How Louisiana can become a clean industry powerhouse

A cutting-edge model identifies the optimal pathway — and green hydrogen is a key player.
By Olivia Ashmoore

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John Bel Edwards
Louisiana Governor John Bel Edwards (D) testifies during a Senate Energy and Natural Resources Committee hearing. (Tom Williams/CQ-Roll Call via Getty Images)

Olivia Ashmoore is a policy analyst at Energy Innovation. This guest essay represents the views of the author, not those of Canary Media.

Louisiana Governor John Bel Edwards (D) has big climate ambitions and is positioning his state to become an advanced clean industry hub, in the process strengthening Louisiana’s economy and cleaning up its air. In the past year, his administration has set tough climate targets, launched a Climate Initiatives Task Force, and joined the United Nations Framework Convention on Climate Change’s Race To Zero Campaign. Last week, Edwards traveled to the COP26 climate summit in Glasgow, Scotland, where he spoke about the threats posed to Louisiana by climate change and the opportunity for the state to lead on clean energy.

Edwards’ climate task force is charged with drawing up a strategy to meet the state’s climate goals, which will mean slashing greenhouse gas emissions while creating jobs for the workers of today and tomorrow. One tool it’s using to do the job is the Louisiana Energy Policy Simulator, a modeling platform. Edwards praised the EPS last week and noted that it’s available to the public, so anyone can explore the potential impacts of climate policies.

A recent report I co-authored using the Louisiana EPS charts a policy pathway for the state to cut carbon emissions by 97 percent by 2050, add billions of dollars in value to Louisiana’s economy each year and create 260,000 job-years by 2050 — all fueled by clean industry.

Why Edwards’ moves matter

Climate leadership from states such as Louisiana is critical — the U.S. can’t hit its climate goals without bringing along heavy-hitting industrial states. After Texas, Louisiana is the second-largest producer of chemical products. It’s also one of the top five natural-gas-producing states and is currently building new facilities to export liquefied natural gas.

Louisiana’s petrochemical sector helped to power industrial growth in the U.S. over the last century, but that growth has come at a cost. Some communities have been burdened with toxic pollution and poor air quality. The state now has the country’s seventh-largest energy-related greenhouse-gas footprint.

And the climate change being driven by greenhouse gas emissions is particularly threatening to Louisiana communities. Hurricanes and extreme heat are devastating the state’s infrastructure, forcing migrations and costing lives. Managing climate-driven disasters in Louisiana will be staggeringly expensive. Estimated costs from this year’s Hurricane Ida, which affected a number of states but hit Louisiana the hardest, exceed $95 billion.

Policies to reach net-zero carbon and kick-start clean industry innovation

Louisiana can reverse its emissions trends while positioning itself as America’s clean industry innovation leader, as indicated by modeling carried out with the Louisiana EPS.

The EPS — developed by my organization, Energy Innovation, in collaboration with clean-energy think tank RMI — is an open-source, peer-reviewed modeling tool that empowers users to estimate climate and energy policy impacts on emissions, the economy and public health using publicly available data. EPS models have also been developed for nearly a dozen countries and several subnational regions, including California, Colorado, Minnesota, Nevada and Virginia. (Canary Media is an independent affiliate of RMI.)

Using the Louisiana EPS, we designed a set of smart climate policies that would align the state with the pledge the U.S. has made under the Paris Agreement, known as a nationally determined contribution (NDC). The policy suite would cut statewide greenhouse gas emissions almost to zero by 2050. Without these policies in place, emissions could increase at least 30 percent over the same period.

Three policies from our NDC scenario” would have a particularly large impact: a clean electricity standard, industrial fuel-switching to electrification and hydrogen, and green hydrogen production.

(Energy Innovation)

Clean electricity standard

A clean electricity grid combined with increased grid storage and transmission investment is essential to the industrial sector’s shift to electrification and hydrogen. Fossil fuels generate most of Louisiana’s electricity, despite the ever-increasing cost-competitiveness of renewable resources.

The NDC scenario models an 80 percent clean electricity standard by 2030 and a 100 percent clean electricity standard by 2035, unlocking deeper reductions by enabling industrial users to switch from fossil fuels to clean electricity.

New Orleans recently previewed what Louisiana as a whole can achieve, passing a standard requiring 100 percent clean electricity by 2050.

Industrial fuel-switching

The industrial sector represents an overwhelming share of Louisiana’s fossil fuel consumption and greenhouse gas emissions. Switching from fossil fuel use to electricity and green hydrogen will cut greenhouse gas emissions while reducing particulates that harm the health of communities located near industrial facilities. 

(Energy Innovation)

Electricity can be used for many industrial applications, but some of Louisiana’s largest industries need fuels capable of producing very high heat levels for use in industrial processing. For example, the chemicals and refining industries require high heat to produce petrochemical products. Green hydrogen can fill this niche, serving as a substitute for fossil fuel combustion in industries with high heating loads.

Industrial fuel-switching could occur through policies including air pollution or equipment standards, carbon pricing on industrial fuels, or industrial carbon caps. Any policy combination, however, must push industry away from fossil fuels and toward zero-emission alternatives, and then turn to eliminating the remaining emissions.

The Build Back Better Act, now being debated in Congress, currently includes significant funding for provisions aimed at lowering emissions from heavy industry, including clean manufacturing tax credits and U.S. Department of Energy loans. If enacted, these federal programs would make it easier and more affordable for Louisiana to clean up its industrial sector.

Green hydrogen

Hydrogen can be produced using clean electricity through a zero-carbon process called electrolysis. Hydrogen is already used and produced in Louisiana as an industrial fuel source, but almost all of it is produced with fossil fuels. Shifting hydrogen production to renewable electricity would provide a clean industrial fuel.

The global race to produce green hydrogen is already underway, with huge opportunities for first movers. Australia, Germany and South Korea are taking the lead so far. While production costs are expected to drop rapidly over the next decade, the U.S. is just getting started with green hydrogen pilot projects in Texas and Utah.

If Louisiana acts quickly, it can position itself as a green-hydrogen hub, creating new jobs. Green hydrogen and industrial fuel-switching account for 92 percent of the NDC scenario’s job growth by 2050, and these shifts contribute the lion’s share of emissions reductions.

A boost for health too

The clean energy policies in the NDC scenario would also dramatically cut air pollution, preventing 800 deaths and 22,000 asthma attacks per year by 2030, increasing to 2,300 deaths and 67,000 asthma attacks per year by 2050, with benefits expected to accrue largely in communities that are now heavily burdened by pollution.

Louisiana is seeking out expert recommendations, building climate policy momentum and focusing on the actions needed to achieve economywide emissions reductions. By acting quickly, the state can become a guide star for competitive 21st-century industry.

Olivia Ashmoore is a policy analyst at Energy Innovation, focused on the firm’s Energy Policy Solutions program.