Change proposed to compensation method for carbon capture leases

Greater compensation for many property owners whose land is taken through eminent domain for carbon capture and sequestration projects is in a proposal at the Louisiana House of Representatives.

House Bill 783 would require landowners be compensated per acre to "no less than the maximum amount paid to any other landowner in that project."

The bill is applicable for carbon sequestration projects where the gas is put into pores underground, which is the empty space between grains in a sand layer. Rep. Danny McCormick, R-Oil City, sponsor of the legislation, told the committee some of these CO2 storage plumes can be up to 20,000 acres.

The bill is on the House calendar, but a time for debate on it has not been scheduled.

During debate on Monday at the Committee on Civil Law and Procedure, McCormick told the committee that instead of having unelected officials from the state's Department of Natural Resources writing rules determining compensation for landowners under these projects, his bill would allow lawmakers to provide guidelines for the agency.

"This is a precedent that needs to be set," McCormick said. "There's no doubt some of these plumes are going to be under a small landowner, under subdivisions. What this bill does is protect small individuals, they don't want it under their property, but they're getting compensated at the same amount as someone who owns 10,000 acres. We're not asking for more, we're not asking for less. We're just putting up guardrails."

Landman Brian Hanks, who was opposed to the bill, said he and his companies have bought 800,000 acres worth of oil and gas leases in 39 states. Landmen act as a go-between for oil and gas exploration and production teams and property owners.

Hanks said the bill, if it became law, would act as incentive for property owners to hold out for the maximum amount for their leases and would take away the ability to negotiate for the parties.

In a fiscal note, legislative staffers noted that the Department of Energy and Natural Resources said the proposed law "may change the economic viability and profitability of carbon capture and sequestration projects in Louisiana. Revenues may be impacted to the extent that facility operators are discouraged from participating in CCS in Louisiana."

Carbon capture has become a contentious issue for lawmakers, as industry officials say the projects, which would inject carbon dioxide into geologic formations known as salt domes as well as pores, would bring jobs and tax revenue to parishes.

Residents and local officials largely oppose the projects, which they say present a safety hazard to residents and wildlife.