Where does all the inductor stored energy go?
If i remove both terminals rapidly enough to avoid any arc formation


The more rapidly you remove the terminals, the more an arc will want to form.

Ideal inductance is defined by:

$$ v(t)= L\frac{\mathrm di}{\mathrm dt} $$

If you remove the terminals "instantly", then the current must stop "instantly". That means the di/dt term will approach infinity, and consequently the voltage term will, also.

The faster you stop the current, the higher the voltage generated. That energy has to go somewhere, and the harder you try to stop it, the more it will try to get out. If considering this situation in a purely theoretical, ideal situation where you posit the energy can't go anywhere, it's simply not possible. There is no real mathematical solution.

In practice, there are places the energy can go besides arcing. If you could somehow magically eliminate arcing in an otherwise real circuit, you'd have to consider:


capacitance in parallel with the inductor, including the parasitic capacitance of the inductor and the wires connecting to it, which makes a resonant circuit where the energy oscillates between the capacitance and inductance
resistive, magnetic, and dielectric losses, creating heat
electromagnetic radiation
corona discharge


In practice several of these will be in play, in addition to arcing. Depending on the particular design of the circuit some may be more significant than others.