This story has been updated to add new information received after initial publication.
Closed-door negotiations over a long-stalled lithium project near the Salton Sea between the developer and a prominent California desert nonprofit have included a request by the nonprofit’s head for more than $80 million in payments over 30 years.
The two sides met again this May 16 in an El Centro hotel, but the discussions still yielded no consensus, and litigation over the project continues.
The eye-popping figure illustrates the high stakes for both businesses and destitute communities in Imperial County, a rural corner of California at the Mexico border that sits atop a boiling hot underground reserve loaded with lithium and other key minerals.
Luis Olmedo, executive director of Comite Civico del Valle, sought $2.75 million a year in early 2024 from would-be lithium and geothermal energy developer Controlled Thermal Resources, according to a confidential settlement document seen by The Desert Sun, and interviews with both sides. The project has approvals for 30 years, with an option to renew for another 30 years.
Olmedo and CTR executives offered sharply differing thoughts about the proposed agreement, though neither disputed its authenticity.
CTR’s chief executive officer Rod Colwell says he believes Olmedo is acting out of self-interest, and because they declined to pay, his nonprofit deliberately stalled not just their project, but a potentially transformative industry for the impoverished region in rural Imperial County via a lengthy lawsuit and appeal.
“They’ve just got no shame,” said Colwell of the 2024 request. “Basically we said, ‘we’ll see you in court.’ It was such a ridiculous ask, such a terrible thing to do.”
But Olmedo said “the $2.75 million annual community impact fee was … intentionally crafted to be reasonable,” equaling just an estimated half percent to 1% of the project’s total revenues, depending on what produced lithium was selling for, and based on its estimated water use and industrial water rates.
Responding to the fact that the proposed payments would total at least $83 million over three decades, Olmedo stressed in an emailed statement, “CCV made clear, before and after filing the lawsuit, that any community benefit/impact fee would have to be on an annual basis (never upfront).” He said the payments were to begin after lithium extraction operations started, could not be paid directly to his group, and were to be used for environmental programs benefiting EJ communities around the Salton Sea.
“There is no proposal in which Comite (Civico del Valle) personally profits or personally would administer any mitigation,” Olmedo said. “Those making these accusations try to make organizations like us the villains. It’s textbook.”
Instead, after CTR declined to make the payments last year, Comite Civico del Valle and a national environmental group, Earthworks, sued rural Imperial County officials alleging that they and CTR violated the tough California Environmental Quality Act by not adequately considering water supply, tribal resources, hazardous waste or air pollution impacts. After losing a state Superior Court ruling in January 2025, they challenged the defeat in appellate court on March 7, and filed related documents in mid-May.
If the hefty payments and a list of other conditions had been agreed to by the company, the draft agreement said that Comite Civico, Earthworks and CTR would issue a joint letter of support not just for their project, but for a similar framework for the county’s yet-to-be-completed programmatic environmental impact report for an 81-square-mile Lithium Valley industrial area.
That overarching document is intended to streamline project approvals by handling all environmental reviews inside its boundaries at once, rather than project by project. That could have been a huge boost for CTR, which plans to build up to half a dozen more power plants and mineral extraction facilities on and near the drying edge of the Salton Sea, though it isn’t clear if more payments would have been required for each new plant.
Olmedo said on May 19 that “there were substantial concerns submitted, not just by us, but even by regulatory agencies (to county planners and supervisors) and largely these concerns were ignored. And so this is why we’re in this situation.”
He and others noted CEQA challenges of large projects are common, as are neighborhood advisory councils or boards near major landfills, stadiums and factories, and related community agreements. Riverside County on May 7 approved a $77 million payment via a vaguely worded community benefits agreement from national renewables firm NextEra, in exchange for its support of a controversial hydropower project near Joshua Tree National Park.
“Let me be clear: the Community Benefits Agreement, or CBA, being discussed is not a payoff to CCV,” wrote Olmedo in an email. “It is a standard accountability tool designed to ensure that large-scale industrial development provides tangible, lasting benefits to the local communities that live with the environmental and public health impacts of these projects. So too are Community Advisory Committees, or CACs. These are not new ideas and are widely used as best practice in responsible development efforts across the country and in California …. to protect the most vulnerable in our communities.”
Olmedo said he could not confirm or comment on any recent confidential settlement talks, but added, ” We’re very optimistic … that, you know, CTR will realize these are really good measures. … I am hopeful that we will see a good agreement in the end.”
But Controlled Thermal Resources CEO Colwell and president Jim Turner noted they are a start-up company, and have already agreed to pay millions via a state tax on every ton of refined lithium they produce. They said that although they met again on May 16 with Comite Civico representatives at the nonprofit’s request, they had made clear they will make no additional payments.
“It was a waste of goddamn time,” said Colwell of the May 16 meeting.
Turner, the company’s president, was more conciliatory, saying they had a daylong discussion about more than a dozen other proposals and could meet again in a few weeks.
The public benefits agreement that Olmedo presented to CTR would have been in addition to federally required wetland mitigation, the state lithium tax and county measures. Extensive permitting oversight, monitoring and an annual compliance review were also included.
“He basically wanted a shadow government,” Turner said of Olmedo’s demands, who said he tried repeatedly and in vain to negotiate with him in spring 2024 to avoid the initial lawsuit. “I told him he needed to run for office instead … He just sat there.”
Slow road to lithium production in Imperial County
Critics of Olmedo say the lengthy litigation has thrown a monkey wrench not just into CTR’s project, but the widely acclaimed Lithium Valley concept, which then-President Joe Biden, California Gov. Gavin Newsom and others praised as a win-win situation for clean energy, less destructive critical mineral production and major economic development for one of the nation’s poorest counties.
Imperial County has a 16.4% unemployment rate, four times the national average, and a third of its 180,000 residents have no high school diploma. Per capita income is half the U.S. average of $82,000. Residents near the dusty Salton Sea suffer the state’s highest asthma rates, and have elevated heart disease and other chronic health risks. But it sits atop a huge, boiling hot underground reserve capable of producing relatively clean geothermal steam power, and which researchers say contains enough lithium, manganese and other minerals to power every EV on the road today. But a commercial-scale lithium production plant has yet to be built.
“The lawsuit was erroneous, and it caused a delay of over 12 months, and now the appeal is delaying it even further,” said Fourth District Supervisor Ryan Kelley, who represents nearby communities. “The actions by CCV and Earthworks are continuing to put us in a position where other areas … Nevada, Texas … are developing it at the detriment of our potential to be able to provide jobs, homes and futures for Imperial County residents.”
Apart from the litigation, several factors have contributed to delays, including difficulties in scaling up processes to remove lithium from gritty, salty brine, though CTR and another company, Energy Source say they’ve fully perfected workable technologies. EnergySource is stuck in limbo awaiting word on whether a $1.3 billion loan conditionally approved by the U.S. Dept. of Energy under Biden will move forward under Trump or not. Berkshire Hathaway Energy Renewables has paused its attempts to win licenses for three new geothermal power plants here, which it blamed on state regulators’ high fees.
County officials are also more than a year behind on finalizing the programmatic EIR and a companion specific plan, and some say the lawsuit has complicated their efforts, as they attempt to account for every possible area upon which they could be sued.
There is a glimmer of progress. Despite the protracted litigation, Colwell said his company has now obtained grading permits to finally begin work on their combined geothermal and mineral production facility. A grubbing and clearing permit for 15.51 acres was approved on Apr. 6, according to a copy of the plan and approved application provided by county planning director Jim Minnick, who said grubbing occurs early in a project, and amounts to clearing vegetation.
Stalling for self gain, or fighting to help poor residents?
Colwell said the lawsuit and subsequent appeal by the groups when they lost in civil court had snarled project timelines, costing his start-up badly needed investment funds, and they need to be back on track. Colwell said his team analyzed the risks and found just 8% of CEQA cases succeed at the appeals level, so they are preparing to move ahead within weeks.
But Olmedo said they are suing and seeking tangible benefits because farmworkers and small businesses with the greatest needs in Imperial County are repeatedly left out of “community benefits” or other agreements that instead provide hefty revenues or grants to farmers or other politically connected individuals. He pointed to the solar industry as a prime example, which despite initial promises of hundreds of good paying jobs, has instead built on converted fields that have cost farmworkers their employment.
As for criticisms that the litigation is delaying the entire region’s growth, he is unbowed, noting that state law allows anyone to challenge unfair or potentially harmful government actions.
“They’re emotional because they’re used to getting their way. They’re not used to being challenged,” he said.
What does the document say?
The three-page memo, stamped “Confidential and Protected Settlement Communication” in red ink, says that the author is “open to other CTR suggestions or commitments.”
According to the top portion and another section, the payments were to be used “at the discretion” of a community advisory committee that named as examples Olmedo’s organization and the newer Imperial Valley Equity and Justice Coalition, as well as area tribal members and representatives of cities closest to the proposed project, such as Niland, Calipatria and Westmoreland.
Priority was to be given to several efforts, including reducing area residents’ water bills, which are among the state’s highest, or buying them water rights, stepping up residential water retrofits and conservation and protecting tribal resources. The agreement also included an open-ended clause allowing the funds to be used for “other environmental/cultural interests affecting fenceline communities near and around the project site.”
Payments of at least $2.75 million annually or five times the project’s water use per year, whichever is greater and adjusted for inflation, were to be made to the committee, overseen by a compliance officer. Although Comite Civico del Valle is named, Olmedo said administration of the funds, setting up the council and hiring of compliance staff were never meant to be handled by them, and that CTR could oversee it if they wished.
A major focus of the draft agreement was water conservation, including requirements to capture water from geothermal steam condensate, as well as onsite water treatment and recycling. The document outlines 18 requirements in all, with others focused on elimination of and monitoring for air pollutants and hazardous waste, specific plans to back up the company’s pledge to use electric rather than diesel trucks, and requirements for all vehicles accessing the site to be EVs.
The group also wants solar-powered rather than diesel back-up generators in case the steam power fails, and a separate $325,000 payment to a tribal representative for a cultural resources assessment and guaranteed tribal access to the project site.
If all the conditions were agreed to, then the document states that Olmedo’s nonprofit would join with Earthworks and CTR to give their blessing not just to that company’s pilot project, but to the entire, huge industrial zone.
Chronology of a failed deal
Turner said he reached out to Olmedo in early 2024, when an attorney for Comite Civico del Valle publicly asked county supervisors to hold off on certifying an environmental impact report and zoning amendment for CTR’s pilot Hells Kitchen lithium and power project.
The $1.9 billion plant, the first of as many as seven planned atop the massive, underground brine reserve, would create almost 50 megawatts of steam power and 25,000 metric tons of commercial lithium hydroxide each year – enough for approximately 415,000 electric vehicle batteries.
At current prices of about $9,500 per ton — the lowest they have been in five years — gross revenues for a year’s worth of full production would be about $237 million, and the state’s per ton fees would reduce those revenues by an estimated $9.4 million annually.
Turner said he told Olmedo he wanted to save them both money on attorneys’ fees, and try to resolve whatever concerns they had with the environmental and zoning documents. He said they met two or three times at a local Starbucks coffee shop, and the company agreed to a one-time 15 day extension past the nonprofit’s statutory deadline to challenge county approvals.
The settlement proposal was sent by the nonprofit to the company after the two sides had legally entered into what’s known as a tolling agreement, said Olmedo and Turner. Tolling extends a statuary deadline to file a lawsuit and gives both sides time to discuss good-faith alternatives. In this case, the tolling agreement began on Feb. 21, 2024, close to a month after a formal notice was submitted saying the project met CEQA requirements, and two days before the deadline to appeal in court.
CCV said they sent the proposed settlement terms the next day, and Turner said he received them on Feb. 23. During the extension of the 30-day deadline, extensive discussions on the parameters of the proposed measures were held, according to both sides. But CTR did not agree to them and said its environmental reviews were adequate. CCV sued on March 13, the final day the tolling agreement was in effect.
Turner said he was aghast at what added up to at least an $83 million request, and told Olmedo there was no way they could or would pay so much. He also noted they were already working on some of the other conditions, like paved roads and use of electric trucks. Steam condensate from the geothermal portion will be recycled. But he said some requests were too costly or impractical, such as covering a 100-foot-long brine pond or paving dirt roads before heavy construction, which would quickly destroy them and send more particulate into the air. Paving will be done afterward. After Olmedo wouldn’t budge, Turner said he subsequently told him that CTR would pay Olmedo’s organization $300,000, to be used for two verifiable community projects.
When Olmedo declined, Turner said he told him, “We’ll see you in court.”
Colwell, CTR’s CEO, said the ensuing lawsuit badly delayed a thoroughly vetted project that would bring hundreds of jobs, tax dollars and other benefits to the area.
At peak, the project would employ 450 area construction workers and once built, about 220 well-paid long-term jobs, Turner said.
“They’re trying to put the golden goose in the oven before it’s even, you know, been built or done anything. It just doesn’t make any sense,” Colwell said. “If they’re really worried about the community, you’d think that they’d want the industry to get going.”
Olmedo disagreed. He has noted in the past that the facility and others like it will garner billions once they are up and running, while using dwindling public water supplies from the Colorado River, and potentially creating air emissions, waste and other impacts.
“We’re not asking for anything unreasonable,” he said.
Turner said Olmedo’s requests for detailed monitoring and other conditions should be directed to the county, not their company. Imperial County supervisors in September 2024 approved a voluntary community benefit framework that encourages companies to commit to local hiring, safety, infrastructure improvements and other benefits.
Colwell said they’ve spent tens of millions of dollars to design an environmentally superior and energy-efficient project, and signed project labor agreements with area building trade unions.
But Olmedo and a coalition of other community groups want an independent, enforceable community benefits agreement. They and some local officials are also dismayed that county officials will control the state tax distribution, with just a third coming to the destitute “northend.”
“We’re going to give you access to water, or even provide you subsidized water … and access to minerals, and you’re going to be able to build your business,” said Olmedo.
He added, “Handshakes only go so far, right? But you can’t take a handshake to court.”
Janet Wilson is senior environment reporter for The Desert Sun and co-authors USA Today Climate Point. She can be reached at jwilson@gannett.com.
This article originally appeared on Palm Springs Desert Sun: Nonprofit sought $83 million ahead of lawsuit that stalled Hells Kitchen lithium project
Reporting by Janet Wilson, Palm Springs Desert Sun / Palm Springs Desert Sun
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