Dr. Loren Scott joined Jason Spiess to discuss the EPA’s decision to award Louisiana the power to approve carbon capture projects.
Louisiana is the third state—after North Dakota and Wyoming—given primary authority by EPA to issue permits for the Class VI wells used in carbon capture and sequestration (CCS). North Dakota approved its fourth well permit last spring, and an ethanol producer is already capturing and storing carbon there.
Texas, West Virginia, and Arizona all have similar requests into EPA. The federal agency took 4 years to approve Louisiana’s bid for primacy.
Proponents say giving more states primary authority to issue permits will accelerate approval of new projects essential to reduce CO2.
The Inflation Reduction Act of 2023 fueled additional interest. Companies can receive a tax credit up to $85/ton to capture and permanently store carbon about a mile below the earth’s surface.
As applications continue to flow in, EPA now has a backlog of Class VI well-permit applications, including about 20 from companies operating in Louisiana, an EPA spokesman said Jan. 4 in a written statement. Under the new agreement, Louisiana will handle all new Class VI applications in the state, and EPA has begun discussing handover of permit applications already submitted, the EPA spokeswoman said.
Louisiana is an emerging hub of carbon management deployment working within the regional Gulf Coast context.
In the state, there are 324 facilities that qualify for the 45Q tax credit, ranging from various power generation sources, refineries, and more industrial sectors. The emissions from these 320 facilities represent an estimated 99.7 percent of all the emissions from facilities in the state.
Louisiana recognizes the potential that carbon management presents to curb these emissions while strengthening the state’s economic base. As such, Louisiana has enacted policies to further deployment in the state and applied for Class VI primacy from the Environmental Protection Agency.
Critics of carbon storage, including environmental groups and local citizens, questioned whether Louisiana was capable of proper oversight and storage safety. Dr. Scott pointed to successful carbon projects being run by Denbury for decades.
In fact, Denbury, pipeline and carbon sequestration company, announced this past summer that they have two new projects in south Louisiana, marking at least its sixth carbon capture endeavor in the state.
The first of the two new projects is a joint venture with Lapis Energy, a Dallas firm that specializes in carbon sequestration. The joint venture, dubbed Libra CO 2 Storage Solutions LLC, calls for a carbon sequestration complex at Lapis Energy’s 14,000-acre site in St. Charles Parish, about 20 miles west of New Orleans.
Denbury and Lapis Energy will each own a 50% interest in the joint venture, according to a news release.
Lapis Energy will lead the initial construction of the project and the carbon injection well permitting process, while Denbury will assume operatorship and construction management once carbon injection begins, the news release said.
Loren C. Scott & Associates, Inc., is a 35-year old firm that provides economic consulting and public speaking services for a wide range of clients. Consulting activities include impact studies, forecasting services, analysis of policy proposals, and general economic analyses. Consulting clients include BP, ExxonMobil, Entergy Corporation, J. P. Morgan Chase, Capital One Financial, Nucor, Sasol, and a diversity of others. Our objective is to put together the very best team of associates to attack our client’s problems. Dr. Scott makes 50-70 presentations a year on the state of—and the outlook for—the economy and the energy sector in particular.
He is one of the 32-member National Business Economic Issues Council, which meets quarterly to discuss issues of state, national, and international interest. This group has experts who cover international trade, Washington economic policy, retail trade, trucking, steel, chemicals, etc.
Dr. Scott is an energy specialist on the NBEIC. He has been appointed to the Economic Advisory Board of the U.S. Council on Competitiveness—a group made up of the CEOs of the Fortune 100, top university presidents, and presidents of three major unions.
He has been interviewed on MSNBC, CNBC, Bloomberg TV, and several local TV stations and his work has been cited in such publications as the Wall Street Journal, the Financial Times, USA Today, the Los Angeles Times and the Moscow Times, to name a few.
Dr. Loren C. Scott is President and founder of the firm. He was on the Economics Department faculty at Louisiana State University from 1969 to 1998, where he rose through the ranks from Assistant Professor to the holder of the Freeport-McMoran endowed Chair of Economics. He is presently Professor Emeritus of Economics at LSU.
Over the thirteen-year period from 1983-96, Dr. Scott was the chairman of the Economics Department at LSU. During that time, the Department’s ranking among the 3,000 economics departments in the U.S. rose from 101st to 38th. He received 7 awards at LSU for outstanding classroom teaching.
Dr. Scott is co-developer of the Louisiana econometric model, a model used for providing annual forecasts of the Louisiana economy, which are released each fall. He was a co-investigator on over $1 million in grant research at LSU and is the author of over 75 articles and technical reports in addition to reports written for consulting clients.
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