Analysis by Energy Workforce President Tim Tarpley
Last week, after a long deliberation process, the EPA granted primacy to the State of Louisiana to issue class VI permits for wells that store carbon dioxide. Currently, only North Dakota and Wyoming have primacy, while Texas, Arizona and West Virginia have applied but are still waiting on the EPA to approve their applications.
The action is anticipated to allow the State of Louisiana to move much quicker than the EPA has been moving to grant applications. Some environmental groups had opposed the action, but ultimately, the EPA felt that adequate environmental safeguards had been put in place and approved the application. There is significant interest in the potential for carbon capture in Louisiana due to the geography and high concentration of industrial facilities that could benefit from the technology. In fact, more than 30 carbon capture projects are currently proposed for the state, which is the highest in the country.
Regulators in Louisiana have long argued that they could do a better job approving permits at a much faster rate than the EPA while still ensuring that the review process is robust. This logjam has threatened to significantly curtail the promise of carbon capture.
“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 framework will be,” Louisiana Department of Natural Resources Commissioner of Conservation Monique Edwards said in a statement.
Texas may be the next on the list for the EPA to grant primacy, as the application has been pending for nearly as long as Louisiana. State officials are hopeful that they will see a similar action from the EPA soon. Speeding up the permitting process for carbon capture will go a long way to encourage investment in the technology. The Inflation Reduction Act has significant financial incentives for the technology, but even with those incentives and with significant regulatory uncertainty surrounding the permitting process, investors have been wary to invest. As we start to see permits granted at a quicker rate as more states receive primacy, this may begin to change.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.