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IUB OKs summit CO2 pipeline permit, but ’yeahs’ are still battling ’nays’

By David Kruse, Comm Stock - Farm News columnist | Aug 9, 2024

The widely anticipated announcement that the Iowa Utilities Board had approved the permit for the Summit Carbon Solutions CO2 pipeline, as well as their use of eminent domain to gain easements from landholders holding out, finally came through. Opponents said that they were not surprised and would begin seeking their next avenue of opposition in the courts. Summit had made deals for voluntary easements with 75% of landowners needed, which surpassed the benchmark of 70% which Dakota Access had gotten when their pipeline permit and eminent domain use was approved. I am one of the landowners with which Summit has an easement.

I expected that this day would come. Before negotiating an easement, I and a small group of family members and neighbors with land on the Summit pipeline route met to discuss the proposed pipeline to decide as to what we would do. We were all corn growers and understand that the ethanol industry has added more to the Iowa economy than any other value-added venture in our lifetimes. The future growth of the ethanol industry, prompting a recovery in the depressed corn market, hinges on lowering carbon scores. The ethanol industry could significantly reduce its carbon score by sequestering its CO2 produced as part of the corn refinery process. The lowered carbon score allows its use as a feedstock for Sustainable Aviation Fuel. Ethanol’s acceptance as a SAF feedstock allows it to compete with electric vehicless in carbon scoring competition. Just as the value of ethanol demand flowed back to farm incomes, low carbon CO2 sequestered ethanol should give ethanol demand another boost to bolster struggling farm incomes. We need this to happen ASAP. Landowners are being paid a substantial sum to allow a pipeline to be buried as unobtrusively through their property as possible. I know that I have had worse days.

As to if our group thought that it would happen, our conclusion was that if anyone could drive this project across the finish line, Bruce Rastetter could. No one bats a thousand but because despite it needing to happen, there was no guarantee that it would. There may have been no one else that could shepherd getting it done than Rastetter. We watched a competitor to Summit, Navigator, fail because they did not read the “market” for easements like Summit did. Summit very quickly adapted to a sellers’ market for easements that Navigator balked at. It took more money raised up front to finance higher easement expenses and production delays that they accommodated for in their business plan. Summit, on the other hand, was going to pay whatever it took and had acquired the resources to do so and were committed to overcoming all obstacles. The pipeline opposition came mostly from activists who did not give a rip about the farmers’ or landowners’ interests, using them to peruse their own agenda. The Sierra Club even opposes growing corn. There was an instance of a pipeline break in LA from a petroleum refinery with a product mixed with CO2 that the opposition repeatedly cited as the safety threat from the industry. That is how public relations campaigns distort risk.

The only rationale that I sympathized with relative to pipeline opposition was use of eminent domain. I opposed the RICL powerline because they only secured 18% voluntary easements. That doesn’t work. The concept of eminent domain use was to complete projects that had broad support. Three out of four landowners in Iowa voluntarily agreed to Summit easements. We can quibble about what the benchmark should be, but that was strong landowner participation.

The opposition rags on Bruce Rastetter because he is politically connected. He is … but it is because he and our governor and other state leaders, that have been duly elected, have the same collective vision for economic development of the state as he does. There is nothing wrong with that. Iowa, Minnesota, South Dakota and North Dakota need the ethanol demand growth that the CO2 pipeline should deliver. We have an upward trending historical corn yield, and without upward trending demand growth for corn, the ag economy will stagnate. I promoted the development of the ethanol industry which delivered on the promise of adding value.

This is no different. It is a needed addition to support the ag economy. That fact dominates the argument. Along with Iowa Gov. Kim Reynolds, South Dakota governor Kristi Noem and North Dakota Governor Doug Burgum support the pipeline as well. Why wouldn’t they? Since when do governors not support things that benefit their states’ ag economy? This was not a hard decision or a political one.

IUB approval requires duplicate approval of South Dakota and North Dakota regulators. North Dakota should be no problem. The South Dakota legislature enacted a bill last session that was supported by Summit that is supposed to go into effect soon. The opposition however has reportedly raised enough signatures by petition, that it has become a fall ballot issue in South Dakota. That presents another kind of challenge. South Dakota Public Utilities Commissioners are elected in South Dakota so they will pay attention to public sentiment. There are many economic benefits written into this bill and a no-vote will not stop the pipeline.

Stout opposition to the Summit pipeline has caused at least a year’s delay in development from what they had hoped for, but given the epic flood that just unfolded, some delay may have proven fortuitous. Attempting to bury pipe in mud through flood waters deluging the region would have been a disaster in itself. Next year has to be better. It will take until sometime in the second halof of 2026 before the pipeline is operational. That means that new corn demand is still too far away.