Carlos Anchondo, E&E News reporter |Published: October 14, 2020
Developers announced plans yesterday to build and operate a regional carbon capture hub near industrial producers in southwest Louisiana that they say will be the country’s “premier carbon sequestration project.”
The company, Gulf Coast Sequestration (GCS), said it has submitted initial filings to EPA to secure permits for carbon dioxide injection wells used for long-term underground storage of the gas. The project has the capacity to store up to 2.7 million tons of CO2 per year, the company said.
The planned storage capacity of the project is nearly three times bigger than that of the largest operating carbon capture and storage facility in the United States with geological storage in saline rock formations, according to the Global CCS Institute. That facility — the Illinois Industrial CCS project — stores 1 million tons of CO2 annually, the think tank said.
Benjamin Heard, principal at GCS, said the project is ideally positioned to accept captured CO2 from industrial facilities in southeast Texas and southwest Louisiana — the heart of the U.S. energy sector.
“By providing safe and secure storage for carbon dioxide, GCS will assist industrial customers in achieving their sustainability goals,” Heard said in a statement. “Working together, we can help to steer the United States toward a more economically and environmentally sustainable future.” The company’s leaders include other experts who have worked at both large energy companies like BP and smaller firms with CCS operations.
In a phone interview, Heard said EPA asked GCS to submit its permit application in waves, given the scope of the information required. So far, the company has filed information pertaining to the project site and the area where the CO2 would be stored, he said.
Heard said saline sequestration — not enhanced oil recovery — is the right solution for this particular project. The reservoir that GCS has chosen, he said, sits at the right depth; is significantly far enough away from underground sources of drinking water; and is capped by thick, non-permeable rock.
That rock is “an additional variable that helps prove containment,” Heard said, noting that credits for carbon storage under Section 45Q of the tax code are “enablers around making projects like this economically attractive.”
In the past, analysts have said CO2 pipeline networks and storage sites could help spur more carbon capture projects, but so far, EPA has received only eight permit applications since July 2011 for Class VI wells — CO2 injection wells for permanent geologic storage in deep rock formations (Energywire, Sept. 8).
David Dismukes, a professor at Louisiana State University and executive director of its Center for Energy Studies, said the project comes amid a shift over the last decade in which companies have become more wary of the price risk and uncertainty tied to enhanced oil recovery, which is historically where carbon capture projects have sent their CO2.
“It’s just that a lot of companies have wanted to stay away from that piece of it, because you have additional uncertainty and revenue risk,” Dismukes said, who added that there likely would have been more carbon capture announcements this year were it not for the pandemic and its impact on the energy sector.
He also said Louisiana would benefit if the state could secure primary enforcement authority, or primacy, over Class VI wells.
EPA has only granted primacy over Class VI wells to two states, North Dakota and Wyoming.
Brad Crabtree, vice president for carbon management at the Great Plains Institute and director of the Carbon Capture Coalition, said that a majority of publicly announced carbon capture projects have declared their intention to store CO2 in saline formations and claim a $50-per-ton tax credit, rather than storing CO2 in oil and gas fields through enhanced oil recovery, which garners $35 per ton under 45Q.
“Louisiana has the potential to become a global hub for carbon management, and Gulf Coast Sequestration and other potential storage projects in the state would be positioned at the intersection of this industrial production and extraordinary geologic potential,” he said.