Developers Eye Louisiana, Texas Coasts for Offshore Carbon Storage

Is the Gulf of Mexico the ‘single best opportunity’ to store climate-warming gas — or an existential threat to wildlife and people?

The fishers in Gulf of Mexico waters off Cameron Parish estimate their catch has fallen catastrophically from 1 million tons a season to 150,000 tons since the first liquefied natural gas terminal in the parish began operating eight years ago.

Now, a new industry is being developed in the waters that were once the most productive grounds in the nation for fish, shrimp, and oysters.

A company called OnStream CO2 is developing the GeoDura hub, which it says could hold millions of tons of carbon dioxide captured from fossil fuel industries, including LNG terminals, a mile or more below the waters off Cameron Parish’s shores. It would be among the first of its kind in the United States. Currently, there are just a handful of offshore CCS projects in the world.

“These people are book smart, but when it comes to common sense, they have nothing,” said Travis Dardar, a Cameron-based fisher and founder of the group, Fishermen Involved in Sustaining our Heritage (FISH).

According to a report from the Center for International Environmental Law, in the best-case scenario, the injection of captured carbon may temporarily disrupt fisheries because of drilling and seismic testing.

In the worst-case scenario, underwater carbon sequestration wells could fail and release the stored carbon, killing off the plants, fish, and even the people in boats in the waters above. Storing carbon also has potential global implications, if, as opponents claim, carbon capture and sequestration will allow the fossil fuel industry to maintain the status quo as one of the world’s top emitters of greenhouse gasses.

The federal government, which is supporting the GeoDura hub with a recently announced $26 million award, and geologists who have studied carbon storage say offshore sequestration projects make a lot of sense.

But as with other climate change mitigations supported by the Inflation Reduction Act and the Bipartisan Infrastructure Act — such as hydrogen and direct air capture — the effectiveness of offshore carbon storage is unclear. Worries and claims on both sides of the offshore carbon capture debate are mostly hypothetical, based on modeling and just a few existing offshore storage sites.

Gulf offshore carbon storage pushed

The geology of the Gulf of Mexico combined with the fossil-fuel heavy industries along the coasts of Louisiana and Texas make carbon capture and sequestration (CCS) under the Gulf, “the single best opportunity for developing a CCS industry in the United States that can effectively address national emission reduction strategies at the required scale,” University of Texas-Austin research scientist Tip Meckel told a congressional committee in 2022.

Acknowledging that potential, Congress directed federal agencies to develop regulations to permit carbon storage under federal offshore waters. Draft regulations, requested by November 2022, have yet to be issued. The U.S. Bureau of Ocean Energy Management told Floodlight it will issue its first draft of a proposed rule next year.

In the meantime, companies have focused on developing carbon storage in the state waters off Louisiana, stretching 3.5 miles from the shore, and Texas, which controls the waters for about 10 miles from the shoreline.

Residences stand in front of a Venture Global LNG storage tank in Cameron, Louisiana.

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Meckel says there are 10 proposed projects in the two states, including GeoDura. Louisiana, unlike Texas, has the authority to permit carbon storage underground, including under state waters.

But the development of carbon storage in waters near the coast raises concerns about the higher number of abandoned, idle, or older oil and gas wells closer to shore that could allow stored carbon to leak out through existing wells. There are also questions about whether Louisiana would do a good job permitting and regulating carbon storage.

“I can’t say it cannot be done, but the history of this technology, the history of the lack of pollution monitoring in the Gulf and in Louisiana waters in particular, we are extremely skeptical,” said Scott Eustis, community science director for Healthy Gulf, a Louisiana-based community and environmental advocacy group.

Land grabs onshore and off

The concept of storing carbon under offshore waters was supercharged by the 2022 Inflation Reduction Act, which increased tax credits for capturing and permanently storing carbon underground from $39 per ton to $85. The incentive spurred a rush of development in the United States. About 125 new carbon capture, transport or storage projects have been announced since 2022, according to the Clean Air Task Force.

The incentives also sparked a land grab in Louisiana and Texas, with companies competing to purchase rights for underground storage onshore, often acquiring multiple parcels from multiple landowners to have access to a single deep reservoir for carbon storage.

With offshore sites, though, a developer usually only has to deal with a single landowner, the state or federal government.

In August 2023, Castex Carbon Solutions signed an agreement with Louisiana for the rights to store carbon underneath 24,000 acres off Cameron Parish, around Monkey Island, at an initial cost of $7.25 million. Additional millions will flow to the state when the project begins injecting carbon. Castex is one of the partners of the GeoDura hub, along with Carbonvert and Enbridge.

The OnStream CO2 collaboration says the hub will have the capacity to store 250 million metric tons of captured carbon, or the annual emissions from 58 million gas-powered cars. It has signed a contract with Commonwealth LNG in Cameron Parish to store the 9 million tons of carbon Commonwealth expects to capture each year from its terminal after it is operational.

Offshore CCS raises a litany of concerns

OnStream says its project will be operational in 2028. In addition to completing a geologic assessment of the site — funded in part by the Department of Energy grant — the company will need to build a pipeline to move captured carbon from the nearby industrial hubs of Lake Charles and Port Arthur, Texas. It will also need to obtain a permit to inject the carbon from the state of Louisiana.

Louisiana is the third state, and the first with a coastline, to receive permission from the U.S. Environmental Protection Agency to permit carbon sequestration wells.

“What our folks are looking for is confining layers,” said Patrick Courreges, a spokesperson for the Louisiana Department of Energy and Natural Resources. “Clay, shale, something real thick and non-permeable that’s not going to allow anything to bubble up past it.”

Environmental advocates have a litany of other concerns, including that drilling and the injection of carbon could cause seismic activity in the region, a hotspot of industry. Meckel told Floodlight, “We do not anticipate much induced seismicity.”

Louisiana “is spending millions of dollars to protect the coast in one area and then another area, they’re permitting the wholesale destruction of it. That is just totally inconsistent,” said Anne Rolfes, director of the environmental group, Louisiana Bucket Brigade.

Technology largely untested

There are just a handful of operating subsea carbon sequestration projects in the world, and none in the United States.

Two offshore carbon storage projects off Norway’s coast have been called a success. But last year, the Institute of Energy Economics and Financial Analysis published a study pointing out that even in those two projects, the storage of carbon yielded some unwelcome surprises.

The research “has revealed that storing carbon dioxide underground is not an exact science,” IEEFA said. “It may carry even more risk and uncertainty than drilling for oil or gas, given the very limited practical, long-term experience of permanently keeping CO2 in the ground.”

Dardar hasn’t followed the offshore carbon debate closely. But the way he sees it, the presence of any more industry in his corner of Louisiana is “just no good, all the way around.”