American Oil and Gas Reporter - April 2020 - 84

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state's underground injection control program and was working with EPA's Region
6 on the proposed transfer of authority.
The state assumed control over Class II
permits several years ago, and Lee said
that program worked efficiently.
One concern at the federal level is the
number of retiring Region 6 personnel,
he warned, adding their eventual replacements would not have comparable UIC
experience or expertise. If the state agency
receives Class VI primacy, Lee said
Louisiana would have to hire additional
workers, a contingency planned for when
the state first proposed to seek that authority in 2009.
"Wyoming has submitted a package,
and I don't know how long it will take for
that state," Lee related. "Louisiana has set
up a working group with EPA. It consists
of personnel from the EPA headquarters
in Washington and Region 6, and my staff.
We have set this up to hopefully cut some
time off this primacy process. I am hoping
by the time it gets Louisiana's package
EPA will have been through this enough
so it will move faster."
The Pelican State is unique in that,
while most states see most of their CO2
emissions coming from power generation
sources, Louisiana's principal emitters
are its industrial applications, assessed
David Dismukes, executive director of
the Center for Energy Studies at Louisiana
State University.
"If we are looking for a solution, it
must primarily be associated with those
industrial sources," he argued. "In
Louisiana, industrial sources, alone, are

Dan Cole, vice president, commercial
development and government relations
for Denbury Resources Inc., tells the
Louisiana Oil & Gas Association and
the Louisiana Mid-Continent Oil & Gas
Association that an effective carbon capture, utilization and storage program can
help provide affordable energy and mitigate the impacts of climate change.

84 THE AMERICAN OIL & GAS REPORTER

Participating in a panel discussion on carbon capture, utilization and storage are, from
left, David Dismukes, executive director of the Center for Energy Studies at Louisiana
State University; Stephen Lee, director of the injection and mining division at the Louisiana
Department of Natural Resources; Jan Sherman, a Shell petroleum engineer; and Jason
Lanclos, director of the energy office and technology assessment division at the Louisiana
Department of Natural Resources.

189 individual points that can range as
high as 80 million tons. If you are
looking at only the high-purity streams,
the ones I would refer to colloquially as
the 'low-hanging fruit,' Louisiana has
80-some projects with somewhere around
20 million tons."
Capturing CO2
Dan Cole, vice president, commercial
development and government relations
for Denbury Resources Inc., told LOGA
a National Petroleum Council study released in December projected the needs
of a CCUS infrastructure network that
would serve the United States into the
future. He indicated that the system was
being built, with a Montana project adding
120 miles to the nation's 1,400 miles of
pipelines dedicated to CO2 transport.
Louisiana's network now includes the
Green Pipeline Louisiana, part of Denbury's more than 900 miles of CO2
pipelines, he added.
State and federal estimates put
Louisiana's CO2 emissions at 5.5 billion
cubic feet a day, Cole indicated. "The
Green Line Louisiana can hold about 1.0
Bcf/d," he said. "If widescale CCUS deployment takes place, the Green Line
will have to expand, but more importantly,
there needs to be some large-scale geological storage sites."
The business case for CCUS is built
on the world's need for affordable and
reliable energy while addressing the
risks of climate change, Cole explained,
with widespread CCUS deployment essential to meeting this dual challenge.
"We still need to deliver energy at the
lowest possible cost, so that everyone

will be able to have a better quality of
life. Clean energy is the future, and
CCUS supports the development of clean
energy," he asserted.
Section 45 Q of the U.S. tax code,
one provision of the Bipartisan Budget
Act of 2018, provides a tax credit for
carbon capture projects that securely store
CO2 in geological formations or beneficially use the gas as a feedstock to produce
products, Cole described. He noted that
Section 45 Q allowed for using CO2 in
enhanced oil recovery projects.
"We are confident that more than 99%
of what is injected remains in the reservoir," he said. "Some of those storage
projects now are being looked at for development. That is the next step to have
widescale deployment of CCUS, especially
along the Louisiana-Texas Gulf Coast,
because there is too much volume and
the enhanced oil recovery industry cannot
utilize 100% of the CO2 that could-we
hope will-be captured."
The United States has the largest
known CO2 storage capacity in the world,
with reservoirs and formations adequate
to store CO2 from industrial sources for
hundreds of years, Cole reported.
"As Louisiana moves toward UIC
Class VI primacy, we feel that improvements are needed to make the Louisiana
Geological Sequestration of Carbon Dioxide Act fit for purpose," he suggests.
"There is a Senate bill, SB 353, that
amends the original statute. The financial
liability requirements now are very open
ended, and we have to separate the pipeline
transport away from the storage facility
requirements."
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American Oil and Gas Reporter - April 2020

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