Carbon-Dioxide Pipelines Take Root in U.S.

Carbon-dioxide (CO2) pipelines have gained considerable attention in recent years as a potential solution for reducing greenhouse gas emissions and mitigating climate change. These pipelines facilitate the transport of CO2 from sources such as power plants and other industrial facilities to storage sites or utilization facilities. While their use has definite benefits, like other pipelines, they also come with potential problems and safety concerns. Industrial Info is tracking about $6 billion in active U.S. CO2-transport projects.

CO2 pipelines play a major role in carbon capture and sequestration (CCS) endeavors, which are becoming increasingly prevalent as companies and governments seek to reduce their carbon footprints. CCS technology allows for the capture of CO2 from power plants and industrial processes before it is released into the atmosphere. Pipelines provide a safe and efficient means to transport captured CO2 to suitable storage locations, such as depleted oil and gas fields or deep saline aquifers, where it can be stored permanently underground.

The pipelines also can be used to transport carbon dioxide to use at enhanced oil recovery (EOR) sites, where CO2 is injected into oil reservoirs to increase oil production. This application allows for the utilization of CO2 while reducing overall carbon emissions. Denbury Incorporated (NYSE:DEN) (Plano, Texas) is one of the leading companies establishing EOR projects in the U.S. and also has shifted into pure CCS without an EOR component. The company's projects under development include a CO2 pipeline extension from near Bucktunna, Mississippi, to Mobile, Alabama, where it has plans to develop a permanent CO2 sequestration site that could store more than 300 million metric tons of CO2. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for related reports.

While the reduction of carbon emissions is a noble goal, CO2 pipelines are not without some drawbacks. Carbon dioxide is a colorless, odorless gas that can be hazardous to human health in high concentrations. Leakage or accidental release of CO2 from pipelines can pose risks to nearby communities and ecosystems. A few years ago in Satartia, Mississippi, a CO2 pipeline burst, leading to the evacuation of about 200 residents and sending 45 people to seek medical attention.

In addition, finding suitable storage sites for captured CO2 can be challenging. The capacity of storage sites is limited, and identifying appropriate locations that are geologically secure and environmentally safe can be complex. Suitable formations for carbon storage include depleted oil and gas fields, deep saline aquifers and unmineable coal seams. The availability of suitable storage sites can significantly impact the placement and viability of carbon-dioxide pipelines.

Navigator Energy Services LLC (Dallas, Texas), in conjunction with BlackRock Incorporated (NYSE:BLK) (New York, New York), appears to have found a suitable CO2 storage site near Springfield, Illinois, for its Heartland Greenway CCS project.

Navigator is setting up a CO2 pipeline system across five Midwestern states that, when fully operational, will have the ability to capture and store approximately 15 million metric tons of CO2 every year. The system is aimed at ethanol producers in the region, as well as other industrial concerns. Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) will be the anchor shipper, with eight of its ethanol plants connected to the system, which is expected to begin startup activities in late 2024. Subscribers can click here for related reports.

Summit Carbon Solutions LLC (Ames, Iowa) is aiming for a similar geography with its proposed Midwest Carbon Express Project, which involves constructing grassroot CO2 pipelines in North Dakota, South Dakota, Minnesota, Iowa and Nebraska to sequester the carbon at a site in North Dakota. According to a company website, Summit has partnered with more than 30 ethanol plants in the five-state region. Construction could begin later this year, putting segments of the pipeline system on track for completion in 2024, followed by the sequestration well in 2025. Subscribers can click here for related reports.

Tallgrass Energy Partners (Leawood, Kansas) is taking a slightly different approach in its carbon transport plans. Rather than building a grassroot system, the company is repurposing its Trailblazer system in Nebraska and Wyoming from carrying natural gas to transporting CO2, with a key shipper being an Archer Daniels Midland Company (NYSE:ADM) (ADM) (Chicago, Illinois) corn-processing complex in Columbus, Nebraska. The CO2 on the repurposed pipeline system will be transported to a permanent storage facility in Wyoming, where up to 10 million tons per year can be stored. Construction of parts of the project could potentially kick off this year. Subscribers can click here for related reports.

Overall, pipelines are crucial for carbon sequestration as they enable the efficient and reliable transport of captured CO2 from emission sources to storage or utilization sites. They provide a vital infrastructure backbone, supporting efforts to reduce greenhouse gas emissions.