Decatur, Ill.-based Archer Daniels Midland [1] (NYSE: ADM [2]) said today it would work with the Midwest Geological Sequestration Consortium and the Illinois State Geological Survey on carbon sequestration.

The $84.3 million project will involve the capture and storage of carbon dioxide from ADM's ethanol plant in Decatur, storing the CO2 in porous rock underground.

"Carbon sequestration is a promising technology to mitigate greenhouse gas emissions. Our goal for this project is to further demonstrate its safety and effectiveness," said Robert Finley, director at the Illinois State Geological Survey.

"Deep saline rock formations, like the Mount Simon Sandstone, offer the greatest potential for sequestration of large volumes of carbon dioxide."

Mount Simon Sandstone is a regional saline-water-bearing rock formation in Illinois. The project will test the formation's ability to accept and store 1 million tons of carbon dioxide over a period of three years.

The system will be located on ADM's Decatur property, with wells drilled into the sandstone at an expected depth of more than 6,500 feet.

ADM said the project would be funded by $66.7 million from the U.S. Department of Energy over a period of seven years, supplemented by co-funding from ADM and other corporate and state resources.

The company said drilling is set to begin in the spring of this year, with environmental monitoring to start in October to collect a year of background information.

The sequestration and injection of carbon dioxide is scheduled to begin in October 2009 and conclude in 2012.