A Louisiana legislator recently delivered a spirited defense of lightly-regulated carbon sequestration, but omitted the bigger picture that significantly weakens her argument.
Republican state Rep. Jessica Domangue had a piece in The Hayride that made a subsidized economic argument for carbon storage. Essentially, she asserted that additional regulation on storage – such as having local option on whether to allow it, restricting expropriation of/expanding compensation for land used, placing additional restrictions on pipelines to transport it, or even outright bans on storage or transport, with all of these ideas encapsulated in almost two dozen bills that the Legislature will consider this session – would hamper the ability of transporters and storers of it directly or indirectly to take advantage of tax credits that cover in part the methods of capture and thereafter to take advantage of stringent environmental regulations promulgated in Europe that will provide a market for it. This is done through a credit scheme, where the storer certifies the capture and a carbon producer can buy or register the credit to stay under the limits that then allows sales to Europe.
In other words, she argues that free money is there for the taking, in the form of the tax and carbon credits, offset only by the costs of impounding and storing carbon, typically in what are called “pore” spaces (usually fairly deep) underground. Making it harder to consummate the deal, as these bills would do, impedes this extra economic development.
For some opponents, making it more difficult arises from health and safety concerns, which Domangue dismisses and even derisively so by creating a straw man argument that because leftist ideologues oppose carbon capture and sequestration – because they think it a smokescreen to allow fossil fuel usage – and also that allegedly Russian and Chinese interests favor limiting CCS (because it cuts into their market share for export of liquified natural gas), there’s no merit to these concerns. This ignores that in regulatory policy, the end product must come from a consideration of costs and benefits, whereupon the line gets drawn where the latter exceeds the former.
At present, there are only two sensible arguments in favor of CCS: practical uses and the subsidization from both kinds of credits. Climate alarmists will point to another, trying to “save” the planet from the myth of catastrophic anthropogenic global warming, but that fails even on their own terms: using economically feasible CCS methods barely dents the amount of carbon taken out of the atmosphere and even using the enormously economically infeasible methods that would break the bank wouldn’t make much progress.
That removes the argument for the tax credits and should for the carbon credits, but Europe in particular is behind the curve on this. However, economic reality is catching up even there, as one after another states are scaling back their obsession with ridding the air of carbon dioxide in response to the rise of populist political parties (which in fact now may be the leading party in each of the four largest countries in western Europe, according to opinion polls) which have seized upon the ruinously and unnecessary escalating energy prices on the continent caused by green energy policies including the regime for carbon credits. Even without immediate policy change, the pressure is causing credits to lose value, making it that less attractive to sequester carbon across the Atlantic.
Otherwise, practical uses are few, and until recently essentially were limited enough – mainly enhanced oil recovery – where storage needs were low. But the scale now proposed is unprecedented, courtesy of the massive subsidization. It is basically the only benefit for light CCS regulation.
And it is this massive scaling that elevates cost considerations. Rarely has anything gone wrong with CCS, but when it does it really goes wrong. Even if this aggregate cost remains lower than benefits, an additional unknown cost stems from scaling. Quite simply, there’s no long-term history upon which to draw concerning storing massive amounts of carbon in a location, and so the impact on things such as aquifers, tectonics, deposits of other materials, etc. has only theory on which to draw in terms of large-scale storage’s impact. This uncertainty necessarily must raise costs in the calculation.
Then consider the kind of cost other than to safety: how the process leading to obtaining and utilizing storage can injure property rights. As for expropriation as an issue, Domangue alleges that Louisiana has “perhaps the strongest” such rights among the states after the enactment of Act 458 of 2025 (the act number she used as misstated). She provides no evidence to back this up and, unfortunately, the data that ranks states on the strength of expropriation jurisprudence was collected last in 2007.
That was in the wake of the U.S. Supreme Court’s decision in Kelo v. New London, and should give pause to anybody in Louisiana worried about CCS and property rights. Essentially, Kelo gives state and local governments the right to invoke eminent domain as they see fit on behalf of a private entity as long as they can wedge an economic development argument into the equation. States are free to regulate that, and Louisiana actually has constitutional restrictions that private property can’t be taken for private economic development purposes … except it permits some exceptions by statute, and two of the dozen are for carbon dioxide transport by pipeline and its underground storage.
In other words, if the government wishes to grab surface space on which to put a pipeline for carbon dioxide transport or underground space in which to inject and turn it over to a private operator, all it has to do is make sure it follows the legal process and invokes the exact economic development argument Domangue makes. As well, at present there is enough wiggle room under state law and case law that negative spillover effects could be suffered by adjacent property owners where carbon is stored (which, of course, can be legislatively cured).
Yet there is one other economic consideration in all of this. Given that there is zero benefit gained by large-scale sequestration other than provided by the artifice of subsidization – meaning presently if credits were to disappear tomorrow there would be no large-scale CCS activity at all – any analysis of storage must include a highest and best-use perspective. Specifically, could there not be more economically productive uses for pore space than stuffing a bunch of carbon into it and letting it sit at the very least for decades?
Maybe. We don’t know what future economics hold. But we do know that the CCS enterprise is much akin to widget manufacturing. Other than grift off of taxpayers and deluded European governments, large-scale carbon storage does next to nothing of value and inflicts extremely low-value use onto pore space, pipelines, capture methods, etc. Only the incredible market distortion through credits diverts the use of such resources to CCS that otherwise could be deployed to much more economically beneficial uses that will deliver much greater economic development as a whole to Louisiana.
In light of these considerations, opposition to CCS, or at least to the level of regulation of it currently under Louisiana law, isn’t at all unreasonable or misguided. That description better fits Domangue’s argument marked by simplistic and shallow stumping for it, which reads as if it were ripped from the pages of a CCS lobbyist’s briefing book.
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