The scoop: Air Products, a global industrial gas company, has announced plans for a $4.5 billion clean energy complex in Ascension Parish.
The details: The megaport will produce 750 million standard cubic feet per day of “blue” hydrogen, which utilizes traditional hydrocarbons like natural gas as a feedstock, while carbon dioxide generated at the facility will be captured, compressed and sequestered at one-mile-deep underground sites east of the facility.
Why it matters: The world is moving towards green and renewable energy sources. Louisiana is still the epicenter of the traditional petrochemical industry in the U.S. Projects like this one build on the state’s strengths, and utilize existing infrastructure to find new opportunities in alternative and innovative energy solutions.
- Fuels like blue hydrogen can be transported using existing pipelines and substituted for traditional hydrocarbons. “We have such existing core strengths and a workforce that has skills in areas that were based in more traditional fossil fuels,” says economist Stephen Barnes, director of the Kathleen Blanco Public Policy Institute at the University of Louisiana at Lafayette. “This is a unique opportunity to leverage that.”
- There’s increasing demand nationwide for environmentally friendly products like blue hydrogen, even if they’re not as clean as pure renewable power sources like wind and solar. “They likely have offtake agreements and downstream contracts lined up already,” says David Dismukes of the LSU Center for Energy Studies. “You don’t build something like this speculatively.”
- The Edwards administration has prioritized carbon capture and sequestration as an economic development opportunity. The Air Products facility will generate more than 5 million metric tons per year of CO2 for permanent sequestration in geologic pore space underground.
The big picture: It’s a huge economic development win for Louisiana, at a time when there haven’t been many.
- The facility will create 170 permanent jobs with an annual payroll of $15.9 million, and 2000 construction jobs over three years.
- It positions Louisiana as a leader in a growing field. “The development of this large-scale clean hydrogen project highlights our strategic geographic assets as we position ourselves to become the clean energy capital of the U.S. Gulf Coast,” says Kate MacArthur, president and CEO of the Ascension Economic Development Corp.
What’s next: Addressing environmental concerns over carbon sequestration, approval of tax incentives and a final investment decision by Air Products, though the company’s CEO said today a Final Investment Decision has already been made.
- Though blue hydrogen, like biodiesel, is a step in the right direction, it’s not as clean as clean as wind and solar. Environmentalists are particularly concerned about storing mass quantities of CO2 deep underground. “It’s great to see new forms of innovation but we must remember that safety comes first,” says Rob Verchek, an environmental law professor at Tulane University’s Environmental Law Clinic. “Transporting and permanently storing these amounts of pressurized carbon dioxide is unprecedented. Havin a comprehensive and rigorous regulatory structure in place is the first step in keeping affected communities safe.”
- Approval of a property tax abatement under ITEP, as well as other state and local tax breaks, will likely be approved. But the company will still have to weigh global market conditions before moving forward. “This project doesn’t look as vulnerable to the ups and downs of the market as some,” Barnes says. “But in a time of great uncertainty nothing is definite until it happens.”
The project is expected to be operational by 2026.