Carbon dioxide pipelines planned for Minnesota fall into regulatory black hole

Source: By Mike Hughlett, Star Tribune • Posted: Sunday, February 6, 2022


Highwater Ethanol in Lamberton is one of six Minnesota plants that would connect to a proposed pipeline to carry CO2 to underground storage in North D

Two of the largest carbon dioxide pipelines in the world are slated to cross Minnesota, transporting the climate-poisoning gas for burial deep underground — yet also falling into a regulatory black hole.

CO2 is considered a hazardous pipeline fluid under federal law and in some states, including Iowa, but not Minnesota.

The pipelines — one of which would be more expensive than the Enbridge pipeline project across northern Minnesota — would primarily ship CO2 captured at ethanol plants across the Midwest.

Transporting and storing CO2 has never been done on this scale. Carbon-capture technology is still in a nascent stage. And a 2020 pipeline mishap in Mississippi caused an evacuation and dozens of injuries.

“CO2 is a hazardous material that can lead to absolutely disastrous ruptures,” said Bill Caram, executive director of the Pipeline Safety Trust, a Washington state-based group. While CO2 isn’t explosive like natural gas, it’s an asphyxiant that can be fatal in large doses.

Right now, the CO2 pipelines don’t require approval from the Minnesota Public Utilities Commission (PUC). But the PUC in December opened a proceeding on whether it should change state regulations to deem CO2 pipelines as hazardous. The Minnesota Departments of Transportation, Agriculture, Commerce and Natural Resources (DNR) all favor such a change.

“A developing body of research has raised concerns about the safety and environmental effects of pipelines transporting CO2,” the DNR said in a PUC filing Monday. “Leaks or breaks in a pipeline can cause CO2 to accumulate in low-lying areas [including basements of area residences and building], thereby displacing oxygen.”

The Midwest Carbon Express, proposed by Ames, Iowa-based Summit Carbon Solutions, would run for 150 miles in Minnesota, connecting to five ethanol plants. The Heartland Greenway, proposed by Texas-based Navigator CO2 Ventures, would jog 12 miles into Minnesota, linking to one ethanol plant.

Both pipelines are hefty financial endeavors: At $4.5 billion, Summit’s pipeline would cost nearly $500 million more than the U.S. portion of Enbridge’s new Line 3 oil pipeline (most which is in Minnesota). Navigator’s project would cost around $3 billion.

Deep-pocketed private equity investors are behind both projects, smitten by “45Q” federal tax credits. The credit, which will provide $50 per ton for carbon that’s captured and sequestered, is potentially worth billions of dollars to Summit alone.

“There is no economic incentive without 45Q to store CO2,” said Jessie Stolark, public policy manager for the Carbon Capture Coalition, a pro-carbon capture group created by the Minneapolis-based nonprofit energy research group the Great Plains Institute.

Pipelines could help ethanol market

Carbon capture has become an increasingly popular — though often controversial — concept in recent years. It’s aimed at reducing greenhouse gas emissions, the root of climate change.

Plans abound to refit fossil fuel power generators to capture and store carbon CO2, particularly in North Dakota. But so far, coal-based carbon capture has fared poorly.

Ethanol plants are significant sources of CO2. Capturing carbon from them is considerably cheaper than at coal plants. The latter requires expensive equipment to remove impurities from burning coal. CO2 from ethanol — a byproduct of fermenting corn — is cleaner.

“What makes ethanol plants such a good target is that you have almost pure CO2,” said Chris Hill, Summit Carbon Solutions’ environmental and permitting director.

Besides Minnesota, Summit’s pipeline would collect CO2 from ethanol plants in Iowa, Nebraska and the Dakotas. The company aims to annually transport 12 million tons of liquified CO2 to North Dakota where it would be stored over a mile underground.

“We are on the cutting edge of getting infrastructure like this in place,” Hill said.

Navigator CO2 Ventures’ multistate pipeline would connect to about 20 ethanol plants, including one just west of Fairmont, Minn. The pipeline would terminate in Illinois, which like North Dakota has geology conducive to deep storage of CO2.

In Iowa, where both pipelines are the furthest along in permitting, opposition has arisen from landowners and environmental groups.

Carbon capture has the potential to make ethanol makers — who’ve been battered economically in recent years — more profitable.

“I think this definitely secures our future,” said Brian Kletscher, CEO of Highwater Ethanol in Lamberton, Minn., which would hook into Summit’s pipeline. “The dollar value comes from lowering our carbon intensity score.”

That score gauges the amount of carbon dioxide emitted relative to transportation energy delivered. By capturing its CO2, an ethanol plant can cut its score in half, Kletscher said.

With the lower score, he said producers like Highwater can get a premium for their ethanol in California, Oregon and Washington, all of which have mandated clean-fuel laws. Several other states — including Minnesota — also are considering such laws, as is Canada’s federal government.

By capturing carbon, ethanol makers can also sell credits to companies looking to lower their carbon intensity profiles.

Summit will own and operate the CO2 capture equipment at Highwater and other ethanol plants. The pipeline operator will get about half of the clean fuel premium — Summit’s primary source of revenue. Also, a significant chunk of Summit’s revenue would come from 45Q tax credits, Hill said.

Federal tax credits for storage are crucial because the market for CO2 is so limited. Petroleum companies are the main consumers of carbon dioxide, buying it off pipelines and injecting it into depleted wells to extract the remaining oil.

CO2 can cause illness

There are about 5,000 miles of U.S. carbon dioxide pipelines — a fraction of the nation’s 2.6 million miles of natural gas, oil and petroleum products pipelines.

The worst accident on CO2 line appears to have occurred in 2020 near Satartia, Miss. A 24-inch pipeline owned by an oil and gas company ruptured, leading to the evacuation of more than 300 people. Forty-six were treated for injuries at local hospitals.

Law enforcement officers told the Jackson (Miss.) Clarion Ledger that some people overtaken by the gas were walking around like “zombies” while others were “foaming at the mouth.”

The Mississippi rupture also released hydrogen sulfide, a dangerous gas often lurking in naturally occurring CO2 deposits. It wouldn’t be present, however, in the purer CO2 stream from ethanol plants, Summit and Navigator say. Also, the diameter of the CO2 pipes in Minnesota would be relatively small — primarily 6 to 8 inches.

Still, CO2 leaks alone can cause breathing difficulties, rapid heartbeat, vomiting, headaches and impaired thinking. The Great Plains Institute said in a PUC filing that there has not been a fatality in the history of CO2 pipeline operations. But death by suffocation is possible if CO2 concentrations are high enough, including for wildlife and livestock near a pipeline rupture.

CO2 flowing through pipelines is pressurized. It has the density of a liquid and the viscosity of gas — both good traits for transport. But in a rupture, CO2 rapidly depressurizes and returns to a pure gas phase, raising the risk of “ductile fractures,” said the Pipeline Safety Trust’s Caram.

“If there is a ductile fracture, it can rip the line like a zipper and it can be miles long,” he said.

Natural gas pipelines are primarily overseen by the federal government. In Minnesota, the PUC issues permits for pipelines carrying hazardous liquids including oil, petroleum-derived products and ammonia.

The PUC has been fielding comments on whether to include carbon dioxide on that list. For now, the C02 pipelines would need only county permits.

The PUC acted soon after Minnesota-based Clean Up the Riverfront Environment (CURE) petitioned for a state environmental review of the CO2 pipelines. CURE says an “environmental assessment worksheet” is required by law.

Both pipeline companies have since said they will voluntarily conduct the assessment. But both are against the PUC deeming CO2 a hazardous liquid for their pipelines.

Along with branches of Gov. Tim Walz’s administration, the Upper Sioux Community, two labor unions, CURE and several citizens have filed comments with the PUC asking that CO2 pipelines be regulated as hazardous.

“The commission adopted its definition of hazardous liquid in 1988, when [carbon capture] technology was still relatively unknown outside of oil-rich states like Texas,” CURE said in a PUC filing.

Yet CO2 is “precisely the type of hazardous liquid contemplated by the Legislature” back in the 1980s.

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