In five Midwestern states, a battle is taking place over the construction of carbon dioxide (CO2) pipelines as part of the energy transition. Farmers and communities are resisting large-scale pipeline networks. But utility companies and state governments want to confiscate land despite protests from landowners.
On June 25, the Iowa Utilities Board (IUB) approved Summit Carbon Solutions’ (Summit) application for a permit to build a carbon pipeline through Iowa. The IUB ruled that the pipeline was for “public use” and granted Summit the right to expropriate land from Iowa landowners through expropriation. Expropriation is commonly used to take private land for government projects that serve a public good, but not for private industry.
Summit plans to build pipelines through Iowa, Minnesota, Nebraska, North Dakota and South Dakota to transport the captured CO2 to deep underground storage facilities in North Dakota. The 2,500-mile project is estimated to cost about $5.5 billion.
Summit wants billions of dollars from the federal government. When the pipeline network goes live, the company will receive tax credits of up to $85 per ton under Section 45Q of the Internal Revenue Code. The company intends to sequester up to 18 million tons of carbon each year, earning over $1.5 billion per year in tax credits. Summit claims to have signed contracts with over 2,700 landowners to build the pipeline.
Ethanol producers in the five states are interested in participating in the project. Captured CO2 from 57 ethanol plants would be sold to Summit, providing a revenue stream for the producers. Billions in federal funding could also be available for ethanol plants that capture CO2. In addition, reducing CO2 emissions could allow ethanol producers to qualify their product as sustainable aviation fuel for commercial airlines.
Supporters claim the project will deliver environmental benefits in the fight against climate change. Summit says the annual CO2 savings would be equivalent to taking 3.9 million vehicles off our roads. But the project faces feasibility and cost issues, as well as environmental and safety concerns.
The feasibility and cost-benefits of carbon capture are poor. There are currently 47 large carbon capture and storage (CCS) plants in operation worldwide, and most are loss-making despite high subsidies. Ethanol plants that rely on CCS are likely to lose money, as are the taxpayers who fund the subsidies.
For example, Shell’s Quest CCS project in Alberta, Canada, captures only 35% of the CO2 released during a chemical process to refine bitumen from oil sands. The capital cost of the project is $811 million, fully funded by grants of $865 million Canadian from the Canadian and Albertan governments. Quest CCS will cost $41 million per year to operate, with only $27 million per year offset by payments from carbon credit subsidies.
The environmental benefits of the Summit project will be small. The CO2 captured by the Midwest’s ethanol plants will have little impact on global temperatures. Today, all CCS plants in operation worldwide capture just 0.1 percent of industrial emissions. Even the Sierra Club opposes the Summit pipeline, calling CCS efforts “false climate solutions.”
CO2 pipelines pose enormous safety problems. There are only about 8,000 miles of CO2 pipelines in the U.S., compared to 84,000 miles of crude oil pipelines and 3 million miles for natural gas. Most CO2 pipelines transport liquefied CO2 short distances to oil fields, where it is pumped underground to bring oil and gas to the surface.
CO2 in pipes is a liquid under high pressure. When it leaks out, it turns into a gas as it flows out. Because it is heavier than air, it stays close to the ground and can cover large areas. CO2 is harmless in small amounts, but in large amounts it is suffocating, can displace oxygen from the lungs, and can cause headaches, dizziness, serious injury and death.
On February 22, 2020, a CO2 pipeline burst in Sartaria, Mississippi. The rupture occurred on a Saturday and spewed CO2 for about four hours. An invisible cloud of CO2 passed through the rural community, forcing more than 200 people to evacuate and at least 45 to be hospitalized. Victims were unable to breathe and suffered unconsciousness and convulsions. No one died in the incident, but some victims still suffer physical problems.
Opposition to the pipeline is growing due to concerns about feasibility and safety. Supporters and opponents are battling it out in state legislatures and public utility meetings. Counties in all five states have recently passed bans or restrictions on carbon pipelines.
Regulators in North Dakota rejected Summit’s application last August but have agreed to reconsider the request. Last month, Illinois passed a law that puts construction of a carbon pipeline on hold until 2026. Regulators in South Dakota rejected Summit’s application last September, but lawmakers passed a package of regulations earlier this year that could make it easier to approve the pipeline network. South Dakota voters will have the opportunity to reject that package of regulations on this year’s Nov. 5 ballot.
The Summit pipeline project would not exist without huge government subsidies for CCS. We have enough CO2 for soft drinks and other uses. Huge subsidies funded by fear of man-made global warming are the only reason to take land away from farmers in the Midwestern states.
Even if this massive pipeline system were built and CO2 captured in 57 ethanol plants, the impact on global emissions would be insignificant and the impact on global temperature would be unmeasurable.
Land for pipelines is not the only case of land being seized to promote green energy. The U.S. Department of Energy recently announced plans to use expropriation law to seize vast tracts of land to build transmission towers for new wind and solar plants. Illinois and Michigan have passed laws preventing restrictions and outright bans on the deployment of wind and solar plants by local communities. Governments consider the fight against man-made climate change more important than citizens’ property rights.
First published by Real Clear Energy.
