Edwards ‘Supremely Confident’ $4.5B Clean Energy Complex Will Pay Off
BATON ROUGE – Louisiana Gov. John Bel Edwards announced a $4.5 billion clean energy commitment Thursday from industrial gas manufacturer Air Products.
The company pledged the investment to build “the world’s largest permanent carbon dioxide sequestration endeavor to date,” and will receive millions in taxpayer-funded business incentives in return.
Air Products’ plan involves producing massive amounts of blue hydrogen and sequestering the carbon dioxide generated through the manufacturing process.
“Carbon capture and sequestration are important to Louisiana’s efforts to reduce carbon dioxide emissions while maintaining jobs and growing our manufacturing base,” Edwards said. “This project is a clear demonstration of our ability to grow the Louisiana economy while lowering the carbon footprint of industry.”
The clean energy development is slated for Ascension Parish, near Burnside, and purportedly will deliver 170 jobs with an average annual salary of $93,000 plus benefits. Louisiana Economic Development estimated the project also could lead to 413 new indirect jobs.
During a news conference at the Louisiana Capitol, Edwards said he was “supremely confident” the deal would deliver economic benefits while helping the environment. He also said “we don’t really have a choice.”
“No matter how you slice it and dice it, this is a big deal,” Edwards said. “I think the risk, quite frankly, to all of us, is in not doing projects of this type. It’s a risk in terms of the economy because there’s an energy transition underway and we’re powerless to stop it. We’re either going to take advantage of the opportunities we’re given or we’re going to lose.”
Air Products President and CEO Seifi Ghasemi praised Edwards during his prepared remarks and claimed “hydrogen is the clean energy of the future.”
Ghasemi said the sequestration plant is scheduled for completion 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 also would flow through a 700-mile pipeline from New Orleans through Texas and help “decarbonize” energy production along the way.
A news release said Air Products was offered “a competitive incentive package,” including a $5 million grant to offset plant and pipeline construction costs. The grant is said to be performance-based and payable over five years.
The package also includes perks from the Industrial Tax Exemption Program (ITEP) and the Quality Jobs program.
ITEP will provide an 80% property tax abatement for five years, after which Air Products can receive an 80% property tax abatement for another five years on capital investments related to manufacturing.
The Quality Jobs program gives cash rebates for well-paying jobs.
“The program provides up to a 6% cash rebate of annual gross payroll for new direct jobs for up to 10 years,” Louisiana Economic Development said. Additional Quality Jobs giveaways include a state sales and use tax rebate on capital expenditures or a 1.5% project facility expense rebate.
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 nation 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 known as COP26.
“I want to be there to meet as many of those people as possible and talk to them about opportunities that they have right here in Louisiana,” he said.
Referring to Air Products, Edwards boasted: “This won’t be the last one you hear about.”
By William Patrick for the Center Square