GRANITE FALLS, Minn. — The Minnesota River cuts through this quiet prairie town, powering a small hydroelectric plant in a 19th century dam. A winding downtown riverwalk flanks the west side of the river while a park stretches across the far bank. The dam’s frothy tailrace holds the promise of fish that attract families and pelicans.
The old-school hydro provides a tranquil scene in this town of about 2,700 residents. The town’s real energy powerhouse, however, stands on the outskirts, where the towering Granite Falls Energy plant produces 63 million gallons of ethanol annually.
Ethanol production has become a vital piece of state economies across the Midwest. Forty-five percent of U.S. corn production now is destined for the scores of ethanol plants that rise from the farm fields.
The industry is at a crossroads.
Proposed pipelines to move carbon dioxide, a byproduct of ethanol production, would crisscross the Upper Midwest like spiderwebs. From North Dakota to Illinois, thousands of planned miles of metal pipeline would link dozens of ethanol plants, including Granite Falls Energy and an even larger facility up the road in Atwater.
The proposed projects have drawn controversy, leaving state officials with tough decisions. State regulators are wrestling with whether and how to approve the pipeline projects. And state lawmakers are fighting over property rights and whether land can be taken from unwilling owners to build the pipelines.
Officials are torn between two sets of interests.
For the energy industry, major farm groups and other proponents, the ability to store carbon dioxide thousands of feet underground holds the promise of opening new ethanol markets and snagging federal tax credits while preventing carbon dioxide from being emitted into the atmosphere.
For farmers, tribal groups and environmental activists, the proposed pipelines spell disaster. Opposition has brought unlikely allies together.
Farmers and other landowners say property rights are being trampled and livelihoods threatened. They fear the pipelines could affect their productivity and hurt land values. Tribal groups worry that ancestral grounds will be disrupted. Environmentalists cite the potential hazards of the highly pressurized liquid carbon dioxide and say ethanol use just delays the move to carbon-free energy. Even climate change deniers, who see no need for reducing carbon, are against the pipelines.
Opponents, though, know they are up against a well-funded and politically powerful foe.
“It’s David vs. Goliath,” said Joy Hohn, whose family farms corn and soybeans outside of Hartford, South Dakota.
Currently, there are a handful of pipelines that carry carbon dioxide from ethanol, but the network of proposed pipelines would be on a whole different scale.
State permitting activity will ramp up across the region throughout the summer and fall, but three carbon pipeline companies say they expect construction to begin in 2024.
Summit Carbon Solution’s $5.5 billion Midwest Carbon Express says its project will be the largest carbon capture and storage in the world. It will collect CO2 from 34 ethanol facilities over five states and use more than 2,000 miles of pipeline to deliver it to west-central North Dakota. The company says it has reached agreements with more than 2,700 landowners.
The project has the capacity to store 18 million tons of CO2 thousands of feet underground. That’s the equivalent of removing 3.9 million vehicles from U.S. roads, it says. Construction is expected to begin next April, according to COO Jimmy Powell.
Navigator CO2 Venture’s Hartland Greenway will run 1,300 miles through five states, linking 30 facilities. At its peak, it will store 15 million metric tons annually. The pipeline will service ethanol plants run by POET, the world’s largest biofuels producer. Construction is expected to begin in the second quarter of 2024.
Wolf Carbon Solution’s Mt. Simon Hub will include 280 miles of pipeline, linking Archer-Daniels-Midland plants in Iowa to a deep underground Illinois storage facility. It is estimated to handle 12 million tons per year. Construction is expected to begin in the second quarter of 2024.
Battling over eminent domain
Pipeline opponents in the region have fought similar battles before. They say lessons learned while protesting the Keystone XL and Dakota Access oil pipelines have prepared them to take on a formidable foe. They see strengthening eminent domain requirements as the most direct path to blocking pipeline companies from accessing their land and acquiring easements.
Eminent domain allows the government to take or grant easements on private property for public use. States can adjust the scope of eminent domain by restricting its use to specific types of projects or by requiring a certain threshold of voluntary landowners to agree before it can be invoked.
In both Iowa and South Dakota, legislation to restrict the use of eminent domain for carbon pipelines passed in the state House but failed in the state Senate. In North Dakota, the state House this year killed two state Senate bills aimed at protecting landowners in eminent domain proceedings.
Legislation to exclude CO2 pipelines from eminent domain in Illinois also died this year.
In Nebraska, which leaves carbon pipeline permitting to its counties, any attempt to use eminent domain for a carbon pipeline will likely be decided by the courts, lawyer Brian Jorde told the Nebraska Examiner. Jorde represents landowners who are rejecting right-of-way offers from pipeline companies.
Minnesota alone among the affected states does not allow the use of eminent domain for carbon dioxide pipelines.
In South Dakota, Jorde told KELO Newstalk radio, Summit has sued more than 80 landowners to acquire access rights through condemnation proceedings.
A bill to end companies’ right to eminent domain passed the South Dakota House 40-28, then was killed a week later by a 9-0 vote in the Senate Commerce and Energy Committee.
Senators who voted to kill the bill noted the importance of ethanol to the state’s economy and a desire to keep regulations consistent during the process.
“We can’t keep changing the rules,” said Republican state Sen. Lee Schoenbeck, the Brookings Register reported.
Republican state Rep. Karla Lems sponsored the House bill that passed because she wants to protect farmers’ land rights.
“This is the heartland of America. It’s out here in farm country that the people tend to remember where they came from, as some of this land has been in families for up to seven generations,” she said.
Lems said pipeline backers had more than 20 lobbyists at the capitol in Pierre, while three lobbyists worked for landowners.
Republican Gov. Kristi Noem has not taken a public stand on the issue.
KELO-TV of Sioux Falls, South Dakota, reported that Summit was a “platinum sponsor” of Noem’s inaugural events, a connection noted by pipeline opponents. But Ryan Sheldon, media coordinator for the event and Noem’s former digital media manager, told KELO, “There isn’t any direct link to any conflict.”
Summit is also well represented in Iowa, the nation’s largest ethanol producer. Former Iowa Gov. Terry Branstad, a Republican and the longest-serving governor in U.S. history, is listed as a special adviser, and Jess Vilsack, son of Democrat Tom Vilsack, the current secretary of agriculture and a two-term Iowa governor, is Summit’s general counsel.
Navigator’s Elizabeth Burns-Thompson told Energy News Network that the company would only use eminent domain as a last resort.
“Eminent domain does not save us time, it does not save us money and it does not make us any friends,” Burns-Thompson, the company’s vice president of government and public affairs, told the website.
Pipeline proponents also point to the federal 2022 Inflation Reduction Act, which raised the tax credit for carbon sequestration to $85 per ton. They say farmers will benefit from a bigger market that will create demand and drive up profits. Cleaning up CO2 emissions also opens markets for the region’s ethanol in states with low-carbon standards, such as California.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, argues ethanol plants that don’t capture and store CO2 will not be competitive and says the effects will ripple through the state’s economy.
“If Iowa screws this up, we’re in big trouble. We will absolutely lose a huge chunk of our industry and put the Iowa ag economy in a tailspin,” Shaw told NPR.
But Jorde, the attorney for landowners, sees it another way.
“You are funding these carbon pipeline companies so they can take your land and rights away from you,” Jorde told a landowners gathering in Norfolk, Nebraska.
Safety and access disputes
Critics cite numerous concerns over pipeline safety. CO2 pipelines operate at much higher pressure than oil or natural gas pipelines and pose daunting safety challenges. Many point to a 2020 pipeline rupture in Satartia, Mississippi. The 30,000-barrel leak vaporized immediately and left 49 people hospitalized and produced a 40-foot crater. Like most of the more than 5,000 miles of CO2 pipeline already in use, the Satartia pipeline is used to enhance oil production.
Landowners fear local first responders will have neither the training nor specialized equipment to handle a pipeline incident.
On its website, Summit says its proposal “goes above and beyond” federal standards on pipeline depth, clearance and setbacks.
Summit already has been served notice of a tough permitting process in Minnesota. The state’s Public Utilities Commission voted unanimously in January for an environmental impact statement rather than a speedier review sought by Summit.
“Taking longer to make sure we get it right, isn’t that in everybody’s best interest?” asked Minnesota Public Utilities Commission Chair Katie Sieben at the January hearing. “We have certainly heard a lot of concerns about CO2 pipelines.”
In Bismarck, North Dakota, the city commission has requested a 25-mile setback from the pipeline. The local school board added a resolution of support for the setback. Also in North Dakota, a state legislator has questioned whether Summit is running afoul of a state law that prohibits property investments by “foreign adversaries.”
But pipeline companies are pushing back against regulation attempts by cities, counties and other jurisdictions. In November, for example, Summit sued two Iowa counties that attempted to pass routing and permitting restrictions, claiming that such authority belonged to the federal government and Iowa Utilities Board. At least four South Dakota counties face lawsuits over moratoriums or other restrictions.
Hohn expects a drawn-out struggle throughout the region. She contends the companies are pushing to get projects underway before the Pipeline and Hazardous Materials Safety Administration, which regulates pipelines, issues new construction and safety regulations. The first draft is expected in 2024.
In a statement to Stateline, Summit said it “actively engage(s) with PHMSA and other regulatory authorities to stay up-to-date with industry best practices and evolving safety standards.”
Hohn is skeptical. “They are trying to wear us out,” she said of the pipeline companies.
Hohn, however, recently heard that Summit was re-routing the pipeline off their land.
Good news? Not quite. Hohn surmises she was “too vocal,” so Summit moved the route to her neighbor’s land — her brother’s cattle and buffalo operation.