BATON ROUGE – Louisiana Governor John Bel Edwards on Thursday announced a $ 4.5 billion clean energy commitment from industrial gas maker Air Products.
The company has pledged to invest to build “the world’s largest permanent carbon dioxide sequestration company to date,” and will in return receive millions of taxpayer-funded business incentives.
Air Products’ plan is to produce massive amounts of blue hydrogen and sequester the carbon dioxide generated by the manufacturing process.
“Carbon capture and sequestration is important to Louisiana’s efforts to reduce carbon dioxide emissions while maintaining jobs and expanding our manufacturing base,” said Edwards. “This project is a clear demonstration of our ability to grow Louisiana’s economy while reducing the industry’s carbon footprint.”
Clean energy development is slated for Ascension Parish near Burnside and will allegedly create 170 jobs with an average annual salary of $ 93,000 plus benefits. Louisiana Economic Development estimated that the project could also lead to 413 new indirect jobs.
At a press conference at the Louisiana State Capitol, Edwards said he was “extremely confident” that the deal would bring economic benefits while helping the environment. He also said “we don’t really have a choice”.
“No matter how you cut it and dice it, it’s a big deal,” Edwards said. “I think the risk, quite frankly, for all of us is not to make plans like this. It is a risk for the economy because there is an energy transition underway and we are powerless to stop it. Either we will take advantage of the opportunities offered to us or we will lose them. “
Air Products President and CEO Seifi Ghasemi praised Edwards in his prepared remarks and said “hydrogen is the clean energy of the future.”
Ghasemi said the sequestration plant is expected to be completed in 2026. Once operational, he said, the plant would produce 750 million standard cubic feet of blue hydrogen per day.
“That’s enough energy to drive 3 million cars,” he said.
The hydrogen would also flow through a 700-mile pipeline from New Orleans to Texas and help “decarbonize” energy production along the way.
A press release said Air Products was offered “a competitive incentive package,” including a $ 5 million grant to offset the costs of building the plant and pipeline. The grant is supposed to be performance-based and payable over five years.
The package also includes benefits of the Industrial Tax Exemption Program (ITEP) and the Quality Jobs program.
ITEP goes to bring an 80% property tax rebate for five years, after which Air Products is eligible for an 80% property tax rebate for an additional five years on manufacturing-related capital investments.
Quality jobs program offers cash rebates for high paying jobs.
“The program offers up to 6% cash back on gross annual payroll for new direct jobs up to 10 years,” Louisiana Economic Development said. Additional giveaways for quality jobs include a rebate of state sales and use tax on capital expenditures or a 1.5% rebate for project facilities.
Economists Often Criticize Business Tax incentives as “corporate welfare,” but Edwards said Thursday the partnership was “necessary” and “an obligation.”
“There is no state in the country that is more affected by climate change than Louisiana,” he said.
The message dovetailed with Edwards’ trip to Scotland later this month to attend a United Nations climate change conference conference known as COP26.
“I want to be there to meet as many of these people as possible and tell them about the opportunities they have here in Louisiana,” he said.
Referring to Air Products, Edwards boasted, “This won’t be the last you hear about.”
By William Patrick for Place du Center