Pipeline Debate: CO2 projects may benefit ethanol, but worry landowners

Source: By Aaron Viner, Iowa Farmer Today • Posted: Monday, March 28, 2022

As the U.S. looks to reduce its carbon footprint, ethanol has come under scrutiny from various environmental groups.

Ethanol plants are emitting nearly 150,000 metric tons of carbon dioxide for every 50 million gallons produced each year, according to Attis Biofuels, and some companies are looking to find ways to limit their impact on the environment.

Multiple carbon dioxide (CO2) pipelines are proposed to run through Midwest states, with the goal of capturing the carbon from these plants.

Summit Carbon Solutions is one of the companies with a pipeline proposed to run through Iowa, Nebraska, Minnesota, North Dakota and South Dakota. Heartland Green has proposed a pipeline through Iowa, Illinois, Nebraska, Minnesota and South Dakota. And Wolf Carbon Solutions is planning a sequestration site in Decatur, Illinois, and carbon capture sites in Clinton, Iowa, and Cedar Rapids, Iowa.

Justin Kirchhoff, president of Summit Ag Investors, said the pipeline is going to take the carbon dioxide produced by ethanol plants and store it permanently underground, as opposed to using it for enhanced oil recovery, a process of injecting pressurized CO2 into oil and gas reservoirs to produce more hydrocarbons. The benefit he noted for the community is the property taxes the company will be paying to counties.

“There’s going to be more and more focus placed on sustainability and energy sources that have the ability to lower their carbon footprint,” he said. “Our view is that ethanol has had a really powerful impact on rural America.

“The tangible benefits are that we are also going to be paying $30 million in property taxes on this pipeline. That’s an average of a million dollars to each county we go to in the state.”

Kirchhoff said Summit is looking to acquire a permanent easement that would run 50 feet wide along the path of the pipeline, and the pipe would run a minimum 4 feet below the surface of the soil. The land would still be able to operate as farmland after the pipeline is installed, and they would make sure farmers are compensated for any issues.

“We would also pay them a temporary easement on both sides of the permanent easement for construction, and pay them for any crop damages that incur as a result of installation,” he said. “Effectively, we get the permanent easement and the farmer gets to continue to utilize the ground above it in the long term, and we are making sure the soil gets put back right and all tile is fixed.”

He said there will be an impact on yield for a short while, but they are planning to pay for 100% of crop damage incurred for three years. He also said farmland values would go up.

More than 50% of the corn bushels grown in Iowa go to ethanol, making it a critical industry for Midwestern farmers, Kirchoff said. The impact of ethanol can be seen in the increase in corn prices, and they want to make the process more sustainable. The major result from the carbon sequestration is making ethanol plants fit more fuel policies in states such as California, Oregon and Washington.

“It makes the fuel more valuable in states that have incentives around low-carbon fuel policy,” he said. “By lowering the carbon footprint of the ethanol plant, they are going to be more profitable and more competitive versus other low-carbon transportation methods such as electric vehicles.”

Fertilzier facilities will also benefit from the project, Heartland Green wrote in a statement to IFT.

“The Heartland Greenway will help agricultural and rural processors reduce their carbon footprint, thus extending the economic longevity of these facilities,” the company said. “As long as corn, DDGs, and liquid fuels markets remain volatile into the future, this project will create stability for these plants and the many local farmers and community members who are personally invested in their success.”

Mahmud Fitil, the frontline action and logistics and land defense organizer for Great Plains Action Society, a collective of indigenous-led organizers from the Great Plains, said his organization is opposed to all three of the projects. Safety is one of their primary concerns, while land access is another issue.

Fitil said there are concerns about the reasons companies are putting in these pipelines and worries about oversight.

“There are concerns of how we keep the companies honest, how do we have a true reading of just how much CO2 they are sequestering,” he said. “For example, how would an audit be performed to ensure they are actually doing what they say rather than merely taking advantage of the perverse incentives such as the 45Q tax credit or the Low Carbon Fuel Standard in California?”

The 45Q tax credit was worth $31.77 per metric ton sequestered without using enhanced oil recovery in 2020, and is increasing to $50 in 2026 and adjusting for inflation after that point, according to the Congressional Research Service. To be eligible to receive the tax credit, carbon emissions must be measured at capture as well as injection and meet specific sequestration storage requirements.

Fitil said his organization doesn’t see an amenable solution for both landowners and the carbon companies looking at building pipelines.

“The only end result that we see that would be amenable to both the carbon company and the farmers/landowners would be to stop pushing these projects forward and never build them,” he said. “Summit, for example, is heavily invested in both ethanol and CAFOs and does not need yet another profiteering scheme risky for Iowans with taxpayers footing the bill while externalizing the risks to the public.”