On May 31, the Louisiana Legislature passed HB 492 expressly providing that a pipeline company has authority to expropriate property rights for pipelines transporting carbon dioxide for Carbon Capture & Storage (CCS) projects. This bill is one of several bills related to CCS projects introduced this legislative session.
Prior to HB 492, the text of Louisiana Revised Statute 19:2(12) limited expropriation authority to entities engaged in the business of CCS, arguably excluding pipeline companies who only transport carbon dioxide for CCS projects. Additionally, the prior version of the law provided an ambiguous requirement that the expropriating authority first obtain some approval from the State of Louisiana, Department of Energy and Natural Resources, Office of Conservation (“DENR”). However, the required approval was not defined by statute or regulation.
Importantly, HB 492 expressly expands expropriation authority under Title 19 to clearly provide expropriation authority for legal entities created “for the purpose of, or engaged in the transportation of carbon dioxide by pipeline for underground storage, including but not limited to through connecting to an existing pipeline transporting carbon dioxide to underground storage . . . .” More simply, pipeline transporters now have expropriation authority under Title 19 for CCS projects.
HB 492 further eliminates the ambiguity of the unknown DENR approval requirement. In addressing this ambiguity, the bill clarifies that the expropriating authority must first obtain a certificate of public convenience and necessity from the DENR pursuant to Title 30 of the Louisiana Revised Statutes. HB 492 then expands Title 30 to specifically allow the DENR to issue certificates of public convenience and necessity to pipeline transporters “for the laying, maintaining, and operating of a pipeline for the transportation of carbon dioxide to a storage facility,” regardless of whether the pipeline transporter is also the storage operator.
However, while it is now clear that DENR approval through the issuance of a certificate of public convenience and necessity is required prior to expropriation, neither HB 492, nor current statutes, nor existing regulations discuss the threshold requirements for obtaining the necessary certificate from the DENR. As this particular safeguard of landowner property rights is unique to CCS and does not appear in similar enabling statutes under Title 19 for other pipeline expropriations, future statutory amendments or regulations providing for some standard for DENR approval of certificates of public convenience and necessity will likely be necessary.
While HB 492 expands expropriation authority for pipeline transporters, it further limits authority for storage operators. HB 492 prohibits storage operators from exercising expropriation authority relative to reservoir or pore space rights for geologic storage, except for those projects already authorized by law. However, a separate bill, HB 966, was introduced instead to provide for unitization for carbon dioxide geologic storage. On May 31, the Louisiana Legislature also passed HB 966.
For further questions regarding this legislative update, contact Liskow attorneys Zachary Berryman, Matt Simone, and Neil Abramson and visit our Carbon Capture & Storage practice page.
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