Carbon pipeline headed for North Dakota oil wells? Summit says 'no' but skeptics remain
Enhanced oil recovery uses pressure to force oil toward the production well. One of the ways to create that pressure is to pump in carbon dioxide. Summit Carbon Solutions has a plan to capture carbon from ethanol plants and send it to western North Dakota, but the company says it is for permanent storage, not the oil industry.
AMES, Iowa — It is known by the term “enhanced oil recovery.”
Unlike hydraulic fracturing, or fracking, which opens up cracks in the oil-rich rock layers, enhanced oil recovery uses pressure to force oil toward the production well. One of the ways to create that pressure is to pump carbon dioxide into the rock formation.
A potential source for that carbon dioxide? Carbon emissions captured from the ethanol plants that dot the countryside, turning corn into biofuel.
Several carbon capture projects are in the works at upper Midwest ethanol plants. At the forefront is a $4.5 billion project from Summit Carbon Solutions that, if built, would be the largest carbon capture project in the world.
But Summit’s Midwest Carbon Express, with plans for 2,000 miles of pipeline linking 31 ethanol plants across five states, is being met with some resistance from landowners and environmentalists.
One of several issues — safety concerns, landowners rights in the face of eminent domain, damage to farmland — that opponents have with the project is that the carbon dioxide could be sold to oil companies for enhanced oil recovery.
Dan Wahl is a farmer near the Green Plains ethanol plant at Superior in northwest Iowa.
“I don’t think there’s anything good about this whole thing,” Wahl said of Summit's plans.
He said neighbors have banded together in opposition to Summit, and the pipeline’s route to North Dakota makes them suspicious of the carbon dioxide being used in the Bakken oilfields.
“No one will put it in writing that they’re not going to use it for enhanced oil recovery,” Wahl said.
And at least one news article from early on in the project said Bruce Rastetter, the CEO of Iowa-based Summit Agricultural Group, which is the parent company of Summit Carbon Solutions, said enhanced oil recovery was being explored.
But Summit says that is not the plan.
“Our plan is not to use the CO2 for enhanced oil recovery,” said Chris Hill, who is in charge of permitting for Summit.
And Hill says it is writing.
Summit has applied for pipeline permits in two states, Iowa and South Dakota. Hill notes that there is no reference to enhanced oil recovery in the permit applications and that the applications specify “permanent” storage of the carbon dioxide.
“I don’t know how it could be more clear,” Hill said.
Hill also said enhanced oil recovery doesn’t fit with Summit’s business model.
Summit is banking on a federal tax credit of $50 for every ton of carbon dioxide stored. Summit says it will be capable of storing 12 millions tons of liquid carbon dioxide per year.
While there is a federal tax credit for using carbon dioxide in enhanced oil recovery, it drops to $35 per ton.
On top of that, Hill said using the carbon dioxide for enhanced oil recovery jeopardizes Summit’s plan for its other major source of revenue — taking a percentage of the premium price that ethanol plants would get from selling fuel on the low-carbon market.
Summit says it isn’t asking for any of the ethanol plants to help pay for the pipeline project, instead counting on markets such as California with low-carbon fuel standards to provide demand for low-carbon fuel.
With enhanced oil recovery “they wouldn’t give these ethanol plants credits,” Hill says.
Jessica Mazour with the Sierra Club in Iowa, a key group in organizing landowners to oppose carbon pipelines in the state, said Summit has not been up front about several issues, including not telling people at public meetings that there is a tax credit for using the carbon on enhanced oil recovery. She said profit is the company’s real motive, not reducing greenhouse gasses.
“I highly doubt they're going to leave money on the table,” Mazour said.
The main trunk of Summit’s pipeline would run from Iowa, through eastern South Dakota and end west of Bismarck, North Dakota. There also would be feeder lines from ethanol plants in Minnesota and Nebraska.
Iowa is the epicenter of carbon pipeline activity, with two other projects also based there. Navigator CO2 Ventures is developing the Heartland Greenway to send carbon from ethanol plants in southeast South Dakota, eastern Nebraska and one plant in southern Minnesota to Illinois. Wolf Carbon Solutions is partnering with ADM on a third pipeline, which would run from Iowa to Illinois.
“Navigator has been very up front … in their meetings that they don’t own the CO2; they own the pipe and so they don’t have control over what the CO2 is used for,” Mazour said.
Mazour questioned why Summit’s permit application in Iowa did not include more information about the site in North Dakota where Summit says it plans to permanently store the liquid carbon dioxide underground — a process called sequestration.
She noted that Summit has yet to apply for a federal permit for a class 6 well.
Hill said that’s because North Dakota was able to gain “primacy” over class 6 well permitting. North Dakota and Wyoming are the only states that have done this, which requires the state permitting process to be at least as stringent as the federal Environmental Protection Agency.
In addition to filing for a pipeline permit with the North Dakota Public Service Commission, something Hill said Summit expects to do in March, Summit also will have to file for the class 6 storage permit with the North Dakota Industrial Commission . The North Dakota Industrial Commission’s members are Gov. Doug Burgum, who has been a vocal supporter of carbon storage in North Dakota, Attorney General Drew Wrigley and Agriculture Commissioner Doug Goehring.
“Iowa shouldn’t even be considering this project until they have a class 6 permit,” Mazour said.
Hill says Summit is in the process of drilling monitoring wells and running tests in the intended storage area in Mercer and Oliver counties, which he said is about 50 east of oil and gas activity in North Dakota’s Bakken Formation. There is currently no oil and gas activity in Mercer and Oliver counties.
Summit still has a lengthy process to go through to obtain all the permits needed.
Iowa required public meetings before Summit could apply for its permit with the Iowa Utilities Board.
Wally Taylor, an attorney with Iowa’s Sierra Club, likened the IUB’s permit process to that of a lengthy trial with the chance to have Summit testify with what he called “conflicting statements” on enhanced oil recovery.
“That’s one thing we’re really going to have to be down on when we get them under oath,” Taylor said.