Despite setbacks, CO2 pipeline projects press forward

DES MOINES — Companies seeking to build carbon dioxide capture pipelines across the Midwest have faced a range of regulatory hurdles this year as they push on with the projects they say will benefit Iowa’s ethanol industry and economy.

Two companies — Summit Carbon Solutions and Wolf Carbon Solutions — propose projects that will capture the CO2 emitted at ethanol plants and send it underground for storage, taking advantage of lucrative federal tax credits and low-carbon fuel markets.

A third company, Navigator CO2 Ventures, last month suspended its planned pipeline, citing regulatory challenges.

As Summit awaits a decision over its application from the Iowa Utilities Board after evidentiary hearings for it have ended, its initial applications in two other states have been denied. Evidentiary hearings in Iowa on Wolf’s proposed pipeline — which includes Linn County --- haven’t started, but the company said it will refile its request in Illinois after questions were raised there.

The projects have encountered resistance from environmentalists, who argue they are not a serious solution to greenhouse gas emissions, and from landowners opposed to the use of eminent domain to involuntarily take land for easements. Wolf has not requested eminent domain authority for its proposal.

Critics also point to safety concerns over the potential for a pipeline to rupture. In 2020, a CO2 pipeline burst near Satartia, Miss., caused the evacuation of the town and sickened dozens of residents.

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Ethanol and agriculture leaders, though, say the projects will be vital to the biofuel industry’s continued success in the coming decades as more states and countries demand low-carbon fuels in an effort to combat climate change. Being able to sequester carbon dioxide produced in the manufacturing process will give ethanol producers the opportunity to sell their product at a premium.

“We are very close to unlocking a massive new market that would make the ethanol boom of the early 2000s pale in comparison,” said Iowa Renewable Fuels Association President Monte Shaw. "But we also have people who want us to throw that key away."

Summit Carbon Solutions

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Summit Carbon Solutions, which has proposed a multistate pipeline that will cross 721 miles in Iowa, this month finished an eight-week hearing filled with hours of testimony from company officials, dozens of concerned landowners and industry experts.

The $5.5 billion pipeline is proposed to cover 2,000 miles total across Iowa, North Dakota, South Dakota, Minnesota and Nebraska.

North Dakota’s Public Service Commission denied the company’s initial request for a permit in that state in August after hearing concerns from landowners. In September, the panel granted Summit a request to reconsider its application.

In South Dakota, regulators denied the company’s permit request in September because the proposed project violated a handful of county ordinances in the state. Summit said it would submit a new request there and work with counties to comply with their requirements.

Summit Carbon Solutions Chief Executive Officer Lee Blank said the opposition from regulators in other states had required the company to shift its strategy as it works to comply with various states' rules.

“There's certainly a lot of work here, and I don't think we underestimated the amount of work,” he said.

Opponents said they were encouraged by the testimony presented by landowners at Summit’s hearings in Iowa and they think the Iowa Utilities Board should deny a permit for the company.

Iowa law requires entities seeking to build hazardous liquid pipelines to prove they “promote the public convenience and necessity” — something the opponents say was not shown at the hearings. And while Iowa law allows the use of eminent domain for CO2 pipelines, opponents argued it should not be used in the service of private companies.

They point to the fact that the profits from the projects will go to private investors, and cite concerns about safety as reasons a permit should not be approved.

“Nothing that puts risks in our communities, damages our land, steals our land without our permission, is not a public convenience or necessity,” said Jess Mazour, the conservation program coordinator for the Sierra Club Iowa chapter. “So at the end of the day, they did not meet the burden of proof.”

Summit officials argued during the hearings that the project would stimulate Iowa’s economy by creating larger markets for ethanol producers, and it would have an environmental benefit by sequestering millions of tons of CO2 a year.

Blank said 75 percent of the landowners on Summit's proposed route have signed voluntary easements with the company, saying the agricultural community largely agrees the pipeline would bring value to Iowa's corn farmers and ethanol producers.

"We're an agricultural company building an infrastructure project to help the next generation of agriculture," he said. "Opening new markets for this ethanol industry where they can drive higher values for the products, those economics will filter to the farm gate."

What’s next for Summit?

The state utilities board has given the several parties involved in the hearing until Dec. 29 to submit briefs of their final arguments, and then until Jan. 19 to submit replies. The three-member appointed board can grant the permit, grant it with modifications or deny it, said board spokesperson Don Tormey.

"The IUB is satisfied that landowners and parties had a full and fair opportunity to present their testimony and evidence," Tormey said in an email. "Over the hearing’s eight weeks, the IUB heard from dozens of scheduled witnesses and more than 100 landowners who chose to testify."

There is no deadline for the board to make its decision, but Blank said he estimates it will be sometime in early 2024.

If the permit is approved, Blank said the company will wait until it has its approvals in South Dakota and North Dakota before starting construction in Iowa. That process could take more than a year to conclude, Blank said.

The Iowa Utilities Board’s decision won’t likely be the end of the road for the pipeline proposal. If the permit is approved, opponents like the Sierra Club are likely to appeal the decision, Mazour said.

“There are multiple parties running those ideas through their head, exactly what that would look like," she said. "I feel very strongly that no matter what the IUB does, it’s going to be appealed either by us or by Summit."

For Summit’s part, Blank said if the permit is denied, the company would likely present a new proposal.

“We would just take the next logical steps to put a permit application back in front of the IUB and really start the process over again,” he said.

Navigator CO2 Ventures

Last month, Navigator CO2 Ventures dropped its plan to build the Navigator Heartland Greenway, a pipeline system that would have spanned 1,300 miles across Iowa, South Dakota, Nebraska, Minnesota and Illinois.

In ending the plans for the project, the company cited the “unpredictable nature of the regulatory and government process,” noting South Dakota and Iowa particularly. South Dakota regulators denied Navigator’s permit in September.

“As good stewards of capital and responsible managers of people, we have made the difficult decision to cancel the Heartland Greenway project,” said Navigator CO2 CEO Matt Vining in a statement in October. “We are disappointed that we will not be able to provide services to our customers and thank them for their continued support.”

Mazour said the decision signals the company realized it would be an uphill battle to get the project approved and built.

“I also don’t think we’re out of the weeds yet,” she said. “There’s all these ethanol plants that were on Navigator’s route that are up for grabs. Navigator could come back in a different fashion with a different name.”

Breaking into the industry as a new company is difficult, Blank said, and he is skeptical another company will come along to serve the ethanol plants along Navigator’s route. Summit’s pipeline, though, would have the capacity to add on other ethanol plants and carbon dioxide emitters along its route, including the plants that would have been connected to Navigator's pipeline, Blank said.

“There's a fair amount of ethanol companies that are not on our particular system today, but I think over time, will be,” he said. “And I think that's probably the logical path for how the ethanol industry sequesters their carbon, it will be through Summit.”

Wolf Carbon Solutions

Wolf Carbon Solutions has the shortest proposed pipeline, a 300-mile project that will run through five Iowa counties and sequester carbon from ethanol plants at a site in Illinois.

Unlike the proposals from Summit and Navigator, Wolf has said it does not plan to use eminent domain authority to force easements for its project, which starts at the ADM ethanol plant in Cedar Rapids.

While the project still is under consideration by the Iowa Utilities Board, the company pulled its application to Illinois regulators and said it intends to refile the application in early 2024.

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A staff member for the Illinois Commerce Commission recommended this month that the application be denied, citing issues over public safety, the lack of a final agreement over who would supply the CO2 and where it would be stored, among other concerns.

“We have made the decision to withdraw our current application, with the intent to refile in early 2024, to address the questions and concerns raised by ICC staff in their recommendation,” Wolf Carbon Solutions U.S. President Dean Ferguson said in a statement. “This voluntary action does not impact our commitment to the project and its stakeholders, or the ongoing regulatory processes, including with the Iowa Utilities Board (IUB) and Army Corps of Engineers.”