Clean Fuel News

Louisiana eyeing clean energy projects with Volkswagen settlement money

Photo: Louisiana Clean Fuels

Posted by Sam Karlin
Via Greater Baton Rouge Business Report

State officials are eyeing clean energy projects like fuel-efficient school buses in Louisiana after a U.S. settlement with Volkswagen over the auto maker’s emissions scandal will send $18 million to the state.

Louisiana Department of Environmental Quality Secretary Chuck Brown gave government, business and environmental leaders at Louisiana Clean Fuels’ annual meeting today an outline of how the state plans to spend Louisiana’s chunk of the $4.3 billion VW will pay as part of its emissions-rigging settlement with the U.S. government. Brown highlighted the alternative energy projects that will come from the deal.

The process is underway on securing the money and getting the federal government to approve Louisiana’s plan for spending it, Brown said. States will get money based on how many such diesel engines were purchased from the company, and must follow federal rules on how to spend it.

For Louisiana, the settlement will likely mean replacing the diesel engines in school buses—including in East Baton Rouge Parish—with ones that run on compressed natural gas, electricity or other clean fuels. Other projects could include investing in clean energy for ferries, ocean vessels, trucks and forklifts, among other things.
Market shifts in energy technology could be so drastic that in 30 years, Brown said, most of the vehicles on the road will be powered by alternative energy. Brown hopes to bulk up the state’s electric-friendly infrastructure, using a separate pot of money from VW, to keep up with technological advances and government agencies replacing their fleets with electric vehicles. But he was quick to point out that the clean energy focus will not spell disaster for the Louisiana economy and oil and gas companies.

“Oil and hydrocarbons are never going to go away,” Brown said. “And what you lose (in oil), you’re going to gain” in natural gas production.

Randy Hayden, Louisiana Clean Fuels president, noted much of the clean-burning energy on the market comes from resources that Louisiana already produces—including petroleum-based products.

While clean energy is on the state’s mind thanks to the VW money, environmental groups like Louisiana Clean Fuels are facing a deep period of uncertainty with the new Trump administration largely thought to be unfriendly to things like clean fuel incentives. Alternative energy business leaders are also preparing for a legislative session this spring that leaves the fate of tax expenditures for clean energy up in the air.

Advocates are trying to emphasize that natural gas is a driver of clean fuel initiatives in Louisiana, which is one of the biggest natural gas producers in the country. Policymakers and clean energy leaders painted alternative energy as a lucrative endeavor for Louisiana’s economy, not an attack on the state’s wide-ranging oil and gas industry.

“This is Louisiana industry,” said State Rep. Julie Stokes, R-Kenner. “This is not … California coming in and giving alternative energy to Louisiana. This is natural gas. This is our product. This is our people.”

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State Contacts for VW Funding

In his presentation to LCF Stakeholders, Dr. Brown explained that Louisiana's share of the VW funding will be split between three state departments: LDEQ (the lead agency), LDOT and LDNR. He also shared the names of the state contacts for the VW funding in each department:

LDEQ - Perry Theriot
LDOT - Dr. Erik Kalivoda
LDNR - Paul Miller