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Released August 28, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Carbon pipelines planned for the U.S. Midwest have been meeting mixed results in the planning and permitting stages. The latest setback comes for Summit Carbon Solutions (Ames, Iowa), which late last week saw South Dakota's Supreme Court rule against Summit's proposed use of eminent domain to construct the pipeline.
Until last week, things had been looking relatively bright for Summit. In March, leading U.S. ethanol producer Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) agreed to make eight of its ethanol plants available for carbon offtake by Summit's pipeline, known as the Midwest Carbon Express system. Valero signed on one plant each in Nebraska, Minnesota and South Dakota, and five in Iowa. Valero's signing on to the project brought the total number of ethanol plants planned to be connected to the system to 57. Valero joined the system along with other regional ethanol producers, including POET LLC (Sioux Falls, South Dakota), which in January signed on all of its plants in South Dakota and Iowa, some of which were not on the originally proposed pipeline route.
Iowa, as the nation's largest ethanol producer, weighs heavily in Summit's plans, and in July the Iowa Utilities Board granted Summit the right of eminent domain, judging that the pipeline "will promote the public convenience and necessity." The board said it had examined each of the more than 90 cases for parcels of land of subject to eminent domain and ended up denying only four, along with two valve placements. In May, the Supreme Court of North Dakota, where Summit's sequestration site is planned to be located, sided with Summit in disputes with landowners who refused access to their land by Summit for survey purposes, although construction of the pipeline still has not been approved in that state.
The Midwest Carbon Express Pipeline would span 18 counties in eastern South Dakota. Last Thursday, however, the South Dakota Supreme Court did not present a rosy outlook for the pipeline's future in the state, judging that the company had not presented enough evidence to show it was a "common carrier." Under state law, a common carrier holds itself out to the general public as transporting a commodity for hire. The court said it was unclear whether the carbon dioxide that would be transported would be a commodity, noting that the company intends to store it underground rather than put it to any productive use. "We reverse the circuit courts' grants of summary judgment on the common carrier issues," the state's Supreme Court said on Thursday. Summit Carbon Solution's "ability to conduct pre-condemnation surveys depends on whether it is a common carrier vested with the power of eminent domain. However, in this early phase of the litigation, the record does not demonstrate that [Summit Carbon Solutions] is holding itself out to the general public as transporting a commodity for hire."
The ruling left open the possibility for Summit to present more evidence in the future but made no judgment regarding whether the company could ultimately qualify as a common carrier. Summit remains determined to continue its efforts in lower courts.
But opponents of the pipeline are already gearing up for the next round. Brian Jorde, an attorney representing more than 1,000 landowners, raised concerns that Summit might alter its strategy by claiming that the captured carbon dioxide could be used in enhanced oil recovery, a technique in which carbon dioxide is used to extract additional oil from declining wells, which Jorde argued would undermine the project's environmental goals by furthering the production of fossil fuels. "If they start saying they'll use the carbon to produce more oil, it completely contradicts the climate benefits they've been touting," Jorde told news media, as quoted in Environment + Energy Leader . "This whole project just doesn't make sense."
Although Summit remains confident it will succeed in building the pipeline, the South Dakota court's ruling potentially jeopardizes a project that would lead to billions of dollars in spending. While Iowa garners the largest chunk of spending for the pipeline, Industrial Info estimates the South Dakota portion as the second highest for designated spending, where estimated outlays top more than a billion dollars for the pipeline and associated pump stations.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipeline Project Database can learn more by viewing the related project reports.
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).
Until last week, things had been looking relatively bright for Summit. In March, leading U.S. ethanol producer Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) agreed to make eight of its ethanol plants available for carbon offtake by Summit's pipeline, known as the Midwest Carbon Express system. Valero signed on one plant each in Nebraska, Minnesota and South Dakota, and five in Iowa. Valero's signing on to the project brought the total number of ethanol plants planned to be connected to the system to 57. Valero joined the system along with other regional ethanol producers, including POET LLC (Sioux Falls, South Dakota), which in January signed on all of its plants in South Dakota and Iowa, some of which were not on the originally proposed pipeline route.
Iowa, as the nation's largest ethanol producer, weighs heavily in Summit's plans, and in July the Iowa Utilities Board granted Summit the right of eminent domain, judging that the pipeline "will promote the public convenience and necessity." The board said it had examined each of the more than 90 cases for parcels of land of subject to eminent domain and ended up denying only four, along with two valve placements. In May, the Supreme Court of North Dakota, where Summit's sequestration site is planned to be located, sided with Summit in disputes with landowners who refused access to their land by Summit for survey purposes, although construction of the pipeline still has not been approved in that state.
The Midwest Carbon Express Pipeline would span 18 counties in eastern South Dakota. Last Thursday, however, the South Dakota Supreme Court did not present a rosy outlook for the pipeline's future in the state, judging that the company had not presented enough evidence to show it was a "common carrier." Under state law, a common carrier holds itself out to the general public as transporting a commodity for hire. The court said it was unclear whether the carbon dioxide that would be transported would be a commodity, noting that the company intends to store it underground rather than put it to any productive use. "We reverse the circuit courts' grants of summary judgment on the common carrier issues," the state's Supreme Court said on Thursday. Summit Carbon Solution's "ability to conduct pre-condemnation surveys depends on whether it is a common carrier vested with the power of eminent domain. However, in this early phase of the litigation, the record does not demonstrate that [Summit Carbon Solutions] is holding itself out to the general public as transporting a commodity for hire."
The ruling left open the possibility for Summit to present more evidence in the future but made no judgment regarding whether the company could ultimately qualify as a common carrier. Summit remains determined to continue its efforts in lower courts.
But opponents of the pipeline are already gearing up for the next round. Brian Jorde, an attorney representing more than 1,000 landowners, raised concerns that Summit might alter its strategy by claiming that the captured carbon dioxide could be used in enhanced oil recovery, a technique in which carbon dioxide is used to extract additional oil from declining wells, which Jorde argued would undermine the project's environmental goals by furthering the production of fossil fuels. "If they start saying they'll use the carbon to produce more oil, it completely contradicts the climate benefits they've been touting," Jorde told news media, as quoted in Environment + Energy Leader . "This whole project just doesn't make sense."
Although Summit remains confident it will succeed in building the pipeline, the South Dakota court's ruling potentially jeopardizes a project that would lead to billions of dollars in spending. While Iowa garners the largest chunk of spending for the pipeline, Industrial Info estimates the South Dakota portion as the second highest for designated spending, where estimated outlays top more than a billion dollars for the pipeline and associated pump stations.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipeline Project Database can learn more by viewing the related project reports.
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).
