(The Center Square) − Louisiana lawmakers are grappling with how to ensure equitable revenue distribution from emerging carbon capture and sequestration projects, as testimony before the House Committee on Natural Resources and Environment highlighted local concerns about economic benefits and risks.
Dr. Greg Upton, director of LSU’s Center for Energy Studies, emphasized the complexities of cost-benefit analyses for carbon capture and storage projects, particularly the disparity between the economic benefits at the state level and the localized impact on parishes.
Upton and the committee are concerned that while the state benefits from increased tax revenues and reduced emissions intensity, local governments face limited property tax revenues associated with sequestration sites.
The issue is particularly pressing for parishes like Allen, Beauregard, and Vernon, where carbon capture and storage infrastructure is proposed. Representatives from Allen Parish pointed to the massive profits companies stand to gain from tax credits like the federal 45Q program while advocating for a share of the revenues to support local communities.
Roland Hollins, an Allen Parish Police Jury representative, proposed an $8-per-ton injection fee on stored carbon, arguing it would provide critical funding for struggling parishes.
“It’s real simple,” Hollins told the committee. “If you send CO2 into our parishes, it should be a tariff for every ton of CO2 that’s pumped underneath our our water and pipeline through our parishes.”
We have no choice but to come to you,” Hollins said. “This is less than 10%. The company still will receive 11,000,000,700 $550 million off of that 12,000,000,750 by giving the parishes $8.”
Upton outlined potential revenue streams, including property taxes on sequestration sites, pipelines, and capture equipment.
However, he noted that the current system limits tax benefits to the location of injection wells, leaving neighboring parishes without direct compensation. He suggested lawmakers consider expanding revenue models to reflect the broader geographical impact of carbon capture and storage storage areas.
Lawmakers also discussed Texas’ injection fee model, which could serve as a blueprint for Louisiana. However, questions remain about how such a fee could be equitably distributed among parishes.
Rep. Shane Mack, R-Livingston, raised concerns about fairness, noting that parishes housing sequestration sites like Vernon benefit disproportionately, while neighboring parishes impacted by pipelines or storage plumes, such as Beauregard and Allen, receive little or no compensation.
The committee is expected to review potential legislative solutions, including an injection fee or adjustments to property tax rules, to address the concerns raised by local governments.
