As legislative session adjournment looms, a rush to regulate carbon capture industry

SPRINGFIELD – A technology that some say is a key tool to address climate change and others say is a cash grab for heavy industry could face new regulations – if lawmakers can find the time before their scheduled adjournment this week.

Carbon capture and sequestration technology is used to take carbon dioxide – a powerful greenhouse gas – and move it through pipelines before storing it deep underground. Several interest groups – including business groups, environmentalists and labor organizations like the AFL-CIO – are pushing for a bill that would regulate the emerging technology at the same time some companies are pitching pipeline projects to state regulators.

But environmentalists and activists opposed to carbon pipelines, groups that have called for a complete moratorium on carbon pipelines in the past, are hoping that any legislation includes tighter safety regulations.

While some companies in Illinois and other states already use this technology on a small scale, the past two years have seen proposals for much larger carbon transport and storage projects. Additionally, the federal government in recent years has allocated hundreds of millions of dollars in grants to carbon capture and sequestration projects, with potentially billions in tax credits and other grants to come.

These larger projects and potential for increased government funding have sparked concerns over safety, with critics of the technology sometimes pointing to a 2020 explosion in Satartia, Mississippi, that forced the evacuation of hundreds and hospitalized almost 50 people.

When carbon pipelines fail, they can leak carbon dioxide gas into the air that can asphyxiate people in minutes. This has led some to call for a required “setback” distance between pipelines and residential buildings.

There are also legal issues with the technology, such as currently unclear state law over who owns the rights to use “pore space” – the part of the underground geology where CO2 is stored – as well as who would maintain long-term legal liability for the stored carbon.

Additionally, in the wake of that 2020 pipeline failure, the U.S. Pipeline and Hazardous Materials Safety Administration began a process to create new safety rules, although those are yet to be finalized.

Negotiations between the various camps have been taking place behind the scenes in Springfield for over a year and are nearing an inflection point, with multiple people familiar with the talks saying last week they are optimistic about the chances of moving legislation to regulate carbon pipelines by the time lawmakers are scheduled to adjourn on May 24.

State Rep. Ann Williams, D-Chicago, said on Monday that while she sees a path to move a bill by the end of the week, she and others involved in the talks are operating on a very short timescale.

Lawmakers, environmental groups, business groups and organized labor have been meeting “almost daily” to exchange proposals for legislative language, said Jack Darin, the head of the Illinois chapter of the Sierra Club. He also noted in an interview last week – and other sources confirmed – that the governor’s office has been convening the talks.

“Carbon capture might turn out to be an important climate solution, but it also carries significant risks,” Darin said.

Those representing business interests, meanwhile, say that encouraging carbon capture technology could be a win for the state both economically and for its climate goals. Mark Denzler, the head of the Illinois Manufacturers’ Association, said more sequestration developments would “create jobs, generate tax revenue and reduce carbon emission.”

Lawmakers have floated various forms of regulation of the industry in the past, but none of them have received the level of support necessary for passage in the General Assembly.

In April, Williams proposed a bill that would have instituted several safety regulations on owners of carbon pipelines and sequestration facilities. That bill was similar to another bill she introduced last year.

State Rep. Jay Hoffman, D-Swansea, introduced a separate bill in March that would have regulated the industry, which was backed by a coalition of business and labor groups. Like Williams’ bill, Hoffman’s proposal was similar to one he filed in 2023.

Both the pending legislation in Springfield and pending rules from the federal government have been a sticking point for current carbon sequestration projects in Illinois.

Steven Kelly, the president of Gibson City-based One Earth Energy, is overseeing an about 7-mile project that would sequester carbon dioxide produced by his company during the ethanol production process.

Kelly hopes the project will help his company reduce emissions as it transitions away from producing the type of ethanol used in cars and trucks toward producing aviation fuel.

The Illinois Commerce Commission, which is responsible for approving this type of project at the state level, is considering granting the company a permit for the project and will likely rule on the case later this year. Last month, a staff member of the ICC tasked with evaluating the project testified to an administrative judge that the agency should deny the request.

“The lives and safety of Illinois citizens must come before business concerns,” Mark Maple, a senior engineer at the ICC, said in written testimony. “In fact, there is pending Illinois legislation calling for a moratorium on CO2 pipeline construction pending the new [federal] rulemaking, indicating that the General Assembly may share the same safety concerns.”

While lawmakers have yet to impose new requirements for carbon capture technology, some groups have taken to arguing for stronger safety considerations at the ICC.

Lan Richart, who works on the Coalition to Stop CO2 Pipelines campaign, said that One Earth Energy’s project was too large for their proposed use and the models they used to predict where dangerous gas would go if the pipeline burst were too simplistic.

“We’re saying they should be using a more sophisticated model and establishing setbacks so that in the case of an emergency, everyone can be rescued,” Richart said last week.

Kelly pushed back on some of these concerns in an interview last week, saying that his company “would never pursue something that would be harmful for the Earth or to people.” He also noted that, if regulations go too far, projects could become “cost prohibitive.”

“That would be a huge loss of economic potential,” he said.

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