Midwest Carbon Express CO2 pipeline makes halting progress
Loren Flaugh
Primghar, Iowa
The unexpected 2023 decision by Omaha-based Navigator CO2 Ventures LLC to suspend its proposed 1,300-mile carbon capture utilization and sequestration pipeline, affected state regulatory agencies and Summit Carbon Solutions (SCS) LLC in ways that continue to ripple into 2025. SCS’s already complicated 2,000-mile Midwest Carbon Express liquified CO2 pipeline system was made even more so by the sudden addition of 17 Iowa ethanol plants, boosting the project to 57 CO2 collection sites across its five-state footprint.
The Iowa Utilities Commission (IUC) public evidentiary hearing on SCS’s pipeline began Aug. 22, 2023, concluding Nov. 9, 2023, just 2 weeks after Navigator’s decision. More than 9 months passed before IUC issued its final written order (June 25, 2024) approving SCS’s construction permit to build 688 miles of multi-diameter pipeline in Iowa.
SCS had originally filed its petition for a hazardous liquid pipeline permit Jan. 28, 2022. During the intervening 34 months, the IUC hosted 33 county public informational meetings at the county level, received roughly 50,000 pages of pre-filed testimony and exhibits from hundreds of witnesses and landowners, held a public hearing at Fort Dodge, Iowa, that lasted 25 days, accepted more than 150 intervenors into the docket, heard testimony at the hearing from more than 200 witnesses and landowners, and received nearly 7,500 pages of hearings transcript and almost 4,200 written comments, including 600 filed after the deadline required by Iowa law.
Even for a big project, this was a lot of consultation. By comparison, the 2015 hearing regarding the Energy Transfer Partners-operated Dakota Access crude oil pipeline lasted 11 days, had 69 witnesses, and yielded nearly 4,000 filings and 300 total exhibits, according to IUC. That 1,100-mile, 30-in. OD pipeline was largely completed in 1 year, 2016. A Missouri River crossing near the North Dakota-South Dakota state line was completed in second-quarter 2017, allowing oil to begin flowing.
One of the witnesses to testify at the Fort Dodge hearing was Andrew Phillips, an economist with Ernst & Young LLP (EY). Much of Phillips testimony centered on projected pipeline construction costs, potential property tax revenues, and potential labor force and employment figures if the pipeline project became operational.
In IUC’s June 25, 2024, 507-page summary and written order of approval, Phillips testified that, based on economic impact modelling, he expected “62% of the approximately $1 billion in costs to construct Summit Carbon’s proposed project in Iowa would be spent on local purchases.” For the overall project Phillips testified that “the EY report estimates $6.7 billion of production and sales, $2.4 billion in labor income, and 11,427 jobs over the estimated 3-year construction period across the entire footprint…Upon operation it is expected that Summit Carbon will employ 1,120 persons generating $101 million in labor income and benefits and more than $419 million in gross economic output annually.”
New partners
Two of Navigator’s primary partners, Sioux Falls, SD-based POET LLC and San Antonio, Tex.-based Valero Renewable Fuels Co. LLC, decided in early 2024 to partner with SCS, adding the 17 extra Iowa ethanol plants to the project. With the addition of the POET and Valero plants, SCS’s pipeline became an estimated $8.9 billion, 2,500-mile system capable of sequestering 18 million tonnes/year of CO2.
The additions created a conundrum, however, in that the IUC had concluded SCS’s public evidentiary hearing in November 2023 and now had 340 miles of new small diameter laterals to assess, some crossing counties that may not previously have been impacted by the pipeline.
IUC required that before any SCS land agents could begin negotiating to acquire voluntary easements for the new sections from landowners, a public informational meeting had to be held. The commission ruled June 25, 2024, that the pipeline “will provide a service that is in the public necessity” and could be built. Its decision granted SCS the right to use eminent domain over specific parcels on which a voluntary easement agreement couldn’t be secured.
The approval order, however, specifically stipulated that SCS could not begin pipeline construction until the project had gained permit approvals from both the North Dakota Public Services Commission (PSC) and the South Dakota Public Utilities Commission (PUC). Nor could SCS start work on the line heading southwest into Nebraska and the other heading north into Minnesota until after those two states had issued construction permits.
The IUC decision prompted SCS on June 28, 2024, to file a request to conduct 23 Phase II public landowner informational meetings from Aug. 26 to Sept. 20, 2024, for the additional 340 miles of 6-in. and 8-in. OD pipe. IUC approved the requested meetings. O’Brien County held its IUC-hosted meeting Sept. 18, 2024, at the Primghar Community Center.
Proposed Phase I construction in the county had included 24 miles of 20-in. and 10 miles of 12-inch OD line. The Phase II expansion added 15 miles of 6-in. OD lateral extending north from the mainline to a POET plant at Ashton, Osceola County. Another 10 miles of 8-in. OD lateral will also head north to the Valero Renewables ethanol plant at Hartley. Combining Phase I and Phase II mileage estimates, about 60 miles of CO2 pipeline would be routed through O’Brien County.
SCS requested that EY economist Andrew Phillips prepare an estimate showing how much property tax revenue might result from those 60 miles of pipeline. Phillip’s figures show that SCS could pay an estimated $3.691 million in property taxes each year. Of that figure, about $1.974 million would be apportioned to school districts, $1.117 million to the county’s general fund, and $419,000 to the various townships.
Next steps
As of October 2024, 17 new dockets had been created to address Phase II, meaning IUC will host 17 individual public meetings in the seat of each county affected by Midwest Carbon Express. These hearings are not expected to start for several months.
The two phases combined include construction of 1,028 miles of line in Iowa alone. At the same time, SCS began the process of filing its petitions with IUC for hazardous liquid pipeline trunks and extensions in Iowa, Docket Nos. HLP-2024-0001 through HLP-2024-0014. Under Iowa Code 479B.4 and the IUCs Chapter 13 administrative rules at 199-IAC-13.2(1), the company has to wait at least 30 days after the completion of the last public informational meeting in each docket to file its petitions for a hazardous liquid pipeline permit.
After an application is filed, IUC reviews the information for any deficiencies and for compliance with its administrative rules and issues an order establishing a procedural schedule for each docket. Under Iowa law, the hearing for each docket is required to be held in the county seat at the midpoint of the proposed pipeline if the total length of the proposed pipeline is more than 5 miles in length. If the proposed pipeline is less than 5 miles long, the hearing may be held at a location determined by the IUC.
Also in October, the South Dakota Supreme Court ruled that the proposed pipeline project could not be considered a common carrier, an argument SCS had advanced. The court further ruled that carbon dioxide could not be considered a commodity; a point Summit had also argued. The two decisions prevent SCS from using eminent domain to secure rights-of-way for the project when crossing property of which the landowner had refused to sign a voluntary easement agreement, potentially delaying the pipeline significantly.
SCS Carbon Transport LLC on Nov. 19, 2024, refiled its siting permit request with South Dakota’s PUC. The commission has 1 year from the date of application to make a decision.
Better news for the project emerged in November, when the North Dakota PSC approved SCS’s pipeline siting permit. Construction, however, can’t begin until approval is granted by the South Dakota PUC. This process has begun, with six public meetings addressing the project held in South Dakota during the second week of January 2025.
On December 12, 2024, the Minnesota PUC approved the portion of SCS’s project running from Minnesota to North Dakota. The approval was contingent upon Midwest Carbon Express not only receiving the necessary permits from but beginning construction in other states along the proposed route.
The Otter Tail-to-Wilken Carbon Dioxide Pipeline Project is a 28-mile, 4.5-in. OD pipeline designed to transport captured CO2 from Green Plains Inc.’s ethanol plant near Fergus Falls in Otter Tail County, Minn., to the North Dakota border in Wilken County, Minn. A separate line running from Iowa to Minnesota will require its own permit and environmental review. As of mid-December, the Minnesota PUC had not received an application for that portion of the project.
Completion
Estimates of the timeline to complete the entire project—to be divided into 14 spreads across the five states (see map)—vary. EY’s Phillips estimated it would take roughly 3 years to build. Depending on whether Summit gets South Dakota approval, it plans to start construction no later than August 2026 and work until November. It would then resume in March 2027 for a second construction season with the intent of completing work late that year.
Progress also depends on continuation of the 45Z tax credit, now under review following the change in US presidential administrations.
