Posted on August 15, 2022
Louisiana officials are touting state incentives for a $198.5 million carbon capture project at an Ascension Parish chemical plant, despite evidence and experts suggesting it’s a questionable investment.
Louisiana Gov. John Bel Edwards announced on Friday CF Industries plans to invest $198.5 million to construct a CO2 compression and dehydration unit at its Donaldsonville complex that’s expected to process up to 6,000 tons of CO2 per day.
The project, which would reportedly create 12 new jobs with $100,000 per year average salaries, will enable up to 2 million tons of CO2 to be processed each year before it’s liquefied and transported via pipeline to a yet-to-be-determined sequestration site. The process will enable CF Industries to produce up to 1.7 million tons annually of blue ammonia, which is considered a clean energy source because its components — nitrogen and hydrogen — do not emit carbon when combusted, according to the Edwards announcement.
“To achieve our goal of net zero emissions by 2050, Louisiana must simultaneously increase new clean energy investments and decrease current greenhouse gas emissions,” Gov. John Bel Edwards said. “CF Industries’ plan to add carbon capture capabilities to its Donaldsonville plant accomplishes that, while stimulating economic activity and creating high-paying jobs in Ascension Parish. We applaud the company’s commitment to sustainability and encourage other industry leaders to recognize that decarbonization is good for both our economy and our climate.”
The Board of Commerce and Industry and local governments have approved CF Industries for the state’s Industrial Tax Exemption program, which provides an 80% property tax abatement on qualifying capital investment. The company is also expected to take advantage of Louisiana’s Quality Jobs program.
“We believe that ammonia will play a critical role in accelerating the world’s transition to clean energy and that demand for blue ammonia for this purpose will grow meaningfully in the coming years,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “We are pleased to be able to leverage our previous investments in Louisiana to add CO2 processing technology to our Donaldsonville complex that will enable a significant volume of blue ammonia production by the middle of the decade. This will position CF Industries and Louisiana at the forefront of this emerging global market.”
The project is the second announced this year in which taxpayers will subsidize carbon capture, with the first involving a $900 million investment announced by Cleco in April to add carbon capture at its Boyce powerplant.
Katie Tubb, research fellow with The Heritage Foundation’s Center for Energy, Climate and Environment, pointed to a Government Accountability Office report issued last year that showed poor returns from 11 carbon capture projects subsidized by the Department of Energy since 2009.
Other experts, including Mark Jacobson, professor of civil and environmental engineering at Stanford University, have suggested carbon capture technologies can cause more harm than good.
“The politics around CCS (carbon capture and sequestration) are interesting. Many climate extremists oppose CCS projects and government subsidies because at the bottom of it they oppose production and use of oil and natural gas,” Tubb said. “Many in the energy sector support CCS projects and government subsidies because they see it as a way to get PR points, and make a bad situation less bad — that is, the current situation where their competitors are heavily subsidized and they themselves have a big regulatory target on their backs.”
“The best thing policymakers can do to protect taxpayers and encourage innovation is to step aside — let CCS succeed or fail on its own merits by working to convince investors and consumers, not politicians,” she said. “As an aside, the climate impact of US energy producers/consumers using CCS is trivial.”
