Summit proceeds with pipeline expansion amid uncertainty in Dakotas

Summit Carbon Solutions in recent weeks has filed formal petitions for permits that seek to expand its proposed carbon dioxide pipeline system to include 13 more ethanol plants in Iowa, according to documents filed with the Iowa Utilities Commission.

The company's initial proposal spanned about 690 miles and included a dozen ethanol producers in Iowa. The commission approved a hazardous liquid pipeline permit for that proposal — along with eminent domain authority for about a quarter of the route — earlier this year.

The expansions would add about 370 miles of pipe, including about 64 miles in Bremer, Buchanan, Butler, Fayette and Floyd counties. Bremer recently filed a motion to dismiss the petition that affects it because Summit obtained land easements too early.

Background

Summit, based in Ames, is one of three companies that have proposed pipeline networks in Iowa to transport captured carbon dioxide from ethanol plants to out-of-state sites for underground storage or other commercial purposes.

Navigator CO2 abandoned its project last year. Summit's expansions are largely the result of that abandonment — ethanol producers that had initially signed with Navigator switched to Summit.

The third company, Wolf Carbon Solutions, has a pending request for a much smaller project in Eastern Iowa that would connect to ethanol plants in Cedar Rapids and Clinton, but the project has stalled amid regulatory setbacks in Illinois, which also instituted a moratorium on the projects.

Summit was the first to announce its project, in February 2021, to be laid in Iowa, Minnesota, Nebraska and North and South Dakota. It is now poised to span about 2,500 miles and connect to 57 ethanol plants. Summit has said it will cost about $8 billion to construct.

Iowa and the Dakotas are the most vital. Iowa and South Dakota contain the vast majority of the plants, and North Dakota is where Summit wants to inject the greenhouse gas into the ground.

Summit has forged profit-sharing agreements with the ethanol producers, the details of which it has not publicly disclosed. The additional revenue that is expected to be generated for the plants would come from federal tax credits for producing low-carbon fuels and for capturing and sequestering carbon dioxide emissions, and from the sales of those fuels in low-carbon markets.

Proponents of the project say it is crucial for the future of Iowa's ethanol industry, which in turn is crucial for corn farmers. More than half of the state's corn is used to make ethanol.

"As yields continue to rise and prices fluctuate, it’s critical to have markets that will keep our local ethanol plants sustainable and provide a stable income for future generations of farmers," Bill Couser, a farmer near Nevada and a leader of the Lincolnway Energy ethanol plant, wrote recently to the Iowa Utilities Commission.

But opponents of the project think it is unsafe and shouldn't be eligible for eminent domain, a governmental power that forces unwilling landowners to host it in exchange for compensation.

Many of the counties through which Summit's system would pass have adopted resolutions that oppose the use of eminent domain for the project.

"The Bremer County Board of Supervisors objects to the use of eminent domain for private economic gain," the county's May 2024 resolution said.

The county also challenged Summit's acquisition of land easements that had first been obtained by Navigator and then sold to Summit after Navigator’s project folded. The county successfully argued Summit violated state law by obtaining the easements before it held informational meetings about the project. The commission fined Summit $10,000.

What's happened since

Bremer County recently asked the commission to reconsider the penalty and dismiss Summit's petition for a permit that was filed Oct. 17. That would, in effect, force the company to renegotiate for the land easements for the expansion route that goes through the county.

"If the informational meeting requirements were not met, which is a condition precedent to filing a petition, then approval of the route proposed in the petition is also not appropriate under" Iowa law, wrote Tim Whipple, an attorney for the county.

It's unclear when the commission might rule on Bremer's motion to reconsider.

But the fate of the overall project might hinge on what happens in South Dakota. Last year, utility regulators in that state rejected Summit's permit application because its route violated county ordinances that require the pipelines to be located certain distances from houses and other places.

A law that was adopted this year by South Dakota lawmakers would have weakened those county ordinances, but voters nullified the law in a referendum this month.

The South Dakota Supreme Court also cast doubt on whether Summit's project is eligible for eminent domain, but the point still is being litigated.

Summit said it will reapply for a permit in South Dakota. The company must obtain permits in both Dakotas before it can start construction in Iowa.

"Projects like ours have successfully navigated South Dakota's existing regulatory landscape in the past," the company said. "We will continue to operate within the current framework, knowing that the future of ethanol and agriculture is vital to our shared success."

Comments: (319) 368-8541; jared.strong@thegazette.com