Ascension Parish, located along the Mississippi River between Baton Rouge and New Orleans, is becoming a focal point of industrial carbon dioxide capture projects. Abundant water supply, existing transportation infrastructure, access to low-cost natural gas, the world’s largest hydrogen pipeline, and geologic reserves allegedly fit for carbon capture and sequestration make it stand out to investors in the rapidly growing, federally subsidized industry.
While industry eagerly exploits the parish’s advantages, environmental and public health watchdogs are raising the alarm about potential costs, environmental damage, and misleading messaging.
“Industries have historically set up shop in Louisiana due to resources—ports, minerals—and lax regulation, and I have little doubt this is why the state is being targeted for carbon capture and storage projects,” said Logan Burke, the executive director of the Alliance for Affordable Energy. “The facilities now in the pipeline are associated with methane gas and will cause net new emissions, even if they are able to capture the levels of CO2 they have promised. This does not look like a winding down of the oil and gas industry in Louisiana, but a gearing up.”
One such oil and gas-related facility proposed for the parish is being developed by a multinational partnership including Denbury, Inc.—the largest carbon dioxide (CO2) pipeline operator in the U.S., which is being acquired by ExxonMobil—and the international shipping companies Hafnia and Mitsui O.S.K. According to investigative research by Empower LLC, published by Louisiana Against False Solutions, the plant appears to be majority owned by the Chinese government.
“The plant is being developed by Clean Hydrogen Works, a company whose CEO and president is the top executive at Shanghai Bi Ke Clean Energy Technology Co., the private equity arm of the government-owned Chinese Academy of Sciences,” the research group wrote in a recent report.
There is no mention of Chinese government involvement on Clean Hydrogen Works’ website. However, Simon Zhang and Yanning Luo appear on the leadership listings for Clean Hydrogen Works and Shanghai Bi Ke Clean Energy Technology Co., which is affiliated with the government-owned Chinese Academy of Sciences. Zhang’s role as CEO for Shanghai Bi Ke Clean Energy Technology is described as connecting “clean and abundant overseas gas to high value oil products in China through technology and commercial innovation.”
“Whether Chinese or otherwise, the energy market, especially gas, is now multi-national largely due to the expansion of liquefied natural gas (LNG) facilities in the permissive Gulf Coast,” Burke said. “As we saw last year with the spike in the cost of gas, the greater the international demand and value of LNG, and potentially methanol and ammonia, the greater the impact on the cost of these commodities here at home.”
Clean Hydrogen Works’ international profile is not unusual in today’s Gulf Coast investment landscape. For example, near Corpus Christi, Texas, ExxonMobil and a Saudi Arabian government-owned company teamed up to build a petrochemical plant called Gulf Coast Growth Ventures that makes a plastics ingredient called ethane from natural gas. An Indonesian company called Indorama purchased and re-opened a similar ethane production plant near Lake Charles, Louisiana. And the state-owned QatarEnergy owns a majority stake in the Golden Pass LNG export terminal currently under construction near Sabine Pass, Texas, among many other examples.
The Ascension Clean Energy plant in Louisiana, if built, would be able to produce nearly 7.9 million metric tons of liquid ammonia every year from natural gas to be transported and then converted into hydrogen fuel. The company claims that it would use carbon capture and storage to capture up to 98 percent of the carbon dioxide generated during the production process, or around 12 million metric tons of carbon dioxide per year, making it largest existing deal for CO2 capture and storage in Louisiana, by far.
While there are not yet any carbon capture and storage projects operating in Louisiana, the Ascension Clean Energy facility is one of dozens in the proposal or development stages, with many encouraged by billions in taxpayer subsidies included in the Inflation Reduction Act. But carbon capture and sequestration technology is untested and unproven at an industrial scale, making many skeptical of its long-term environmental and public health benefits. Transporting the carbon dioxide from a facility to underground storage wells often requires the construction of new pipelines, which present their own risk of leaks and explosions. Instead of being injected for permanent sequestration, it’s more common for CO2 to be injected into the ground to recover hard-to-reach oil reserves, producing more fossil fuel that is then burned -- negating the environmental benefits of carbon capture.
Bruce Robertson, a former energy finance analyst of the natural gas and LNG sector for the Institute for Energy Economics and Financial Analysis, said oil companies are keen to invest in carbon capture in the U.S. to take advantage of subsidies and, at the same time, satisfy their shareholders’ wishes to see lower emissions from the carbon-intensive oil and gas industry.
“Chinese entities are keen to expand their lower-emissions technologies, and U.S. government subsidies make the U.S. an attractive investment destination,” said Robertson. “Chinese investment in the U.S. is no different than any other countries’ U.S. investments.”
Robertson said no facility has ever managed to come even close to capturing 98 percent of its carbon dioxide emissions are as far as he’s aware. He said carbon capture is “an old technology that has a long history of disappointing operating results.”
“In essence, CCS is a partial, unreliable solution to a small portion of the emissions from oil and gas,” he said. “It will do little to arrest the increases that we are seeing in CO2 in the atmosphere.”
A recent study from the Institute for Energy Economics and Financial Analysis found that 13 out of 15 major carbon capture projects around the world have failed to meet their targets.
“I do not think that the companies financing (carbon capture) projects are ready to be regulated and scrutinized as the industry has consistently failed to perform,” Robertson said.
The focus for many new ammonia production projects is to use the hydrogen in ammonia to help produce hydrogen fuel, which burns without releasing any greenhouse gases. Ammonia is easier to ship in liquid form than hydrogen, which must be supercooled to form a liquid (an energy-intensive process). So, the idea is to transport liquid ammonia on ships or via rail to manufacturing plants or other end users, and then convert ammonia to hydrogen fuel.
“We are enthusiastic about the potential to bring this transformational project to Ascension Parish, which has an ideal location with existing infrastructure,” Mitch Silver, Clean Hydrogen Works senior vice president and chief operating officer, said in a statement. “Utilizing clean hydrogen-ammonia production to meet the global demand for carbon-free affordable energy, Ascension Clean Energy aligns with Louisiana’s Climate Action Plan, specifically the state’s goal to be carbon neutral by 2050.”
In 2022, companies announced $11.5 billion in potential investments in energy projects with carbon capture systems within Ascension Parish, with final investment decisions still pending. Meanwhile, also in the same county, $6.6 billion in similar projects are nearing completion from Methanex, Chevron Renewable Energy Group, and Air Products.
Clean Hydrogen Works says it intends to make a final investment decision and begin construction sometime next year, with initial production targeted for 2027. To help attract the project, the state put together an incentives package including the Industrial Tax Exemption Program and Quality Jobs program. After a final decision, Clean Hydrogen Works would also be eligible for a performance-based award of up to $7 million to reimburse dock infrastructure expenses.
The Federal Inflation Reduction Act also combines an array of clean energy tax incentives, totaling an estimated $369 billion, meant to address energy security and climate change over the next decade, including generous tax credits for carbon capture and storage projects. The bipartisan infrastructure law set aside up to $8 billion for the establishment of six to ten regional clusters of facilities to produce, distribute and store hydrogen—known as hydrogen hubs.