ensure injection activities won’t endanger drinking water sources.
Generally, permitting such wells is handled by the EPA, although the Agency can grant regulatory authority to individual states that develop a regulatory framework that matches or exceeds the EPA’s Class VI standards, which is the case with Louisiana, where these matters will now be handled by the state’s Office of Conservation (OC).
In April, following the EPA’s announcement that it intended to approve Louisiana’s primacy application, the Agency received 41,622 public comments, of which 400 were deemed substantial, with the majority of public comments classified as being supportive of approval, according to a press release issued by U.S. Senator Bill Cassidy, R-La.
Only two other states have currently been granted this authority: North Dakota and Wyoming. Arizona, Texas, and West Virginia have also begun the process to receive primacy authority.
Under the federal process, receiving permit approval is lengthy—typically three to six years for approval. Since being granted state primacy, North Dakota has reached approval on a project in only eight months, notes DeSmog.
With the passage of the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), the number of these types of pending permits has grown, “with 169 applications received across 58 projects as of November 9, 2023,” says the Bipartisan Policy Center.
The IRA provides a tax credit to companies of $85 per tonne of carbon stored underground, which makes carbon capture a profitable proposition. With tax breaks and grant funding available, many developers are seeking permits for carbon sequestration, including one plan in Louisiana that seeks to capture carbon emissions directly from the air, according to AP News.
Louisiana Governor John Bel Edwards said Louisiana’s geology and existing base of industry and pipeline infrastructure position the state to be a major player as a hub for CCS projects, a news release issued by the governor’s office notes.
“Finding alternative means of harnessing our traditional fuel sources at the same time we expand our options for alternative fuel sources to the point they are market-ready, available and affordable is probably the great challenge of our generation and some of the most important work we can do for future generations,” Edwards said in the news release. “While CO2 sequestration is not the only strategy available for carbon management, it is the most mature and market-ready tool available in the near term.”
The state’s regulatory power arrives as heavy industry in Louisiana seeks to clean up greenhouse gas (GHG) emissions.
Louisiana’s path to primacy
In 2019, the Louisiana State Legislature made an adjustment to state law to bring it in line with federal requirements. Then, the OC’s Injection and Mining Division (IMD) spent approximately two years preparing a package of CO2 sequestration regulations. That work included a painstaking review of all existing and proposed state regulations on CO2 sequestration in comparison to federal requirements, the governor’s news release continues.
In January 2021, the OC finalized the state regulations, which exceed EPA requirements in several areas, including:
- Louisiana won’t grant waivers to injection depth requirements.
- Louisiana prohibits sequestration of CO2 in salt caverns.
- Louisiana won’t issue area permits for multiple wells at once, requiring each individual well to be reviewed and permitted on its own.
- Louisiana requires additional measures for monitoring systems and operating requirements.
These regulations provide public health safeguards and methods for community participation and avoid environmental discrimination in the permitting process, WWNO reports. These safeguards and regulations are expected to provide models to other states in the process of seeking primacy.
There are currently more than 20 Class VI applications for proposed Louisiana projects with the EPA.
“We have seen unprecedented interest in carbon sequestration projects over the past couple of years, with companies reaching out to our office to express interest in what the regulatory landscape will be,” said Monique Edwards, Louisiana Department of Natural Resources (DNR) commissioner, in the governor’s press release. “The applications already in with the EPA are just the start.”
Edwards said her office will be reaching out to EPA Region 6 to discuss the handover of projects currently in the application process.
Precedent in these matters would be for applicants to choose whether to resubmit applications to the new permitting authority or to remain within the federal permitting process.
“Some applicants that have undergone significant reviews by EPA may choose to finish through the traditional federal pathway, but other applicants that submitted their application more recently may choose to resubmit through the new state authority,” reported the Bipartisan Policy Center.
Supporters of the state’s primacy application include the Louisiana Oil and Gas Association (LOGA).
“This is a huge victory for Louisiana,” said LOGA President Mike Moncla in a statement. “Louisiana now stands at the forefront of [CCS]. LOGA and its members look forward to taking advantage of the tremendous opportunities this presents [to] the state and its workforce.”
Environmental justice
“A 2019 Stanford University analysis found that carbon capture technology reduced the climate warming emissions of a coal-burning power plant by a mere 10%, while increasing overall air pollution,” adds DeSmog.
“After these steps forward, we are now confronted with the possibility of a major setback,” said. Dr. Beverly Wright, executive director of Deep South Center for Environmental Justice (DSCEJ). “Oil and gas companies are now attempting to push us back and lock us into the continued burning of dirty energy dressed up with [CCS].”
Environmental groups are pushing back against carbon sequestration, saying it “is not without risk for people living nearby, especially since low-income and Black communities are already disproportionately affected by the state’s heavy industry in areas like the Mississippi River chemical corridor,” WWNO notes.
The groups have expressed doubt that Louisiana is “capable of proper industry oversight and protecting residents,” the AP News article adds.
“It can be done in a way that builds in environmental justice principles that allow for the community to participate in the process and ensures that these communities are safe,” said EPA Administrator Michael Regan in AP News.
Carbon capture hurdles
Opponents say CCS is just a way for the fossil fuel industry to continue to have high emissions and retain its current business models.
Monique Harden, director of law and public policy and community engagement program manager for the DSCEJ, “believes that the proposed carbon injection sites are stalling efforts to transition away from oil and gas,” reports Nonprofit Quarterly.
“Organizations like the Climate Justice Alliance see carbon capture as another form of geoengineering that manipulates efforts to stop climate change and continues our dependence on fossil fuels.”
Environmental groups “also question the potential of carbon capture, with some arguing that it’s an excuse to delay or prevent the rapid phase-out of oil, gas and coal that is needed to halt climate change,” the AP News article continues.
Earthjustice has gone on record expressing doubt that Louisiana can protect public health and the environment considering its “failing track record” in managing other programs to protect health and drinking water.
Risks associated with CCS include potential links from both underground wells and pipelines.
“These leaks can be deadly, as compressed CO2 can suffocate people,” reports Food & Water Watch.“In 1986, a lake in Cameroon released a massive bubble of CO2 that formed from volcanic activity. That CO2 spread in a cloud that killed nearly 1,800 people, some more than 15 miles away. A pipeline leak in Satartia, Mississippi, hospitalized almost 50 residents in 2020.
“Additionally, captured CO2 often isn’t just CO2. It can have dangerous impurities, including volatile organic compounds (VOCs) and mercury. That’s not just bad news for public health in case of a rupture — these impurities are also corrosive, increasing the odds of a leak in the first place. (Not to mention, removing them adds to carbon capture’s already massive energy costs.)”
Another concern is “induced seismicity,” which is human-caused earthquake activity.
The potential for leaks arises from instability in geological formations, structural failure, or the compromise of containment integrity.
That’s because carbon and the captured impurities are corrosive to the metals used in transportation and storage.
“Carbon corrosion can break down metals in pipelines and potentially contaminate the environment, including waterways and drinking water sources,” adds Nonprofit Quarterly. “Corrosion can also break down rocks and cause catastrophic shifts above ground. Penn State researchers point out the number of ways carbon dioxide can escape. This makes CCS a questionable long-term solution for climate change if these sites become unviable.
“The economic viability of CCS projects is also in question. The capture of carbon can lead to reduced efficiencies in power and industrial plants, while simultaneously increasing their water consumption. This is a particular challenge for plants operating in regions already grappling with water scarcity. These additional expenses have the potential to render a CCS project economically unfeasible as well as environmentally harmful.”
CCS liabilities
Industry seeking to enter the CCS space should be aware of these potential areas of liability:
- Property: This technology requires new equipment. Industry is advised to ensure property policies are adjusted to provide coverage for new equipment and technology.
- Directors and officers insurance: Key directors could be liable for damages arising from CCS mishaps related to corporate decisions.
- Tax credit recapture: Tax credits received for CCS storage may have to be paid back to the federal government in the event of unintentional releases.
- Environmental/casualty: This is the biggest area of potential liability exposure. With storage so far underground, leaks may be difficult to find. While such leaks may cause sudden ground pollution, they might also be very gradual and take years to be discovered, resulting in significant damages, hefty fines, and lawsuits.
“The extent to which carbon capture and storage will be used in the future is highly uncertain,” states a December 2023 report on CCS in the United States by the Congressional Budget Office. “Its prospects depend on a variety of factors, including changes in the cost to capture CO2, the availability of pipeline networks and storage capacity for transporting and storing CO2, federal and state regulatory decisions, and the development of clean energy technologies that could affect the demand for CCS.”