A bill passed by Iowa legislators would make it harder for liquefied carbon dioxide pipelines to gain approval in the state, but the measure has drawn strong opposition from corn and ethanol groups that are urging Gov. Kim Reynolds to veto it.
Environmental groups, including the Sierra Club, back the legislation, saying it would expand opportunities for public input and force pipeline companies to cover costs of potential damage.
Reynolds hasn't indicated whether she will sign the legislation, which passed the Senate 27-22 on May 12 after clearing the House 85-10 on March 26. Her office did not return a call asking her position.
Reynolds met with affected landowners supporting the bill last week, said Jess Mazour, conservation coordinator with the Iowa chapter of the Sierra Club. The governor listened and took notes but did not indicate how she is leaning, said Mazour, who was not in the meeting.
A direct issue is the pipeline proposed by Summit Carbon Solutions to carry liquefied carbon dioxide from 57 ethanol plants in Iowa, Nebraska, Minnesota, South Dakota and North Dakota.
The 2,500-mile project, which includes a sequestration site in North Dakota, has received approval from regulators in that state and Minnesota and is partially approved in Iowa. South Dakota’s legislature recently passed a bill barring use of eminent domain for carbon pipelines, and the company is navigating a county-by-county process in Nebraska.
On a call with reporters last week, pipeline supporters in Iowa said Reynolds needs to veto the bill in order to ensure the future of the ethanol industry in the state.
“We have to look at the long-term survivability of the corn industry, and right now we're not doing that with this legislation,” said Vic Miller, a farmer in Fayette County who used to head the Iowa Corn Growers Association.
Mike Jerke (LinkedIn photo)Mike Jerke, president and CEO of Southwest Iowa Renewable Energy, objected to language in the bill allowing anyone with a “minimally plausible interest in the proceeding” to intervene and provide input on any project before the Iowa Utilities Commission.
“That is not clear language,” Jerke said. “And when you don't have clear language, you invite arguments and debates, [which] translate into time and delays and potential for permits to not be issued in in the .. time frame you expected. And this all amounts to some very serious dollars that are at play already for our company.”
SIRE is part of a Tallgrass Energy project to “capture, transport and permanently sequester over 10 million tons of CO2 per year from industries in Nebraska, Colorado and Wyoming” at a sequestration site in Wyoming, Tallgrass said. Jerke said it’s all been done through voluntary easements. Summit’s project has secured most, but not all, the land it needs through paying landowners for the right to use their property.
Mazour said during the process in Iowa, renters of impacted land or “neighbors to the pipeline who don't have it on their land but their bedroom’s 200 feet away … were denied the right to intervene.” The bill gives those people the right to have a say in the process, she said.
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Jerke also pointed to a provision in the bill that would require any applicant to provide proof of insurance covering any damage resulting from construction or operation of a hazardous pipeline.
“So, apparently, we need to go find an insurance product that will allow us to do something that would be in violation of the very permit that we're applying for?” Jerke asked rhetorically. “I can't even imagine that that exists.”
But Mazour said that “dozens and dozens of landowners got letters from their insurance companies asking if they would be covered in the event of a [pipeline] rupture, and we did not find a single person who had their insurance company say they would be covered because CO2 is considered a pollutant, and most insurance policies, if not all of the ones that the landowners have, have pollution exclusion clauses.”
Jess Mazour (LinkedIn photo)Summit announced its plans to build the pipeline in February 2021, and Mazour said the insurance issue was identified early on.
“That's a problem that was never addressed, and so it made it in the bill," she said, adding that even some corn growers “have been submitting evidence that they can’t guarantee they’re going to be covered.”
Mazour said some corn producers are asking for their checkoff funds to be returned by the Iowa Corn Growers Association because of the organization’s support for the pipeline.
Pipeline proponents also are upset about language in the bill that would not only sunset permits for liquefied carbon dioxide pipelines after 25 years but also prohibit state regulators from renewing those permits.
“The death blow is you cannot renew a permit,” Jerke said. “We're making a significant investment. We have contracts in place for over $45 million to build the equipment on our site to capture and compress the CO2. We probably spent a little over half that because equipment purchases take time, and then construction will come here in the fall.”
“The ethanol industry in Iowa did not exist anything close to the form it does now, 25 years ago,” he said. “So, how are we able to predict what the sustainable aviation fuel industry might look like in 25 years? And if you were going to build a sustainable aviation fuel plant, you're going to want low carbon intensity ethanol.”
Capturing CO2 emissions from ethanol production can significantly lower the carbon footprint of the fuel, making it more attractive compared to gasoline and in the export market.
On the other side of the issue, Mazour said landowners have been “adamant they don't want forever easements that go with the land,” especially those that come with restrictions on selling or transferring land.
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