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Dakotafest audience hears carbon pipeline critics, proponents

The prospect of a web of pipelines to carry excess carbon dioxide from ethanol plants in the Midwest to a permanent burial field in North Dakota has the corn ethanol industry excited but landowners and farmers worried.

A farmer in a ball cap at right, speaks on a panel and criticizes landowner effects of a proposed carbon dioxide pipeline, which is good for the ethanol industry that many farmers supply with corn.
Jay Poindexter, right, a farm owner at Ree Heights, South Dakota, speaks at the Dakotafest ag show in Mitchell, South Dakota, on Tuesday, Aug. 16, 2022, for an educational panel about proposed carbon dioxide pipeline projects in the state. The farmer thinks the state needs to change eminent domain rules and that county zoning boards need to increase setbacks for pipelines for personal and farm safety.
Mikkel Pates / Agweek
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MITCHELL, S.D. — The prospect of a web of pipelines to carry excess carbon dioxide from ethanol plants in the Midwest to a permanent burial field in North Dakota has the corn ethanol industry excited but landowners and farmers worried.

The South Dakota Farm Bureau hosted an educational panel on the first day of the Dakotafest farm show in Mitchell, South Dakota, on the topic of the proposed Summit Pipeline. The multi-billion project would take carbon dioxide from 32 ethanol plants from Iowa, South Dakota, and Minnesota, and put it deep underground in North Dakota, sequestering it for the benefit of the environment.

A good sized crowd of about 200 people attend an educational panel on a controversial carbon dioxide pipeline in South Dakota, at the Dakotafest farm show.
A large crowd gathered at the Dakotafest ag show in Mitchell, S.D., on Tuesday, Aug. 16, 2022, for an educational panel about proposed carbon dioxide pipeline projects in the state. The ethanol industry is for it. Many landowners thinks it tramples on their rights. Photo taken Aug. 16, 2022, in Mitchell, S.D.
Mikkel Pates

Jim Pirolli, chief commercial officer for Summit Carbon Solutions, the major pipeline system in the state of South Dakota, said he would not have anything to do with a project that would run roughshod over farm rights.

A young, dark-haired executive in a black polo shirt answers questions behind a microphone at a farm show stage.
Jim Pirolli, chief commercial officer for Summit Carbon Solutions, the major pipeline system planned in South Dakota, and surrounding states, said he would not have anything to do with a project that would trample on landowner rights. Photo taken Aug. 16, 2022, in Mitchell, S.D.
Mikkel Pates

He said Summit is the largest pipeline project in the U.S. in 40 years, at 2,000 miles. He said the project has 2,200 easements with over 1,400 individuals. Of those, 40% are in Iowa, over a third in South Dakota. That accounts for almost 35% across the entire project, and $120 million has been paid.

ND burial ground

As for the CO2’s final destination, Summit secured leases on 130,000 acres west of Bismarck, North Dakota, to bury carbon dioxide. The system is designed to connect 32 ethanol plants. The pipelines start at 4-, 6-, 8- and up to 24-inch diameter. Pirolli noted that each of the ethanol plants must invest in a $25 million to $30 million project to capture the carbon dioxide — compressing and dehydrating it to be injected into a pipeline.

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The company is completing a drive to provide for construction operating permits in Iowa and South Dakota, and is going to apply for permits in North Dakota, Nebraska and Minnesota in the next 90 days.

An ethanol company executive in a blue polo shirt answers questions into a microphone as a pipeline executive and a farm organization president in a red shirt listen.
Jim Seurer, right, is chief executive officer of Glacial Lakes Energy, a farmer-owned cooperative based in Watertown, South Dakota, an ethanol producer, explains in a Dakotafest farm show educational forum that a proposed carbon dioxide pipeline would add value to the state’s ethanol and corn. Seurer is flanked by Jim Pirolli, left, chief commercial officer for Summit Carbon Solutions, a company working to build a pipeline carrying carbon dioxide from 32 ethanol plants into North Dakota for permanent burial. In the background is moderator Scott VanderWal, a Volga, South Dakota, farmer and president of the South Dakota Farm Bureau. Photo taken Aug. 16, 2022, in Mitchell, South Dakota.
Mikkel Pates / Agweek

Besides market premiums for ethanol, the project is expected to add an average of $1 million per county in tax revenue, although some opponents have complained that the taxes are abated for the first 10 years. He said the pipelines will create 11,000 jobs in construction and 1,100 ongoing jobs when the plant is in operation.

A packed audience of farmers applauded loudest after the measured but concerned comments from Jay Poindexter, a cattleman and farmer from from Ree Heights, South Dakota. The Farm Bureau added Poindexter to the program after landowners had expressed concerns that opposition to the pipeline was being excluded.

Poindexter said he and his sister, as well as neighbors, started receiving letters about surveying in July 2021. Land agents were persistent to let them on the land, but their insurance company declined to cover their liability from a pipeline because of a “pollution exclusion rule.”

Poindexter said some land agents have told some landowners they would take the land by eminent domain, where the government expropriates private property for public use, with payment of compensation.

“They should be working on finding willing sellers, not resigning sellers,” he said.

None of that

Pirolli, although not contradicting Poindexter during the panel, in a later interview said his company and the land agent companies they hire to acquire easements are specifically instructed not to “threaten” landowners with eminent domain. Asked if they are instructed not to bring up at all, he said sometimes landowners themselves bring the topic up.

Poindexter said the state needs better eminent domain laws to protect citizen landowners. He said local zoning laws must be updated because he noted one friend who has a pipeline within 300 feet of his home and a feedlot. Poindexter worried about safety issues, including explosions, and he said there should be proper setbacks from schools, nursing homes and hospitals.

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081622.AG.DakotafestCarbonPipelineForum05
Jay Poindexter, a farmer-rancher from Ree Heights, South Dakota, in a a Dakotafest farm show educational event at Mitchell, South Dakota, on Aug. 16, 2022, said he is against the property rights' impact from the Summit pipeline, which substitutes others’ economic values for damages to property.
Mikkel Pates / Agweek

In an interview, Pirolli said his company and its land agents would lose their jobs if they threatened landowners who don’t want to sign easements with eminent domain. On stage, he urged landowners to contact competent legal or accounting advice to be comfortable with signing easements.

Pirolli acknowledged that of the company’s 500 investors, about 10% are from a South Korean company, and noted they have both business and esoteric reasons for reducing the carbon.

Pirolli said the pipeline must be covered by at least 3 feet of soil, but Summit is making that 4 feet. It will go at least a foot lower than field drain tiles. He said burying deeper requires removing more “overburden,” and requires a wider temporary work space.

Some pipelines today are still functioning well even though they were built in the 1950s and 1960s, Pirolli said. He noted that his company is all steelpipe that’s coated. All welds are X-rayed before they are in the field. All of the pipe is pressure-tested with water, well beyond normal loads.

The company pays for a 50-foot wide easement and another 50 feet for temporary easements, at a rate of 100%, 80%, and 60% for the first three years and 240% of crop damage up-front.

“In addition we’ve hired local agronomists and landowner relationship managers with agriculture and agronomy land managers,” he said.

Corn’s relevance

Jim Seurer is chief executive officer of Glacial Lakes Energy, a farmer-owned cooperative based in Watertown, South Dakota. Seurer said said his company needs the pipeline and its market incentives available in markets like California and Canada, each representing 40 million people. The markets help make sure corn ethanol stays “relevant” in a world that is leaning into electric cars and away from petroleum, which is blended with ethanol.

A man in a blue polo shirt speaks into a microphone at a farm show stage.
Jim Seurer, right, is chief executive officer of Glacial Lakes Energy, a farmer-owned cooperative based in Watertown, South Dakota. He explains in a Dakotafest farm show educational forum that his company, an ethanol producer, tried other routes to find markets for carbon dioxide, but nothing would work like the pipeline sequestration plan. Photo taken Aug. 16, 2022, in Mitchell, South Dakota.
Mikkel Pates / Agweek

The company has a 12-year contract with Summit. They grind about 350,000 bushels of corn a day. He said the company has looked at “countless” other ways to cut its carbon score, but no others provides a 40% reduction in the carbon score, without spending “tens of millions of dollars.”

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Only Glacial Lakes’ plant at Huron, South Dakota, plant currently qualifies for a 10 cent per gallon carbon incentive on its 40 million gallon annual production, because they don’t dry their distillers grains for a cattle feed. The rest of his company has 270 million gallons of production.

If the incentives hold, that would be a $27 million increase from what they receive in the marketplace today. He said only a “very small slice” of the ethanol industry is not making the change. And if the market incentives disappeared, it would at least help Glacial Lakes remain viable in the fuel market, and a viable buyer of corn from its 4,200 shareholders.

At the same time, Seurer said some of his co-op members are affected by the pipeline pathway. He said the impact is “top of mind for us,” and the company is not just focused on its profit margins. Seurer said he’s talked to landowners and has advised them to do a “good job of negotiating.”

Seuer said his company has tried to sell carbon dioxide to industrial markets, but the ones that would buy it already have a source and say his plants are too far from their companies. Pirolli noted that if CO2 buying industries sprang up along the pipeline routes, the company could easily create off-ramps to serve them.

Neutral, so far

Scott VanderWal, a Volga, South Dakota, farmer and president of the South Dakota Farm Bureau, as well as American Farm Bureau vice president, moderated the educational panel. VanderWal emphasized the panel was “not a debate” and urged the audience to be polite. He explained to Poindexter that the Farm Bureau state organization is “neutral” to the pipeline “at this time." State policies start with county resolutions at meetings that are happening now and are debated at state meeting.

A woman lawyer with glasses on her head, gestures as she answers questions on a farm show educational panel stage.
Kristen Edwards, a staff attorney for the South Dakota Public Utilities Commission, at a Dakotafest farm show educational event at Mitchell, South Dakota, on Aug. 16, 2022, said the state will hold hearings on the permits for the Summit pipeline and urged people to get involved. The PUC weighs pipeline approval based on potential impacts, including to the environment and economy, she said.
Mikkel Pates / Agweek

Kristen Edwards, a staff attorney for the South Dakota Public Utilities Commission, said the state will hold hearings on the permits and urged people to get involved. The PUC won’t approve projects that pose a threat to the environment, to the social or economic conditions, threatens health, safety or welfare of the area, or interfere with the orderly development in the area, she said.

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