Across rural America, a lucrative federal subsidy program is turning small towns into de facto dumping grounds for industrial carbon. Dozens of carbon sequestration projects are moving toward approval, backed by generous tax credits that critics say amount to a backdoor bailout for oil and gas companies dressed up as climate action.
The cash is staggering. A single mid-size project that buries 200,000 metric tons of carbon annually can pocket $17 million per year through the federal 45Q tax credit. Larger operations planning to sequester tens of millions of tons stand to earn far more. Industry analysts speak openly of a "huge wave" of approvals expected within the next year, with potential revenues in the billions.
The problem is where this carbon is going: deep underground in geologic formations beneath farming communities with little power to refuse.
In Clymers, Indiana, population struggling to survive, an ethanol plant backed by Marathon Oil subsidiary has proposed injecting captured CO2 more than 3,000 feet below the town. Melissa Harrison, who raised five grandchildren in one of the remaining white-clapboard homes, watches her childhood town hollow out. The school closed years ago. The Methodist church was demolished. Playground equipment sits dwarfed by fertilizer tanks on trailers.
"This is our place," Harrison said. Generations of her family rest in the local cemetery. Now the town faces becoming something else entirely.
The company offered residents $150 annually for the right to store carbon beneath their property. Harrison rejected the logic. "If they make Clymers bad enough that no one wants to live here, they can take over the whole town, real cheap," she said.
The town was already carrying an industrial burden. A fertilizer supplier, hazardous waste recycling facility, and the ethanol giant had already saddled Clymers with contaminated well water, lacking sewage systems, and poverty that deepened each year. Carbon storage became another weight on a community drowning.
Farmer Dennis Crume, who grows soybeans and corn on nearby plots and raises cattle for his family, flatly rejected the project at a company meeting. "I said that's bullcrap. I'm worried about my well," he said. But Indiana law strips individual landowners of meaningful power to block these projects. The decision flows top-down, not up from the community.
The federal government's embrace of carbon sequestration as climate strategy began under both Democratic and Republican administrations. The Biden administration enshrined it in the Inflation Reduction Act. The Trump administration, which has called climate change a hoax and gutted other climate programs, kept the lucrative 45Q tax credit intact because energy companies already using underground injection technology for fracking benefit enormously.
The technology itself, proponents insist, is sound and heavily regulated. The Andersons Renewables, the company behind the Clymers project, stated that carbon capture and burial is "a safe, established technology, with a rigorous permitting, engineering, and monitoring process." The captured CO2 would be compressed and injected deep into rock formations identified through seismic analysis and test wells.
But the track record tells a different story. In 2024, the nation's first commercial carbon capture project, operating beneath a lake that supplies drinking water to central Illinois, developed two leaks. Illinois subsequently banned new CCS projects under its largest aquifer. In 2020, a carbon dioxide pipeline ruptured in rural Mississippi, hospitalizing 45 people and evacuating 200 others. Emergency responders found residents collapsed on the ground unable to breathe, with one county official describing it as "the zombie apocalypse."
Charles Harvey, a MIT professor of civil and environmental engineering, co-founded one of the world's first carbon sequestration companies in the early 2000s. He has since become a fierce opponent, saying guilt consumed him comparable to what J. Robert Oppenheimer felt inventing nuclear weapons. "It's just the stupidest way to reduce emissions," Harvey said, arguing that the billions flowing to carbon burial should instead fund renewable energy.
Industry analysts acknowledge the Mississippi disaster and Illinois leaks have made companies hyperfocused on engineering perfection to prevent another catastrophic failure. Brad Johnston, a market analyst tracking these permits, suggested operators are now "overbuilding a lot of these systems" to avoid the publicity nightmare that would follow another leak.
Yet the financial incentive remains overwhelming. The 45Q credit was structured to make every ton stored enormously profitable. Oil companies love the program precisely because it subsidizes their existing operations while requiring them to do nothing about the core problem. Environmental groups have labeled it a de facto bailout disguised as climate policy.
Meanwhile, residents in places like Clymers face a choice between staying in communities transformed by industrial infrastructure or leaving ancestral homes. The federal government has chosen their fate for them.
Author James Rodriguez: "This is what climate policy looks like when designed by corporate lobbyists instead of climate scientists. The billions in subsidies should be building solar and wind farms, not burying problems under people's wells."
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