Why Decatur's carbon sequestration agreement is a disservice to Decatur residents
After over a year of negotiations, a finalized agreement between the City of Decatur and ADM Co. to sequester carbon dioxide under Lake Decatur was concluded as of July 17, 2024. This agreement is a disservice to residents of Decatur and establishes a concerning precedent for individuals and municipalities affected by carbon sequestration including under the Mahomet Aquifer.
A BRIEF HISTORY ON REACHING A POOR AGREEMENT
At its March 20, 2023 meeting, the Decatur City Council authorized the city manager to negotiate the terms and conditions for a carbon sequestration easement. When the council gives the manager authority to negotiate, city council members are not directly involved in the negotiations but are updated by the manager and can provide feedback.
As negotiations moved forward, the city could have discussed with ADM Co. the inclusion of a fee for every ton of CO2 sequestered. Thus, if ADM Co. sequestered 10 million tons of CO2 under Decatur’s property in a year, at a fee of $0.05 per ton, the city would receive $500,000 that year. Having a per ton fee in addition to the one-time payment is far more reasonable compensation to the city of Decatur. After all, it is Decatur residents that suffer the greatest consequences to global warming, it is the federal government that is providing hundreds of millions of taxpayer dollars to incentive companies to bury their greenhouse gases underground, and the city of Decatur has some of the best land on planet Earth to sequester CO2. Such a fee would be in addition to the one-time payment of $450 for every acre that ADM injects and/or stores CO2 that was already part of the March 20, 2023 authorization to negotiate.
Decatur’s former city manager made the decision to sign the sequestration easement without providing the city additional compensation in the form of a per ton fee. This agreement was signed on May 3, 2024, the work day immediately before Decatur’s new city manager began and prior to the state legislators finalizing the details of the “Safety and Aid for the Environment in Carbon Capture and Sequestration Act”. On July 17, 2024, the council received notification that this matter had concluded, one day before the governor signed the above legislation into law.
After a year of negotiations, the city finalized an easement that provides compensation to Decatur that is below market value and may make it more likely that residents will be subject to eminent domain for use of their pore space. Furthermore, the agreement is so poorly written it does not even include basic information about how many injection wells ADM Co. will be permitted to have and where the wells will be located. The agreement does not set limits on how much CO2 will be allowed to be stored and CO2 storage is permitted at distances far closer to the surface than what was discussed at the March 2023 meeting.
NOT HAVING A PER TON FEE COST CITY RESIDENTS MILLIONS
It is readily apparent that the compensation for sequestration that was offered to the city of Decatur was below what other entities are being offered. Other landowners have reported they are receiving higher per acre fees, and some entities were offered per acre fees for every year CO2 is being stored. Property owners should be compensated for pore space in a similar manner to compensation for extraction of below ground natural resources. A $0.05 per ton fee is trivial compensation for a resource that can slow the existential threat of global warming. Yet, a $0.05 per ton fee would provide millions in new revenue to a municipality that does not involve increasing taxes and fees on residents. Instead it involves transferring a greater share of the hundreds of millions of dollars in federal incentives that are currently available to an environmentally disadvantaged community.
EASEMENT MAY INCREASE RESIDENTS’ SUSCEPTIBILITY TO EMINENT DOMAIN
The recently passed state law allows for eminent domain to take place once 75% of land area rights above a prospective sequestration facility are obtained. The City of Decatur easement is for 2,694 acres, and it is highly unlikely that any landowner has enough contiguous land to be shielded from eminent domain (as it would require ~900 acres). Furthermore, since the city is not receiving a per ton fee, residents subjected to eminent domain may receive compensation for their pore space far below its true worth.
While companies such as ADM Co. may have a fiduciary responsibility to their shareholders, a city should be responsible to its residents. This agreement weakens private property rights, undervalues the city’s and private property holders natural assets, and sets a concerning precedent. Governor Pritzker was correct in his statement at the signing of the law that “Every marginal reduction in planetary warming that we can achieve, every fraction of a percent, represents billions of dollars in savings for our economy here.” The question is whether more of the savings should go to the companies most responsible for global warming or to the people who suffer the greatest financial harm from its consequences.
IS DECATUR’S EMERGENCY WATER SUPPLY NOW UNDER GREATER THREAT?
Those that reside in the Mahomet Aquifer, a water source for over 800,000 people, are correct to be concerned about the potential impacts of CO2 pipelines and sequestration. Since sequestration began in Decatur in 2011, ADM Co. has stored 3.5 million metric tons. CO2 pipelines can easily deliver more than that total each year. Thus, citizens are right to question whether scaling up of sequestration efforts will result in environmental consequences that are currently not documented.
Ironically, the Decatur City Council recently agreed to purchase a second parcel of land in DeWitt County so that it can use water from the Mahomet Aquifer as an emergency water supply in times of drought. Based on the easement Decatur signed, project developers could reasonably conclude that the city will be open to sequestration at its DeWitt Co. well fields, that the city will likely accept lower compensation than other entities and will ask for fewer details about sequestration operations before agreeing to a project. In short, by finalizing this agreement, Decatur may have made its emergency water supply, which is also the water supply for hundreds of thousands of Central Illinois residents, unnecessarily vulnerable and diluted the economic value of its land.
Given that a class action lawsuit was filed last year alleging that ADM Co. stored CO2 underneath properties without the owners’ permission, the science of sequestration may be less certain than it is portrayed. Furthermore, the city is allowing carbon storage at a much shallower distance below ground than what was discussed at the meeting on March 20, 2023. Specifically, the city council was provided documentation that sequestration was going to take place at ~6,700 feet and that CO2 storage was to take place at ~5,550-7,000 feet. The reason that the CO2 would not go above ~5,550 feet was because of a large impermeable shale layer that went from ~5,000-5,550 feet. The easement Decatur signed allows sequestration to take place 4,500 feet below ground surface, 500 feet above the supposedly impermeable shale layer.
One could argue that that the city should be thrilled to receive $1,212,334.74 for an agreement that gives ADM Co. the exclusive right to sequester its greenhouse gases under the city’s drinking water supply. After all, Decatur is one of the poorest cities in IL, we need the revenue, and a large proportion of our residents are under significant economic distress. However, long-term public safety and economic prosperity should not be put at risk for a one-time payment of what amounts to 1% of the annual general fund revenue of the city.