Illinois’s carbon dioxide pipeline and sequestration law passed May 26 is being described as among the nation’s strictest. It is only the second carbon dioxide pipeline moratorium in the U.S., after California, and it creates a significant permitting process once the moratorium is lifted.

But landowners and advocates are still unhappy with several key provisions left out of the law, and said they are exploring options to end the use of eminent domain for carbon pipelines and protect landowners from carbon being sequestered in their underground pore space against their will.

“There’s a lot of good in there, but it definitely is a work in progress in terms of guard rails,” said Jennifer Cassel, a senior attorney for Earthjustice who worked with the Illinois Clean Jobs Coalition that endorsed the new law after members previously worked with lawmakers on a stronger bill. “The federal uncertainty was part of the push, and there’s so much of a gold rush already happening,” with applications for 22 carbon dioxide injection wells pending in the state, plus various pipeline proposals.

SB 1289, or the SAFE Act, allows a company seeking to sequester carbon to move forward if the owners of 75% of the affected land agree to the plan, which provides them compensation. That means, critics note, that owners of 25% of the land cannot stop a project, even if they are opposed. Owners of small several-acre parcels would have few rights compared to large landowners, noted Pam Richart, co-founder of the Coalition to Stop CO2 Pipelines.

The coalition had worked with lawmakers on a much more stringent bill, which would have limited the use of eminent domain to acquire land for pipelines and sequestration. It would also have banned the injection of carbon dioxide through the Mahomet Aquifer. The Farm Bureau opposed the SAFE Act in part because it didn’t address eminent domain, though the new law includes some protections regarding compensation for land damage.  

“Landowners are profoundly disappointed that the act was approved without eminent domain [limits],” Richart said.  “The landowner protections weren’t as strong as we hoped.”

The coalition’s preferred bill would not have allowed forced integration of pore space against landowners’ will. Richart said they expected some compromise on that front, but not to the extent enshrined in the SAFE Act.  

“That’s not how this is supposed to work,” she said. “If a project is in the public interest, you wouldn’t expect landowners of 25% of the land to hold out.”

The SAFE Act stands for Safety and Aid for the Environment in Carbon Capture and Sequestration. It still awaits signature by Gov. J.B. Pritzker, who has indicated he will sign it, and bills become law after 60 days in Illinois if the governor takes no action. 

Future options

Richart said advocates don’t plan to “reopen the whole process” around legislation, but hope to work with legislators on a trailer bill that could increase protections for landowners.

“A lot of legislators expressed serious concern about the aquifer, I wouldn’t be surprised if those issues and potentially others come back up in some form,” Cassel said.

The new law places a moratorium on new carbon dioxide pipelines for two years or until the federal Pipeline and Hazardous Materials Safety Administration issues regulations for carbon dioxide pipelines, which are in the works. The previous bill advocates backed included a moratorium of four years or until the federal regulations are adopted. Cassel said labor unions felt that moratorium was too long.   

Richart said the Illinois law is only a “quasi-moratorium” since companies can begin the application process for new pipelines even before the PHMSA regulations come out.

Meanwhile the SAFE Act does not include setbacks from properties for carbon dioxide pipelines. If the PHMSA regulations do not include setbacks, which is likely, Illinois advocates could push for setbacks under the permitting process created by the SAFE Act, since it allows for additional safety measures to be developed provided they are not in conflict with federal regulations.

Advocates say county governments, which have in multiple cases refused to approve sequestration sites connected to pipelines, could work together to push for setback policy.

Benefits of new law

Advocates are grateful for a robust public engagement process created by the new law.

“Before there was no requirement to notify anybody about a carbon dioxide pipeline except when the Illinois Commerce Commission was ready to begin its application process,” said Richart, citing two recent controversial proposals. “Wolf never notified anybody, One Earth never notified anybody. The commerce commission just said, ‘You better come to this hearing, it might be subject to eminent domain.’”

The Illinois Commerce Commission decides whether a given proposal is in the public interest and able to invoke eminent domain, but previously the commission had no authority over carbon sequestration sites and its consideration of pipelines was largely limited to property values.  

The SAFE Act creates a permitting process that requires companies hold two public meetings in each affected county and post materials about the proposal and public comment process. Under the new law, the Illinois Commerce Commission can consider safety and other information in deciding whether to grant eminent domain powers.

Under the new law, companies must also pay into an emergency response fund and create an emergency plan, which entails modeling about possible risks and the expected distribution of carbon dioxide plumes in case of a leak.

“They have to do computational fluid dynamics modeling, and they have to make it public, at a time when there is a definite movement by pipeline developers to make their modeling proprietary, confidential,” said Richart. “So this is huge.”

Companies doing carbon injection and sequestration must also put up money for future environmental mitigation, so future costs don’t fall on the state. The law does not allow self-bonding, a controversial financing mechanism used by coal companies in the past that ultimately forced the state to foot the bill for mine cleanup.

The SAFE Act also enshrines safeguards to make sure that carbon capture and sequestration doesn’t ultimately lead to an increase in air pollution by allowing coal plants to keep operating, and it prohibits the use of carbon dioxide for enhanced oil recovery.

These protections gained approval from environmental justice organizations like the Little Village Environmental Justice Organization, a member of the Illinois Clean Jobs Coalition.

The Illinois Corn Growers Association and Illinois Renewable Fuels Association also backed the new law. Their members stand to benefit from the expansion of the ethanol industry, which depends on carbon sequestration to reduce its greenhouse gas emissions. While carbon capture and sequestration was launched in Illinois in relation to coal plants, recent pipeline proposals have focused primarily on connecting ethanol plants to sequestration sites.

State Rep. Ann Williams, a sponsor of the law, said in a statement that:

“Illinois is a national leader on climate and energy policy, and SB 1289 ensures that if companies are going to use CCS as a climate mitigation strategy, they will need to meet some of the strongest standards in the nation. The CCS protections bill ensures critical guardrails are in place to protect Illinois taxpayers, landowners and our environment.”

Illinois passed ‘strongest standards in the nation’ on carbon sequestration, but advocates say more work is needed is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The oil and gas industry in North Dakota wants more carbon but the company behind a giant carbon capture project says it remains committed to underground storage. 

North Dakota’s oil industry sees strong potential in using carbon dioxide for enhanced oil recovery — pumping gas underground to force oil toward a drilled well. 

“We don’t have any customers today approaching us about enhanced oil recovery,” Lee Blank, CEO of Summit Carbon Solutions, told the North Dakota Monitor in an interview. 

The Summit plan is to store carbon dioxide emissions from ethanol plants in underground wells northwest of Bismarck. The Department of Mineral Resources has set a hearing for June 11-12 on that part of the project. 

For the underground storage to happen, Summit needs permits in North Dakota and other states for pipelines to carry the greenhouse gasses to the storage site. 

The North Dakota Public Service Commission last year denied Summit’s application but will hold a series of hearings beginning Monday in Mandan to reconsider that decision. There also will be hearings May 24 in Wahpeton and June 4 in Linton. 

Summit has made changes to its route, especially through Burleigh County, moving farther away from Bismarck, leading some intervenors to withdraw from the PSC case. It also has made changes to avoid landslide and wildlife areas.  

“What I’m hopeful of is that the company comes in and provides good clear testimony to how they’re addressing the deficiencies that were put forward in the denial last summer,” said Randy Christmann, chair of the three-person Public Service Commission.

Summit said Chief Operating Officer Jimmy Powell and Wade Boeshans, executive vice president, will provide testimony. 

Christmann said there may also be landowner testimony on the first day of the hearing. While the Mandan facility is reserved for the week, Christmann said the hearing may not last that long. 

In public hearings last year, the PSC heard from residents concerned about the safety of carbon pipelines, damage to drain tile and farmland, liability issues and effects on property values.  

North Dakota Agriculture Commissioner Doug Goehring is a carbon storage skeptic who adds that Summit got off on the wrong foot with landowners, saying people felt threatened and bullied by Summit agents trying to obtain easements. 

“That spreads like wildfire,” Goehring said.

Summit says it has obtained about 80% of the route it needs through voluntary easements, paying landowners in return. Blank says that percentage will likely shoot up if Summit is granted a permit.

Without a voluntary easement, Summit may try to use eminent domain, getting a court order to force landowners to provide a right-of-way, though they would still receive some compensation. 

Other opponents say carbon capture isn’t needed because they don’t view climate change as a real threat. 

While carbon capture is seen by some as a way of addressing climate change, the project is opposed by several environmental groups such as the Dakota Resource Council in North Dakota. 

Supporters say the pipeline project is needed to support the ethanol industry and the farmers who supply ethanol plants with corn. 

Farmers and industry leaders are trying to lower their carbon intensity score to tap into markets with a low carbon fuel standard, where a lower score can mean a premium price.  The Tharaldson Ethanol plant at Casselton is the only ethanol plant in the state that is part of the Summit Carbon Solutions pipeline project. (Jeff Beach/North Dakota Monitor)

Carbon capture and storage, or CCS, would dramatically lower that score and by tacking on some other technologies, Ryan Carter of Tharaldson Ethanol at Casselton said the plant could get close to 0 or even below. 

“If we don’t do the CCS, everything else that we’re doing to decarbonize our facility does not work,” Carter said Monday in a Fargo seminar on the topic, hosted by the Friends of Ag & Energy. 

Blank said the benefits would vary with each ethanol plant but said the plants should get a minimum benefit of 20 cents per gallon of ethanol. 

“The ethanol industry has been very up and down when it comes to income,” Blank said. “Some years, a nickel or a dime can be a good margin for them. So when you consider the fact that this could add an additional 20 cents a gallon or even more to their revenue streams, it gives you an idea of what that means to the cash flow.” 

Tharaldson Ethanol remains the only North Dakota plant in the project. The project has grown from 31 plants to 57 plants after another carbon pipeline project, Navigator CO2 Ventures, abandoned its plans. 

The bulk of the plants are in Iowa, where Summit is based. Other plants are in Minnesota, Nebraska and South Dakota. 

Why North Dakota?

If the bulk of the plants are in other states, why store the carbon in North Dakota? 

John Harju of the Energy and Environmental Resource Center at the University of North Dakota says the state has some of the best geology in the world for underground storage, with a lot of pore space to store millions of tons of carbon dioxide and a cap rock to keep it underground. 

North Dakota also is one of the few states able to issue its own permit for underground storage, rather than going through the federal Environmental Protection Agency.  John Harju of the Energy and Environmental Research Center chats with an attendee to a seminar on carbon capture in Fargo on April 15, 2024. (Jeff Beach/North Dakota Monitor)

Two western North Dakota ethanol plants are using CCS, taking advantage of being near areas with the right geology for underground storage.

The Navigator project planned to use a storage site in Illinois, but Blank said Summit has not considered that site or others. 

“We may not have gotten everything right, but I think we chose the right direction to take our CO2,” Blank said. 

When Summit announced its project, there was speculation that the carbon dioxide would end up in North Dakota oilfields for enhanced oil recovery. 

But Summit’s pipeline permit application specifies underground storage. And the federal tax credits, a major source of revenue for the project, are higher for storage than if the carbon were to be used for oil production. 

Summit officials have said the pipeline could be used for enhanced oil recovery in the future with the right agreement with a customer. 

The tax credits for storage are set to expire in 12 years. 

Goehring sees benefits to the state after that. 

“I may not like how the whole pipeline issue has transpired, but I do see value in it on the back end, which is after 12 years of them meeting their obligation,” he said.  

While it is more difficult to use enhanced oil recovery in North Dakota’s Bakken shale formation than in conventional oil wells, Harju says the technology is ready. 

“It’s ready for prime time. It needs a lot of investment,” Harju said.  

He said enhanced oil recovery could extend the Bakken oilfield from 20 to 30 years of productivity to 50 years. 

Harju said large producers of CO2 in North Dakota emit about 30 million tons annually. He said the Bakken system could use about eight to 10 times that amount for enhanced oil recovery. 

But without enhanced oil recovery, Harju said wells that have declined in productivity will get capped and enhanced oil recovery will likely never be used on those wells. 

“Now is the time, but our incentives are really stacking the deck against enhanced recovery,” Harju said. 

Why ethanol?

Why are ethanol plants the focus of carbon capture projects? 

The fermentation process of turning corn into ethanol produces carbon dioxide that is very pure and easy to compress and transport by pipeline – easier than other high carbon emitters such as power plants.  Ryan Carter of Tharaldson Ethanol, left, and corn grower Andrew Mauch, discuss carbon capture’s effect on the ethanol industry and agriculture on April 15, 2024, in Fargo. (Jeff Beach/North Dakota Monitor)

Ethanol is blended with traditional gasoline made from fossil fuels and its use has become widespread. 

Canada and some states, with California leading the way, have created a low carbon fuel standard, creating premium prices for fuel produced with a low carbon score. 

While some see electric vehicles as a threat to liquid fuels, a developing market for the ethanol industry is sustainable aviation, with battery power not practical for planes.

Andrew Mauch of the North Dakota Corn Growers Association said he was only able to come back to the family farm near Mooreton because of ethanol. 

“I only had that opportunity because of the ethanol boom at the time,” Mauch said during the seminar in Fargo. 

He said corn-based fuel gives his kids a chance to keep the farm going.

“I think this sustainable aviation fuel and just the growing demand for ethanol is that next big thing,” he said. 

North Dakota Monitor is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. North Dakota Monitor maintains editorial independence. Contact Editor Amy Dalrymple for questions: info@northdakotamonitor.com. Follow North Dakota Monitor on Facebook and Twitter.

Summit to make its carbon pipeline permit case again in North Dakota is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Carbon dioxide pipeline and sequestration projects would face significant new scrutiny and regulations under proposed legislation introduced this week in Illinois.

Advocates who helped draft the proposal (SB 3930, HB 5814) say it is crucial to institute standards and protections, as multiple companies seek to sequester carbon in Illinois’ Mt. Simon sandstone geology and reap lucrative federal tax credits. The legislation was formally introduced Monday.

State lawmakers held a hearing earlier this month on separate bills (HB 4835, SB 3441) that would place a moratorium on carbon dioxide pipelines for four years or until new federal safety regulations are adopted by the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Many Illinois residents and pipeline opponents are hoping both bills pass, to stop pipeline construction while the state studies safety issues, appropriate setbacks and other factors.

Companies seeking to sequester carbon dioxide in Illinois have so far failed to secure county approvals for proposed sites, and two major carbon dioxide pipeline proposals — from the companies Navigator CO2 Ventures and Wolf Carbon Solutions — were withdrawn from consideration by the Illinois Commerce Commission last year. 

But Wolf is expected to refile its application for a necessary certificate of authority. And the commerce commission is currently considering a proposal from One Earth Energy for a six-mile pipeline that — if built — is expected to spur proposals for longer pipelines that would connect to it and a proposed sequestration site.

The newly proposed legislation, as described in a summary, includes: “pipeline setbacks for safe evacuation, limits on eminent domain, expanded monitoring at carbon sequestration sites, provisions for long-term liability in the event of disaster, a ban on the use of captured carbon dioxide for enhanced oil recovery.”

It would also mandate that when sequestration sites are proposed, regulatory agencies review life-cycle greenhouse gas emissions and consider alternatives to carbon sequestration. The legislation bans injecting carbon dioxide through the Mahomet Aquifer, labeled by the U.S. EPA as the area’s only sole-source aquifer. And it would mandate halts in sequestration if certain magnitudes of seismic activity are detected.

The bill would require the state to study appropriate setbacks from residences, businesses and infrastructure to protect from harm if a pipeline ruptures or leaks. Little or no government guidance or regulation currently exists on carbon dioxide pipeline setbacks, advocates note.

“There is not any federal law, any state law, nothing right now that says you cannot be located ‘x’ distance from people’s homes, schools, daycares,” said Jenny Cassel, an Earthjustice senior attorney involved in drafting the bill. “The problem is the federal government is never going to do it, because local zoning is not part of their purview.”

Pam Richart, a central Illinois resident and co-founder of the Coalition to Stop CO2 Pipelines, added that, “The proposed legislation would demand the state study setbacks based on how carbon dioxide behaves. If it were to rupture, where would it go?”

Cassel explained that once the study is done, the Illinois EPA would be tasked with developing routing standards and modeling criteria that a company must follow when applying for a pipeline route permit. Currently, no such requirement for a permit exists. Pipelines must receive a certificate of authority from the Illinois Commerce Commission, but the commission focuses largely on whether the pipeline would be in the public benefit.

“As long as we have this tax incentive that is dangling money in front of these companies, until they have a clear set of protections that makes them think twice about whether it really is worth it, or until the state of Illinois says ‘We’re not willing to take this risk,’” proposals will continue, Cassel said.

Expanded requirements

The legislation goes beyond similar bills introduced last year and would mandate extensive research and state permitting be done before a company can apply to the Illinois Commerce Commission for a certificate. 

Currently there are no requirements that companies create or release models showing how a carbon dioxide plume would likely spread in case of a rupture. The new bill would require such modeling for a necessary Illinois EPA permit. And it would mandate companies put up funds for future cleanup and maintenance of sequestration sites.

“Industry is trying to hand the keys to the state as soon as they’re done and say, ‘Good luck with that,’” Cassel said. “We think Illinois already has enough Superfund sites, mines, wells, all sorts of other environmental hazards that need to be reclaimed. We need to set aside real cash to address if something goes wrong.”

She stressed that unlike in other geologies, carbon dioxide will likely remain gaseous and unstable in the state’s sandstone formation. This could especially be a concern if new injection wells are added for expanded sequestration, she said.

“The more you mess with an underground formation, the more you’re creating the possibility the plume is going to be shifted underground,” Cassel said. “If you change pressure over here, there’s a decrease in pressure in the same underground formation. It’s not like you can count on the pressure remaining the same over time.”

In recent years, companies including One Earth and Navigator have applied for pipeline permits without having secured rights for a place to sequester the carbon dioxide.

Obtaining necessary permission from landowners and local county boards has proved difficult. Navigator offered to pay county boards for help facilitating their sequestration applications, but multiple boards turned them down.

The state’s Renewable Fuels Association, a trade group representing ethanol producers, did not respond to requests for comment. One Earth Energy also did not respond. 

“Industry needs legislation,” said Richart. “They can’t move forward without addressing the regulatory gaps that exist for ownership and utilization of pore space.”

Changing priorities

In 2011, Illinois passed a law to facilitate the construction of carbon dioxide pipelines and sequestration, and specifically to facilitate the proposed FutureGen project, a multibillion-dollar effort to store carbon dioxide underground at the site of a Meredosia, Illinois, coal plant. 

That law says in part: “carbon dioxide pipelines are critical to the promotion and use of Illinois coal,” and are “a benefit to the welfare of Illinois.”

The FutureGen project died in 2015, but the law continues to be the only specific state guidance on carbon dioxide sequestration and transport. 

The pipelines recently proposed in the state are primarily linked to ethanol plants. But carbon dioxide pipelines are also increasingly likely to be proposed to sequester carbon dioxide from the production of “blue hydrogen” — made from natural gas — since the federal government is offering lucrative tax incentives for hydrogen and $1 billion for a Midwestern hydrogen hub.

Kathy Campbell, an audiologist and professor emeritus at Southern Illinois University, testified before the commerce commission regarding the proposed Wolf, Navigator and One Earth pipelines.

The Navigator pipeline would have passed right through Campbell’s land in central Illinois. Though that proposal was canceled in the wake of massive public opposition and skepticism from the commerce commission, Campbell feels this is only the beginning of a carbon dioxide rush.

“I won’t feel real comfortable until we get some legislation passed,” Campbell said. “We need our moratorium bill, and we need more study.”

Yet another Illinois bill (SB 2860), backed by the Illinois Farm Bureau, would prohibit the use of eminent domain to secure carbon dioxide pipeline rights of way. Illinois farmers are worried about their land being seized through eminent domain for pipelines.Industry players with interests in carbon dioxide transport and sequestration meanwhile are backing a bill (HB 0569) that would allow sequestration operators to use underground pore space even if landowners are opposed, while setting procedures for land access and compensation for damage to land.

Illinois bills seek to regulate carbon dioxide pipelines and sequestration  is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Indiana environmental and citizen groups say a lack of transparency for a planned regional hydrogen fuel hub is stoking fears that the project will primarily benefit polluting heavy industries – though the federally funded program is meant to be part of a clean energy transition.

“If we don’t get this right, if this hydrogen hub program doesn’t unfold in a way that’s equitable and different from the extractive energy programs of the past, this will just be another handout for fossil fuels that harms communities,” said Lauren Piette, senior associate attorney for the environmental law firm Earthjustice.

The U.S. Department of Energy last year awarded $1 billion to the Midwest Alliance for Clean Hydrogen’s “MachH2,” a consortium of companies, universities, and other entities in Indiana, Illinois, and Michigan, to ramp up hydrogen fuel production in the region. The funding is part of a broader effort to scale up and bring down the cost of the clean-burning gas, with the DOE spending $7 billion to fund seven hydrogen hubs nationwide. 

Since that announcement, though, environmental and citizen groups say they have received little information or outreach from MachH2 organizers. In that vacuum, based on what little information is publicly available, concerns are growing that the hub will perpetuate polluting heavy industry in Northwest Indiana and help drive construction of controversial carbon dioxide pipelines.

“Transparency is a demand,” said Chris Chyung, executive director of Indiana Conservation Voters. “To listen to farmers and environmental justice communities is also a demand of Hoosiers who are so frustrated and tired of being the Midwest’s dumping ground and Chicago’s dumping ground.” 

Backers say the large-scale production of hydrogen in the Midwest could mean revolutionary decarbonization for regional industry and transportation, and create more than 13,000 jobs. 

“We’re looking at some heavy industry — steel, glass, concrete,” said Neil Banwart, chief integration officer for MachH2. “From the transportation perspective, we’re looking at heavy-duty long-haul trucking, and in the longer term certain marine applications, maybe rail — fuel cells on locomotives, agricultural production of fertilizer.”

Environmental and citizens groups agree that hydrogen will have an important role in the clean energy economy, offering a clean-burning substitute for fossil fuels in certain industrial and transportation applications where electrification isn’t feasible. But they worry a focus on “blue hydrogen” — made with natural gas and carbon sequestration — will only keep polluters in business longer and distract from cleaner, cheaper climate solutions. 

“It’s at the point now where everything is going to be hydrogen. We’re going to be using hydrogen to make electricity and melt metals and fly planes and make concrete and run boats. It’s a bit of a gold rush,” said Kerwin Olson, executive director of Citizens Action Coalition. “We need to figure out what are the best uses of hydrogen, and what are the environmental impacts going to be of those choices.”

Community engagement 

Banwart said MachH2 is developing a community engagement plan, as required by the Energy Department, and will launch the process once negotiations with the DOE are complete and the hub’s first phase begins later this year. MachH2 has said their process will include community advisory councils, town halls and an online dashboard. Already, Banwart said, the hub organizers have held three state-specific community meetings and the DOE hosted a community meeting shortly after the announcement that MachH2 was chosen to receive funds. 

It is unclear if there will be public comment periods or other chances for stakeholder review of specific hydrogen hub proposals. But most projects would need to get operating permits and other approvals from state, local and federal agencies.

“It’s extremely secretive,” Citizens Action Coalition program director Ben Inskeep said, “We’re really in the dark on a lot of the details.” 

MachH2’s slide deck says the program will include $30 million in funding for startup companies, with a focus on inclusivity. Diversity, equity, inclusion and accessibility will be prioritized in hiring, and $15 million will fund wraparound services and a workforce training program, MachH2 has promised.

But critics say environmental justice can only be achieved through a much deeper look at the plans for the hydrogen hub, which could expand to neighboring states beyond Indiana, Illinois and Michigan.

“We were very disturbed to hear DOE say the majority of hub projects would be located in disadvantaged communities, as if that was a good thing,” said Piette. “Based on the very limited information we have, MachH2 could be environmentally disastrous. It could increase carbon dioxide emissions, on top of that it could add pollution in already overburdened communities.”

Blue hydrogen

Already, the BP Whiting oil refinery in Northwest Indiana produces large amounts of hydrogen from natural gas, known as gray hydrogen. If the carbon emissions from such hydrogen production are captured and sequestered, it is known as blue hydrogen. (Hydrogen produced from water through an electrolysis process, powered by renewable energy, is known as green hydrogen.) 

BP is making major investments worldwide in both blue and green hydrogen. The company has announced its plans to produce hydrogen from natural gas in Northwest Indiana and capture the carbon, piping it to proposed sequestration sites in the state. The hydrogen could be used for local industry as well as sustainable aviation fuel, company officials have said.

A focal point of the hub will likely be BP’s refinery. MachH2’s slide deck notes a “Northern Indiana clean H2 node” spearheaded by BP among nine proposed projects.  

Multiple groups oppose BP’s plans, and the organization Just Transition Northwest Indiana has a campaign called “No False Solutions,” opposing the BP project and urging supporters to “stop the hydrogen hub rush.”  

Many Indiana citizens are also deeply opposed to carbon dioxide pipelines and sequestration, fearing impacts on farmland and danger if carbon dioxide leaks. The demand for those types of projects could rise thanks to new federal incentives. 

The Inflation Reduction Act offers lucrative subsidies for carbon dioxide capture and sequestration, under tax code section 45Q. This could incentivize blue hydrogen production that involves carbon sequestration, with the 45Q tax incentives potentially dwarfing funds received through the hydrogen hub. 

The company Wabash Valley Resources has faced massive community outrage for its plans to use hydrogen in fertilizer production and sequester carbon in Indiana. Wabash Valley Resources has a federal grant for hydrogen technology demonstration.

“It’s all a messy web of hydrogen and carbon dioxide at this point,” said Piette. 

Clean energy advocates generally support green hydrogen, but they and lawmakers have called for clarity and regulations around how renewables used to power hydrogen production are obtained and classified. Ideally, they say, hydrogen production leads to new renewable development. If hydrogen production uses renewable energy that otherwise would flow onto the grid for consumers or power other industries, it is not leading to overall carbon reductions.

The U.S. Treasury Department is currently developing rules governing how hydrogen production receives tax credits for using renewable energy under tax code section 45V. Treasury draft rules require that the production must lead to “incremental” increases in renewable generation to receive tax credits.

“Without safeguards, 45V risks creating a shell game in power markets, where existing clean generation gets nominally claimed by hydrogen electrolyzers but the resulting gap in grid capacity is backfilled by fossil fuel generation,” says an October 2023 letter from U.S. Sen. Sheldon Whitehouse and seven other senators to the Treasury Department. “In such a scenario, the program would undermine climate progress and lead to the production of hydrogen with a true emissions intensity higher than even its conventional fossil fuel-derived counterpart.”

Banwart said that MachH2 will include blue, green and “pink” hydrogen production. Pink hydrogen, powered by nuclear energy, would likely be located in Illinois near one of the state’s nuclear plants. It is not yet determined where and exactly how green hydrogen would be produced in MachH2’s area, Banwart said.

Green steel

There’s widespread agreement that one of the most promising uses of hydrogen is to power heavy industrial processes like those used in steel production. 

Cleveland Cliffs’ Northwest Indiana steel mill near the BP refinery has announced plans to inject hydrogen in its blast furnaces, combined with fossil fuels, and the company is building a hydrogen pipeline to its fence-line. Cleveland Cliffs has said it will procure hydrogen from MachH2 projects. 

Environmental advocates have widely embraced the concept of “green steel,” but usually referring to a specific steel-making process known as Direct Reduced Iron (DRI) that uses hydrogen produced with clean energy. Injecting hydrogen along with fossil fuels in traditional blast furnaces does relatively little to reduce carbon emissions, critics argue, especially if that hydrogen is produced with natural gas. 

“Even in the best-case scenario this is not coming close to the scale of emissions reductions we need to decarbonize steel,” said Inskeep. “Their continued investments in keeping these facilities open are not signaling the pivot they need to make” to DRI steelmaking.

DRI technology is still in its infancy worldwide, but industry sources have pegged it as the most promising way to decarbonize the sector.  Conversion to DRI could be extremely costly but not hard to imagine, said Hilary Lewis, steel director at Industrious Labs, an organization devoted to decarbonizing heavy industry. Cleveland Cliffs has a DRI plant in Toledo, which it bills as “the most modern and efficient direct reduction plant in the world.” 

“Steel technology has changed over time,” said Lewis. “We’ve gone through different types of steelmaking. A hundred years ago it was open hearth steelmaking, the precursor to blast furnaces. That was a big technology transition. The steel industry would point to electric arc furnaces (as another innovation). The steel industry goes through technology changes.”

A report by Citizens Action Coalition and American Council for an Energy-Efficient Economy notes that automakers are increasingly demanding low-carbon metals in pursuit of their own sustainability goals, and Indiana — home to a quarter of U.S. steel production — risks losing market share if steel mills don’t decarbonize.

“The main application [of hydrogen] we want to see is cleaner steel production, and that depends on cleaner hydrogen as well,” said Chyung. 

Advocates worry hydrogen hub will fuel environmental injustice in Northwest Indiana is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The company seeking to build one of the nation’s largest carbon sequestration projects in Indiana was trying to avoid a “PR disaster” by locating in a rural farming area, a company executive said at a community meeting recently.

But that decision has not preempted controversy over both the project itself and the company’s larger strategy. 

Local opposition is quickly snowballing in the small towns around Terre Haute as the EPA considers whether to approve injection well permits crucial for a federal loan guarantee.     

Wabash Valley Resources says it wants to build a fertilizer plant that will bring jobs to rural Indiana. It aims to use petroleum coke or other feedstocks to create hydrogen and then anhydrous ammonia while sequestering carbon dioxide emissions 4,500 feet below ground in Vigo and Vermilion counties, about 12 miles from the plant.

Residents feel the company and the federal government are making them “guinea pigs,” as several said, in a project aimed at taking advantage of lucrative federal grants and tax incentives.  

The company has been seeking to capture and sequester carbon since 2016, when it bought the former Duke Energy coal gasification plant that it plans to retrofit.

The EPA on July 7 issued a draft permit for the two Class VI carbon injection wells. Residents said they were given only days notice by mail about the lone EPA public meeting on the issue, which was held August 10.

Many local farmers had never heard about the concept, and were outraged that the company did little outreach and the government gave them little notice about their chance to weigh in. A 35-day public comment period on the draft permit — shorter than typical 60-day periods — was scheduled to close Aug. 11. The deadline was extended to Aug. 21 at advocates’ behest.

“We understand that once landowners learned it was going in their backyard, there was a short ramp to learn about carbon storage,” Wabash Valley spokesperson Greg Zoeller said. “Admittedly, we could have done better initial outreach to the landowners. We hoped the EPA information session would ease most of their concerns.”

Since that was clearly not the case, the company held its own meeting Aug. 16 in the small town of Universal, where residents pelted the officials with questions and accusations.

A lively meeting

Wabash Valley Vice President of Operations Rory Chambers was asked why the carbon couldn’t be sequestered at the gasification plant site.

He responded that injecting carbon there — under a river and closer to Terre Haute — would be a “PR disaster.”

“Admittedly a little self-servedly I said, ‘Well if I put it in my plant site, this plume will clip the north side of Terre Haute and I end up with 3,000 angry people,” Chambers said.

By sequestering the carbon around Universal, “If there are a few mad people, here I can talk to individuals…and calm them down,” Chambers said. “My god, if there’s 3,000, I’ll never be able to convince them.”

As outrage erupted in the room, Chambers continued:

“It’s not because you’re rubes, I don’t think you’re rubes,” he said, adding that he himself does not have a college education.

Wabash Valley founder Nalin Gupta, meanwhile, explained to the crowd that he previously worked in finance in New York, on a team deploying over $85 billion in energy finance.

“If someone said, ‘Here, take two billion dollars and do something that would destroy people’s properties and water,’ would I do it?” Gupta asked the crowd in an ill-fated attempt to reassure them about the company’s motivations.

“Yes!” someone yelled out. “Nobody in this room wants it!”

Farming community fears

Susan Strole-Kos told Chambers at the meeting that she has spent many hours looking at data and studies about carbon sequestration, and fears the underground carbon plume could harm the farm that’s been in her family for 200 years.   

“I have been given the job to be the steward of my land, and you are trying to take that from me,” she said tearfully. “It may be legal because you have worked politicians, you have the law in your favor, but it is immoral, and I don’t know how you guys can live with that.”

Strole-Kos said her family was approached by the company last year and invited to what they described as a meeting of local farmers about a fertilizer plant.

She thought it could be a good idea. But when she arrived, she found no other residents, just Chambers and two other company representatives who pressured her to “sign a piece of paper” in exchange for a few hundred dollars, as she told Energy News Network.

“I said, ‘No we are not fools here,’ it did not end well,” she said. “Maybe they thought we were just simpletons out in this area.”

Hundreds of residents turned out for a second meeting with company officials on Aug. 22, at an elementary school near the injection well site. Strole-Kos’s daughter Whitney Boyce, a high school teacher, worries about danger to students.  

“We have our natural disaster drills, tornado drills, earthquake drills, we recently added active shooter training; now how do we prepare for a carbon dioxide leak?” she said. “We have to notify students and parents when people come in to spray for bugs. So I find it mindboggling we don’t have to notify parents when something like this is coming in.”

Incentives and concerns

The federal Inflation Reduction Act expanded the 45Q tax credit to $85 per ton of sequestered carbon dioxide. Provisions of the Bipartisan Infrastructure Law could also aid Wabash Valley’s plans.

The U.S. Department of Energy meanwhile is funding the development of hydrogen as a clean fuel, and there are various tax credits available for hydrogen production that the company could potentially tap. Wabash Valley Resources currently has a $33 million federal grant for hydrogen technology demonstration.

During the Aug. 16 meeting, Gupta touted the federal government’s support.

“The Trump administration reached out to me and said restart this plant, we don’t want ammonia from Ukraine and China,” Gupta said. “$20 million was given to us in 2019 by the Trump administration, it was followed by [support from] the Biden administration.”

Zoeller told Energy News Network that “this is not a local project, this is really the first of what I see as a change away from smokestack industry.”

But as multiple carbon dioxide pipelines and sequestration sites have been proposed in the Midwest, residents have raised fears of safety, environmental and economic consequences should carbon escape, as it did in a 2020 disaster in Sartartia, Mississippi. In Illinois, for example, residents and local governments are stridently opposed to the company Navigator’s plans for a carbon dioxide pipeline and sequestration of emissions from ethanol plants.

Near Terre Haute, residents are especially concerned since the area is a seismically active zone, and there is an abandoned coal mine underground.

During the contentious Aug. 16 meeting, Gupta repeatedly noted that there are 145,000 active and defunct carbon injection sites nationwide — mostly in Texas and California. Such sites have long been used for enhanced oil recovery, where carbon is injected into the ground to force hard-to-extract oil out of diminishing reservoirs.

Though common, critics consider enhanced oil recovery to be under-regulated and under-studied, posing a potential risk to drinking water. And they fear large-scale, permanent sequestration of carbon dioxide raises different and little-understood issues.

Doug Martin is town board president of Universal and lives less than two miles from the proposed injection site. He says the company never reached out to the town nor the local fire department.

“How can you say you have an emergency plan when Universal has never been contacted?” said Martin, an author and former creative writing professor at Indiana State University.

“I don’t want to walk out and see people passed out in their yards with permanent brain damage. It’s right by our park too, where kids play. My guess is when they start shooting that much into the ground, it’s going to go under all the houses.”

State support

Under state law, Wabash Valley does not need permission from landowners to sequester carbon below their land. A state law passed last year mandates that permission is needed from 70% of landowners, but that law specifically exempts the “pilot project” developed by Wabash Valley.

In April, the legislature passed a law setting the price the company will pay surface landowners if carbon migrates below their land. Indiana state legislators have sought to pass a law insulating Wabash Valley Resources from liability,  unless landowners can prove actual harm from carbon dioxide migration.

Meanwhile a 2019 state law declared carbon sequestration in the public good and allowed the use of eminent domain for siting the pipeline from the plant. During the community meeting, Wabash Valley officials said they would use eminent domain as a last resort, if they cannot obtain permission from landowners on the pipeline route.

Wabash Valley has said the plant will open in 2026, but Kerwin Olson, the executive director of environmental group Citizens Action Coalition, predicted the process will take much longer, as the company still needs “a jigsaw puzzle” of various federal and state permits to construct the pipeline and open the plant.

He said that in the meantime, the public is bearing unfair financial risks, in the form of federal grants and subsidized loans, not to mention tax credits and potential damage down the road.

“To me what this is really all about at the moment is them getting their money, where the public is assuming all the risks on the financial side of things,” Olson said.

“It’s potentially a Solyndra 2.0,” he continued, referring to the solar company that failed after receiving high-profile federal subsidies under the Obama administration.

In comments filed with the EPA, the Citizens Action Coalition argued that producing and transporting the petcoke, coal, corn stover or biomass feedstock for Wabash Valley’s plant would create more carbon emissions than they plan to sequester.

The coalition proposed in its EPA comments that a fertilizer plant could more efficiently and cleanly operate using the electrolysis method powered by renewable energy, rather than “the Rube Goldberg-machine approach replete with multiple sources of various toxic air emissions, acid gas generation, slag, carbon emissions, and risks to private property and public health.”

Citizens Action Coalition organizer Bryce Gustafson said it appears the increasing number of concerned local residents are “in it for the long haul.”

“They haven’t lost hope,” he said. “A lot of people were under the impression EPA was going to rubber stamp this, but now they’re understanding there are ways they can keep the fight going. When people come together and stand up for their rights, for their communities, it makes me proud to be a Hoosier.”

A developer chose a rural carbon sequestration site to avoid controversy. It didn’t go well. is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.