Groups push for more oversight of carbon sequestration projects

[October 26, 2024]  By Greg Bishop | The Center Square

(The Center Square) – The carbon capture industry lacks significant transparency with billions of tax dollars at stake, according to groups urging U.S. Congress for more oversight.

After a series of leaks of carbon capture wells at an ADM plant in Decatur, Illinois, the company voluntarily halted operations. The issue has heightened concerns about negative impacts such leaks have on aquifers and the environment.

During a recent briefing to congressional staffers, Pam Richart from Eco-Justice Collaborative in Champaign questioned why a halt to operations at ADM wasn’t ordered by the U.S. Environmental Protection Agency. She also said ADM knew of leaks while the company was negotiating carbon sequestration issues with the city of Decatur and state legislators earlier this year.

“ADM knew their well was leaking. They said nothing,” Richart said. “Nothing to Decatur. Nothing to the negotiating team. Nothing to the legislators.”

A spokesperson for ADM said in a statement to The Center Square Friday that the company plays a "critical role in the advancement and evolution of this technology."

"We routinely reported to U.S. EPA the intermittent monitoring issues for VW#2, including the discovery of corrosion on the tubing and action to plug the well in late 2023 according to our permit," the statement said. "The independent test results received in late July 2024 confirming the CO2 migration into the Ironton Galesville were also promptly reported to U.S. EPA. "

ADM contends the leaks posed no threat to the surface or groundwater, nor to public health.

"It is for those reasons that additional notifications were not made," the statement said. "Recognizing the interest in this matter, we have added updates to our webpage (www.adm.com/ccs) so that anyone can be kept up to date.":

A graphic from a Prairie Research Institute report on carbon capture and storage - Prairie Research Institute, University of Illinois

Paul Blackburn with Bold Alliance spelled out the billions of tax credits companies can get from the federal government for carbon storage, but storage must be secure.

“If the storage is not secure then the 45Q tax credit is based on inadequate security standards for the CO2 that’s being put into the ground,” Blackburn said.

The Office of Congressional Research reported in an August 2023 document the actual taxpayer cost of the tax credit for carbon storage operations over time isn’t clear because of uncertainty about future carbon capture sequestration development. But the estimated amount is increasing exponentially.

“In December 2022, the Joint Committee on Taxation estimated that Section 45Q-associated tax expenditures would be less than $50 million per year … through 2026, or about $0.2 billion over the 2022-2026 five-year period,” the document said. “The Department of the Treasury’s March 2022 tax expenditure estimates for Section 45Q were $2.4 billion for the 2022-2026 five-year period and $30.3 billion from 2022 to 2032, suggesting an expected increase in tax credit claims in later years.”

With recent leaks at ADM and concerns elsewhere throughout the country, Food and Water Watch Policy Director Jim Walsh said it’s clear the technology is not ready and more needs to be done by the U.S. Congress and the EPA.

“And ensure that the IRS is properly monitoring billions in dollars in tax credits that the industry is working to exploit,” Walsh said. “And this really raises serious questions about whether the inspector general should look into numerous questions raised by these leaks, such as why the public was not notified of leaks in Illinois, what the EPA knew when and why it took so long for the EPA to issue a notice of violation.”