Carbon Capture vs. Louisiana Constitution

 Former Louisiana Gov. John Bel Edwards has promoted carbon capture projects for years.  In fact, as soon as he left office, he took a job promoting the carbon capture “industry.”  

Somewhat surprisingly, new Louisiana Gov. Jeff Landry also gave carbon capture his full-throated endorsement on Friday, Dec. 29, 2023, just days before being sworn in as governor.

Carbon capture is the process of separating out CO2 during the burning of fossil fuels, transporting it, and burying it underground, which is called carbon sequestration.  Carbon can also be captured from the air and buried in the same manner.

The Main Objections to carbon capture and sequestration projects in Louisiana have been:

1. Use of the power of government to expropriate the use of private property for carbon pipelines and storage sites against the will of the owners.

2. The funding of carbon capture projects is entirely from federal tax credits under the 45Q program. Carbon capture produces no products sold in the market and is completely funded by our tax dollars.  It is not strictly speaking “economic development.”

3. Unknown risks. At least 65 sites across the state have been chosen for carbon capture projects. They will store more than 135 million tons of carbon underground every year, often on expropriated property.

Carbon sequestration has been especially controversial in nearby Livingston, St. Helena, and Tangipahoa parishes and many other parishes where carbon capture projects have been proposed.

Citizens in these areas are in an uproar over these projects.  They say CO2 is not a pollutant and that there is no justification for the projects, which they describe as having unknown risks.  

Taxpayers Pay for This. Developers of carbon capture projects will be paid hundreds of millions by the federal government, but property owners in the areas affected say it is a gigantic boondoggle and that they will receive few benefits but have lots of risk.

An Army of Lobbyists. In recent years, big energy companies hired an army of lobbyists at the State Capitol to kill legislation that would have stopped or restricted carbon sequestration.

For example, they were able to bottle up in committee legislation by Rep. Robby Carter to prohibit the expropriation of the surface or subsurface of private lands for carbon sequestration.  Rep. Carter said Shell and Exxon each have 25,000-acre carbon sequestration projects set for St. Helena Parish.

The Purpose of this Article is 

to discuss the barriers posed by the Louisiana Constitution of 1974 to any effort to expropriate private property for carbon capture or sequestration projects.

In 2020, Sen. Sharon Hewitt passed Act 61, which broadened the authority of private companies involved in carbon capture to expropriate private property for their projects.  The expropriation could include the taking of subsurface rights under homes, businesses, or agricultural property.

Statutes vs. Constitution. This is statutory law, but how do takings of private property for carbon sequestration square with the Louisiana Constitution?  Of course, no mere statute can override the state constitution.

As the author of Article I, Section 4 (Right to Property) of the Declaration of Rights of the Louisiana Constitution, I have to say there could be big problems for developers.  To understand their dilemma, it is essential to realize the United States Constitution does not recognize the Right to Property in the Bill of Rights.  That right is protected only in a back-handed sort of way.

Federal Constitution vs. Louisiana Constitution.  Article 5 the U. S. Constitution provides that “No person shall be… deprived of… property without due process of law, nor shall private property be taken for public use, without just compensation.”  These federal protections were made applicable to the states by the 14th Amendment.

On the other hand, the Louisiana Constitution includes the Right to Property in the Declaration of Rights.  The protections provided are extensive and supercede the limited protection of property rights in the U.S. Constitution.

Unfortunately, even some Louisiana attorneys think of expropriation cases only in terms of meeting “due process” standards and making sure “just compensation” is paid.  However, under the state constitution, there is much more to be considered.

Louisiana Constitution. Article I, Section 4 (Right to Property) of the Louisiana Constitution of 1974 provides that private entities which attempt to expropriate private property must have a “public” and a “necessary” purpose.  It further provides that “whether the purpose is public and necessary shall be a judicial question.”  In other words, it is up to the judge to decide the issue, without respect to any declaration in a statute or any permit issued by the state.  So there is no question about whether a declaration in a statute that carbon capture is a “public purpose” settles the issue. On the contrary, the state constitution clearly says that issue is for the judge to decide.

Is There a “Public” Purpose served by carbon sequestration?  In general, the answer would be no.  For example, suppose Exxon has a plant and a carbon capture storage site 10 miles away. Exxon wants to build a pipeline connecting the two. Fine, but that is clearly a private purpose for Exxon to make money.  It is very different from a common carrier or a public utility that serves everyone.  If it is argued that the carbon capture project promotes “economic development,” does that give it a “public” purpose?  No, because Article I, Section 4 of the Louisiana Constitution clearly provides that when government has a taking, “Neither economic development, enhancement of tax revenue, or any incidental benefit to the public shall be considered in determining whether the taking or damaging of property is for a public purpose.”  Certainly, private takings must meet at least the standard for government.

Necessary: A Tall Hill to Climb.  Can an expropriation for a carbon sequestration project meet the test of being “necessary”?  In general, our courts limit expropriation for highway or pipeline purposes to only such property as may be necessary to get from point A to point B.  So how can it be argued that a carbon sequestration project must be at a specific location in, say, Livingston Parish?Why not in another spot in Livingston or another parish where a voluntary sale of the property could be negotiated?  The question is whether a private expropriator could prove to the judge that a particular site is “necessary.” Necessary for what?  So they can get their federal tax credits?

That seems unlikely. Similarly, how could it be proven that expropriation is “necessary” at all when there are hundreds of thousands of acres of land across the state?  Meeting the requirement that it is “necessary” to locate in a particular spot could be a tall order.

The Next Barrier: The Jury. However, suppose a judge in Livingston Parish rules that the proposed expropriation for carbon sequestration is both “public” and “necessary.” 

The next problem is 1) who will determine the compensation to be paid to the property owner, and 2) what legal standard will determine the amount of compensation?

Under the Louisiana Constitution, the amount of compensation in expropriation cases must be determined by a jury if either party requests a jury trial.  Article I, Section 4 says, “In every expropriation, a party has a right to trial by jury to determine compensation…”

It can be assumed that a jury is much more likely to come back with a favorable sum for the property owner than a judge would.  Bear in mind also that the trial would probably occur in a parish such as Livingston, where opposition to carbon capture is widespread.

Perhaps the proponents of carbon capture have not thought this through, but the potential for enormous judgments seems high.

The Legal Standard for Compensation. Finally, consider the legal standard by which the amount of compensation shall be determined under Article I, Section 4.

I wrote a law review article that covered this subject immediately after the adoption of the Louisiana Constitution of 1974.  The article appeared as part of a symposium on the new Constitution by Loyola Law Review.  Gov. Edwin Edwards wrote the lead article and I wrote the article on the Declaration of Rights.

In that article (Loyola Law Review, Spring 1975), I said,

The amount of compensation to be paid when property is taken is not merely “just compensation” as that term has been understood under the fifth and fourteenth amendments of the Federal Constitution and the 1921 State Constitution.  Instead, the owner must be compensated “to the full extent of his loss”.  This is intended to include things “which, perhaps, in the past may have been considered damnum absque injuria, such  as cost of removal,” attorney fees, inconvenience, loss of aesthetic value or business profits, and so forth. The loss to be measured is the loss sustained by the owner himself.  The Section very carefully says that the owner is to be compensated “to the full extent of his loss” instead of “to the full extent of the loss” (emphasis added).  In other words, the compensation is to be determined subjectively with emphasis on the value placed on the property by the owner instead of on its so-called market value or replacement cost.  This emphasis will generally require compensation to be much greater than in the past.

I wrote in the article that the tilt of the new Constitution was very much against expropriation, saying,

Of course, the award of large sums by generous juries could have the effect of preventing the taking altogether.  Moreover, the [Bill of Rights and Elections] committee did not intend the finding of facts in such jury trials to be reviewed by the courts, because the right to trial by jury in this instance is established by the Constitution, instead of by the statutes, as is the case in other civil jury trials.  In fact, the purpose of permitting jury trials was to encourage more substantial awards instead of placing the authority to decide compensation in the hands of a judge, who is an instrumentality of government paid by the state and the local police jury, either of which may be a party to the suit.  

The language is clear: The jury decides the amount of compensation — not an appellate court.

The bottom line is, carbon capture and sequestration can proceed, but Article I, Section 4 could make it very expensive to expropriate property for pipelines and storage sites. Juries are likely to see to that!

Former Rep. Woody Jenkins was a delegate to the Louisiana Constitutional Convention of 1973 and authored the Declaration of Rights of the Louisiana Constitution.   Contact him at woodyjenkins2020@hotmail.com.