Ethanol industry seeks carbon capture solution
•Summit Carbon Solutions plans to build 2,000 miles of pipeline for a new carbon capture and storage project which will reduce the carbon footprint of thirty-two ethanol plants in Iowa, South Dakota, North Dakota, Nebraska and Minnesota.
•Seven of those ethanol facilities are in South Dakota. Carbon dioxide will be captured at the facilities, compressed and fed into the pipeline. It will be carried to North Dakota, where it will be stored 6,500 feet underground in saline caverns.
•Summit’s infrastructure will be capable of storing twelve million tons of CO2 a year, equivalent to taking 2.6 million cars off the road in a year.
•It is estimated the project will cost $4.5 billion to build the pipeline.
•The project will put ethanol produced at these 32 partner facilities on track to produce a net zero carbon fuel by 2030.
Corn is vital to the South Dakota ag economy, especially as value is added to it by being processed through the ethanol industry. Half of the state’s corn is consumed by the biofuels sector.
As a corn farmer and a board member of an ethanol plant, lowering carbon is something Troy Knecht of Houghton, South Dakota, believes must be done for survival. Knecht is on the board of Redfield Energy, a 65-million-gallon ethanol plant in Redfield, SD and he is on the board for the American Coalition for Ethanol.
Although ethanol is a clean burning fuel, carbon dioxide emissions are a byproduct of the production process. Knecht said, “The future demands lower carbon emissions and standards are increasingly pointing in that direction. We’d love to lower our carbon intensity score as needed for the West Coast market. California retailers sell a lot of E85 for the industry.”
At a recent meeting of the American Coalition of Ethanol that he attended, carbon was a major focus in the breakout sessions as an issue faced by plants across the country. “When we can figure out what we can do to reduce carbon intensity scores, I really see this as the second boom of the ethanol industry.”
Redfield Energy’s board and staff have looked for ways to recapture the emissions to lower the plant’s CI scores. Summit Solutions pipeline provides an answer that is economically workable. “I’m excited. As farmers we can prove we are taking low carbon production seriously. We are working with EPA to use real numbers to show that ethanol is a huge part of this green movement.”
From his research, Knecht believes carbon pipelines are safe ways to move the carbon to storage areas as has been shown out east. In addition, “Plants in western Nebraska have the geological formations where they can sequester carbon right near their plant. We can’t do that here, so being able to transfer the compressed carbon to North Dakota will work for us. That way we can continue to compete with those Nebraska plants for the market in the western United States.”
Knecht does not have any land that the pipeline will cross but other board members do. Knecht said there are pipelines crossing land all over the United States. “This one isn’t carrying oil or other substances that are harmful which could leave land unusable if there would be a leak. The line is under pressure. If there would be a leak, the carbon disperses into the air and is gone.”
He notes that the ethanol industry has been a game changer. “I think back to when I was a kid. Would I have had the same opportunities when I started farming in the 1990s without ethanol? There may be fewer farmers, but we are raising more corn and getting a better price. Corn drives our ag economy. To move forward, we have to deal with carbon.”
Importance to ethanol plants
The pipeline proposed by Summit Carbon Solutions is important to the future of the ethanol industry, according to Jim Seurer, CEO of Glacial Lakes. “Whether or not you agree, there is a move toward lower carbon everywhere. The carbon intensity (CI) scores are in the spotlight in everything from airlines to businesses. Carbon reduction efforts are not cheap.”
“We’ve partnered with Summit early on as the project is important to us because it presents an opportunity to lower our carbon intensity score up to fifty percent,” Seurer said.
Many other states are looking for low-carbon ethanol with California, Washington, and Oregon at the top of the list. New Mexico and Colorado plus the northeast states are considering adopting low-carbon measures. Canada is already there.
“I compare it to the rise in the demand for organic or non-GMO foods,” Seurer said. “The consumer demand created a robust market as it is what consumers want. This niche market expanded and now when you go into a supermarket, you can find a wide selection of those products. It’s a reaction to market demand.”
He continued, “It’s the same with electric vehicles. In some areas, there is a market demand for EV which is perceived to have a lower carbon intensity. That market demand is carving into the market share of internal combustion engines which impacts the market for ethanol.”
Glacial Lakes looked at many ways to reduce or capture the carbon dioxide created through processing ethanol. It was frustrating as proposed changes to the system would cost tens of millions but only reduce the CI by a few points.
That’s why the carbon pipeline is attractive to the 32 ethanol plants that have signed up. And it will come at no cost to the ethanol plants.
California made history last week by becoming the first state to ban the sale of new gas-powered vehicles by 2035. Seurer said, “That is just twelve years away. It’s a message to the public that this is coming in the future. Stripping away the questions that may be involved with running electric vehicles, we have to do something. We have to get our arms around the demand for lower carbon emissions and resolve it. The government programs provide incentives to lower our carbon footprint.”
He outlined how that would work. “We do that through partnering with Summit who can earn what’s called the 45Q tax credits. Section 45Q provides a performance-based tax credit to power plants and industrial facilities that capture and store CO2 that would otherwise be emitted into the atmosphere. In the most recent draft of the clean energy tax package approved by Congress, they increase the 45Q credit value from $50 per metric ton to $85 per metric ton. Glacial Lakes four plants emit 1 million tons annually, which would be captured and transported through the pipeline. The entire carbon pipeline will capture 12 million tons. Doing the math, that’s a sizeable return.”
“The second way is through the premium we get from the reduction, which we split with Summit. As an example, the Huron plant has the lowest carbon intensity score. With their reduction, that could mean a 10-cent premium for more than 40 million gallons, resulting in a premium of $4 million a year.”
He continued, “For an initial period of 12 years, we provide the CO2. Summit will make modifications to our plant which will redirect the emissions by tapping into our stack and running it to a compressor station on our site. They compress the CO2 and push it into the trunk line which feeds into the main line, eventually being stored in North Dakota. There is no cost to us — we just have to give them our carbon dioxide. It seems like the right decision for us.”
Seurer said, “We support the pipeline and voluntary easements. Progress has been slower than what we expected. We share the same concerns that landowners express, and we have used our position to forward those concerns to Summit.”
The recent legislation passed in California is genuinely concerning to anyone who derives an income from agriculture. “To stay in business, this pipeline is something we must do. We have to keep the industry viable. The Summit Solutions pipeline looks to be the best way to do that.”
While fields around Chester, SD, have been short of moisture, Keith Alverson believes there are the makings of an average corn crop this year. Dry conditions are pushing the crop along with an early harvest anticipated. “Last year’s crop was pretty short so an average crop will be seen as a positive success.”
In this state, others are watching their fields as harvest nears. There will be a corn crop to harvest and much of that will go into the production of ethanol.
When asked about the proposed pipeline that will carry carbon dioxide from several ethanol plants to North Dakota, Keith said, “I’m excited about the potential benefits it has. It’s important to continue to see the ethanol industry survive.”
He said, “My dad, Ron Alverson, was part in the startup of the ethanol industry and experienced the challenges and eventual success. I got involved after things were up and growing. Prior to establishing this, farmers in the state took the price offered for their crop. Most of the corn crop was transported out of state. Once we brought ethanol into the mix, our crop stays here. The corn is processed into a product that is in demand. It took vision to see what ethanol could do to generate revenue through the local production of crops. It has been a challenge, as we didn’t know if there was a market. It continues to be a fight. States like California need our ethanol. They are giving us a market signal that we have to follow. It’s never easy, and sometimes we are put in an uncomfortable position, but we have success when we roll up our sleeves and want to innovate. We have to keep up with that.”
Proponents say carbon pipelines are necessary to control the greenhouse gases driving climate change. As Keith understands it, by transporting the carbon dioxide to the storage areas in North Dakota, the carbon footprint of ethanol will be reduced which is what customers in California are seeking. This will enable ethanol plants to increase their profits while increasing demand. “As we are on the western edge of the corn belt, keeping customers in California satisfied is important to us. They pay a premium for ethanol which has a lower emission which reduces the carbon footprint. That ends up with a higher value to me as a corn producer.”
In North Dakota, innovative processes pump oil out of the shale fields. Some of those same practices can inject the carbon into designated areas. “Folks who explain the geology say it’s safe to permanently store the carbon in those areas. Currently, pipelines cross a lot of land safely. To me, it makes sense at this point.”
From what he’s heard, a lot of the project can move forward without having to enter into eminent domain discussions on private land. “The group is negotiating these deals and compensating landowners for crop loss or damage and for the easement. I think this solution can be one where everyone benefits. In our area, we know that when we put down drain tile, it disrupts our fields in the short term but provides benefits to our crops. Farmers run natural gas lines to fuel their corn dryers. Pipelines can be safe. These types of projects drive economic growth.”
“In my mind, as a corn farmer and farmer in general, ethanol provides incredible prosperity in South Dakota, not only to farmers but to rural communities. The success of ethanol in the last decade has brought a lot of vitality to communities that hadn’t seen that before. Projects like this helps small towns, helps communities, and helps corn farmers. I hope to see the project successfully completed.”
Editor’s note: For more information, see “Carbon pipeline causes concerns”
In a phone interview, Jim Pirolli of Summit Carbon Solutions emphasized that education about the Summit Carbon Solutions pipeline is extremely important as people consider the project. “People have questions, and they are always really good ones. We look for opportunities to engage and help people understand and address concerns. So that’s where we start, with education to help them understand what’s in the easement, what do the terms mean, what’s included and what’s not. We address misconceptions, as there is misinformation out there.”
Contacting people about easements continues. “Across the entire project, we are right at 40 percent of the right-of-ways acquired. We are a little further ahead in Iowa as we started there earlier. In South Dakota, we have 310 easements signed so far with over 180 miles signed up.” There are 380 miles of pipeline planned for South Dakota.
Pirolli said their company has met with elected officials at over 600 meetings. Some have been required meetings, some are community outreach meetings, others have been county commission meetings. At each of those, SCS tries to answer every question. “We aim to give them the information they need to step back and look at the concerns of people.”
Sometimes people are misguided and need information. “Some counties have proposed moratoriums. We worked with them early on and continue to do so to address their concerns. Our goal is to work across the entire project to acquire every easement directly and voluntarily with landowners and to work with counties to address their questions.”
Pirolli said questions regard the safety of the project, others deal with the depth of pipes, the schedule for digging, pressure of the pipe, where the valves will be located and the routes of the pipeline. “We address everything we can. The key is communication. As long as people maintain open minds and communication, we continue to work with them to address problems. That’s our goal.”
While there is talk about the threat of eminent domain issue, landowner rights and property rights, Pirolli stressed the commitment of the company to those who own the land. “We are an agriculture-based company. A lot of us are farmers and landowners. We care about the future value of land, and the future generation’s ability to be successful and profitable. We want to position ethanol and agriculture to participate in the economic and environmental benefits as we have done for generations.”
He believes the issues of eminent domain is raised by people who want to fight against the project and feel threatened by it. “They don’t support our similar views of ag and the future of renewables. With that, there is talk out there that continues to grab headlines. The fact is that we have 2,700 easements, with $130 million paid directly to landowners upfront when the easement is signed, and that’s across five states. We’re being really successful and continue to sign easements every day and we will continue until we begin construction.”
He stated, “We absolutely consider safety to be paramount. This will be the safest pipeline ever built and constructed. The federal regulatory agency that oversees pipelines just released new standards. This will be the first pipeline developed following those standards. The carbon dioxide is not flammable or combustible, so there is not a risk of an explosion. It is under pressure. It is at ambient temperature, so it is at the temperature of the surrounding ground. Depending on the diameter, the pipeline itself will have half-inch sidewalls. It’s coated, monitored, and protected continuously. When it’s installed, federal guidelines require us to x-ray a percent of the welds, but we will x-ray all the welds to go the extra step to ensure safety. They will test the lines at pressures far exceeding normal operation.”
SCS filed for a pipeline permit with the South Dakota Public Utilities Commission in February. SCS continues to answer their questions and the PUC will schedule hearings likely in the spring. After that, SCS will wait for them to issue their order to proceed, or the order may include conditions that have to be met. SCS expects they will get the state permits in August 2023.
With confidence, Pirolli said, “It is a very safe system. There are always concerns when new infrastructure comes through. Currently, thousands of miles of pipelines exist in South Dakota with all kinds of products operating safely. There are 5,000 miles of pipelines in the United States that carry CO2 in 50 different projects right now. There is a lot of experience and knowledge in the industry about how to do this properly and safely. We plan to be best in class in operating the system.”
Some questions relate to responsibility in case of an accident. Pirolli said, “We are asked, ‘what is the responsibility to the landowner of the pipeline company if there is an issue?’ We fully indemnify the landowners for everything other than an egregious act. If a landowner intentionally uncovers the line and intentionally damages it, then they would be liable for whatever happens. Otherwise, in all other scenarios, the pipeline company is liable for any damage caused by the pipeline.”
The pipeline will deliver the compressed CO2 to permanent geologic storage in saline aquifers in North Dakota. Pirolli says it is a proven process and describes the handling of the CO2. “They will inject it into the caverns at a depth of 6,500 ft. below the surface to an area contained by impermeable cap rock. There is no oil or gas in the area. There are no existing faults in the area, and it is seismically stable so there is no way for the CO2 to escape. The formation is sandstone that is full of saline solution. The water is much too deep and too high in salt to be purified and consumed, so it’s ideal for this. It’s porous and the CO2 will mingle with the salt water and flow into the pore space like a sponge.”
Summit’s infrastructure will be capable of storing 12 million tons of CO2 a year, which is the equivalent of taking 2.6 million cars off the road per year.
Pirolli believes the message is getting out to people, and many are understanding how important it is to keep ag and renewable fuels competitive, in a global, low-carbon transportation regime out into the future. There have to be multiple solutions to decarbonizing transportation such as by reducing carbon intensity of liquid renewable fuels and blending more into the supply chain through E15 and E30. There is no other way to reduce emissions faster than through renewables and reducing the carbon intensity of fuels. When you hear questions about landowner rights, you really have to ask who is asking those questions and wonder who is behind those people. As far as landowner rights, we want to work with people who want to work with us.”
If people have questions, they have to make sure they ask until they are satisfied. Pirolli said, “And if they are not getting answers, continue to elevate those questions to the land agent in South Dakota and or to those at Summit Carbon Solutions in Ames, Iowa. We want to make sure people have the information they need to make an informed decision. If they hear something that doesn’t sound correct, reach out and ask us and we’ll provide information.”
“Our goal is transparency, integrity, and we want to represent ourselves and the company correctly,” Pirolli said. “We are committed to this project. It’s a transformational opportunity and it’s important to have the serious conversations.”
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