U.S. Allocates Funding for Carbon Transportation Projects

Researched by Industrial Info Resources (Sugar Land, Texas)--Last week, the U.S. government announced that it was allocating $2.1 billion for loans for carbon dioxide transportation projects in the U.S. The Carbon Dioxide Transportation Infrastructure Finance and Innovation (CIFIA) program will be appropriated annually through 2026 to help provide capital for projects transporting carbon to endpoints for its storage or utilization. Industrial Info is tracking more than $3 billion in active carbon dioxide pipeline projects in the U.S.

One of the Biden administration's key planks in its Inflation Reduction Act is the development of carbon capture and storage (CCS) technologies, and the CIFIA will help provide a means for carbon to actually travel from its sources to these endpoints. "One giant challenge in deploying carbon management technologies to reduce emissions is to be able to transport the CO2 to where it is ultimately sequestered or used up," said U.S. Secretary of Energy Jennifer Granholm in a press release. "The CIFIA program will help industry overcome the challenges to accessing the upfront capital needed to build shared infrastructure projects that are essential to advancing our clean energy economy."

Most of the U.S. CO2 pipeline projects being tracked by Industrial Info are positioned in the Midwest market region, home to much of the country's ethanol production, which creates carbon dioxide during the fermentation process. Some of these are large, multi-state undertakings, while others are geared locally.

Among the largest active CO2 transmission and storage projects in the U.S. is Navigator Energy Services' (Dallas, Texas) Heartland CCS system, which in its initial rollout, is expected to span more than 1,200 miles across five Midwestern states, including Illinois, Iowa, Minnesota, Nebraska and South Dakota. The CO2 eventually will be sequestered at site near Springfield, Illinois, capable of storing 5 million metric tons per year. Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) and a division of BlackRock Incorporated (NYSE:BLK) (New York, New York) also are partners in the project. Valero, which is one of the U.S.' leading alternative fuels producers and has several ethanol plants in the Midwest, will be the system's anchor shipper. Eight of the company's plants will be connected to the system, which is expected to begin startup activities in 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines and Terminals Project Databases can click here for the detailed project reports.

A similarly lofty program in the form of Summit Carbon Solutions' (Ames, Iowa) Midwest Carbon Express Pipeline also is in the works. This 2,000-mile system is planned to gather carbon dioxide from plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota for transport to a North Dakota sequestration site. According to news media, the project is facing some pushback from landowners situated on the proposed pipeline routes, and the use of eminent domain to obtain right-of-way is rearing its head. Among the landowners' concerns is lower crop yields on the land through which the pipeline runs. Research published by Iowa State University in November 2021 found that first- and second-year yields on the right-of-the-way of the nearby Dakota Access crude oil pipeline were 25% lower for corn and 15% lower for soybeans. Summit has estimated the pipeline system eventually will carry 12 million tons of CO2 each year. Subscribers can click here for more details of the project.

Tallgrass Energy Partners (Leawood, Kansas) may avoid many of the headaches of grassroot construction as its plans to convert a natural gas pipeline to carry carbon dioxide. The company's 400-mile Trailblazer Pipeline, which spans Nebraska, Colorado and Wyoming, will take CO2 from Archer-Daniel-Midland Company's (NYSE:ADM) (Chicago, Illinois) corn-processing plant in Columbus, Nebraska, and sequester 10 million tons per year at a site in Wyoming. The pipeline conversion and construction on the sequestration facility is expected to kick off next year and be completed in 2024. Subscribers can click here for the report on the pipeline conversion and here for the storage hub report.

While the projects discussed so far are meant to sequester carbon, CO2 also can be used in enhanced oil recovery (EOR) projects, where it is used to extend oil well life by injecting the gas to obtain additional oil from declining wells. Denbury Incorporated (NYSE:DEN) (Plano, Texas) is one of the U.S.' leaders in EOR projects and is planning a grassroot CO2 pipeline from a connection point in Montana to transport CO2 from Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) Shute Creek gas plant and ConocoPhillips' (NYSE:COP) (Houston, Texas) Lost Cabin site, both in Wyoming, to its EOR development site in Bowman County, North Dakota. Construction is planned to occur in 2023. Subscribers can click here for more details.

Subscribers can click here to see project reports discussed in this article, and click here for related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).