Midwesterners to CCUS: Not in My Corn Field

Carbon capture and underground storage projects have been on the drawing board for decades.

And over the same period, Americans have mostly backed the idea.

Poll after poll find that most Americans do not put climate change at the top of their threat list, but they generally support the removal of greenhouse gases from the atmosphere.

A series of Massachusetts Institute of Technology surveys found general support for carbon capture projects dating to the 2010s. The Pew Research Center found support for efforts to curb climate change in 2023.

The first major projects were pitched at the beginning of the 2020s. Since then, midstream companies and their investors have discovered that, while the general public is fine with the idea, many of the locals are much less predisposed to it and have passionate opinions.

Four projects have been attempted in the Midwest since 2021. All but one has encountered staunch opposition from some of the landowners along the proposed routes and the state legislators that represent them.

The projects have also received support from some residents and related industries, but the opponents have been able to claim at least one victory. One project has been canceled, and another was being reconsidered at the end of 2024.

Opponents claim the projects will not help the environment, are dangerous and violate their land rights.

“It’s pretty exciting to be here making property rights one of the most important topics in our state,” Mike Klipfel, a South Dakota farmer, told the Tri-State Livestock News following a court victory against a project in August.

Supporters say the projects are necessary to meet emission standards that keep going up, and to improve the viability of industries such as ethanol production.

“I think this is really a turning point in our industry,” said James Broghammer, CEO of Pine Lake Corn Processors, in a streaming video supporting a carbon capture and storage (CCS) project. “We can either decide to support these plants and get behind CO₂ sequestration, or this is the beginning of the end.”

Land battle

The fights over carbon capture, utilization and storage (CCUS) pipeline projects have a different flavor than typical midstream sector battles. The decisions surrounding the Keystone XL or the Mountain Valley Pipeline projects boiled down to competing lobbying efforts and court battles between the environmental and energy sectors.

CCUS projects are different because the pipelines don’t carry hydrocarbons to market, but greenhouse gases to isolated areas for disposal. Courts are still determining the legal definitions governing the projects on a state-by-state basis.

The state fights over CCUS don’t follow political affiliation and tend to be more regional in nature, with rural landowners battling businesses interested in lowering their carbon output.

In February, Iowa opponents of the use of eminent domain to build Summit Carbon Solutions’ CO₂ pipelines staged a die-in at the state capital in Des Moines. The look was far less “urban” than similar city protests—participants mostly middle-aged or older, flattened on the floor wearing red, button-up, collared shirts along with blue jeans and work shoes.

Continental Resources Executive Chairman Harold Hamm has watched the battle unfold on the $4.5 billion Summit Carbon Solutions project, in which his company invested $250 million in 2022.

After hearing an appeal of a lower court decision, the Supreme Court of South Dakota remanded the case back to the lower courts, saying that too many issues remain unresolved.

“There’s a lot of misunderstanding, because some of that stuff is so hard to explain,” Hamm said in an interview with Oil and Gas Investor.

A big part of the fight in South Dakota, and in other states within Summit’s proposed network, is the issue of eminent domain. Companies building crude, gas and NGL pipelines generally have eminent domain authority because the products on the line are all defined as commodities.

Some states have declared CO₂ to be a commodity and have therefore granted eminent domain authority. The South Dakota High Court found that “the existing record suggested that CO₂ is being shipped and sequestered underground with no apparent productive use and therefore would not qualify as a commodity.” It’s a line of reasoning Hamm did not agree with.

“Really? Well, how about your corn? Do you sell every grain of that, or do you store some of it?” he said. “It is just nonsensical. It made no sense at all."

The court, however, did not make a final ruling on eminent domain when it remanded it back to the lower court, and the Summit project continues to move forward.

Of the four Midwestern CCUS projects announced in 2021, Summit is the most ambitious. The company has partnered with 57 ethanol plants in Iowa, Minnesota, North Dakota, South Dakota and Nebraska. After gathering up to 18 MMton/year of CO₂ along its 2,500-mile network, the greenhouse gas will be moved to disposal wells in North Dakota.

The ethanol industry has backed the development of CCUS as a way to expand its business base. Like all other industrial companies, ethanol producers are required to keep a close eye on their emissions.

Ethanol producers also have to deal with the rising carbon intensity requirements of some U.S. states, especially California, said Sen. Mike Jacobsen (R-Neb.), in a letter for the American Carbon Alliance, an organization that promotes carbon capture.

“Carbon sequestration can make sure Nebraska ethanol continues to have a role in the U.S. economy,” Jacobsen said.

Tough business

The economics of building and running a CCUS operation are still being figured out, giving the start-up firms another hurdle outside of the political barriers.

The CO₂ headed for permanent storage can’t be sold. The start-ups instead rely on CO₂ producers to pay for takeaway and have otherwise depended on government subsidies and the 45Q tax credit.

“It takes a lot of money to build these pipes, build these projects, build these injections,” Hamm said, referring to the need for federal subsidies.

The federal government gave $5.3 billion in support for CCUS research and projects from 2011 to 2023, according to the General Accounting Office. The government predicts that the 45Q credit will allow participating businesses to keep an extra $5 billion from 2023 to 2027.

Financial challenges still exist for midstreamers wanting to enter the market. Projects generally need to be large-scale to move enough volume to collect enough fees, potentially limiting the size of entrants into the sector.

Moving CO₂ also presents several problems when compared to moving methane. CO₂’s liquefication temperature is far higher than methane’s, meaning that the typical pressure fluctuations that would not cause a problem with methane could cause damage with CO₂. It also becomes acidic when mixed with water, corroding pipelines much faster than methane.

The challenges have taken a toll on the original start-ups.

Navigator CO₂ Ventures started business in March 2021. The company’s Heartland Gateway would have operated on a 1,300-mile network providing the same service to ethanol producers as Summit. The South Dakota government rejected the company’s siting approval in September 2023. Navigator canceled the project the next month.

Wolf Carbon Solutions launched in January 2022. The company limited its scope to a 280-mile pipeline from electric generators and ethanol plants in Iowa to a disposal sites in Illinois. In December 2024, the company withdrew its petition to build in Iowa after it had difficulty obtaining easements for the project. In a statement, the company said it was still determining whether it will continue on the project.

Tallgrass Energy has attracted the least amount of opposition for its plan, the Trailblazer Conversion Project. The CCUS is also the only brownfield project of the four. In 2023, Tallgrass received permission from the Federal Energy Regulatory Commission to convert an interstate natural gas pipeline to a CO₂ pipeline. The project will transport CO₂ from ethanol facilities in Nebraska to a disposal site in Wyoming. Tallgrass held an open season for capacity on the project in May 2024. Tallgrass filed for permits to build compression facilities at an ethanol plant in Aurora, Nebraska, in September, the Aurora News-Register reported.

Proven elsewhere

While the major projects in the Midwest are new, storing CO₂ underground is old hat for much of the energy sector.

CO₂ is useful in many fracking operations, and for years producers in Texas and Louisiana have been shipping it and storing it underground for later use.

About 5,000 miles of CO₂ pipeline already exist in the U.S., primarily for enhanced oil recovery, according to the Congressional Research Service.

As of 2023, a small number of carbon capture and storage facilities were operating in the U.S., most of them co-located with gas processing or ethanol plants, according to the Congressional Budget Office (CBO). Almost all of the facilities send the captured CO₂ to E&Ps for enhanced oil recovery.

“The main reason CCS is used to such a limited extent is that the cost to implement CCS technology exceeds its value in most potential settings,” the CBO said in a report on the technology.

However, some operators see potential. 

Louisiana is attempting to join the Midwest in developing permanent underground storage for CO₂ on a major scale. The state recently received permission from the federal government to dig the deep wells needed for permanent storage and currently has 10 projects vying for permits.

In the Midwest, many in the ethanol industry see it as the natural next step in growth.

Speaking in a Summit informational video, Dave VanderGriend, CEO of biorefiner ICM, said “If this does not happen, you’re going to stagnate this industry at the point it’s at today.”