CO2 pipeline official tells concerned Polk crowd that project likely won't need permanent tax subsidies

·4 min read

Navigator CO2 Ventures says its 1,300-mile carbon capture and sequestration pipeline project, proposed to cross Iowa and four other Midwestern states, isn't financially viable without hefty federal tax credits and other incentives offered to cut greenhouse gas emissions.

But ultimately, the project should be able to operate without public funding, a Navigator official said at an informational meeting Friday for affected Polk County landowners.

Navigator proposes building a pipeline across 36 counties in Iowa, capturing carbon dioxide emissions from ethanol and fertilizer plants, then liquefying the gas under pressure and transporting it through an underground pipeline to a site in Illinois, where it would be permanently sequestered.

A sign reading "Iowa farmers against CO2 pipeline" stands in a Linn County field.
A sign reading "Iowa farmers against CO2 pipeline" stands in a Linn County field.

Ames-based Summit Carbon Solutions plans a similar carbon capture-and-sequestration pipeline with plans to permanently sequester the carbon dioxide in North Dakota. Summit says the project, which the company calls the world's largest, will cost $4.5 billion.

More: What we know about two carbon capture pipelines proposed in Iowa

Texas-based Navigator has held a series of meetings across Iowa in recent weeks to explain its proposal, including three this week in Boone, Story and Polk counties.

Some of the roughly 60 residents attending the Polk County meeting at the Iowa State Fairgrounds questioned whether taxpayer money should be used to support the private pipeline project. The pipeline would cut across the country's northeast corner.

Jesse Mazour, the Sierra Club Iowa Chapter's conservation program coordinator, said the amount of public tax dollars potentially going to the pipeline is alarming.

David Giles, Navigator's chief operating officer, said the project needs to the funding to get started.

"Is the project viable without federal tax credits? ... The answer is no," Giles said.

But he said it should be able to operate without subsidies after 12 years, when the federal tax credits would end.

More: Carbon pipelines could extend ethanol’s viability, but some Iowa farmers say they’re not worth the tradeoffs

The federal government now offers projects cutting carbon dioxide emissions tax credits valued around $50 per ton of sequestered carbon. Congressional leaders are looking at raising the amount to $85 a ton.

However, "We think over time that other ... market-based incentives will grow that have nothing to do with tax credits," Giles said.

Giles said Navigator and its investors would expect to recoup the $3 billion invested in the pipeline and look to provide an 8-13% return on the investment.

BlackRock, a New York investment company, is providing the project’s financial backing. Valero Energy, a large Texas oil company with a dozen Midwest ethanol plants —including five in Iowa, the nation's top ethanol producer — is providing commercial participation.

Proponents say the pipeline projects would help ethanol and other energy-intensive agricultural industries remain viable as the nation seeks to cut net greenhouse emissions in half by 2030 to combat climate change.

Navigator says carbon sequestration would cut ethanol's carbon footprint in half and allow it to be sold in California and other states with low-carbon fuel standards.

But central Iowa residents at this week's meetings said they're concerned about the pipelines' safety, and their potential impact on the environment. And farmers and cropland owners say they're concerned projects would damage underground drainage systems in their fields and harm corn and soybean yields.

More: Planned carbon sequestration pipeline gains support of southeast Iowa fertilizer plant

"This isn't Texas or Oklahoma. This is Iowa and things are different here," Hardin County farmer Greg Gilbert told company officials at a meeting\ Thursday in Ames.

Brenda Brink of rural Huxley said at Friday's meeting that she feels like Navigator and Summit are using Iowa as "guinea pigs" for its carbon capture pipelines. She questioned whether the company would spend money informing residents about safety concerns given the possibility of a leak.

Concentrated carbon dioxide can be hazardous, and is used as an asphyxiant to euthanize livestock before the animals are slaughtered.

Stephen Lee, a Navigator engineering and construction senior vice president, said the company would plans to spend "millions and millions of dollars" equipping and preparing first responders for the possibility of a leak.

Even though ethanol production absorbs about half of Iowa's corn crop, the nation's largest, the companies are running into mounting opposition. Landowners, many of whom are farmers, are filing objections with the state utilities board and calling county and state leaders about the projects.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457. //

This article originally appeared on Des Moines Register: Company official: Iowa CO2 pipeline should be commercially viable

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