Economist Loren Scott Says Louisiana’s CCS Pause Comes With “A Lot at Stake”

Louisiana economist Dr. Loren Scott says Governor Jeff Landry’s decision to temporarily halt new applications for carbon capture and storage (CCS) wells comes at a pivotal moment for the state’s economy — one where billions of dollars in future industrial investment hang in the balance.

“There are a significant number of major projects — we’re talking about tens of millions, hundreds of millions of dollars — that are very closely tied to the CCS issue,” Scott said in an interview with Business Report. “There’s a lot of jobs and a lot of tax revenue on the line. There’s a lot at stake here from an economic standpoint.”

Landry’s executive order, issued Wednesday, places a moratorium on new Class VI injection-well applications while directing state agencies to strengthen oversight of existing proposals and establish clearer permitting guidelines. The governor framed the move as an effort to balance industrial growth with environmental protection and community concerns about transparency.

Since Louisiana earned federal “primacy” in late 2023 — meaning it now has authority from the EPA to issue and regulate CCS permits itself — the Department of Natural Resources has received applications for 33 carbon-sequestration projects, each requiring roughly 2,000 hours of review. That backlog, combined with growing local scrutiny, prompted the administration to pause new filings while agencies evaluate how to manage workload and ensure safety.

Scott, who recently released his Louisiana Economic Forecast, noted that about $120 billion in announced but not yet finalized projects across the state depend on CCS infrastructure to proceed. Those projects include new manufacturing, refining, and energy facilities that rely on carbon capture to meet emissions standards and qualify for certain international contracts.

“Some of these companies are making products that will go to countries that are still demanding a certain level of ‘green’ component to their products,” Scott explained. “If they can’t sequester some of their carbon, that’s going to make some of their products not be able to go into those markets — which, in some cases, is going to cause the project to not be viable anymore.”

Scott cautioned that even a short-term pause could shake investor confidence and prompt companies to look toward neighboring Texas, where the permitting landscape may appear more favorable. “We are always in competition with Texas,” he said. “If Texas has a policy that’s more favorable to these Class VI wells and carbon sequestration — they’ve got so much going for them already. They have better K-12, better highways, better taxation. They’re so far ahead of us in so many ways. Something like this could trigger some companies to start looking there.”

Greg Upton, executive director of LSU’s Center for Energy Studies, told Business Report that to his knowledge, no other state has enacted a similar moratorium. “Other states couldn’t do something like this if they don’t have primacy,” he said. “But no, I’m not aware of any other state that’s done this before.”

Louisiana is one of only five states — along with Arizona, North Dakota, West Virginia, and Wyoming — that hold Class VI primacy. The designation was seen as a milestone achievement when granted last year, giving Louisiana more control over a permitting process previously managed in Washington.

Now, with the moratorium in place, the state faces a delicate balancing act: addressing public safety and environmental concerns while maintaining the confidence of global investors who view CCS as key to the next generation of industrial growth.

As Scott put it, “There’s a lot at stake here from an economic standpoint.”