The recent cancellation of a large air products, chemicals and clean energy complex in Louisiana is likely due to political hostility and public distrust, according to industry analysts looking at potential ramifications for the petrochemical industry.
Air Products announced Tuesday that it has canceled a planned hydrogen production facility in Ascension Parish and an associated carbon capture project to transport and store carbon dioxide from a site beneath Lake Maurepas. Overall, the company had plans to invest $8 billion in Louisiana.
Baton Rouge-based economist David Dismukes said the project has faced increasing political headwinds since it was announced in 2021, including the loss of clean energy tax incentives at the federal level and public resistance to carbon sequestration and industrial expansion at the local level.
“I’m not really surprised,” Dismukes said in a phone interview. “It became a very important political issue.”
In an announcement Tuesday, Air Products said it would post an after-tax loss of $2.2 billion in the third quarter, primarily related to the decision to close the Louisiana Clean Energy Complex.
“I think that also speaks volumes about this project, that you’re willing to give up $2 billion,” Dismukes said.
At the federal level, President Donald Trump’s hostility to clean energy has prompted other companies to abandon similar projects. exxon mobil A planned low-carbon hydrogen plant was shut down. It took place in Baytown, Texas, last year when the $332 million the Biden administration poured into the project was withdrawn.
Air Products of Louisiana’s proposal called for a total investment of $8 billion, including approximately 170 permanent jobs once the Ascension site is operational. The company also planned other related facilities and expenditures to limit air pollution from so-called blue hydrogen facilities, which use fossil fuels to produce gas and capture the carbon dioxide they produce.
Elements of carbon sequestration are widely opposed by communities around Lake Maurepas, and injection wells would have been used to pump greenhouse gases about a mile below the lake bed. Both Democratic and Republican state legislators have introduced bills to block CO2 pipelines and storage, but pro-oil and gas lawmakers have blocked progress on these and similar policies.
After announcing plans for Louisiana, Air Products stormed the state capitol in 2023 and began hiring. 25 lobbyists He acted to circumvent unfriendly laws and almost succeeded. The first and only policy speedup for carbon capture and sequestration in Louisiana was a moratorium on new permits that Gov. Jeff Landry introduced last October. His freeze did not apply to ongoing projects, with more than 30 proposed in the state.
But economist Lauren Scott said Air Products’ cancellation could have ripple effects throughout the state’s economy. He said environmental groups will likely be emboldened to oppose other carbon sequestration projects in the state.
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Businesses don’t do well in political uncertainty, Scott added. He sees Landry primarily playing both sides of the carbon storage debate, enacting business-friendly taxes and policies while also issuing permit moratoriums.
“The governor is going to have to come off the fence if he wants to save these projects,” Scott said.
The public’s distrust of carbon sequestration may lie less in the technology and more in how and where it is used, he says. a carbon storage project The Caldwell Parish company faces little public opposition because it injects gas directly beneath its own facilities on its own land, he said.
This may hold lessons for other industries as well. Scott said people don’t like to see CO2 being pumped under public lands or lakes.
Another impact of Air Products’ withdrawal of plans is a $17 million research grant the company promised to Southeastern Louisiana University. Scientists monitor Lake Maurepas to industrial pollution. Schools will need to find other sources of funding to continue operating.
“The (Environmental Research Center) was established with initial funding from Air Products, and the loss of that funding requires us to refocus our capabilities and priorities. However, the Center remains a cornerstone of our university’s research infrastructure,” SLU spokesman Mike Riveaux said in an email. “Southeastern University seeks additional funding for the center so that it can continue to serve as a trusted, transparent, and essential resource for understanding the local environment and its complex ecosystems.”
Environmental groups welcomed Air Products’ announcement and said the best thing for Lake Maurepas was to keep it free of industrial activity.
Marylee Orr, director of the Louisiana Environmental Action Network, welcomed the news by phone Wednesday.
“An unintended positive effect of the Trump administration’s doubling down on oil and gas is the cancellation of such projects that were considered part of the no longer supported renewable energy sector,” Orr said. “This is good news for Louisiana communities that would otherwise be bearing the burden of pollution and risk from these so-called ‘clean’ industries.”
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