Louisiana could become a world leader in the mitigation of climate change — albeit on a very small scale. Industry leaders say some of the ideas coming out of the recently created Louisiana Climate Initiatives Task Force might one day serve as a template for deployable global solutions.
Comprised of industry, government leaders, technical experts and academia, the task force just met for the first time in November 2020 but has an aggressive February 2022 deadline for making recommendations for reducing greenhouse gas emissions. Along the way, they hope to advance Louisiana’s economic and energy profile.
Tyler Gray, president and general counsel of the Louisiana Mid-Continent Oil & Gas Association in Baton Rouge, says the task force is essentially “a state-oriented group dealing with a global problem” and provides a platform for moving initiatives forward. “Louisiana has the opportunity to figure this out,” Gray says. “The underlying fact is that we have industry, jobs and natural resources here, so we could become a microcosm of how to manage this problem around the world, given the right opportunity.”
According to its stated goals, the task force will ultimately lay out “strategies and recommendations to reduce emissions through an inclusive, balanced approach that recognizes there are differing opinions on the best ways to reduce the worst impacts of climate change while preserving economic competitiveness.” Some of the recommendations could eventually require legislative action.
LMOGA has three of its own staff members serving on task force committees, each with its own agenda and reporting deadlines. They’re discussing such things as legal issues around climate equity, net-zero emissions, renewables, hydrocarbons, carbon capture, utilization and storage, methane reduction, monitoring and pipeline infrastructure.
Louisiana Economic Development Secretary Don Pearson says his role on the task force is multifaceted, but he ultimately hopes to encourage job-creating investments.
“We need to be able to look over the horizon to identify new areas of potential growth,” Pearson says. “When we talk about a plant that creates renewable diesel, or there’s an announcement around an ammonia operation that produces a lower carbon footprint … these are all things that we want to optimize.”
A Real Problem
One of the initial discussions coming out of the group: a growing consensus around a carbon tax. A white paper published by LSU’s Center for Energy Studies suggests that carbon tax revenues could advance CCUS and reduce CO2 emissions. A carbon tax prices CO2 emissions equal to its environmental damages and is becoming a likely tool for Louisiana and 24 other states for reaching net-zero carbon emissions.
Written by LSU Professor Brittany Tarufelli, the paper reviews the potential of utilizing carbon tax revenues to fund the research, development and implementation of CCUS.
“Policymakers have largely overlooked the possibility of recycling carbon tax revenues to incentivize and reduce the costs of CCUS,” Tarufelli says in a prepared statement. “This proposition would help emissions-intensive industry and smooth the transition to a lower-carbon economy.”
With global energy consumption forecast to grow 50% by 2050, industry and policymakers are being pressured to address the challenges of meeting rising energy demands while reducing CO2 emissions.
“Advancing CCUS through carbon tax revenues would enable Louisiana’s emissions-intensive industries to meet CO2 reduction goals without drastic cuts in production,” Tarufelli says. “This approach would also reduce the tax burden on these industries and ultimately save consumers money.”
While LMOGA hasn’t taken a position on the carbon tax issue, Gray has concerns about its impacts on smaller oil and gas companies.
“It would be great for Louisiana to look for ways to modernize its infrastructure and manufacturing, and incentivize that development,” he adds.
“As states become more opportunistic when it comes to modernizing infrastructure, you’re always going to want to make it attractive to Louisiana, so what does that look like? How can you make it more at attractive? Incentives always help … tax credits always help.”
LMOGA member companies have already made great strides over the years in dramatically reducing greenhouse gas emissions, Gray says. Regardless of what the task force decides, he feels it’s critical that companies be given adequate time to process and prepare for any new initiatives.
Greg Bowser, president and CEO of the Louisiana Chemical Association, agrees.
Several LCA staffers are involved on the task force committee and have been meeting behind the scenes since the group first convened.
“If this is actually going to happen, the science has to catch up to it,” Bowser says. “It’s going to be industry that drives it, because that’s where the ability to change is going to come from. If you look around, a number of members are doing it right now. Some of the things they’re proposing for reducing emissions, they’re doing it right now. Many of our member companies already plan to cut emissions in half by 2030.”
Bowser says the task force has an ambitious agenda with an equally ambitious timeline. Incentives will undoubtedly be a part of the process.
“Once they come up with a game plan in how we move in that direction, from a regulatory standpoint, then how do we monitor and encourage that? Do you build in incentives to get them to do that and do it quicker?
“Also, what do you do with those companies who are ahead of the game and have already reduced emissions. Do they get any credit for that?”
A year ago, Bowser says, LCA began working on its own climate change policy, which has since been incorporated into the organization’s long-term vision.
“We took a number of different elements, and identified what we were going to do,” he adds. “We found that a lot of our members were already doing a lot to reduce emissions without any mandates.”