Exclusive: Carbonated Beverages Not Enough to Take Sequestration Out of Equation [WATCH]

Nissa Darbonne, executive editor-at-large, Hart Energy: Thank you for joining us. I'm Nissa Darbonne, Hart Energy's executive editor-at-large. I'm visiting with Reg Manhas. He's CEO of Lapis Energy, which is developing a CCS project in south Louisiana with Denbury and also is developing one in El Dorado, Arkansas.

Reg, thank you for joining us. Reg just spoke at the Carbon & ESG Strategies Conference, and in a few follow-up questions, he's going to tell us more about: how quickly is Louisiana in particular progressing in terms of being CCS ready?

Reg Manhas, CEO, Lapis Energy: Yeah, thank you for the question. I mean, I think that Louisiana is probably well positioned as any state in this particular geography, in the sense that Louisiana has passed a regulatory framework for CCS, unlike other states like Arkansas and Texas, which are still kind of progressing that. And Louisiana is also fairly far down the road in terms of achieving its primacy for Class VI permitting from the EPA in Washington D.C.

ND: And then Arkansas. How far along is it?

RM: So Arkansas I think is as more at the early stages. Arkansas just recently passed in their last legislative session an amendment to their gas storage act, which allows the state to regulate carbon, and it grants the state the authority to move forward with its own primacy application, which we think will happen within the next six months. So we think Arkansas is on that path. We're really happy to be working in Arkansas. It's been a great regulatory environment, but I think that they would acknowledge there's more work to be done over time.

ND: A speaker earlier today discussed how with carbon sequestration, it's critical that these new projects are so well planned and so well monitored that there be not a single molecule leaked from them. They're in such a spotlight right now. Tell us more about how important that is right now.

RM: Yeah, I mean, I think that certainly as a new industry trying to get its footing in the United States, there's been a lot of talk of CCS, but until the public sees projects actually going through the permitting process, getting its EPA Class VI permits and then beginning an injection and doing it in a safe manner, I think there's going to be a degree of stakeholder scrutiny that is justified. So I think it's very important for the industry to really step forward in the proper way. I think the EPA Class VI process is such a rigorous process that almost by definition to go through that and to receive a permit from the EPA, which their entire modus is to protect U.S. drinking water. That's a very high bar. For example, our permit for the El Dorado project was 822 pages to the EPA. So a tremendous amount of data and analysis goes into that process.

ND: It just occurred to me too, we actually extract CO₂—naturally occurring CO₂, such as from Jackson Dome—I think in Mississippi—for multiple purposes, but for example, carbonated beverages. There was a contamination problem with Jackson Dome in 2020, and the beverage makers were hurting to find some CO₂. Let me move along. We're looking at burying CO₂. There just seems to be a bit of a duality there.

RM: Yeah, I mean, I think that the business itself is known as CCUS, right? So it's carbon capture utilization and storage. So there certainly are opportunities to utilize carbon. So for example, at the LSB facility in El Dorado, not only will we be taking carbon dioxide and sequestering it permanently, they have an existing partner on the plant site, which is taking a stream of CO₂ and converting it into dry ice, for example, for the beverage industry, etc. So there are multiple uses. I think that the volume of CO₂ we're talking about from an emission standpoint is so much larger than what the utilization is or the requirements are that sequestration has to be part of the equation at the end of the day.

ND: Okay, true. Because dry ice and carbonated beverages is such a small part the CO₂ that's out there.

RM: Relatively small.

ND: That's right. Yeah. Super. Thank you, Reg.

RM: Thank you.

ND: And thank you for joining us. Please find more information here hartenergy.com.