Exxon wins a round in Louisiana carbon pipeline dispute

Clean Hydrogen Works, which plans to build a $7.5 billion clean fuels plant in Ascension Parish, contends control of Denbury’s 620-mile-long CO₂ pipeline network in Texas, Louisiana, and Mississippi effectively makes Exxon a gatekeeper for blue hydrogen and ammonia projects at industrial hubs in an area stretching from Lake Charles to the Mississippi River corridor.

The ruling by Houston Division Judge Sofia Adrogué gives Exxon a partial win on antitrust charges without ending the broader dispute over unfair trade practices.

Clean Hydrogen Works alleges that shortly after the acquisition of Denbury in late 2023, the Spring, Texas-based energy giant "weaponized" the pipeline operator’s infrastructure by abruptly revoking a contract for a connection to the developer’s planned Ascension Parish ammonia export hub, stalling the project.

ExxonMobil’s lawyers rejected accusations of market sabotage, persuading the court that a 20-year-old Texas Supreme Court precedent involving the Coca-Cola Company strips Texas courts of the authority to adjudicate antitrust claims.

"Exxon is essentially thinking like a regulated utility, operating on the stance that they bought the network, paid a heavy premium for it, and have an internal use for it," said Dr. Eric Smith, associate director of the Tulane Energy Institute. "Their message to independent developers is that while they cannot outright refuse access, the entry price is going to be steep,” Smith told The Center Square.

Smith said building high-pressure CO2 pipelines with 12-to-20-inch diameters is "extraordinarily expensive," noting Clean Hydrogen Works' estimate of $1 billion to build an alternative connection to a Denbury competitor showed the financial barrier faced by independent clean fuel producers.

Clean Hydrogen Works executives maintain the project remains active, unlike the nearby $4.5 billion Air Products blue hydrogen plant proposed in the same parish that was abandoned by developers in June after intense local opposition to carbon pipelines and storage beneath Lake Maurepas in South Louisiana.

Exxon maintains that the contract termination was a routine corporate response to localized project delays, missing engineering schematics, and timeline breaches committed by the developer rather than an intentional strategy to defeat a clean energy rival.

ExxonMobil CEO Darren Woods announced late last year a pause in the development of the company’s own $7 billion blue hydrogen production hub in Baytown, Texas, citing a lack of long-term buyer agreements and a sluggish global carbon sequestration market.

Although the Texas court backed away from the monopoly claims, an analysis of the lawsuit by energy industry law firm Dowd Bennett concluded the Lone Star state will adjudicate the claims of unfair business practices while the antitrust and pipeline monopoly litigation would be heard in Louisiana.

"When you are totally realistic, it does not matter what the United States thinks about carbon dioxide removal; all that matters is what the international customer thinks," said Tulane Energy Institute’s Smith.

"European buyers face strict carbon mitigation rules that they must abide by to even purchase Gulf Coast gas, and if American developers cannot meet those constraints due to infrastructure bottlenecks, global competitors in Qatar, Mozambique, and Trinidad will happily step in. The jury is still out on whether ExxonMobil violated unfair trade practices, but there's a disconnect between Louisiana's role as an exporter and people's preferences in terms of what takes place before you can export the product," said Smith.