Supervisors hear CO2 pipeline update

Friday, June 17, 2022

At Tuesday’s Board of Supervisors meeting, a spokesman for Summit Carbon Solutions (SCS), the company proposing a liquid CO2 pipeline through Cherokee County, presented all the positives involved in the project, including a projected $2 million annual property tax payday for the county.

And though that appealing morsel turned heads throughout the room, it didn’t prevent the specter of the known pitfalls associated with such a project from hanging over the proceedings like a CO2 cloud.

Among those pitfalls: Liquid CO2 is hazardous and a deadly asphyxiant; as a form of coercion from the jump, SCS has threatened possible use of eminent domain to secure land easement rights; SCS promoters, employees and investors form a powerful political contingent, including Iowa governors past and present; SCS and supporters continue proceeding as it’s all a done deal despite few landowners signing over easements and tons of pushback by opposition from many fronts and their attorneys.

According to the SCS spokesman, the Iowa Utilities Board will decide on issuing the required permits in June 2023, about a year ;later than initially proposed. The three-members of IUB are Republicans with two appointed by former Iowa Gov. Terry Branstad, and one by current Gov. Kim Reynolds. Former Democrat Iowa Gov. Tom Vilsack, current USDA Secretary, and son Jesse (SCS General Counsel) are also on board the pipeline project.

The pipeline routed in Cherokee County will be 29 miles long and represents an estimated $57 million investment, according to SCS. There are 12 ethanol plant “partners” currently on board for SCS to capture and sequester CO2 emissions, including Little Sioux Corn Processors at Marcus, and Quad County Corn Processors at Galva.

In its handout distributed at Tuesday’s Board meeting, SCS claims it will “open new

economic opportunities for the ethanol industry vital to Iowa's economy. This investment will strengthen the marketplace for corn growers while enhancing commodity prices, land values, and revenues for local communities.”

SCS reports that 57% of corn sold in Iowa goes to ethanol plants and 40% of US corn supplies ethanol plants.

The pot-o-gold at the end of the pipeline rainbow for SCS is based on simple math. To annually capture and sequester the reported 12 million metric tons of CO2 is driven by a section of the Federal Tax Code, a 12-year tax credit paid upfront in the amount of an annual $50 per ton of CO2 properly sequestered. This amounts to $600 million of annual tax credits for at least 12 years and totals $7.2 billion over the first 12 years of the life of the pipeline.

Tax credits are sold to large taxpayers for a percentage of their value. Or they may also be diverted to partner investors of the pipeline to be used to offset tax liabilities of their own. The current $3.5 trillion dollar “Build Back America Better” budget being considered includes legislation authorizing the direct payment of the $50 per ton to the owners of the pipeline.

In addition, the ethanol plants could realize as much as a 30-cents per gallon price increase with expanded markets and volume due to lower carbon ethanol, with that windfall split between the plants and SCS. Corn producers also would hike their profits.

If approval is given by the IUB, construction would begin in August 2023 and become operational in 2025 across Iowa, Nebraska, Minnesota, South Dakota and North Dakota. Currently 31 ethanol plants in the five-state area have committed to the project.

Written comments or objections to the proposed pipeline can be filed electronically using the IUB’s online comment form, by emailing customer@iub.iowa.gov or by writing to the Iowa Utilities Board, Attention: Docket No. HLP-2021-0001, 1375 E. Court Ave., Des Moines, Iowa, 50319.

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