Ethanol executive: Carbon capture might be ‘life or death’ for producers

By: - February 7, 2023 3:09 pm

Monte Shaw, executive director of the Iowa Renewable Fuels Association, speaks at the Iowa Renewable Fuels Summit on Feb. 7, 2023. (Photo by Jared Strong/Iowa Capital Dispatch)

An increasing demand for low-carbon fuels will imperil ethanol producers unless there is widespread adoption of equipment to capture emissions from ethanol plants, the executive director of the Iowa Renewable Fuels Association said Tuesday.

“I honestly don’t think it’s hyperbole to say that capturing and sequestering carbon will be life or death for most ethanol plants over the next five years,” Monte Shaw said at the organization’s annual summit in Des Moines.

His comments come at a pivotal time in a long-running debate about whether Iowa landowners should be forced to allow carbon dioxide pipelines to be built across their properties.

There are three proposed pipelines that would take captured carbon from ethanol plants, liquefy it and transport it out of state for underground sequestration or commercial use.

State lawmakers have said the pipeline proposals are among the top issues for their constituents. There are several bills pending in the Iowa Senate that would limit or eliminate eminent domain for the pipelines and limit the companies’ abilities to conduct land surveys and negotiate for easements.

Shaw argued that the proposed legislation unfairly targets one type of infrastructure project.

“If you are an Iowa legislator and you honestly believe our current laws don’t provide enough landowner protections, that’s your right,” Shaw said. “But if you support legislation that singles out (carbon dioxide) or liquid fuel pipelines instead of applying new standards to all eminent domain requests, then I politely suggest you’re not really interested in property rights.”

One of the bills would require companies to secure voluntary easements for 90% of its route in Iowa before it could use eminent domain to get easements from unwilling landowners — a proposal that has the support of the influential Iowa Farm Bureau Federation. Summit Carbon Solutions, which is furthest along in the permit process, recently announced it has obtained voluntary easements for about two-thirds of its route in Iowa.

“Every day, more and more Iowa landowners are signing easement agreements with Summit Carbon Solutions because they know it will ensure the long-term viability of the ethanol industry and drive growth in our ag economy, commodity prices and land values,” the company’s chief executive, Lee Blank, said in a press release.

Navigator CO2 Ventures — which has the largest number of proposed miles of pipe in the state for its project — has declined to reveal the percentage of its route for which it has signed voluntary easements.

Summit has hoped to get approval for the project from the Iowa Utilities Board this summer, but the board has not yet set a final hearing for the proposal, and an overall timeline is unclear.

Summit has enticed landowners with payments that they keep even if the pipeline is not built. Under its agreements with ethanol producers, Summit would pay to install the infrastructure to capture, compress and transport carbon dioxide in exchange for an unspecified percentage of the increased revenue that results.

Low-carbon ethanol can be sold for a premium in certain markets, and the federal government offers tax credits to ethanol producers for capturing carbon. Those tax credits are the greatest if the carbon dioxide is sequestered underground.

Carbon dioxide that is produced by fermentation at ethanol plants has a high purity, which reduces or eliminates the need to refine it before sequestration. The question is: Where should it be sequestered?

The pipeline companies have suggested the geology in Iowa is not ideal for underground sequestration — hence the need for the pipelines — but that is not necessarily true, Ryan Clark, a geologist for the Iowa Geological Survey, told state lawmakers last week.

He said about half of the state’s biofuels facilities are located in places that have the potential for on-site carbon sequestration but that someone would need to drill tests wells to confirm it.

Clark said it’s possible that huge quantities of carbon dioxide could be stored in the Midcontinent Rift System, which lies beneath nearly half of Iowa.

About five of the state’s 42 ethanol plants currently capture carbon dioxide to some degree, said Jared Palmer, a spokesperson for the Iowa Renewable Fuels Association. It is used by other businesses to carbonate beverages, flash freeze products and for other purposes, he said.

Opponents of the pipelines have objected to the projects over safety concerns, landowners’ rights and damage to farmland. Some environmentalists also argue that increasing the long-term viability of ethanol by reducing its carbon intensity will merely prolong its use at a time when the nation is transitioning toward electric vehicles.

“Taking carbon already in the atmosphere from past fossil fuel use and putting back underground should not only be considered an incredible achievement from your supposed point, but it is a central tenet of every country’s plan to meet 2050 carbon reduction goals,” Shaw said.

Geoff Cooper, chief executive of the Renewable Fuels Association, speaks at the Iowa Renewable Fuels Summit on Feb. 7, 2023. (Photo by Jared Strong/Iowa Capital Dispatch)

Electric vehicles are a key component of President Joe Biden’s efforts to reduce greenhouse gas emissions, but his administration has been “quietly supportive” of ethanol despite that focus, said Geoff Cooper, chief executive of the national Renewable Fuels Association.

The recent Inflation Reduction Act was “game-changing” for ethanol because of its tax credits and $500 million in funding to update fuel infrastructure to accommodate higher-percentage ethanol blends, Cooper said. The 2022 federal legislation also increased the tax credit rate for capturing and storing carbon dioxide, from $50 per ton to $85.

“We look at it as probably the single largest commitment to biofuels from Congress since 2007,” Cooper said.

Gov. Kim Reynolds speaks at the Iowa Renewable Fuels Summit on Feb. 7, 2023. (Photo by Jared Strong/Iowa Capital Dispatch)

The ethanol industry is a key market for Iowa farmers because it buys more than half of the corn produced in the state.

Gov. Kim Reynolds said biofuels are “truly the difference between profit and loss for countless farm families.”

She has joined other Midwestern governors in seeking waivers from the U.S. Environmental Protection Agency to expand summertime sales of blended fuels that contain 15% ethanol.

“The future is already growing here, and it’s growing in Iowa fields,” Reynolds said.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.