Louisiana

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Louisiana Fuses Energy Strengths into Climate Leadership

5 Jan, 2021

By: Gary Perilloux

In the cradle of Louisiana’s coast, the future of energy and climate change converge. Zoom in to a spot 25 miles west of New Orleans, and that change comes into sharp focus. There, a 1,000-acre industrial site teems with 1,500 construction workers who have pounded thousands of foundation piles into the earth. They’re installing processing pipe measured by the hundreds of thousands of feet. In 2021, they’ll complete a refinery expansion, ahead of schedule, that offers a glimpse into the world’s energy future.

Next to its 340,000 barrels-per-day crude oil refinery, Valero Energy and venture partner Darling Ingredients are expanding Diamond Green Diesel, a seven-year-old refinery growing to annual production of 675 million gallons of renewable diesel. In St. Charles Parish, a Louisiana community of 53,000 people and over 20 major industrial sites, it is the largest renewable diesel refinery in North America.

“Our parish is steeped in industrial production,” said St. Charles Parish President Matthew Jewell. “Along with the billions of dollars in capital investment attracted over the years, we’ve developed a globally competitive workforce and a hub for manufacturing research and development. We’re not only productive. We’re creative. We’re excited about our energy future, and we’re confident St. Charles Parish and Louisiana will be innovative contributors to that future.”

The Diamond Green Diesel project showcases what energy and ingenuity can do. In their joint venture, Valero and Darling Ingredients opened the original 10,000 barrels-per-day refinery in 2013, then expanded it to the current 18,000-barrel capacity, which feeds off 2.3 billion pounds a year of inedible corn oil, vegetable and animal byproducts, and used cooking oil, all sourced by Darling Ingredients.

That production will more than double in the Diamond Green Diesel expansion, with Valero also boosting output of alkylate, a high-octane gasoline component, at its neighboring petroleum refinery in Norco. Together, the projects represent a $1.5 billion capital investment and will boost combined direct employment at the refineries beyond 600, with a similar number of site contract workers.

The St. Charles Parish growth is one of many focal points establishing Louisiana as a renewable energy leader. 

Energy Momentum

In a year of rapid change, 2020 marked a watershed for clean energy and climate solutions in Louisiana. Private- and public-sector initiatives make up a slate of projects focused on renewable energy, coastal restoration, and reduced greenhouse gas emissions.

Galvanizing that momentum, Louisiana Governor John Bel Edwards created a diverse Climate Initiatives Task Force within his Office of Coastal Activities in August 2020. Among its goals is a more than 25 percent reduction in greenhouse gas emissions by 2025, leading to net-zero emissions by 2050. The task force harnesses progress by Louisiana’s 50-year Coastal Master Plan — a $50 billion program entering its second decade — with new initiatives such as carbon capture and sequestration projects and offshore wind energy.

“Just as we have done with coastal protection and restoration, we are building an inclusive, science-driven process to lead us to solutions to an incredibly complex and difficult problem,” Governor Edwards said. “I know we can achieve consensus on the most important points because I know we all want a better future for Louisiana and its people.” 

This fiscal year, Louisiana will spend more than $1 billion on projects to protect and restore the state’s coast. In the next four years, Louisiana expects to build 40 percent more coastal acreage than it loses, reversing a previous tide of loss.

“With our Coastal Master Plan, Louisiana has led the nation in adapting to environmental change,” said Chairman Chip Kline of the state’s Coastal Protection and Restoration Authority. “It is time we take a more proactive stance on one of the largest drivers of that change: greenhouse gas emissions.”

The task force will produce a final climate strategy document by February 2022. In the interim, industry leaders are cooperating on plans for diverting greenhouse gases to geologic storage, with Lake Charles-based Gulf Coast Sequestration pursuing EPA approval for an 80 million-ton underground reservoir to store carbon dioxide, to repurpose it for enhanced oil recovery, and to recycle it for industrial applications.

The sequestration of CO2 and production of lower-carbon chemicals and fuels are targets that private industry shares with the state. By November 2020, CF Industries — which operates the world’s largest nitrogen-based fertilizer complex in Donaldsonville, Louisiana — shared its initial plans for reaching net-zero greenhouse gas emissions by 2050.

Diverse Portfolio

In October 2020, Renewable Energy Group Inc. announced a minimum $825 million capital investment to more than triple its renewable diesel production to 340 million gallons per year in Geismar, Louisiana. Slated to begin construction in 2021, that project will boost renewable diesel capacity to more than one billion gallons annually in Louisiana, when combined with Diamond Green Diesel.

In November 2020, Grön Fuels LLC announced feasibility plans for a $9.2 billion renewable fuels complex over the next decade at the Port of Greater Baton Rouge, where the company has secured a long-term lease for 141 acres. A final investment decision for the project will come in 2021, with the first phase leading to an expected $1.25 billion capital investment and a 60,000 barrels-per-day refinery that would nearly double the state’s renewable diesel output again.

Principals Daniel Shapiro and Bengt Jarlsjo — cofounders of the project’s parent firm, Fidelis Infrastructure — project an eventual 1,025 permanent jobs, with Louisiana Economic Development estimating an additional 4,560 new indirect jobs resulting from the full project. Grön Fuels will utilize Louisiana’s robust agribusiness sector for soybean oil, corn oil, animal fats and other renewable feedstocks.

“This is not a science experiment,” Shapiro told port commissioners in November. “This is bankable, proven, mature technology.”

Another maturing technology in the renewable energy sector is wind. Off the coast of Rhode Island, Louisiana liftboat operators Aries Marine Corp. of Lafayette and Falcon Global LLC of Galliano helped build the nation’s first commercial offshore wind farm. For that Block Island project, Keystone Engineering of Metairie, Louisiana, provided the design expertise.

In November, Governor Edwards asked the U.S. Bureau of Ocean Energy Management to establish an intergovernmental task force that would chart the regulatory path for offshore wind farms in the Gulf of Mexico. Today, wind energy is the nation’s number one source of renewable energy, and Louisiana is uniquely prepared to grow that source.

“As technology and expertise advances, we should explore additional opportunities in energy, such as offshore wind,” said Don Pierson, the state’s cabinet secretary for Louisiana Economic Development. “Some of the state’s offshore oil and gas service providers have already played a key role in the early development of offshore wind projects off the East Coast, so it makes plenty of sense to pursue that renewable energy source and the associated economic benefits.”

Forecasts by the National Renewable Energy Laboratory and industry sources suggest offshore wind energy could grow to 22 gigawatts through $70 billion of new capital investment in manufacturing and port infrastructure and 45,000 new jobs. The Gulf of Mexico is expected to produce 10 percent of that energy as soon as 2035.

Coastal Louisiana is not the only part of the state playing an instrumental role in the renewable energy future. In North Louisiana, Drax Biomass is compressing wood pellets from sustainable forestry sources to fuel renewable electricity generation in the U.K. In 2018, Drax Group’s U.S. headquarters moved to Monroe, Louisiana, also the headquarters of Fortune 500 Lumen Technologies.

Nearby in rural Morehouse and LaSalle parishes, two manufacturing plants contribute to annual production of 1.5 million metric tons of biomass shipped through the Port of Greater Baton Rouge. Drax Group aims to boost its yearly biomass production to five million metric tons in 2027 and to reach a carbon-negative climate posture by 2030. Carbon capture technologies will contribute to that milestone.

In Louisiana, Drax Biomass has already created 220 corporate and manufacturing jobs.

 “Sustainable biomass is already playing an important role in meeting global climate targets – both in producing renewable electricity and as a path to negative emissions,” said Drax Biomass senior vice president Matt White. “Louisiana’s well-managed and sustainable timber industry is well placed to continue providing the resilient and robust supply of biomass needed to generate renewable electricity in the UK, while also providing jobs and clean growth to the economy here.” In the cradle of Louisiana’s coast, the future of energy and climate change converge. Zoom in to a spot 25 miles west of New Orleans, and that change comes into sharp focus. There, a 1,000-acre industrial site teems with 1,500 construction workers who have pounded thousands of foundation piles into the earth. They’re installing processing pipe measured by the hundreds of thousands of feet. In 2021, they’ll complete a refinery expansion, ahead of schedule, that offers a glimpse into the world’s energy future.

Next to its 340,000 barrels-per-day crude oil refinery, Valero Energy and venture partner Darling Ingredients are expanding Diamond Green Diesel, a seven-year-old refinery growing to annual production of 675 million gallons of renewable diesel. In St. Charles Parish, a Louisiana community of 53,000 people and over 20 major industrial sites, it is the largest renewable diesel refinery in North America.

“Our parish is steeped in industrial production,” said St. Charles Parish President Matthew Jewell. “Along with the billions of dollars in capital investment attracted over the years, we’ve developed a globally competitive workforce and a hub for manufacturing research and development. We’re not only productive. We’re creative. We’re excited about our energy future, and we’re confident St. Charles Parish and Louisiana will be innovative contributors to that future.”

The Diamond Green Diesel project showcases what energy and ingenuity can do. In their joint venture, Valero and Darling Ingredients opened the original 10,000 barrels-per-day refinery in 2013, then expanded it to the current 18,000-barrel capacity, which feeds off 2.3 billion pounds a year of inedible corn oil, vegetable and animal byproducts, and used cooking oil, all sourced by Darling Ingredients.

That production will more than double in the Diamond Green Diesel expansion, with Valero also boosting output of alkylate, a high-octane gasoline component, at its neighboring petroleum refinery in Norco. Together, the projects represent a $1.5 billion capital investment and will boost combined direct employment at the refineries beyond 600, with a similar number of site contract workers.

The St. Charles Parish growth is one of many focal points establishing Louisiana as a renewable energy leader. 

Energy Momentum

In a year of rapid change, 2020 marked a watershed for clean energy and climate solutions in Louisiana. Private- and public-sector initiatives make up a slate of projects focused on renewable energy, coastal restoration, and reduced greenhouse gas emissions.

Galvanizing that momentum, Louisiana Governor John Bel Edwards created a diverse Climate Initiatives Task Force within his Office of Coastal Activities in August 2020. Among its goals is a more than 25 percent reduction in greenhouse gas emissions by 2025, leading to net-zero emissions by 2050. The task force harnesses progress by Louisiana’s 50-year Coastal Master Plan — a $50 billion program entering its second decade — with new initiatives such as carbon capture and sequestration projects and offshore wind energy.

“Just as we have done with coastal protection and restoration, we are building an inclusive, science-driven process to lead us to solutions to an incredibly complex and difficult problem,” Governor Edwards said. “I know we can achieve consensus on the most important points because I know we all want a better future for Louisiana and its people.” 

This fiscal year, Louisiana will spend more than $1 billion on projects to protect and restore the state’s coast. In the next four years, Louisiana expects to build 40 percent more coastal acreage than it loses, reversing a previous tide of loss.

“With our Coastal Master Plan, Louisiana has led the nation in adapting to environmental change,” said Chairman Chip Kline of the state’s Coastal Protection and Restoration Authority. “It is time we take a more proactive stance on one of the largest drivers of that change: greenhouse gas emissions.”

The task force will produce a final climate strategy document by February 2022. In the interim, industry leaders are cooperating on plans for diverting greenhouse gases to geologic storage, with Lake Charles-based Gulf Coast Sequestration pursuing EPA approval for an 80 million-ton underground reservoir to store carbon dioxide, to repurpose it for enhanced oil recovery, and to recycle it for industrial applications.

The sequestration of CO2 and production of lower-carbon chemicals and fuels are targets that private industry shares with the state. By November 2020, CF Industries — which operates the world’s largest nitrogen-based fertilizer complex in Donaldsonville, Louisiana — shared its initial plans for reaching net-zero greenhouse gas emissions by 2050.

Diverse Portfolio

In October 2020, Renewable Energy Group Inc. announced a minimum $825 million capital investment to more than triple its renewable diesel production to 340 million gallons per year in Geismar, Louisiana. Slated to begin construction in 2021, that project will boost renewable diesel capacity to more than one billion gallons annually in Louisiana, when combined with Diamond Green Diesel.

In November 2020, Grön Fuels LLC announced feasibility plans for a $9.2 billion renewable fuels complex over the next decade at the Port of Greater Baton Rouge, where the company has secured a long-term lease for 141 acres. A final investment decision for the project will come in 2021, with the first phase leading to an expected $1.25 billion capital investment and a 60,000 barrels-per-day refinery that would nearly double the state’s renewable diesel output again.

Principals Daniel Shapiro and Bengt Jarlsjo — cofounders of the project’s parent firm, Fidelis Infrastructure — project an eventual 1,025 permanent jobs, with Louisiana Economic Development estimating an additional 4,560 new indirect jobs resulting from the full project. Grön Fuels will utilize Louisiana’s robust agribusiness sector for soybean oil, corn oil, animal fats and other renewable feedstocks.

“This is not a science experiment,” Shapiro told port commissioners in November. “This is bankable, proven, mature technology.”

Another maturing technology in the renewable energy sector is wind. Off the coast of Rhode Island, Louisiana liftboat operators Aries Marine Corp. of Lafayette and Falcon Global LLC of Galliano helped build the nation’s first commercial offshore wind farm. For that Block Island project, Keystone Engineering of Metairie, Louisiana, provided the design expertise.

In November, Governor Edwards asked the U.S. Bureau of Ocean Energy Management to establish an intergovernmental task force that would chart the regulatory path for offshore wind farms in the Gulf of Mexico. Today, wind energy is the nation’s number one source of renewable energy, and Louisiana is uniquely prepared to grow that source.

“As technology and expertise advances, we should explore additional opportunities in energy, such as offshore wind,” said Don Pierson, the state’s cabinet secretary for Louisiana Economic Development. “Some of the state’s offshore oil and gas service providers have already played a key role in the early development of offshore wind projects off the East Coast, so it makes plenty of sense to pursue that renewable energy source and the associated economic benefits.”

Forecasts by the National Renewable Energy Laboratory and industry sources suggest offshore wind energy could grow to 22 gigawatts through $70 billion of new capital investment in manufacturing and port infrastructure and 45,000 new jobs. The Gulf of Mexico is expected to produce 10 percent of that energy as soon as 2035.

Coastal Louisiana is not the only part of the state playing an instrumental role in the renewable energy future. In North Louisiana, Drax Biomass is compressing wood pellets from sustainable forestry sources to fuel renewable electricity generation in the U.K. In 2018, Drax Group’s U.S. headquarters moved to Monroe, Louisiana, also the headquarters of Fortune 500 Lumen Technologies.

Nearby in rural Morehouse and LaSalle parishes, two manufacturing plants contribute to annual production of 1.5 million metric tons of biomass shipped through the Port of Greater Baton Rouge. Drax Group aims to boost its yearly biomass production to five million metric tons in 2027 and to reach a carbon-negative climate posture by 2030. Carbon capture technologies will contribute to that milestone.

In Louisiana, Drax Biomass has already created 220 corporate and manufacturing jobs.

 “Sustainable biomass is already playing an important role in meeting global climate targets – both in producing renewable electricity and as a path to negative emissions,” said Drax Biomass senior vice president Matt White. “Louisiana’s well-managed and sustainable timber industry is well placed to continue providing the resilient and robust supply of biomass needed to generate renewable electricity in the UK, while also providing jobs and clean growth to the economy here.” T&ID

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