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22 April 2024

Louisiana Carbon Capture Legislation Moves Out Of Committee

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Liskow & Lewis

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Liskow is a full-service law firm providing regulatory advice, transactional counsel, and handling high-stakes litigation for regional and national companies. Liskow lawyers are strategically located across the gulf coast region and serve clients in the energy, environmental, and maritime sectors, as well as local and regional businesses in virtually all industries.
Three bills relating to Carbon Capture & Storage (CCS) projects sponsored by Chairman Geymann passed favorably out of the Louisiana House Committee on Natural Resources and Environment.
United States Energy and Natural Resources
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Three bills relating to Carbon Capture & Storage (CCS) projects sponsored by Chairman Geymann passed favorably out of the Louisiana House Committee on Natural Resources and Environment. The description of those bills can be found below:

  • HB 492 by Chairman Geymann was originally filed to make a limited grammatical change to the eminent domain provision for CCS projects, but served as a placeholder bill for Chairman Geymann to make amendments during committee. The amendments to HB 492 included important clarifications for eminent domain relative to transportation for CCS projects, particularly for pipeline companies. As amended, HB 492 sets out eminent domain authority for transportation projects related to CCS and provides a clear procedure for obtaining that eminent domain authority. Conversely, HB 492 as amended removes existing eminent domain authority for storage operators relative to pore space rights, which is being replaced by unitization as set forth in another Chairman Geymann bill, HB 696.
  • HB 696 by Chairman Geymann 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 by Chairman Geymann 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.

In addition, two other bills also regarding CCS projects within the state will be heard later this week. The description of those bills can be found below:

  • HB 934 by Rep. Lacombe seeks to correct an unintended consequence from HB 571 last year which intended to direct 30% of revenue from CCS projects on state owned to the local governments but has been interpreted to exclude revenue sharing with local governments on CCS projects on state property operated by the Department of Wildlife and Fisheries. HB 934 passed out of committee.
  • HB 774 by Rep. McCormick sought to provide for compensation for mineral rights following pore space expropriation. HB 774 was deferred but Rep. McCormick may request a study of the issue.

The next step will be for the bills to be heard on the House Floor, so stay tuned for more updates as they pass through.

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ARTICLE
22 April 2024

Louisiana Carbon Capture Legislation Moves Out Of Committee

United States Energy and Natural Resources

Contributor

Liskow is a full-service law firm providing regulatory advice, transactional counsel, and handling high-stakes litigation for regional and national companies. Liskow lawyers are strategically located across the gulf coast region and serve clients in the energy, environmental, and maritime sectors, as well as local and regional businesses in virtually all industries.
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