Louisiana Moves Forward with Its FoCCuS on Carbon Capture and Sequestration

On June 14, 2023, Governor Edwards signed HB 571 (Act No. 378) into law, codifying what the legislature hopes will provide a path forward with the carbon capture and sequestration industry (“CCS”) in Louisiana while also allowing for additional protections demanded for by local governments and communities.

The sole surviving of the nine CCS bills filed in the Louisiana House of Representatives, House Bill 571, sponsored by Speaker Clay Schexnayder, R-Gonzalez, has been touted as a “middle ground” for CCS industry developers and local communities concerned with both the safety of the developing technology in their community as well potential ecological damage, namely to community drinking water and the continued reliance on fossil fuels.

Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide from industrial facilities by containing carbon dioxide emissions and injecting the emissions into ground instead of releasing it into the atmosphere. CCS is one method of reducing the amount of carbon dioxide in the atmosphere with the goal of reducing global climate change.

Louisiana legalized carbon capture and storage in the 2009 Louisiana Geologic Sequestration of Carbon Dioxide Act. CCS technology is integral to the Governor Edwards’ Climate Action Plan that aims to reduce greenhouse gas emissions to net zero by 2050.

With at least twenty (20) carbon storage sites planned for Louisiana, CCS faces strong concern from local communities. Speaker Schexnayder hopes these community concerns will be satiated by the provisions and protections included in HB 571.

HB 571 provides for 30% of revenues from carbon storage under state land or water bottoms to go to local government and specifies that the revenues will be based upon the amount of area it occupies in each parish if the storage area crosses through multiple parishes.

HB 571 also increases the notification requirements for carbon dioxide well permits to include parish governments, mandating public hearings in each parish affected. HB 571 further requires companies conduct an environmental analysis for permits, and to notify the affected parishes of that activity.

Earlier this session, Louisiana lawmakers passed a resolution urging that the Environmental Protection Agency (EPA) grant Louisiana primary enforcement authority in administering permits for Class VI injection wells used in carbon sequestration. HB 571 requires that local governments be notified when a permit is filed for a Class V or Class VI well that would impact a parish. The legislation also requires those applying for a Class VI injection well permit submit an environmental analysis as part of the permit to the conservation commissioner under the Louisiana Department of Natural Resources detailing the efforts made to negative environmental effects, the weight of the social and economic benefits of the project versus the environmental impact, and measures taken to alleviate the environmental impact of the project.

Additionally, HB 571 requires quarterly reports from Class VI injection well operators and requisite notification within 24 hours when injections endanger underground drinking water.

“If you’re for carbon capture, this is a great bill,” said Speaker Schexnayder. “If you’re against carbon capture, this is still a great bill. This is an insurance policy for you back home.”

With HB 571 signed by Governor Edwards, Louisiana is set to jump ahead with its commitment CCS development, hopefully resulting in both economical and environmental successes for the State.

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