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The Department of Energy is giving the green light to Project Cypress, a cluster of facilities in southwest Louisiana that will filter carbon dioxide directly from the air and store it underground. The agency announced Wednesday that it will award the project $50 million for the next phase of its development, which will be matched by $51 million in private investment.
Before receiving any money, the Project Cypress team had to reach an agreement with the DOE regarding how they would engage with community and labor stakeholders. The result, also released Wednesday, was a series of commitments — for example, to assemble a community advisory board, to partner with local workforce development organizations, and to create a public website with project information.
The developers have yet to provide a list of more concrete, measurable benefits the project will bring to the community. This was more like a plan to make a plan that will have robust community input. That the project sits near Lake Charles, home to some of the most contested energy projects in the country, will not make the next steps easy, however.
The funding is part of a $3.5 billion program authorized by Congress in the Bipartisan Infrastructure Law to create four such “direct air capture hubs” around the country in an effort to help commercialize the nascent technology. This is the first award the DOE has handed out after selecting Project Cypress last August as one of two hubs it would consider supporting. A second hub under development by Occidental Petroleum in South Texas is still in negotiations with the agency and has yet to receive funding.
Once it’s fully operational, Project Cypress is designed to capture 1 million tons of carbon from the air per year, employing two different technological approaches to do so.
The first, developed by the Swiss startup Climeworks, uses fans to draw air into metal boxes containing a material called a sorbent that attracts carbon dioxide molecules. Then it heats the sorbent, which releases the CO2 so that it can be stored.
The second approach, pioneered by a California-based company called Heirloom, involves crushing and cooking limestone so that it becomes calcium oxide, a white powder that’s thirsty for CO2. Heirloom lays the powder out on trays, where it binds with carbon dioxide in the air. Then it bakes the powder in an electric kiln to remove the CO2.
Both companies say they will use renewable energy to power their respective processes. To lock the carbon away underground, they are partnering with a company called Gulf Coast Sequestration which has applied for permits to drill two CO2 storage wells on a vast, privately-owned cattle and horse ranch in West Calcasieu Parish. After the carbon is captured, it will be liquified and delivered by pipeline to a well, where it will be injected into porous sandstone about 10,000 feet below the Earth’s surface.
With this award, the project will enter the second of four implementation phases, during which the companies will finalize the project’s design, engage with area residents and stakeholders to complete a community benefits plan, and start on the permitting process.
Phase two will not be quick — it’s expected to last two to three years. Then the companies will begin negotiating with the DOE for funding for phases three — construction — and four — the ramp-up to full-scale operation. The DOE has structured the DAC Hubs program with off-ramps at the start of each phase, allowing the agency to deny additional funding to a project if it finds that it is not meeting previously agreed-upon objectives. But if all goes well, Project Cypress is eligible for up to $600 million.
The Carbon Removal Alliance, a group that lobbies for policies to support what it calls “high quality carbon removal,” sees this award as a “fresh start” for the Department of Energy in that it shows the agency moving beyond its traditional role of funding research and development to commercializing technologies.
“With official funding beginning to flow into states like Louisiana and backed by robust community benefits plans to ensure the highest standards, we’re about to see how technologies like direct air capture can provide positive benefits to our economies and environment,” said Giana Amador, the executive director of the Carbon Removal Alliance.
Members of the community, however, are skeptical that the project will benefit them.
The industrial history of Calcasieu Parish is both an asset and a curse for Project Cypress. The area is home to a high concentration of refineries, petrochemical plants, and liquified natural gas terminals. The developers chose the location because it had a local workforce with relevant skills and the right geology to trap carbon underground, but the residents’ trust will be hard-won after decades of living in one of the most polluted corridors in the country, where news of toxic spills and leaks is common. Many residents have spent the last few years furiously fighting the buildout of several new LNG plants that are expected to increase pollution even more.
One of those activists is James Hiatt, a former refinery worker based in Sulphur, Louisiana. About a year ago, Hiatt founded a group called For A Better Bayou because he wanted to build a grassroots movement to reimagine the future of Louisiana — to be for something, not just against heavy industry.
“I want people to really imagine and embrace an alternative future for ourselves,” he told me. But to him, direct air capture is not it. “I wish I was so sold on it, like this is the way forward and I could get behind it and we could be like oh yeah, let's do this,” he told me. “But it just does not add up for me.”
When the project developers and the DOE held a meeting for stakeholders last November, Hiatt said, even attendees who worked in the oil and gas and petrochemical industries expressed doubts about the plan.
Hiatt shared a few videos from the meeting with me. One speaker questioned whether the jobs created would truly go to people from the area. This is not the first time a company has come in promising jobs and economic growth, only to hire workers from Alabama or Texas. Another speaker called the idea of a community benefits plan a way to “distract the community” from the risks of the project, which the companies have yet to define. (A preliminary list published Wednesday included things like increased traffic and noise during construction, risk of leakage during the transport or storage of the CO2, and energy and water use.) Others implored the companies not to seek property tax breaks, which divert revenue away from schools and social services.
When Project Cypress was first announced, the developers said it would create “approximately 2,300 quality jobs and generate a billion-dollar economic stimulus in the region, with increased opportunities for local contractors, suppliers, and small businesses.” The project also has a stated goal of hiring at least 10% of its workforce from the local fossil fuel and plastics industries.
But beyond that, its intentions are vague. The list of commitments published on Wednesday included lots of plans — i.e., a plan to create a “Site Labor and Workforce Development plan” which will “describe plans to provide equal access to jobs for local residents for construction and operations” — but few concrete actions or outcomes, yet.
Hiatt is especially skeptical that the carbon will stay underground and is worried about leaks. But perhaps more than that, the math of it all doesn’t make sense to him. Project Cypress might capture a million tons of CO2 from the air per year, but Louisiana alone releases more than 200 million tons annually, and is still approving new emissions-intensive facilities like those LNG plants. “Even if we scale this up, we'd have to scale it up orders of magnitude higher than will ever be possible,” he told me. “It doesn't seem like it's worth the time or the money to be doing this when we should be reducing the emissions to start with.”
There are many hurdles to scaling up direct air capture, but overcoming this cognitive dissonance is one of the trickiest. Ultimately, the goal of the project is not to offset Louisiana’s emissions. It’s to demonstrate a technology that could eventually, if we develop the right incentives to support it, clean up carbon that’s already in the atmosphere. But believing in that vision demands that people also see a world where emissions will start to decline — one that’s perhaps not yet apparent in Lake Charles.
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A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.
And more news around renewable energy conflicts.
1. Nantucket County, Massachusetts – The SouthCoast offshore wind project will be forced to abandon its existing power purchase agreements with Massachusetts and Rhode Island if the Trump administration’s wind permitting freeze continues, according to court filings submitted last week.
2. Tippacanoe County, Indiana – This county has now passed a full solar moratorium but is looking at grandfathering one large utility-scale project: RWE and Geenex’s Rainbow Trout solar farm.
3. Columbia County, Wisconsin – An Alliant wind farm named after this county is facing its own pushback as the developer begins the state permitting process and is seeking community buy-in through public info hearings.
4. Washington County, Arkansas – It turns out even mere exploration for a wind project out in this stretch of northwest Arkansas can get you in trouble with locals.
5. Wagoner County, Oklahoma – A large NextEra solar project has been blocked by county officials despite support from some Republican politicians in the Sooner state.
6. Skagit County, Washington – If you’re looking for a ray of developer sunshine on a cloudy day, look no further than this Washington State county that’s bucking opposition to a BESS facility.
7. Orange County, California – A progressive Democratic congressman is now opposing a large battery storage project in his district and talking about battery fire risks, the latest sign of a populist revolt in California against BESS facilities.
Permitting delays and missed deadlines are bedeviling solar developers and activist groups alike. What’s going on?
It’s no longer possible to say the Trump administration is moving solar projects along as one of the nation’s largest solar farms is being quietly delayed and even observers fighting the project aren’t sure why.
Months ago, it looked like Trump was going to start greenlighting large-scale solar with an emphasis out West. Agency spokespeople told me Trump’s 60-day pause on permitting solar projects had been lifted and then the Bureau of Land Management formally approved its first utility-scale project under this administration, Leeward Renewable Energy’s Elisabeth solar project in Arizona, and BLM also unveiled other solar projects it “reasonably” expected would be developed in the area surrounding Elisabeth.
But the biggest indicator of Trump’s thinking on solar out west was Esmeralda 7, a compilation of solar project proposals in western Nevada from NextEra, Invenergy, Arevia, ConnectGen, and other developers that would, if constructed, produce at least 6 gigawatts of power. My colleague Matthew Zeitlin was first to report that BLM officials updated the timetable for fully permitting the expansive project to say it would complete its environmental review by late April and be completely finished with the federal bureaucratic process by mid-July. BLM told Matthew that the final environmental impact statement – the official study completing the environmental review – would be published “in the coming days or week or so.”
More than two months later, it’s crickets from BLM on Esmeralda 7. BLM never released the study that its website as of today still says should’ve come out in late April. I asked BLM for comment on this and a spokesperson simply told me the agency “does not have any updates to share on this project at this time.”
This state of quiet stasis is not unique to Esmeralda; for example, Leeward has yet to receive a final environmental impact statement for its 700 mega-watt Copper Rays solar project in Nevada’s Pahrump Valley that BLM records state was to be published in early May. Earlier this month, BLM updated the project timeline for another Nevada solar project – EDF’s Bonanza – to say it would come out imminently, too, but nothing’s been released.
Delays happen in the federal government and timelines aren’t always met. But on its face, it is hard for stakeholders I speak with out in Nevada to take these months-long stutters as simply good faith bureaucratic hold-ups. And it’s even making work fighting solar for activists out in the desert much more confusing.
For Shaaron Netherton, executive director of the conservation group Friends of the Nevada Wilderness, these solar project permitting delays mean an uncertain future. Friends of the Nevada Wilderness is a volunteer group of ecology protection activists that is opposing Esmeralda 7 and filed its first lawsuit against Greenlink West, a transmission project that will connect the massive solar constellation to the energy grid. Netherton told me her group may sue against the approval of Esmeralda 7… but that the next phase of their battle against the project is a hazy unknown.
“It’s just kind of a black hole,” she told me of the Esmeralda 7 permitting process. “We will litigate Esmeralda 7 if we have to, and we were hoping that with this administration there would be a little bit of a pause. There may be. That’s still up in the air.”
I’d like to note that Netherton’s organization has different reasons for opposition than I normally write about in The Fight. Instead of concerns about property values or conspiracies about battery fires, her organization and a multitude of other desert ecosystem advocates are trying to avoid a future where large industries of any type harm or damage one of the nation’s most biodiverse and undeveloped areas.
This concern for nature has historically motivated environmental activism. But it’s also precisely the sort of advocacy that Trump officials have opposed tooth-and-nail, dating back to the president’s previous term, when advocates successfully opposed his rewrite of Endangered Species Act regulations. This reason – a motivation to hippie-punch, so to speak – is a reason why I hardly expect species protection to be enough of a concern to stop solar projects in their tracks under Trump, at least for now. There’s also the whole “energy dominance” thing, though Trump has been wishy-washy on adhering to that goal.
Patrick Donnelly, great basin director at the Center for Biological Diversity, agrees that this is a period of confusion but not necessarily an end to solar permitting on BLM land.
“[Solar] is moving a lot slower than it was six months ago, when it was coming at a breakneck pace,” said Patrick Donnelly of the Center for Biological Diversity. “How much of that is ideological versus 15-20% of the agencies taking early retirement and utter chaos inside the agencies? I’m not sure. But my feeling is it’s less ideological. I really don’t think Trump’s going to just start saying no to these energy projects.”