Q&A Managing Carbon for the Ethanol Industry to Protect Iowa's Agriculture Economy

Catching up with Summit Carbon Solutions outside counsel Bret Dublinske from Fredrikson & Byron, and Lee Blank, CEO of ABI Member Summit Carbon Solutions.

For those who are unfamiliar, what is Summit Carbon Solutions?

Summit Carbon Solutions (“Summit”), based in Ames, Iowa, is the world’s largest carbon capture and sequestration project. Summit is partnering with 57 ethanol plants to capture carbon dioxide emissions that would otherwise be released into the atmosphere, and then transport that CO2 up to North Dakota where there are geologic formations that are appropriate for permanent underground storage.

For those who are unfamiliar, what is Summit Carbon Solutions?

Summit Carbon Solutions (“Summit”), based in Ames, Iowa, is the world’s largest carbon capture and sequestration project. Summit is partnering with 57 ethanol plants to capture carbon dioxide emissions that would otherwise be released into the atmosphere, and then transport that CO2 up to North Dakota where there are geologic formations that are appropriate for permanent underground storage.

Iowa-produced ethanol needs to lower its carbon intensity (CI) score to stay competitive in a world that values lower-carbon fuels. For about three-quarters of Iowa’s ethanol plants that are working with Summit, capturing and permanently storing their CO2 will cut their CI score by around 30 points, which is about half. While there are investments these ethanol plants can make to decrease their score by single digits, no other single action can as dramatically lower the CI score for Iowa ethanol plants. This reduction not only qualifies them for federal tax credits but also brings more money into local communities.

While protecting Iowa’s agricultural economy is the main purpose and benefit, there are others as well. The project can manage approximately 18 million metric tons of CO2 per year. Additionally, the project will result in thousands of construction jobs and decades of new tax revenues for Iowa counties where the project is located. Some counties will receive up to $2.9M annually once the project is operational.

What is the status of the Summit project?

A project like this is heavily regulated and requires numerous permits – the Summit project has provided the lawyers and staff at Fredrikson & Byron with a lot of interesting work. The primary permits to go into operation are the mainline pipeline permits from the Iowa Utilities Commission, South Dakota Public Service Commission and North Dakota Public Service Commission, as well as the storage facility permits from the North Dakota Industrial Commission.

Summit has obtained its pipeline permit in Iowa. Hearings are completed for both required permits in North Dakota and we are optimistic regarding decisions there yet this fall. In South Dakota, a different carbon capture project was denied before Summit had its evidentiary hearing. Because of the similarities, the South Dakota Public Utilities Commission summarily denied Summit’s application but made clear that Summit could refile addressing some of the concerns raised about the other project. Summit plans to refile in South Dakota later this year, triggering a 12-month timeline for the Public Utilities Commission to issue a permit decision, as required by state law.

As is common with large infrastructure projects, there will surely be litigation around those state decisions. In Iowa, it is already underway, but Summit anticipated that and believes the Iowa Utilities Commission decision – 507 pages long – is thorough and well-supported. Ultimately, we continue to believe the project will be in service around the end of 2026.

What are some of the key legal issues involved?

One of the key legal issues is access to condemnation. Summit understands having that access will always be controversial, so Summit continues to put in a great deal of effort and resources to obtain voluntary agreements with landowners. Summit has negotiated voluntary easements for 75% of its initial project route, which is right in line with prior infrastructure projects of significant size in Iowa, and in many key counties the percentage is higher than that. As the United States Supreme Court observed as recently as 2021, the nature of linear infrastructure is such that a permit without a right of eminent domain is often illusory. Since the impacts of the corn economy are sufficiently broad statewide, it is important that a minority of objectors cannot exercise a veto on a widely beneficial project. Still, Summit will continue to negotiate with landowners, seeking voluntary easements as long as legally possible. Summit’s preference remains 100% voluntary easements.

Another important related issue is the ability to access properties to conduct surveys. Surveys are an important part of building infrastructure – civil surveys for boundaries, geologic surveys for constructability, cultural surveys to ensure there are no historic or archaeological artifacts that would be disturbed, and topsoil surveys to ensure Summit knows the depth of the topsoil so it can be appropriately segregated and protected. There is an appeal pending of a case Summit won at the trial court to obtain survey access over a landowner’s refusal. Iowa has statutes passed by the legislature that allow infrastructure companies to access properties for survey by giving specified notice. This is an issue that is much bigger than just the Summit project – it would impact the way cities and counties build roads, dams and lakes, and other facilities. It would also impact electric companies, natural gas and other pipelines, airports and additional forms of important infrastructure. We anticipate a ruling for that case in the spring of 2025.

What kind of support has Summit seen, and what type of working relationships has Summit built with the Iowa industry?

Summit is encouraged by the strong support the project has received. The fact that 75% of landowners along the route have voluntarily agreed to easements is a clear testament to that support. Additionally, three-quarters of Iowa’s ethanol plants have joined the project, further underscoring its importance to the industry. Summit has also had productive early conversations with numerous Iowa businesses eager to provide goods and services, as well as with local, regional, and state economic development officials.

Organizations like the Iowa Renewable Fuels Association have been strong advocates, recognizing the significant benefits the project offers to their members and the broader community. There is great enthusiasm from farmers and companies connected to corn production. On the labor front, positive discussions about creating jobs to build the most advanced and safest pipeline in the country, with a focus on hiring local Iowa workers, continue to take place.

When Summit engages with stakeholders to discuss the project, answer questions, and listen to concerns, those conversations are often met with common ground and enthusiasm for what the project can achieve. Summit values these conversations and believes they are essential to building trust and understanding. Fredrikson & Byron is proud to bring its experience with large-scale infrastructure and collaborative projects to help ensure Summit’s success, as we work together with communities and partners to realize the benefits for Iowa farmers, ethanol producers, and local workers. ABI