Klopfenstein – Spring 2022

Eminent Domain and Ethanol: Farmland Seizures and Carbon Sequestration in Iowa

Ian Klopfenstein

According to the U.S. Geological Survey (USGS), carbon sequestration is the process of capturing and storing atmospheric CO2.[i] This process occurs through natural processes like photosynthesis and biomass carbon banking, as well as through human-facilitated carbon capture and storage (CCS) operations.[ii] Artificial CCS operations are usually designed around large point pollution sources to capture CO2 produced through industrial processes before it enters the atmosphere.[iii] The CO2 is then transported by pipeline from the point source to its sequestration point, typically being injected into underground geological formations like oil fields and exhausted coal beds.[iv] While the USGS estimates North America has enough storage capacity for 900 years’ worth of CO2 at current sequestration rates,[v] the long-term security of these deposits have been called into question following instances of CO2 leakage and geological instability at injection sites around the country.[vi]

On February 1, 2022, Summit Carbon Solutions filed its first permit application with the Iowa Utilities Board for its Midwest Carbon Express pipeline, the largest carbon capture project in the world.[vii] The pipeline is slated to spread across a route of 2,000 miles, originating in Iowa and transporting around 12 million tons of CO2 annually to an underground deposition site northwest of Bismarck, North Dakota in the Bakken shale formation.[viii] While Minnesota, Nebraska, and both Dakotas are set to be covered by the Midwest Carbon Express by its 2024 completion, permit filings have only commenced in Iowa thus far.[ix]

This project has not been without controversy. It faces opposition from environmental and landowner groups in Iowa. At the heart of the landowners’ concerns is the precedent set by the Iowa Supreme Court following litigation over farmland condemnations to build the Dakota Access Pipeline. In the 2019 case of Puntenney v. Iowa Utilities Board, the Iowa Supreme Court expanded upon its previous policy of upholding seizures of private property under eminent domain for “public use” projects.[x] Previously, “public use” projects were limited to infrastructure projects.[xi] However, the Iowa Supreme Court determined that Dakota Access was considered a “common carrier,” which under Iowa law now renders pipeline development “as a valid public use, even when the operator is a private entity, and the primary benefit is a reduction in operational costs.”[xii] Following this line of reasoning, the Iowa Supreme Court declined to focus on benefits directly conferred upon Iowans and instead justified their ruling by focusing on the general benefit of “low[er] prices for petroleum products.”[xiii]

The Midwest Carbon Express is planned to cross 30 different counties in Iowa, and Summit Carbon Solutions has held public input meetings in each county in Fall 2021.[xiv] Many farmers objected to having the pipeline cross their land, citing concerns ranging from the risk of liquid CO2 leakage to the disruption of soil horizons and uprooting of tiling systems installed to improve field drainage.[xv] Affected landowners also took issue with the lack of any profit-sharing mechanism to continually compensate farmers facing permanent damage to their farmland.[xvi] Highlighting the financial detriment to farmers, an Iowa State University study found a 23% reduction in corn yield and 35.5% decline in soybean yield for right-of-way areas disrupted by pipeline construction.[xvii] This one-two punch of significant crop losses and the lack of localized financial benefits has led many farmer and landowner groups to take significant stands against the project.[xviii]

Joining these local stakeholders in opposing the Midwest Carbon Express are environmentalists, both locally and nationally.[xix] The pipeline is set to connect 12 ethanol plants in Iowa to the larger sequestration network that includes 31 ethanol plants across the upper Midwest.[xx] Bruce Rastetter, the CEO of Summit Agricultural Group, has characterized this project as a “green energy solution,”[xxi] an assertion directly refuted by environmental groups. Instead, this carbon sequestration project is almost exclusively dedicated to benefitting the ethanol industry. The ethanol industry, which creates combustible fuel from excess corn yields, requires heavy water usage, intensive row-cropping and monocultures, and heavy fertilizer and pesticide use to increase yields.[xxii] Instead of supporting a pivot towards a more sustainable and environmentally conscious agricultural economy, this project will subsidize the current fossil-fuel intensive, industrialized scheme that has come to dominate our nation’s heartland.

 Environmental groups also take issue with the project’s “greenwashing,” diverting investment and labor away from legitimate carbon solutions.[xxiii] Iowa is the nation’s leader in per-capita wind energy generation with established land usage agreements and protocols to facilitate farmland leases between landowners and private energy companies.[xxiv] The project is slated to cost around $4.5 billion,[xxv] a direct investment in carbon-intensive fuel markets despite major domestic shifts towards electrification. Even though this project is touted as a “carbon solution,” it doesn’t address any other type of fossil fuel emissions aside from those directly generated by ethanol production. It enhances public and private investment in fossil fuel infrastructure and does nothing to stimulate a market shift towards carbon-neutral energy sources. Furthermore, liquid CO2 pipelines are prone to leakage.[xxvi] An invisible asphyxiant, a liquid CO2 pipeline leak in Mississippi sent 49 people to the hospital and poses and lethal threat to public health.[xxvii] Further environmental concerns arise surrounding the proposed carbon deposition site in the Bakken shale oil formation.[xxviii] This region of North Dakota has experienced increased seismic activity following the meteoric rise of the hydraulic fracturing industry,[xxix] creating a risk of breaching the underground CO2 reservoirs billed as the “carbon solution” in the first place.

Summit Carbon Solution has further been called into question for their close relationship with the Republican Party. Bruce Rastetter, the company’s founder and CEO, was previously appointed as president of the Iowa Board of Regents by Republican governor and former U.S. ambassador to China Terry Branstad, who serves as an adviser to the company.[xxx] Two of the three sitting members of the Iowa Utilities Board, the regulatory agency responsible for regulating utility projects in the state, were appointed by Branstad.[xxxi] Rastetter is a significant financial backer of the Iowa GOP and has employed Jake Ketzner, former chief of staff to Republican governor Kim Reynolds and longtime aide to Branstad, as the vice president of government and public affairs.[xxxii] Another executive Vice President of the firm is an energy executive who was illegally appointed to the North Dakota Legislature by Republican Governor Doug Burgum.[xxxiii] These relationships will be important to observe as the project moves forward, given Summit Carbon Solution’s close relationship with state executives and regulatory agencies. Conflict of interest issues may also arise when determining eminent domain seizures and allocation of state and federal funds.            

Given the Iowa Supreme Court’s deference towards pipeline projects and the lack of support among affected landowners, the easement licensing process will be one to watch. The Midwest Carbon Express would effectively subsidize the ethanol industry while impeding on the yields and growing conditions of the farmers it is purported to help. As the transportation sector moves towards electrification, is now the time to invest in a multi-billion-dollar carbon sequestration pipeline benefitting biofuels? Who is set to benefit in the long run, if not the landowners themselves? The result of the easement process for the Iowa branch of this pipeline will likely foreshadow the eventual repetition of this process in other states along the pipeline’s root. Carbon sequestration is an important facet of climate policy; however, this costly and imperious project is more tailored towards benefitting specific industrial interests instead of supporting sustainable agricultural practices and providing market stability to individual commodity producers.

Ian Klopfenstein is a Junior Editor with MJEAL. Ian can be reached at iklop@umich.edu.

[i] What is carbon sequestration?, USGS (Jul. 7, 2017), https://www.usgs.gov/faqs/what-carbon-sequestration.

[ii] What’s the difference between geologic and biologic carbon sequestration?, USGS (Jul. 7, 2017), https://www.usgs.gov/faqs/whats-difference-between-geologic-and-biologic-carbon-sequestration.

[iii] The Concept of Geologic Carbon Sequestration, USGS (Dec. 31, 2011) https://www.usgs.gov/media/images/concept-geologic-carbon-sequestration.

[iv] Id.

[v] How much carbon dioxide can the United States store underground via geologic sequestration?, USGS (2013), https://www.usgs.gov/faqs/how-much-carbon-dioxide-can-united-states-store-geologic-sequestration.

[vi] T.A. Hill, et al., Understanding the Consequences of CO2 Leakage Downstream of the Capture Plant, Energy Procedia, Volume 4, pg. 2230-2237 (2011), https://www.sciencedirect.com/science/article/pii/S1876610211003080; Mark D. Zoback and Steven M. Gorelick, Earthquake triggering and large-scale geologic storage of carbon dioxide, Stanford University (May 4, 2012), https://www.pnas.org/doi/pdf/10.1073/pnas.1202473109.

[vii]  Jeff Beach, World’s largest carbon capture pipeline aims to connect 31 ethanol plants, cut across Upper Midwest, AgWeek (Dec. 6, 2021, 4:31 AM), https://www.agweek.com/business/worlds-largest-carbon-capture-pipeline-aims-to-connect-31-ethanol-plants-cut-across-upper-midwest.

[viii] Zachary Dupont, What to know about the two proposed CO2 capture pipelines coming to North Iowa, Globe Gazette (Dec. 10, 2021) https://globegazette.com/news/local/what-to-know-about-the-two-proposed-co2-capture-pipelines-coming-to-north-iowa/article_2cfe7436-9bc6-5213-a01d-6b041149dad9.html.  

[ix] Leah Douglas, U.S. Midwest carbon pipeline has secured less than 2% of key Iowa route, filings show, Reuters (Mar. 8, 2022, 6:19 AM), https://www.reuters.com/business/environment/us-midwest-carbon-pipeline-has-secured-less-than-2-key-iowa-route-filings-show-2022-03-08/.

[x] Puntenney v. Iowa Utilities Board, No. 17-0423 (Iowa, 05/31/2019). https://www.iowacourts.gov/courtcases/3110/embed/SupremeCourtOpinion.

[xi] Id.

[xii] Chris Clayton, Getting Access for Carbon Pipelines, Progressive Farmer (Oct. 20, 2021, 9:49 AM), https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2021/10/19/ethanol-producers-see-carbon-boon.

[xiii] Iowa’s laws on easements need to be reviewed and reconsidered, Sierra Club, Iowa Chapter (Oct. 16, 2021), https://www.sierraclub.org/iowa/blog/2021/10/easements.

[xiv] John Steppe, Public weighing in on Summit’s Iowa carbon capture pipeline project, Cedar Rapids Gazette (Sep. 22, 2021, 6:00 AM), https://www.thegazette.com/energy/public-weighing-in-on-summits-iowa-carbon-capture-pipeline-project/.

[xv] Stephen Joyce, Biggest-ever Carbon Capture Project Facing Midwest Opposition, Bloomberg Law (Nov. 22, 2021, 5:30 AM), https://news.bloomberglaw.com/environment-and-energy/biggest-ever-carbon-capture-project-facing-midwest-opposition.

[xvi] Elijah Helton, Money talks for Midwest Carbon Express, N’West Iowa REVIEW (Nov. 26, 2021), https://www.nwestiowa.com/news/money-talks-for-midwest-carbon-express/article_7458bd84-4d83-11ec-94e1-9f5277cc662d.html.

[xvii] Danielle Gehr, ‘It’s gonna screw up everything’: Boone County farmers decry proposed carbon capture pipeline, Ames Tribune (Oct. 5, 2021, 6:03 AM), https://www.amestrib.com/story/news/2021/10/05/iowa-farmers-decry-proposed-carbon-sequestration-pipeline-boone-county-summit-carbon-solutions/5989461001/.

[xviii] Cory Allen Heidelberger, Landowners Near Madison Leary of Carbon-Capture Pipeline; Second CO2 Pipeline May Reach Eastern Edge of SD, Dakota Free Press (Nov. 1, 2021), https://dakotafreepress.com/2021/11/01/landowners-near-madison-leary-of-carbon-capture-pipeline-second-co2-pipeline-may-reach-eastern-edge-of-sd/.

[xix] Emma Schmit, Iowans don’t want carbon pipelines – here’s why, Bleeding Heartland (Jan. 10, 2022), https://www.bleedingheartland.com/2022/01/10/iowans-dont-want-carbon-pipelines-heres-why/.

[xx] Supra note vii.

[xxi] Project Benefits, Summit Carbon Solutions, https://summitcarbonsolutions.com/project-benefits//

[xxii] Virginia Gewin, How Corn Ethanol for Biofeul Fed Climate Change, Civil Eats (Feb. 14, 2022), https://civileats.com/2022/02/14/how-corn-ethanol-for-biofuel-fueled-climate-change/.

[xxiii] Ron Rossman, Opinion: CO2 pipelines are not the answer to climate change, Des Moines Register (Oct. 10, 2021, 4:40 AM), https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2021/10/10/climate-change-needs-real-solutions-not-co-2-pipelines/6008200001/.

[xxiv] Leah Douglas, Giant pipeline in U.S. Midwest test future of carbon capture, Reuters (Nov. 23, 2021, 6:52 PM), https://www.reuters.com/markets/commodities/giant-pipeline-us-midwest-tests-future-carbon-capture-2021-11-23/.

[xxv] Supra note xviii.

[xxvi] Curtis M. Oldenburg, Health, safety, and environmental risks from energy production: A year-long reality check, Lawrence Berkeley National Laboratory (2011), https://www.osti.gov/servlets/purl/1051635.

[xxvii] Erin Jordan, Witnesses describe Mississippi CO2 pipeline explosion, Cedar Rapids Gazette (Feb. 1, 2022, 6:00 AM), https://www.thegazette.com/environment-nature/witnesses-describe-mississippi-co2-pipeline-explosion/.

[xxviii] Adam Willis, Massive Midwest pipeline, a test for North Dakota’s carbon capture goals, hits landowner snags, The Dickinson Press (Dec. 5, 2021, 12:30 PM), https://www.thedickinsonpress.com/business/massive-midwest-pipeline-a-test-for-north-dakotas-carbon-capture-goals-hits-landowner-snags/.

[xxix] Id.

[xxx] Jason Clayworth, Conflict of interest? Critics question $4.5B Iowa pipeline proposal, Axios (Sep. 21, 2021), https://www.axios.com/local/des-moines/2021/09/21/terry-branstad-iowa-carbon-capture-pipeline-proposal.

[xxxi] Board Members, Iowa Utilities Board, https://iub.iowa.gov/board-members-0.

[xxxii] Randy Paulson, O’Brien County questions Summit spokesman, N’West Iowa REVIEW (Jan. 15, 2022), https://www.nwestiowa.com/news/obrien-county-questions-summit-spokesman/article_eb477df2-7580-11ec-9c8f-3307c0af7544.html.

[xxxiii] Doug Culver, North Dakota Supreme Court rules against Gov. Doug Burgum in fight to fill dead candidate’s state House seat, USA Today (Nov. 24, 2020, 10:08 PM), https://www.usatoday.com/story/news/nation/2020/11/24/north-dakota-governor-loses-fight-dead-candidates-house-seat/6415554002/.

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