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Conservatives Split on Funding for Louisiana Gasification Plant

October 3, 2017

Conservatives are split on whether to support the $3.8 billion Lake Charles Gasification project intended to turn waste from oil refining into synthetic natural gas while capturing various emissions and converting them into valuable chemicals.

Louisiana conservatives are split on whether to support the $3.8 billion Lake Charles Gasification project intended to turn waste from oil refining into synthetic natural gas while capturing various emissions and converting them into valuable chemicals such as methanol and hydrogen.

The project’s promoters, including U.S. Sen. Bill Cassidy (R-LA), estimate it would create 1,000 jobs using cutting-edge technologies that would also capture carbon dioxide, the greenhouse gas blamed for global warming, to be used for injection into the Earth to stimulate oil production. The technology isn’t broadly proven, so finding private financing has been difficult. President Obama’s Energy Department conditionally approved a low-interest $2 billion loan guarantee for the project.

Trump’s Opinion Unclear

The money would come from a U.S. Department of Energy program congressional Republicans have targeted for ending, which loaned billions of dollars to failed green energy projects such as the solar panel manufacturer Solyndra, which went bankrupt in 2011. President Donald Trump derided the loan program in 2012, tweeting, “After Solyndra, @BarackObama is still intent on wasting our tax dollars on unproven technologies and risky companies.”

Trump has also said he wants to spend $1 trillion on infrastructure, and the project could help fulfill a commitment he made to G-20 countries to help developing and emerging economies use fossil fuels more cleanly and efficiently. During his confirmation hearings, Energy Secretary Rick Perry told the Senate Energy and Natural Resources Committee, “I’m a big believer that we have a role to play … in applied research to bring new technologies, new commercialization, new economic development opportunities to this country.’’

Corporate Handout

Critics of the proposed loan say it is a corporate handout and government shouldn’t be in the business of picking technology winners and losers.

Frederick D. Palmer, a senior fellow for energy and climate studies at The Heartland Institute, which publishes Environment & Climate News, said the gasification project is an unnecessary Obama-era boondoggle.

“The multibillion-dollar oil waste gasification project with carbon dioxide capture is an Obama-era idea that is simply not needed and will never be,” Palmer said. “There are enormous natural gas and coal resources readily available that can more efficiently and easily be accessed to achieve the same result at a much lower cost with no federal assistance needed.

“The project was only being considered because of the Obama administration’s desire to commercialize carbon-capture technology, but that’s yesterday’s news,” said Palmer. “Today’s news is President Trump’s America First Energy Plan, with no reference in it to CO2 emissions.”

Critical of Corporate Welfare

Nick Loris, the Herbert and Joyce Morgan Research Fellow in Energy and Environmental Policy at The Heritage Foundation, says these programs amount to corporate welfare and don’t make economic or environmental sense.

 “Whenever there’s a Republican in office, the fear is there will be a shift from renewable subsidies to fossil fuel and nuclear ones,” Loris said. “The DOE shouldn’t be putting taxpayers’ money at risk on any project.

“In this loan program, we’ve seen economic failures that couldn’t survive even with the generous support from the government.” Loris said. “We’ve seen blatant instances of corporate welfare, where loans went to some of the largest financiers in the world. Neither case makes sense.”

Michael McGrady (mmcgrady@uccs.eduwrites from Colorado Springs, Colorado.