Challenges to First EPA-Issued Carbon Capture and Storage Permits Dismissed as Moot


Planning and constructing new power plants that will employ new technologies, especially those substantially funded by the federal government, can be a challenging business. Whenever a new law, regulation or agency process goes into effect, industry and legal observers await the often inevitable legal challenges that will arise. For obvious reasons, the exact parameters of any new regulatory program can be of material interest to anyone who makes a living in or near an affected industry. A case in point is the effort to build plants that will rely on carbon sequestration technology to reduce carbon dioxide emissions  generated by these facilities. Both the U.S. Department of Energy and EPA have developed plans and procedures to assist this development, which relies on environmental permits that often generate local opposition. And, thus, when the first Safe Drinking Water Act permits were issued in 2014, the legal challenge that followed was noteworthy. Unfortunately, observers will have to wait a while longer on that count, as this particular permit challenge has vanished in a puff of moot.

On February 23, 2016, in a brief opinion, the U.S. Court of Appeals for the Seventh Circuit, in DJL Farm LLC, et al., v EPA, dismissed as moot several challenges to Safe Drinking Water Act permits issued to FutureGen Industrial Alliance to construct and operate underground injection control (UIC) Class VI wells to store large quantities of carbon dioxide near the land of the petitioners. In January 2015, the Department of Energy suspended funding for the FutureGen project, and no alternative funds were acquired.  As a result,  EPA was requested to terminate the permits, and they expired on February 2, 2016. Since the permits had expired, the Court of Appeals reasoned that there is no relief the court could grant to the petitioners, and the case was dismissed as moot.

According to the Court of Appeals, FutureGen was formed to research and develop “near-zero emissions coal technology”, and intended to use carbon capture and storage to develop the “world’s first near- zero emissions power plant in Morgan County, Illinois.”  In March 2013, FutureGen submitted applications for EPA permits to build four UIC wells and to inject nearly 22 million metric tons of carbon dioxide over a 20 year period. The petitioners unsuccessfully challenged the permits before EPA’s Environmental Appeals Board, and the final permits were issued in May 2015, which the petitioners then challenged in the Seventh Circuit.  

It is difficult to assess how serious this setback will be for the efforts of EPA and the Department of Energy to encourage the deployment of innovative carbon sequestration technology as part of the federal government’s overall clean energy and climate change policy.  However, as illustrated by this case, a determined opposition can often delay a project so that the project is simply not sustainable.