A developer chose a rural carbon sequestration site to avoid controversy. It didn’t go well.

A proposed fertilizer plant in Indiana, backed by millions in federal incentives, would pump CO2 under farmland miles away. Landowners have a lot of questions.

 

 

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.”

 

This article originally appeared at energynews.us (CC BY-ND 4.0).