The Waiting - As EPA Bottleneck Grows, CCS Approvals Pick Up Steam in States With Well Primacy

Passage of the Inflation Reduction Act (IRA) in August 2022 was intended to unleash a wave of clean-energy initiatives, from hydrogen and renewable fuels to electric vehicles and large-scale carbon-capture projects, all part of the Biden administration’s plans to reduce carbon dioxide (CO₂) emissions and move the U.S. closer to a net-zero economy. But while billions in federal financing and tax credits have helped move many projects forward, they can only advance as fast as permitting, regulations and economic reality will allow. In today’s RBN blog, we look at the surge in proposed carbon-capture projects since passage of the IRA, where they are in the review process, and how the pace of permitting at the federal level compares with the states that have primacy over their own sequestration wells. 

Let’s start with a quick refresher on carbon capture. When CO₂ is captured and stored, and that’s all, the process is called carbon capture and sequestration (CCS) and requires a Class VI injection well (right side of Figure 1) for long-term storage in deep geologic formations. If the CO₂ is used for some other process before it’s stored, it is called carbon capture, use and sequestration (CCUS) and requires a Class II injection well (left side of Figure 1) — the most common example being enhanced oil recovery, or EOR. Permitting for Class VI wells is typically handled by the Environmental Protection Agency (EPA), although a few states have control over that process, something referred to as primacy (more on that in a bit).

Figure 1. Class II and Class VI Injection Wells. Source: EPA

Even though regulations around Class VI wells have been around since 2010, few applications have been approved by the EPA in that time. Just two projects with four total wells have reached active status:

• Archer Daniels Midland (ADM) operates the Illinois Industrial Carbon Capture and Storage Project in central Illinois. It captures CO₂ emissions from an accompanying ADM ethanol facility in nearby Decatur. It has one operating well and one that is in its post-injection phase. Ethanol plants are an obvious choice for carbon capture, given that the CO₂ resulting from ethanol fermentation is highly concentrated, which makes capturing it more efficient (and less expensive) compared to many other industrial processes.
• Wabash Carbon Services (WCS) plans to sequester the CO₂ that would be generated by an ammonia fertilizer plant it plans to construct in Terre Haute in west-central Indiana. The wells, which received final permitting in January, are in their pre-operation phase. WCS says the plant will serve as a model for producing fertilizer with zero carbon emissions.