An Indiana company is again asking state legislators to grant it the right to inject carbon deep underground without fear of liability claims or the need to compensate property owners.
Wabash Valley Resources has for years sought legislation to facilitate its efforts to capture carbon dioxide from power generation or chemical manufacturing and store it underground near Indiana’s Wabash River.
A law passed in 2019 allowed the company to undertake a pilot project and declared carbon sequestration in the public interest, allowing the use of eminent domain. But the company has told legislators that the lack of protection from liability claims has hampered its ability to get federal funding.
The state House Committee on Natural Resources heard testimony Tuesday before passing a bill, HB 1249, that would prevent liability claims related to Wabash Valley’s project unless plaintiffs can prove “actual interference with the reasonable use of the person’s property; or direct and tangible physical damage to the person’s property,” as a bill summary puts it. A bill with similar provisions, SB 373, was introduced last spring, passing the state House but dying in the Senate.
The committee also discussed and passed a separate bill, HB 1209, that would establish various rules for the industry’s growth in the state but does not include liability protection.
Opposition to ‘immunity’
With federal incentives for carbon capture and sequestration poised to expand, industry leaders say they don’t want Indiana to get left behind. A BP executive who testified to lawmakers this week said the state’s unique geology gives it an advantage when it comes to underground carbon storage.
Some testifiers noted support for the concept of carbon capture and sequestration. But a litany of stakeholders, including representatives of the water utility, corn and soybean producers, the Farm Bureau, ethanol producers, and community and civil rights organizations, testified in opposition to HB 1249 because of its curbs on liability.
“It does seem to take away the legal rights of those who would be impacted by the carbon stored in the ground,” Denise Abdul-Rahman, environmental climate justice chair of the Indiana State Conference of the NAACP, told the natural resources committee. “Would you want to live where carbon is being stored? We don’t really know what the damages will be in the future.”
The potential risks and hazards, while thought to be relatively small, include earthquakes triggered by the injection process and leaks that could contaminate groundwater or poison people or livestock on the surface.
“They want almost total immunity from any consequences related to migration of carbon dioxide they intend to store underground, whether it’s contaminated drinking water [or] carbon migrating to the surface and asphyxiating a herd of cattle,” Kerwin Olson, executive director of the Citizens Action Coalition, told the Energy News Network. “And any property owner who claims damage — the burden of proof would fall on the owner. They’d have to prove direct correlation.”
During a hearing last spring on the previous version of the bill, Indiana Department of Natural Resources general counsel David Bausman said “nuisance” provisions could be drafted to limit frivolous legal action, but sweeping immunity could harm the state.
“We have very strong concerns that [the bill] would allow for trespass and create immunity for trespass actions,” he said, meaning “trespassing” by carbon dioxide. “The Wabash River is very close — the state owns subsurface mineral rights under the river so any injection of carbon dioxide could very well migrate onto state property, and language in this bill would close a claim” by the state.
Representatives of farmers, meanwhile, told legislators that landowners should be able to negotiate payments for any risk that the injection might entail.
Wabash Valley Resources managing partner Nalin Gupta testified that the project’s “biggest beneficiaries would be the farmers of Indiana.” The company plans to buy corn stover from farmers, along with plastic waste, as biomass feedstock to create “green hydrogen” that would be used for energy generation, chemicals, or fuel.
More than a decade ago, Duke Energy proposed to sequester carbon at its Edwardsport coal gasification plant in southwest Indiana. Amid cost overruns and other problems, the carbon sequestration proposal was scrapped early on. Then Wabash Valley Resources proposed sequestering carbon 50 miles to the north, from a plant producing ammonia at the site of a former coal gasification plant near Terre Haute. Gupta said the company switched its focus from ammonia to hydrogen production as hydrogen became more desirable in the clean energy economy.
Gupta compared the plans to sequester carbon to the emission of carbon dioxide into the atmosphere, and said “your neighbor should not be able to sue you” for airborne emissions “unless they cause actual harm. … If you’re not emitting it into the air, current air-based philosophies should also apply to subsurface,” he told the committee.
Representatives of the Indiana Chamber of Commerce and Indiana Manufacturers Association testified that they supported the Wabash Valley project and HB 1249, which is sponsored by Rep. David Abbott.
Heated competition
Gupta said the company will not be able to win fiercely competitive federal grant dollars without legislation that protects it from liability and “frivolous lawsuits.” Several lawmakers and experts noted that they’ve found no evidence that liability protection is a requirement for a federal grant, nor for injection permits from the U.S. Environmental Protection Agency.
In April, Gupta also asked U.S. Sen. Mike Braun of Indiana to “level the playing field” by removing tax credits for wind and solar, according to the local Tribune-Star.
Other power, fuel, and manufacturing companies have also proposed exploring carbon capture and sequestration in Indiana. Another bill discussed on Tuesday, HB 1209, sponsored by Rep. Edmond Soliday, would pave the way for such endeavors, without immunity provisions. The bill draws from laws on the books in Illinois and North Dakota, backers said.
The legislation outlines how owners of subsurface “pore space” would be notified and compensated, and allows “forced pooling” of subsurface rights for sequestration if the owners of 60% of the pore space area approve, with all owners being compensated. Various industrial stakeholders supported this bill.
BP’s Damian Bilbao, vice president of U.S. business development, testified in support of HB 1209, describing carbon capture and sequestration as “positioning Indiana to remain competitive for large investment and heavy industry.”
He added that it is “a priority technology in keeping heavy industry competitive over the decades to come and meeting environmental targets.”
“There are over 100 CCS [carbon capture and sequestration] projects in development globally, and these projects are going to compete against each other to determine which ones progress,” Bilbao continued. “Indiana however possesses a distinct advantage in this competition. It has a subsurface potential that is unique in the United States and the world.”
North Dakota, Indiana, Illinois, and the Gulf Coast are the U.S. regions BP is considering for carbon capture and sequestration investment, Bilbao said. He said HB 1209 is a “first step” to addressing fundamental questions about how it would play out in Indiana.
Meanwhile, in a Jan. 19 press briefing, leaders with the national Carbon Capture Coalition described the technology as a crucial component of reducing carbon emissions. They called for the passage of the Build Back Better Act, which would invest $12.1. billion in carbon capture-related infrastructure, research, and development, including by extending the commence-building deadline by six years — to 2032 — for projects to qualify for federal tax credits.
“We know there are concerns about individual projects,” said National Wildlife Federation President and CEO Collin O’Mara at the briefing. “But there is no solution to get to net-zero without carbon capture technology. This is a necessary part of the solution especially if you want to build things in this country.”
“We’re really at a pivotal moment,” added Anna Fendley, director of regulatory and state policy for the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. “We have real potential to retain jobs in industrial sectors like steel and cement and refining and chemicals, and we have a real opportunity to invest in the long-term viability of our industrial base, which is so important to our economy.”