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2021 is already poised to offer substantial growth in the area of carbon capture and sequestration (“CCS”). On January 21, Elon Musk announced on Twitter that he will donate $100 million to the “best” carbon capture technology, chosen through a competition whose details and judging criteria are yet to be announced. Further, on February 1, the New York Times reported that ExxonMobil announced that it would invest $3 billion in carbon and other projects to lower emissions. As part of this effort, Exxon is creating a new entity, ExxonMobil Low Carbon Solutions.  In addition, recently passed federal regulations are expected to encourage more private investment in CCS projects.

The Consolidated Appropriations Act 2021 (“H.R. 133”), which was signed into law by former President Trump on December 27, 2020, contains notable bipartisan energy initiatives, ranging from new and extended tax incentives to government programs for research and development for CCS projects. One such initiative authorizes the establishment of a Carbon Capture Technology Program within the Department of Energy’s Office of Fossil Energy.  This program will manage the development of transformational technologies in an effort to reduce emissions in the fossil fuel industry as well as in manufacturing and industrial facilities. The program will use research and development, large-scale and small-scale pilot projects and demonstrations, and a front-end engineering and design program. As part of this pursuit, the Department of Energy will enter into cooperative agreements with industry and other stakeholders for the construction and operation of six demonstration projects for carbon capture at coal electric generating facilities, natural gas electric generating facilities, and industrial facilities.

H.R. 133 also extends the Internal Revenue Code Section 45Q (“Section 45Q”) tax credit program for CCS projects by two years, giving developers of carbon capture projects until the close of 2025 to commence construction on projects eligible for the credit.  Section 45Q provides a tax credit per metric ton of qualified carbon oxide captured and disposed of pursuant to detailed provisions in both Section 45Q and the accompanying regulations.  An upcoming Energy Law Blog post will cover these provisions as well as the most recent Section 45Q regulations issued on January 6, 2021.

These new regulations are likely just the beginning for the advancement of CCS this year as widespread support for CCS is expected from the new Biden Administration. While specific CCS policy measures have yet to be announced, President Biden signed an executive order on climate change. This executive order establishes, among other things, an Interagency Working Group on the Social Cost of Greenhouse Gases, which will publish interim social costs for carbon dioxide and recommend areas of decision-making, budgeting, and procurement where the social costs should be applied. CCS is also expected to play a role in meeting greenhouse gas reduction targets under the Paris Agreement, which President Biden recommitted the United States to through an executive order signed on his first day in office.

Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue. By using this blog site you understand and acknowledge that there is no attorney client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site. The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.

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By ratifying the 2015 Paris Agreement,[1] nations across the world made a commitment to reducing greenhouse gas emissions by at least 40% by the year 2030.  Carbon dioxide is one of the primary greenhouse gases found in the Earth’s atmosphere, accounting for 76% of global greenhouse gas emissions according to published reports.

Any effort to reduce greenhouse gas emissions will undoubtedly rely heavily on reducing the presence of carbon dioxide in the atmosphere. There are two primary ways to achieve a reduction of CO2: (1) decrease the output of carbon dioxide emissions; or (2) increase the amount of carbon dioxide that is removed from the atmosphere.

Continue Reading The Future of Carbon Capture and Sequestration

Governor Edwards’ Climate Initiatives Task Force published the Louisiana Climate Initiatives Interim Report earlier this month, which outlines the process by which the Task Force plans to develop climate actions to reduce greenhouse gas emissions in Louisiana.

In February 2020, Governor Edwards committed to forming a Climate Initiatives Task Force for the purpose of developing recommendations to address greenhouse gas emissions. Executive Order JBE 2020-18, issued on August 19, 2020, formally established the Task Force.

The Executive Order set forth greenhouse gas emission reduction goals, including that Louisiana should reduce net greenhouse gas emissions by 26-28% of 2005 levels by 2025; by 40-50% of 2005 levels by 2030; and to net zero by 2050. These goals are in line with the Paris Climate Accord, as well as commitments made by other states and businesses. The Task Force is charged with making recommendations to achieve these goals.

The Climate Initiatives Task Force is made up of 23 members and supported by six sector committees and four advisory groups, all together consisting of over 135 experts from the government, colleges, private sector, and civil society. The Task Force submitted the Louisiana Climate Initiatives Interim Report, and it will decide what strategies are included in the Final Climate Report due in February 2022.

The committees and advisory groups held their first meetings in December, where they discussed their charges and objectives for the Task Force to consider. The Interim Report lists each groups’ goals, a selection of which are set forth below:

Finance Advisory Group:

  • Consider workforce implications and opportunities associated with proposed policy directions (including K-12 and higher education considering the long-term nature of this issue);

Science Advisory Group:

  • Advise Task Force and Governor’s Office of Coastal Affairs on core components of net GHG emission reduction strategies for consistency and to ensure that strategies are cumulative across sectors, including all major sources and sinks. Address advantages and hazards associated with emission reduction strategies (and risks and costs of not doing anything), emission reduction capabilities, and co-benefits;

Agriculture, Forestry, Conservation, and Waste Committee:

  • Examine opportunities to reduce GHG emissions and increase carbon storage capacity through agriculture and forestry practices, conservation measures that promote natural carbon sinks, blue carbon opportunities, and waste management.

Manufacturing and Industry Committee:

  • Consider opportunities to deploy cleaner sources of energy to fuel operations, enhance efficiencies, reduce unintentional releases, capture and sequester or reuse emissions, offset emissions, and other measures that reduce net emissions from combustion and non-combustion manufacturing and industrial activities in Louisiana.

Mining, Oil, and Gas Committee:

  • Examine opportunities to reduce greenhouse gas emissions throughout the mining, extraction, production, and transportation of oil and gas. This committee will consider carbon capture and sequestration, opportunities to enhance efficiencies and eliminate fugitive emissions, and other measures related to active and inactive elements of this sector.

The Louisiana Climate Initiatives Interim Report does not offer solutions or recommendations to address climate change in the state, however it does mark an important first step by outlining the goals of the different committees and groups and setting forth the process by which the Task Force will develop the Final Climate Report.

For more information see the Climate Initiatives Interim Report: https://gov.louisiana.gov/assets/docs/CCI-Task-force/CITF_InterimReportFINAL_02012021.pdf

Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue. By using this blog site you understand and acknowledge that there is no attorney client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site. The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.
Privacy Policy: By subscribing to Liskow & Lewis’ E-Communications, you will receive articles and blogs with insight and analysis of legal issues that may impact your industry. Communications include firm news, insights, and events. To receive information from Liskow & Lewis, your information will be kept in a secured contact database. If at any time you would like to unsubscribe, please use the SafeUnsubscribe® link located at the bottom of every email that you receive.

Several major oil and gas producers around the world are working with the Rocky Mountain Institute to develop a digital platform to assist in tracking and reducing emissions. Shell, ExxonMobil and Chevron are among the industry leaders piloting this new digital platform, which will enable emissions data to be obtained from a number of different sources, as well as industry reports. The digital platform being utilized is called the Climate Action Engine (CAE). Continue Reading Drilling for our Future: Technological Advances Leading the Industry

Earlier this month, Gulf Coast Sequestration (“GCS”), a limited liability company based in Lake Charles, announced its plans to build and operate a carbon capture and sequestration (“CCS”) project that will create a repository 10,000 feet underground for the permanent storage of more than 80 million tons of carbon. Once completed, the GCS facility is expected to be the largest CCS project in the United States and one of the largest in the world, according to its press release. Continue Reading Advancement of CCS in Louisiana

In the midst of a chaotic year and a tense campaign season, issues such as COVID-19, race relations, and healthcare seem to be at the forefront of Americans’ minds as they head to the polls on November 3.  But the oil and gas industry stands to be impacted regardless of the election outcome in November, and those impacts will have wide-reaching effects on the U.S. economy, its energy independence, and its diplomatic relations.  The 2020 Presidential candidates, Republican Donald Trump and Democrat Joe Biden, have divergent positions on U.S. oil and gas production, with the former pledging continued expansion of domestic oil and gas drilling and production, and the latter pledging to transition the U.S. away from its reliance on fossil fuels. Continue Reading Presidential Election 2020: Considerations for the Oil & Gas Industry

In the midst of a chaotic year and a tense campaign season, issues such as COVID-19, race relations, and healthcare seem to be at the forefront of Americans’ minds as they head to the polls on November 3.  But the oil and gas industry stands to be impacted regardless of the election outcome in November, and those impacts will have wide-reaching effects on the U.S. economy, its energy independence, and its diplomatic relations.  The 2020 Presidential candidates, Republican Donald Trump and Democrat Joe Biden, have divergent positions on U.S. oil and gas production, with the former pledging continued expansion of domestic oil and gas drilling and production, and the latter pledging to transition the U.S. away from its reliance on fossil fuels. Continue Reading Presidential Election 2020: Considerations for the Oil & Gas Industry

On June 9, 2021, Texas Governor Greg Abbott signed House Bill 1284 (“HB 1284”), which was introduced along with its Senate companion, SB 450, during the state’s 87th legislative session.  HB 1284 grants the Texas Railroad Commission (“RRC”), the governmental agency that regulates the state’s oil and gas industry, sole jurisdiction over Class VI Injection Wells and carbon capture, use, and sequestration (“CCUS”) activities in Texas. Continue Reading New Legislation Signals Strong Support for CCUS in Texas