Ethanol Executive: Carbon Capture Might Be ‘Life or Death’ for Producers

February 08, 2023

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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.

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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.

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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.

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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. READ MORE

Gov. Reynolds: ‘The Future of Fuel is Growing Here’ (K92.3)

Shaw: Iowa biofuels industry ‘energized, but a little angry’ (Ethanol Producer Magazine)

Iowa would lose $10.3B a year in ethanol production without pipelines, report says (Des Moines Register)

EXPERT STUDY FINDS CARBON SEQUESTRATION VITAL TO FUTURE OF IOWA ETHANOL PRODUCTION (Iowa Renewable Fuels Association)

STUDY: IOWA ETHANOL INDUSTRY IN JEOPARDY WITHOUT CARBON CAPTURE PIPELINES (Successful Farming)

Opinion: The future of Iowa ethanol production depends on carbon capture -- I do not want my son, and his generation of farm kids, to come of age during an Iowa farm crisis of the 2020s. This time it would be self-inflicted. (Des Moines Register)

Excerpt from Ethanol Producer Magazine: “The Iowa renewable fuels industry is energized, but a little bit angry,” stated (Monte) Shaw. “Producers are energized because the world is demanding clean, affordable, renewable energy, and we can deliver. Why a bit angry? To put it simply, we are sick and tired of the unnecessary roadblocks from elected officials and interest groups that want to protect their cherry-picked forms of energy – whether that be supporters of fossil fuels or electric vehicles.”

One source of frustration cited by Shaw was when “the White House broke its promise” to have the Midwest E15 solution finalized in time for the 2023 summer driving season. “Someone in the White House put the brakes on. This will cause irreparable harm to thousands of fuel retailers and millions of consumers. To put it bluntly, we were told to be patient and keep quiet, and everything would be fine for this summer…So, yes, we’re a little bit angry.”

Another challenge are groups who want to completely block Iowa ethanol producers from utilizing carbon capture and sequestration (CCS). Shaw remarked, “I’m not here today to ask you to support carbon policies or clean fuel tax credits. I am here to ask you to honestly consider the real-world impact they have on Iowa’s ethanol plants. If we want to maintain or grow Iowa ethanol production, it will require CCS.”

To view Shaw’s full prepared remarks, click here.

Shaw also highlighted the results of new research quantifying the impact of renewable fuels production on the Iowa economy. The new study, authored by John Urbanchuk of ABF Economics, found the production of ethanol and biodiesel accounts for nearly $7.2 billion in state GDP, supports more than 57,000 jobs throughout the economy, and boosts Iowa household income by over $3.5 billion.

“Renewable fuels have changed the economic trajectory of Iowa,” stated Shaw. “I believe that is an impact worth fighting to maintain and expand. We will roll up our sleeves and get to work energized by the nearly limitless possibilities for renewable fuels and renewable products as we look to the horizon.”

To view the whole study, click here. READ MORE

Excerpt from Iowa Renewable Fuels Association: Agricultural economic experts released a new study today that found Iowa ethanol production is at a crossroads. Without viable access to carbon capture and sequestration (CCS), Iowa could see 75 percent of its ethanol production migrate to states that facilitate sequestration.

The study, conducted by Decision Innovation Solutions (DIS), determined that current market and policy dynamics would results in Iowa ethanol production becoming noncompetitive with catastrophic results for Iowa ethanol producers, Iowa farmers and the Iowa economy. The finding included:

Production will migrate out of state. By the end of the decade, Iowa ethanol production could contract by 75 percent (nearly 3.5 billion gallons per year) leading many plants to shut down.

Iowa farmers would lose local markets for over 1 billion bushels of corn annually, depressing local corn prices.

Iowa would realize an eventual decline in revenues from ethanol plants of more than $10 billion per year.

Read the summary here.

DIS concluded: “Margins matter. And the 45Z tax credits are a game changer. Clean fuels such as ethanol which are produced with CO2 capture and sequestration via pipeline are the future for the renewable fuels industry. Iowa’s ethanol industry is at a crossroads – will it be positioned to be the leader in ethanol and other clean fuels or watch that future move over the horizon?”

The Iowa Renewable Fuels Association (IRFA) commissioned DIS to conduct an all-encompassing economic impact study based on a scenario where Iowa ethanol plants are precluded from utilizing CCS technology via pipelines while surrounding states allow such projects to move forward. Phase 2 of the study, which is scheduled to be completed later this month, will determine the negative impact on local corn prices from the projected reduction in the Iowa corn grind.

“Legislation that would effectively shut down CCS pipelines would also shut down Iowa ethanol production,” stated IRFA executive director Monte Shaw. “The reality that Iowa ethanol producers face is that reasonable access CCS could be the difference between operating and shuttering their operations. We all recognize the important and emotional issues at play here, but IRFA members are calling on Iowans to unite to support a fair and equitable path forward for CCS. The future of Iowa ethanol production and Iowa corn prices depends on it.”

Read the full study here.

Decision Innovation Solutions (DIS) is the premier economic research and analysis firm for agriculture in Iowa. The leading author was David Miller, Consulting Chief Economist at DIS and former long-time chief economist and researcher for the Iowa Farm Bureau Federation.

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 42 ethanol refineries capable of producing 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce 410 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org. READ MORE