Carbon Sequestration in Decatur,

IL

Nicole Mayer

nmayer@kentlaw.edu

�Client: Sierra Club

�Objective: Submit written comments for draft permit issued by IL EPA.

� Archer Daniels Midland Company (ADM) Carbon Sequestration Pilot Project

What is ADM?

�One of world’s largest processors of soybeans, corn, wheat and cocoa.

�ADM manufactures food ingredients, animal feed, renewable fuels and naturally derived alternatives to industrial chemicals.

�From previously undisclosed crop sources.

�ADM continues to expand.

Chair(wo)man Patricia A. Woertz

Promoter of Ethanol and Biofuels� In addition to its ethanol production, ADM

is involved in a joint project to develop jatropha as a biofuel.

�A succulent suited to tropical areas, it is a candidate for future biodiesel production

�No species has been domesticated.

�So, its productivity is variable, and the long-term environmental impact of its large-scale use is unknown.

Big Time Air Polluter

� In the “Toxic 100” List, ADM is listed as the 3rd largest air polluter in the U.S. by the Political Economy Research Institute.� See http://world-wire.com/news/0804100001.html

�The List is calculated using EPA’s most recent Risk-Screening Environmental Indicators (RSEI), in addition to its Toxic Release Inventory (TRI) data.

Several Federal Lawsuits�2001 - AMD agreed to pay a $1.46 million

for violating clean-air regulations at its Decatur feed plant and to spend $1.6 million to reduce air pollution there.

�2003- ADM settled federal air pollution complaints related to the company's efforts to avoid New Source Review.

� $4.5 million in penalties and over $6 million to support environmental projects.

�Must eliminate more than 60,000 tons of emissions

Criticism of ADM

�Too many federal agricultural subsidies.

� Cato estimates that at least 43% of ADM’s annual profits are from subsidies.

�ADM lobbied to create and perpetuate federal ethanol subsidies.

�Destruction of Rainforests to make biofuel?

Geologic Sequestration will be tested at

ADM’s Decatur Corn Processing Plant

What is Geologic Sequestration?

�Geologic Sequestration involves separating and capturing CO2 from a stationary source and then injecting it deep into an underground repository in such a way that it will remain stored.

�Forever.

� (or at least hundreds of years)

Geologic Sequestration�DOE is investigating 5 types of

underground formations for geologic sequestration

1. Oil and natural gas reservoirs

2. Deep un-mineable coal seams

3. Deep saline formations

4. Oil- and gas-rich organic Shale

5. and Basalt formations

Regional Sequestration Partnerships

�Public/private cooperation

� 7 regions in the U.S. and Canada

�Partnerships formed to develop technological guidelines, regulations, and infrastructure for Carbon Sequestration

1. Characterization phase – 2003-2005

2. Validation Phase – 2005-2009

3. Development Phase – 2008-20018

Partnership Regions

Midwest Geologic Sequestration

Consortium (MGSC)

�Members – Illinois, Western Indiana, and Western Kentucky

� Illinois State Geological Survey is lead agency

�Mt. Simon Sandstone – 1,500 foot thick saline formation extending from 6,500-8000 feet below ground surface

Mt. Simon Sandstone Formation

ADM Pilot Project� MGSC is a partner of ADM

� One million metric tons of CO2 from ADM’s ethanol fermentation plant will be injected 6,500 feet deep into the Mt. Simon sandstone formation in the IL Basin

� During 3 year period

DOE Picks Up the Tab

� $84.3 million project:

� $66.7 million funded by US Department of Energy over 7 year period

� $17.6 million supplemented by ADM and other “corporate and state resources”

NEPA Is Triggered� “A major federal action” must comply with

NEPA

�ADM’s project is a “major federal action”because of:

(1) Federal Funding from DOE

(2) the potential for significant impact on the environment (we’ll discuss this)

To comply, DOE must prepare an Environmental Impact Statement

No Programmatic EIS�04/21/ 2004- Notice of Intent to do PEIS

�To “evaluate the potential environmental impacts of sequestration in comparison with other reasonable alternatives”

� Issues the PEIS would address included: health, atmospheric emissions, cultural resources, vegetation, wildlife, fuels, construction, release

�02/26/07 - Notice of Cancellation of PEIS

Why Sequester?

�The growing realization of CO2’s role in Climate change

�Concern that energy demand is increasing

�Anticipation of the future expenses of Carbon Cap and Trade or CO2 tax

�ADM doesn’t want to lose DOE grant money

�ADM needs to reduce emissions or face future penalties.

ADM’s Sequestration Process

� Injection well drilled below lowermost USDW.

�CO2 will be captured, compressed into “supercritical state,” and injected into the well.

�A 300-500 foot thick shale formation above the sandstone will confine the CO2.

�After injection has ceased (could be 30 years+) the well is plugged and abandoned.

� Some CO2 may chemically react with minerals in the sandstone, increasing the weight of the carbon compounds.

But What If the Gas Escapes?

Health & Environment Risks

�CO2 is an asphyxiate that is capable of suffocating plants, animals, and humans when found in high concentrations.

�A large scale CO2 release may also violate air quality standards.*

�To minimize the danger of a release, the most protective monitoring and leakage detection methods must be in place.

Safe Drinking Water Act Governs

�The SDWA requires EPA to set standards to protect public drinking water sources.

�The Underground Injection Control (UIC)program regulates injection wells to protect drinking water sources.

�Currently, UIC Wells are grouped into 5 regulatory classes.

�Class I wells inject fluids into formations below the lowermost USDW.

Regulatory Crossroads

� Regulations for Class I Wells do not

contemplate modern geologic sequestration.

� IL EPA is regulating ADM as a Class I.

� Meanwhile, US EPA is developing new

Class VI well standard specifically for GS.

� The Notice of Proposed Rulemaking can be

found at 73 Federal Register 43492. 07/2008

Proposed Class VI Wells�The proposed rule would contain criteria

for

�Site Characterization,

�Construction and Operation requirements,

�CO2 and Groundwater Monitoring

�Post-Injection Monitoring and Site Care,

�As well as Financial Responsibility and Insurance Requirements.

ADM’s permit will be governed as a Class VI Well when regulations are finalized.

Will a Release Be Regulated?

�Proposed Class VI regs do not address the status of CO2 as a pollutant.

�The types and level of impurity in the CO2 stream will vary by facility.

�Thus, EPA cannot make a categorical determination as to whether injected CO2 is hazardous under RCRA

�Though Impurity and location of well can result in hazardous injectate.

Uncertainty.

The UIC Permitting Process

1. UIC permit application submitted to IL EPA

2. Internal review process b/t IL EPA and applicant

3. Draft Permit issued by IL EPA

4. Public Hearing (9/16/08 in Decatur) & Public Comment period (ends 10/17/08)

5. Final Permit issued by IL EPA

Sierra Club’s Comments1. ADM’s Failure to do EIS

2. The Permit’s Scope

3. Site Characterization

4. Materials

5. Automatic Shut Down Feature

6. Leakage Detection

7. Post Injection Site Care

8. Financial Responsibility

9. ADM’s Past Non-compliance

No Impact Statement�DOE did not prepare an EIS

� IL EPA should defer permitting activities until DOE demonstrates its action to fund this project complies with its obligations under the National Environmental Policy Act.

Not Within the Scope?

�Failure to comprehensively address the three step carbon sequestration process.

� 1) Capture 2) Transport 3) Storage

�UIC permit only looks

at Storage!

Three Sequestration Steps

Site Characterization

�ADM identified a potential

fault on the property –

will the sequestration

be compromised?

�Seismic surveys not required

by IL EPA until after the well

is drilled

Materials�Corrosion resistant materials must be used

for pipe , casings, and cement used in injection well.

�Proposed Class VI Wells would require this.

� IL EPA’s draft permit doesn’t require any specific materials to be used in the well’s construction

�Materials to be disclosed after well is drilled.

The Plug Should Resist Corrosion!

Automatic shut down feature?

� IL EPA: No automatic shut down feature required by Draft Permit until after well is drilled

�US EPA: “critical component” required to maintain maximum protection to USDWs and earliest warning of malfunction

Monitoring at ADM?

�Monitoring, Mitigation, and Verification (MMV) refers to a list of procedures to reduce risk and imipact of leakage.

�There is much debate about what level of monitoring is actually necessary.

�Please join me on a mini lesson about MMV from NETL.

MMV For Geologic Formations

1. CO2fate and transport models –simulating underground conditions that influence behavior of CO2

2. Plume tracking –map injected CO2and track its movement

3. Leak detection –critical measurements of whether CO2is escaping from storage reservoir

4. Mitigation-steps to be taken to arrest the flow of CO2and mitigate the impacts

Leakage Detection

� In order to protect human health and safety, as well as assess the longevity of storage, the permit should require surface air and soil flux leakage detection monitoring

� Such monitoring can be used “to ensure that there has been no vertical CO2 leakage, which could endanger USDWs.” 73 Fed. Reg. 43492, 45314 (proposed July 25, 2008).

Air Flux Monitoring�The most direct evidence that a

sequestration site is successful is the lack of extra CO2 in the air near the ground

�The presence of CO2 can be measured through Air Flux monitoring

�The technology to do this exists, but is extremely costly for measuring large areas.

�NETL is currently working to develop cost-effective technology.

Soil Gas Sampling

Where are the most protective

standards being used?

(Please look to your handout)

CO2CRC’s Otway Project

Corrosion Monitoring?

�Corrosion monitoring “can help avoid or provide early warning of corrosion of well materials that could compromise the well’s integrity.” 73 Fed. Reg. 43492, 43510-43511

�This is accomplished by “corrosion coupons”

� IL EPA’s draft permit is silent as to whether corrosion coupon installation will be required.

Post Injection site

Care and Monitoring?

None.�U.S. EPA proposes a 50 year post-injection

site care period.73 Fed. Reg. 43492, 43520

� IL EPA requires zero.

� IL EPA’s draft permit is silent as to post-injection site care, even though experts have recognized that injected CO2 may not stabilize for 100 years. See 73 Fed. Reg. 43492, 43518

(That wouldn’t actually

happen)

Financial Responsibility

� States should not be required to assume financial responsibility for sequestered gas.

�The permit should impose a RCRA-like duty upon ADM to accept and demonstrate financial responsibility for long-term site care requirements

� Pay-in -Period Trusts should be used.

Clarification Please . . . 1. If the amount of C02 increases, what

modifications will be made to the permit?

2. If the timeframe is extended, re-permit or permit modification?

3. Will other sources of CO2 (from other industrial operations, for example) be injected into well?

4. What role will public participation and comment play with respect to changes in the scope of IL EPA’s permitting ?

Forgive, but don’t forget � According to U.S. EPA’s Enforcement & Compliance

History Online database (“ECHO”), ADM has been the subject of enforcement actions by the U.S. EPA and IL EPA

� In addition, ECHO identifies three additional “formal enforcement actions”, including two actions in which the IL EPA was the lead agency

ADM’s Past non-compliancePrimary

Law/Section

Case Number Case Type Lead Agency Case Name Issued/Filed

Date

Settlement

Date

Federal

Penalty

SEP Cost Comp Action

Cost

CAA/§165 05-2001-0710 Judicial EPA Archer

Daniels

04/09/03 08/22/03 $757,506 $332,558 $225,201,860

CERCLA/103 05-2002-1037 Admin. EPA Archer

Daniels

09/16/02 09/29/03 $15,468 $100

CAA/ §165 05-2006-5089 Admin. EPA Archer

Daniels

09/25/06 09/25/06 $325,000 $1,045,000 $75,000

Statute Source ID Type of Action Lead Agency Date Penalty

CAA 1711500005 113 Complaint Filed EPA 09/25/06 $0

CAA 1711500005 State Administrative

Order Issued

IL EPA 06/18/04 $0

CAA 1711500005 State Administrative

Order Issued

IL EPA 07/15/04 $0

IL EPA’s ResponseSubmission, review, public comment and Agency approval of the following documents will be required prior to Agency authorization of CO2 injection:

1. Corrosion Monitoring Plan (Condition B.2 (d))

2. Injection Zone Monitoring Well (Condition B.4)

3. Ambient Pressure Monitoring Procedure

4. Contingency Plan including associated monitoring and automatic shutoff systems (Condition H.27)

5. Annulus Protection System (Permit Application, Section 5, Form 4b Section)

How to Appeal this Permit�Third parties who submitted comments

may appeal within 35 days. 35 IAC § 705.212.

�An appeal would stay the permit.

�The appeal must include:

1. A statement of reasons supporting the review,

2. which includes a demonstration that any issues being raised were introduced during the public comment phase.

Sierra Club did not appeal.�Sierra Club decided not to appeal ADM’s

permit.

�ADM invited Professor Harley to the groundbreaking

� (He did not attend)

They got this guy instead.

ADM Breaks Ground

�Ground Breaking Ceremony April 6, 2009

� “The day has to come when we can remove coal from the ground and return carbon dioxide [to the ground],"

� - Sen. Dick Durbin (D-Ill.). (see “Deep dig targets greenhouse gas,” by Joshua Boak. Chicago Tribune April 7, 2009)

� Injection is scheduled to begin in 2010 and end in 2013.

Questions?

Thanks!

MMV related slides courtesy of:

� Office of Fossil Energy

� National Energy Technology Laboratory

� Monitoring, Mitigation, and VerificationModeling

� Dawn Marie Deel

� Project ManagerCarbon Sequestration Program 09/26/2007

Sources (1)

� IPCC 2005: Intergovernmental Panel on Climate Change Special Report on Carbon Dioxide Capture and Storage. Prepared by Working Group III of the Intergovernmental Panel on Climate Change [ Metz, B., O. Davidson, H.C. de Connick, M. Loos, and L.A. Meyer (eds.)] Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 442 pp. 203-204.

� Theme 2: Prediction, Monitoring and Verification of CO2 Movements. In: IEA GHG Weyburn CO2 Monitoring and Storage Project Summary Report 2000-2004, White, D. (ed.),M. Wilson and M. Monea (eds.), 2005 Proceedings of the 7th International Conference on Greenhouse Gas Control Technologies (GHGT-7), Volume III, p 73–148.

Sources (2)

� Separation and capture of CO2 from large stationary sources and sequestration in geological formations. Air and Waste ManagementAssociation. Chow, J.C., J.G. Watson, A. Herzog, S.M. Benson, G.M. Hidy, W.D.Gunter, S.J. Penkala and C.M. White, 2003: (AWMA) Critical Review Papers, 53(10), October 2003.http://www.awma.org/journal/past-issue.asp?month=10&year=2003.

� Overview of monitoring techniques and protocols for geologic storage projects, IEA Greenhouse Gas R&D Programme Report. Benson, S.M., E. Gasperikova and G.M. Hoversten, 2004.

� United States Environmental Protection Agency Technical Support Document: Vulnerability Evaluation Framework for Geological Sequestration of Carbon Dioxide. July 10, 2008. U.S. Environmental Protection Agency EPA430-R-08-009 9.

Sources (3)

� Lessons Learned from Natural and Industrial Analogues for Storage of Carbon Dioxide in Deep Geological Formations. Benson, S.M., R. Hepple, J. Apps, C.F. Tsang, and M. Lippmann. 2002LBNL-51170. Lawrence Berkeley National Laboratory, Berkeley, CA

� United States Environmental Protection Agency Technical Support Document: Vulnerability Evaluation Framework for Geological Sequestration of Carbon Dioxide. July 10, 2008. U.S. Environmental Protection Agency EPA430-R-08-009 14.