Illinois carbon capture rules head to Pritzker (2024)

SPRINGFIELD — Legislation that creates a state regulatoryframework for carbon capture and storage projects, plus a moratorium on pipeline construction, is now headed to Gov. J.B. Pritzker's desk.

The bill cleared the Illinois House with a 78-29 vote Saturday, received the OK from the Illinois Senate on a 43-12-2 roll call on Sunday and now only needs Pritzker's signature to become law.

The governor, in a statement Sunday evening, said he looked forward to signing the legislation "as soon as possible."

Its passage builds on the state's existing energy laws, he said, "by setting nation-leading safety and environmental standards around carbon capture and sequestration while bringing thousands of new jobs and billions of dollars in investment to Illinois."

The measure, a compromise years in the making among business interests, labor unions and environmental groups, places guardrails around use of the relatively new technology, which involves capturing atmospheric carbon dioxide produced at industrial sites and storing it deep underground in porous rock formations.

Illinois is considered an ideal location for such projects because of the state's favorable geology. And with billions of dollars in federal incentives on the table, there was an urgency to get state regulations in place before more projects enter the proverbial pipeline.

"There are elements of this bill that the industry does not like; there are elements of this bill that the environmentalists don’t like," said state Sen. Bill Cunningham, D-Chicago, who has been involved in discussions on the issue. "But the fact of the matter is, we have put in place the safest and most restrictive regulatory regime in the country when it comes to carbon capture."

Wins forindustry, environmentalists

In recent years, industry and labor unions teamed up on legislative proposals that addressed carbon capture and storage but ignored pipelines, which have drawn fierce opposition from both left-leaning environmental groups and often-conservative farmers and landowners.

Environmental groups included all three elements — capture, transport and sequestration —in their legislative proposals, which would have banned the use of eminent domain for pipelines and forced acquisition of pore space from property owners. Such provisions would have made it next-to-impossible for any proposed project to get off the ground.

Pritzker's office got involved in April with Deputy Gov. Bria Scudder quarterbacking negotiations. A compromise was eventually reached, forging a path forward for an emerging industry from which Illinois is uniquely positioned to benefit.

In a win for environmentalists, the legislation puts a pause on carbon pipeline projects until after the federal government adopts final revisions to its pipeline safety rules or July 1, 2026, whichever comes first.

Companies would also need to obtain a permit for sequestration from the Illinois Environmental Protection Agency on top of required federal permits.

In a win for industry, companies would have to obtain the rights from the owners of at least 75% of the land area above a prospective sequestration facility— not far off from the 71% they initially proposed.

And eminent domain for pipeline projects, a decision within the purview of the Illinois Commerce Commission, remains essentially untouched.

On top of being required to maintain an insurance policy of at least $25 million, sequestration site operators will be charged an annual per-ton fee for carbon stored starting at either 31 cents or 62 cents, the latter if there is no project-labor agreement in place. Rates would increase annually based on inflation.

The money generated would go fall into several buckets, including a long-term trust fund to compensate for remediation efforts necessary if carbon is released from the site. It would also cover damages or losses resulting from a leak, and site monitoring in the event that a company abandons its facility.

The revenue will also fund training and other support for local emergency services and disaster agencies. A grant program for infrastructure and energy efficiency projects in environmental justice communities would also be funded.

'Key word is compromise'

Though the groups at the negotiating table came to agreement, some that were left on the sidelines, including commodity groups like the Illinois Farm Bureau and Illinois Soybean Growers Association and downstate Republicans who represent many of the areas targeted for projects, remained opposed.

The issues largely centered around the forced acquisition of pore space from the 25% of impacted landowners who do not agree to terms with the company seeking to sequester carbon. Though the bill calls for "just compensation" to be provided, many lawmakers believed the provision to be not strong enough.

Another major flash point was the lack of a ban on injections underneath the Mahomet Aquifer, which supplies water for more than 800,000 people in east-central Illinois.

State Sen. Chapin Rose, R-Mahomet, pointed to a 2016 leak of methane at a People's Gas field in Champaign County that reached the aquifer as an example of what can happen.

"I don't want a damn thing from anybody about cleaning up the (expletive) environment ... when these people can't drink their water," Rose said during Senate debate, quickly apologizing for his language.

Bill sponsors Rep. Ann Williams, D-Chicago, and Sen. Laura Fine, D-Evanston, both said during debate that there are stringent protections, including decades of site monitoring, that will ensure that water resources are protected.

Currently, Archer Daniels Midland has the only federal Class VI injector permit in the state and is not located within the aquifer area.

Dave Koehler, D-Peoria, expressing a point made in various ways by the bill's supporters, said that "we shouldn't see this as the end of the process, but really the beginning of a process."

"This is not a perfect bill, but it's a very good bill," Koehler said. "And the key word here is compromise."

Despite its favorable geology, there is currently only one open application for pipeline approval with the Illinois Commerce Commission.

One Earth Sequestration LLC filed for approval to construct a nearly 7-mile pipeline from the One Earth Energy plant in Gibson City to three wells in eastern McLean County.

Lawmakers confirmed that the company will have to reapply for a permit once the moratorium is lifted.