Louisiana Caps Legislative Session With Landmark Carbon Capture Legislation

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The Louisiana Legislative 2024 Regular Session has officially come to a close and five Carbon Capture & Storage (CCS) bills were passed.
United States Energy and Natural Resources
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The Louisiana Legislative 2024 Regular Session has officially come to a close and five Carbon Capture & Storage (CCS) bills were passed. The bills create a comprehensive legal framework for CCS projects, including clarifying eminent domain authority for CO2 pipelines, establishing unitization procedures for CCS reservoirs, providing liability protections for landowners, adjusting revenue sharing for local governments, and enhancing groundwater monitoring and community notifications. The passing of these bills represents a major step forward for CCS initiatives in Louisiana. The bills are detailed as follows:

  • HB 492 expressly provides eminent domain authority for pipeline transportation of carbon dioxide for CCS projects. HB 492 also provides a clear procedure for when and how that eminent domain authority can be obtained from the State of Louisiana, Department of Energy and Natural Resources, Office of Conservation ("DENR"). Prior to HB 492, Louisianaʼs expropriation statute was unclear as to whether eminent domain authority existed at all for pipelines relating to CCS projects, and if it existed, it was also unclear as to what approval was needed from the DENR to exercise that authority. While expressly providing and clarifying eminent domain authority for CCS transportation, HB 492 however removes existing eminent domain authority for storage operators relative to acquisition of pore space rights, which is being replaced by unitization as provided in a separate bill, HB 696, which also passed the legislature.
  • HB 696 creates the authority for unitization of CCS reservoirs, which is currently not allowed in Louisiana law for CCS projects. HB 696 follows a similar procedure for unitization which has historically existed in Louisiana for oil and gas projects. Under HB 696, unitization will be done by the Commissioner of Conservation upon application of a CCS operator. Notice and hearing procedures are included, plus a requirement that a minimum of 75% of pore space owners must be agreeable to unitization as a prerequisite to the application. All pore space owners who have not already entered into a contract with the storage operator will be compensated equitably with other members of the unit. HB 696 provides the Commissioner with authority to promulgate regulations to establish the fair and equitable compensation schedule.
  • HB 937 provides that landowners, by the mere fact of being landowners, cannot be held liable for any actions related to CCS projects on their property. HB 937 does not override any contractual obligations which might exist.
  • HB 934 corrects an unintended consequence from HB 571 last year, which intended to direct 30% of revenue to local governments which share geographic boundaries on CCS projects on state property. HB 571 from last year had been interpreted to exclude revenue sharing by local governments on CCS projects on certain state property, including property operated by the Department of Wildlife and Fisheries.
  • HB 516 imposes a semi-annual groundwater monitoring report and requires additional community notifications relating to emergency preparedness plans, receipt of permits, and maps/locations of CCS facilities.

The passage of these five bills highlights Louisiana's commitment to innovation and sustainability and equips the State to lead the way in Carbon Capture & Storage projects.

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