**UNITED STATES ENVIRONMENTAL PROTECTION AGENCY** REGION 5 77 WEST JACKSON BOULEVARD CHICAGO, IL 60604 - 3590

**STATEMENT OF BASIS FOR ISSUANCE OF A CLASS VI**  **UNDERGROUND INJECTION CONTROL**  **(UIC) PERMIT**

**Permit Number: IL**  **- 115**  **- 6A** **- 0001**  **Facility Name: CCS#2**  Archer Daniels Midland (ADM) of Decatur, Illinois applied for a U . S . Environmental Protection Agency (EPA) Underground Injection Control (UIC) injection well permit to be used for geolog ic sequestration of carbon dioxide (CO 2 ) as a Class VI well (CCS#2) . ADM is capturing CO 2 at its agricultural and biofuels facility generated from a fuel ethanol production unit which, when injected underground, will support the goal of reducing carbon emissions to the atmosphere to help mitigate climate change. ADM has planned for two injection wells at this project location. The first well, C CS#1, is currently operating with an injection well permit from the Illinois EPA . It will receive 1 million metric tons of CO 2 over three years (2011 - 2014) and prior to injection at CCS #2 . EPA reviewed all information submitted by ADM to inform the draft permit decision on CCS#2 . EPA considered information and issues including:  Geol ogic site characterization, injection and confining zone characterization, and project siting;  Computational modeling of the project’s Area of Review (AoR);  The proposed well construction and operational conditions;  The approach ADM proposed to monitor th e well and track the plume and pressure front to ensure protection of underground source s of drinking water (USDW) for the life of the project

–including both the injection and post - injection site care periods;  ADM’s financial responsibility demonstration;  The strategy

to address and mitigate risks associated with induced seismicity;  The proposed alternative post - injection site care timeframe;  Emergency

and remedial response strategy development;  The CO 2 stream source, characteristics and purity;  Environmental justice;  Endangered species; and  Ensuring USDW protection. EPA’s review of the permit application indicates that the proposed injection project meets the requirements for Class VI injection wells and will not pose a risk of endangerment to USDW s . The EPA,therefore, is issuing a draft permit decision for this well. Under the authority of Title 40 of the Code of

Federal Regulations (40 CFR) Parts 144 and 146, EPA Class VI permits must specify conditions for the construction, operation, monitoring, reporting, plugging , post - injection site care and site closure of Class VI injection wells so as to prevent the movement of fluids into any USDW or unauthorized zones . General provisions for EPA UIC permit requirements are found at 40 CFR Parts 12 4, 144 , 146 and 14 7 . In accordance with 40 CFR 124.7, general information and highlighted permit conditions specific to this well are discussed in the following sections. **Area of Review (A o**  **R) and Corrective Action :**  In accordance with 40 CFR 144.55, 146.6 , 146.7 and 146. 84 , th e AoR is the region surrounding the geologic sequestration project where any improperl y sealed, completed or abandoned wells that penetrate the injection and/or confining zone s could provide a conduit for fluid migration . ADM delineat ed an AoR of approximately 12.6 square miles , as shown in the map below .

**Figure 1**  **. The ADM project proposed AoR**  **including: the modeled CO 2**  **plume (in blue) and the predicted area of**

**elevated pressure (outlined in green).**This area was delineated pursuant to 40 CFR 146.84 (c)(1) using a computational model that predict s the

movement of the carbon dioxide plume and pressure front based on available informati on about planned injection operations and the subsurface rock formati ons . EPA performed an extensive evaluation of the AoR proposed b y ADM by independentl y modeling the AoR using the Subsurface Transport Over Multiple Phases (STOMP) multi -phase transport model, based on the site - specific geologic and operational data in the permit application and determined that the AoR delineated b y ADM is sufficiently extensive and meets the requirements of 40 CFR 146. 84 (c)(1) . EPA also evaluated the modeling approach used by the permittee and determined that it meets the requirement s for computational models to delineate Class VIAoRs. In formation about EPA’s independent assessment is available in a report in the Administrative Record for this permit decision. In accordance with 40 CFR 144.55 and 146.84, ADM must perform c orrective action to address any deficienc ies identified in wells in the AoR, as described in the Area of Review and Corrective Action Plan attached to the permit. Based on an evaluation of well records, ADM has determined that there are two active wells (an injectio n well and a monitoring well for the nearb y CCS#1 site) and no temporarily abandoned or plugged and abandoned wells within the Ao R that penetrate the injection z one. EPA confirmed ADM’s assessment of wells in the AoR by reviewing water well databases from the Illinois State Geological Survey

and the Illinois State Water Survey , and confirmed that no wells in the AoR penetrate the confining zone and thus no wells require corrective action . As required at 40 CFR 146.84(e), ADM will reevaluate the AoR using c omputational modeling at least every five years over the lifetime of the project to verify , based on monitoring and operating data, that the carbon dioxide plume and pressure front are moving as predicted . ADM will also review monitoring data annually to d etermine whether additional reevaluations of the AoR are needed . This AoR reevaluation , and any additional corrective action that is needed, will be performed pursuant to the Area of Review and Corrective Action Plan, which is an enforceable condition of the Class VIpermi t. If this reevaluation indicates that there are changes from predictions, ADM must revise all of the project - specific plans and the permit will be modified per 40 CFR 144.39. **Underground Sources of Drinking Water (USDWs) :**  A USDW i s defin ed by the UI C regulations as an aquifer or portion of an aquifer that supplies any public water s ys tem or that contains a sufficient quantity of ground water to supply a public water s ys tem, and currently supplies drinking water for human consumption, or that contains fewer than 10,000 mg/L total dissolved solids and is not an exempted aquifer . The base of the St. Peter Formation , the lowermost USDW in the vicinity of the injection well , has been identified at approximately 2,604 feet below the ground surface , based on potentiometric data collected from four ground water monitoring wells at the site . The shallow, Quaternary- and Pennsylvanian - age aquifers that serve as th e source of local drinking water are approximately 140 feet below the ground surfac e. **Injection and Confining Zone :**  Injection for geologic sequestration is limited by the permit to the Mt. Simon Sandstone in the interval between 5,545 and 7,051 feet below the ground surface. This injection zone is separated from the lowermost USDW by approximately 2 ,000 feet of rock , including an impermeable confining zone , the Eau Claire Formation , which will ac t as barrier to fluid movement . Figure 2 shows the depth of the injection and confining zones . EPA has reviewed extensive information submitted by ADM , including maps, well logs, cores , and the results of seismic surveys . Based on this information, EPA has determined that the regional and local geologi c features at the site will allow the Mt. Simon San dstone to receive the amount of carbon dioxide proposed to be injected without an excessive buildup of pressure that would create faults or fractures. EPA also determined that the site is free of any known faults or fractures that could affect containment and that the Eau Claire Formation will provide suitable containment to ensure that the carbon dioxide remain s inplace and USDWs will not be endangered , as required under 40 CFR 14 6.83 . EPA also evaluated

information on seismic history in the area and seismic risk to conclude that the project poses a low risk of inducing felt seismic events. Information on this evaluation is available in a separate document in the Administrative Rec ord for these permit decisions. **Construction Requirements :**  The proposed construction of the injection well meets the regulatory criteria of 40 CFR 146. 86 . All Class V I wells must be constructed with carbon dioxide - compatible materials and cements that can withstand exposure to carbon dioxide and carbon dioxide/water mixtures without excessive corrosion over the life of the project (see Figure 2 for a construction schematic) . This well will be equipped with an automatic surface shut - off device that will shut off the well if any permitted operating parameters (such as injection pressure) diverge from limitations set in the permit. EPA reviewed the proposed well schematics submitted with the permit application to verify that the cements and other materials proposed for the well will be compatible with the carbon dioxide stream and planned operations (e.g., injection pressures). Following well construction, pursuant to 40 CFR 146.82(c), EPA will review any final “as built” well schematics to confirm that the well was constructed to ensure USDW protection, meet the goals of the Class VIRule at 40 CFR 146.86(a) and that it is equipped with the required shut down devices before injection is authorized. **Injection Fluid :**  The permit limit s the fluid that may be injected to the carbon dioxide stream generated from ADM’s fuel ethanol production unit and is proposed to be 99.9 percent CO 2 . The expected maximum daily amount of carbon dioxide to be injected is 3,000 megatons. ADM anticipates injecting a total of 5 .5 million tons of carbon dioxide over five ye ars in the CCS#2 well . EPA evaluated historical information about the carbon dioxide generated b y the ethanol plant provided by ADM and determined that the carbon dioxide generated is very pure and contains no hazardous constituents . **Maximum Injection Pressure :**  The maximum injection pressure will be limited to 2,380 pounds per square inch gauge (psig) measured at the surface . This pressure is 90 percent of the fracture pressure of the Mt. Simon Sandstone, which was calculated based on the results of formation testing performed at the CCS#1 well near the proposed site. This limitation will ensure that the pressure during injection does not initiate fractures in the injection or confining zone s, pursuant to 40 CF R 146.88(a) . This , in turn , ensures that the injection pressure will not cause the movement of injection or formation fluids into a USDW as prohibited by

40 CFR 146.86(a) . EPA confirmed, based on geomechanical information about the injection and confining zones (e.g., fracture pressure, porosity , and permeability), that the injection pressure is appropriate and will not initiate fractures in the injection or confining zone s.**Figure 2**  **. Injection Well Schematic Monitoring and**  **Reporting Requirements :**  In accordance with 40 CFR 146.90, ADM will implement an

approved Testing and Monitoring Plan for the project. The multi - faceted Testing and Monitoring Plan , which is an enforceable condition of the Class VIpermi t, includes the foll owing testing that ADM will undertake to ensure USDW protection :  Analyzing the carbon dioxide quarterly : to provide information about its chemical and phys ical characteristics .  Testing of the injection well : to demonstrate the integrity of the well before injection commences and throughout injection operations. ADM must conduct and pass a two -part mechanical integrity test (MIT), in accordance with 40 CFR 146.8 and 146.89, before receiving authorization to inject. After injection commences, ADM will continuously observe and record injection pressure, flow rate and volume and the pressure on the annulus to detect leaks in the casing, tubing or packer. In addition, ADM must demonstrate external mechanical integrity annuall y using a temperature or noise log or another method approved b y the Director to detect fluid movement behind the casing. ADM will also test the well material s for signs of corrosion on a quarterl y basis to provide earl y warning of corrosion due to contact with carbon dioxide in the presence of water that could compromise the well .  M onitoring the environment near the well : to verify that the project and the injected carbon dioxide plume and pressure front are behaving as predicted. (See the section entitled “Area of Review and Corrective Action” for details on the delineation of this area and Figure 1) . ADM will: o P erform groundwater quality monitoring in shallow wells quarterly in the first years of the project and every

6 months later in the project, and monitor ground water quality in deeper wells annually

to detect geochemical changes that may be a result of changes in the subsurface (such as leaching or mobilization of heavy metals and organic compounds or fluid displacement) that could impact USDWs. o Cond uct Pressure fall - off testing half - way through the injection period and at the end of injection to verify that the injection zone is responding (to injection) as predicted. o Track the movement of the carbon dioxide p lume and pressure front using direct methods (e.g., fluid sampling and pressure/temperature monitoring) and indirect methods (e.g., pulsed neutron capture/reservoir saturation logs and 3D seismic surveys ) to verify that the carbon dioxide plume and pressure front are moving as predicted or provide earl y warning if they are not.  Monitoring for natural or induced seismic events: to verify that the project is operating as predicted and the geologic s ys tem and injection wells are not compromised by any felt or unfelt microseismic events, whether natural or induced. In accordance with 40 CFR 144.54 and 146.9 1 , ADM will submit the results of this monitoring to the permitting authority semiannually or within 30 days of the completion of an MIT or other required testing. EPA evaluated ADM ’s propo sed Testing and Monitoring Plan to ensure that all testing procedures are appropriate to the planned operations, the well’s construction, and the geologic environment and that this testing and monitoring meets the requirements of the Class VI Rule at 40 CF R 146.90. The proposed well testing is appropriate to the planned well construction and will provide early warning of any

problems that may occur. EPA also determined, based on information regarding the anticipated movement of the carbon dioxide plume and pressure front, that the locations and methods for monitoring ground water quality and the position of the plume and pressure front will provide the information needed to provide earl y warning of ground water quality

changes or carbon dioxide leakage. EPA considered modeling data, hydrogeologic information on the properties of the injection and confining zone, and the need to limit the number of penetrations of the confining zone in determining the appropriate direct and indirect ground water and carbon dio xide monitoring regime.**Emergency and R** **emedial R** **esponse :**  In accordance with 40 CFR 146.94, ADM developed a site - specific

Emergency

and Remedial Response Plan that identifies the resources that may be at risk due to the injection activities, including USDWs; drinking water wells; the Sangamon River; Bois Du Sangamon Nature Preserve; and Lake Decatur; and infrastructure, including the wellhead, structures at Richland Community

College , and the ADM facilities . The Plan , which is an enforceable part of the permit , also describes the responses that would be taken to address adverse events, and the staff and equipment available to support this and other such activities. The Emergency and Remedial Response provisions of the permit will facilitate expedient responses and prevent or mitigate harm to the environment, including USDWs. EPA evaluated the Emergency and Remedial Response Plan to verify that sufficient, specific procedures are in place should an adverse event (including a well failure, leakage of carbon dioxide, or a seismic event) that impacts any identified resource in the AoR arise, so that ADM can expeditiously take effective actions to prevent or mitigate harm to USDWs. **Financial R** **esponsibility :**  In accordance with 40 CFR 146.85, ADM has demonstrated and will maintain adequate financial res ources to perform all needed corrective action on wells in the AoR, to plug the injection well , to perform all required post - injection site care activities and close the site , and to conduct any emergenc y and remedial response needed to address adverse events at the site. This financial responsibility ensures that resources are available to perform all USDW -protective activities without using public/taxpayer money . ADM estimated the costs necessary to cov er the activities described above and provided financial statements and bond ratings to demonstrate that it has the necessary resources to cover these costs. ADM will update the cost estimates on an annual basis and, if necessary , adjust the financial resp onsibility

demonstration to address any changes, e.g., based on inflation or changes to the project that affect these costs . EPA determined that the amount of funds ADM has set aside is adequate by comparing cost estimates provided b y ADM for the covered activities to estimates EPA independently generated using its Cost Estimation Tool, which estimates financial responsibility costs based on site - specific information (e.g., about well depth, the presence of USDWs in the AoR, and the volume of carbon dioxide to be injected) . EPA also evaluated the financial responsibility instruments using checklists developed by the UI C Program that evaluate the strength of available instruments. In formation on EPA’s cost estimation anal ys is is documented in a repor

t that is available in the Administrative Record for this permit decision . **Well Plugging**  **:** Inaccordance with 40 CFR 146. 92 , the permit includes a Well Plugging Plan for environmentally

protective plugging of the injection well to ensure that the well will be plugged in a manner that will not allow movement of injected or native fluids into USDWs . The well will be plugged using approved materials that are compatible with carbon dioxide/water mixtures to ensure that it will not serve as a conduit for fluid m ovement . EPA evaluated ADM proposed Injection Well Plugging Plan to verify that the well will be plugged with sufficient numbers and types of plugs and cement, based on the proposed depth and design of the well and geologic information , to ensure that after it is plugged, the well will not serve as a conduit for fluid movement. EPA will review the plugging plan after ADM submits the final “as built” well schematics following construction of the well to confirm that the p lugging plan is appropriate. The Injection Well Plugging plan is an enforceable condition of the Class VI permit. **Post -**  **I njection**  **S ite**  **C are**  **(PISC) and**  **S ite**  **C losure**  **:** In accordance with 40 CFR 146.93, the permittee must implement an approved Post - In jection Site Care and Sit e Closure Plan , which is an enforceable condition of the Class VI permit . F ollowing the cessation of injection, ADM must continue to monitor ground water quality and track the movement of the carbon dioxide plume and pressure front in a manner similar to that described under “Monitoring and Reporting Requirements” above . This monitoring will help confirm predictions about the behavior of the carbon dioxide plume and pressure front (i.e., that pressures will subside after injection ceases) , provide earl y warning of any USDW endangerment , and eventuall y inform a non - endangerment demonstration (i.e., that the site no longer poses a risk ofendangerment to USDWs and no further monitoring or site care are needed) . EPA evaluated the proposed

post - injection monitoring along with its review of the injection -phase ground water and carbon dioxide plume and pressure front monitoring, as described under “ Monitoring and Reporting Requirements ,” above. ADM will continue this post - injection monitoring for at least ten (10) ye ars and until they can demonstrate that the site does not pose a risk of endangerment to USDWs and that site closure may be authorized . This timeframe differs from the 50 - year default in the Class VI Rule, and is allowable if a permittee can demonstrate, based on significant, site - specific data and information about the site and the proposed operation that the project will no longer pose a risk of endangerment to USDWs at the end of this alternative post - injection site care timeframe . In approving ADM’s alternative PI SC timeframe , EPA considered information on the predicted movement of the carbon dioxide plume and pressure front, as informed b y the AoR delineation modeling ; predictions of plume migration, pressure decline, and carbon dio xide trapping; site - specific geology ; well construction; and the distance between the injection zone and the nearest USDWs. Post - injection monitoring must continue until ADM can successfull y demonstrate that the site does not pose a risk to USDWs, based on site - specific information that is descried in the Post - In jection Site Care and Site Closure Plan . This non - endangerment demonstration will be based on a comparison of monitoring data to model predictions and an evaluation of the carbon dioxide plume, mobilized fluids, reservoir pressure, and potential conduits for fluid movement . Following a

uthorization of site closure, ADM will plug all monitoring wells with carbon dioxide compatible materials to ensure that they cannot serve as conduits for fluid mo vement and will restore the site to its original condition (by removing all equipment and planting vegetation). **Issuance and Effective Date of Permit :**  In accordance with 40 CFR 124.15, the permit will become effective immediatel y upon final issuance if no public comments are received during the public comment period that request a change in the draft permit. However, in the event that public comments are received that request a change in the draft permit , then the permit will become effective 45 days after the date of issuance unless the permit is appealed. In accordance with 40 CFR 144.36(a), the permit will be in effect for the life of the project , unless it is otherwise modified, revoked and reissued, or terminated as provided at 40 CFR 144.39, 144.40 and 144.41. The permit will expire in one (1) year if ADM fails to commence construction, unless a written request for an extension of this one (1) year period has been approved by the Director . Authorization to inject under this permit will be granted following well construction and compliance with additional requirements as outlined in the permit and regulations at 40 CFR 146.82, 146.86 , 146.87 and 146.89 . If significant changes occur to the permit between this draft decision and the authorization to inject, there will be an additional opportunity for public comment pursuant to requirements at 40 CFR 144. 39 . **Opportunity for Public Input :**  Questions, comments and requests for additional information may be submitted in writing to Allan Batka at batka.allan@epa.gov via the internet. The public comment period on this permitting action will close on May xx, 2014 , 45 days after the date of the public notice. During the comment period, EPA will also conduct a public hearing on May xx, 2014 at [location, address ] to facilitate submittal of verbal comments on this permit . The administrative record index for this permit is available at www.epa.gov/region5/water/uic/adm/ . The full administrative record, including all data and information submitted by ADM in support of its permit application, is available for public review at EPA’s Chicago regional office. The office is open 8:30 a.m.

– 4: 30 p.m., weekdays.To preserve your right to appeal any final permit decision that may be made in this matter under 40 CFR Part 124, you must either participate in the public hearing or send in written comments on the draft permit decision. The first app eal must be made to the Environmental Appeals Board; only after all agency

review procedures have been exhausted may you file an action in the appropriate Circuit Court of Appeals for review.