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Nebraska ethanol plants could soon store carbon dioxide underground

Nebraska ethanol plants could soon store carbon dioxide underground

A new study suggests that conventional vehicles can run on E-30 ethanol blends. If 10% of the state's vehicles switched to E-30, greenhouse gas emissions would be reduced by 64,000 tons a year, a professor says.

A new industry is set to take off in Nebraska.

If it works out as backers hope, it would create jobs in the state and offer financial advantages for the state’s ethanol producers. In addition, the industry could have significant implications in the effort to combat climate change.

The groundwork was laid by State Sen. Mike Flood’s Legislative Bill 650, which all but one legislator voted to pass last month. Since then, multiple companies have announced plans to contract with ethanol producers in Nebraska to filter carbon dioxide and permanently store that element in the ground — either in the state or piped elsewhere.

Other production facilities, such as power and fertilizer plants, are also eligible to participate.

Here’s how it essentially works: Instead of allowing carbon dioxide to emit from a producer’s stacks, those stacks would be capped and route the carbon dioxide to a series of compressors. The carbon dioxide is then converted into a transportable form such as liquid and stored well below the surface — at least 2,600 feet below.

The specific storage plan varies.

Research and development organization Battelle and investment firm Catahoula Resources, for example, want to put the carbon dioxide underneath the ethanol plants or, at most, a few miles away.

According to Jon Cartlidge, commercial sales director at Battelle, the companies expect to spend anywhere between $20 million and $50 million per plant. The companies do not intend to seek public financing.

Cartlidge said the company is exploring locations in the state where the rock below the surface is porous and thus conducive to carbon storage.

Already, Grand Island-based Chief Industries confirmed in a press release last week that it has entered into a partnership with Catahoula for carbon sequestration via its Chief Ethanol division in Hastings. Battelle is currently researching storage sites.

In Nebraska, the most promising areas are in the central and western parts because the higher elevations create deep rock reservoirs. Still, state geologist and University of Nebraska-Lincoln professor Matt Joeckel emphasized that companies should confirm each site’s integrity for carbon storage before making plans.

“Thorough site investigations are absolutely critical,” he said. “That takes money. That is probably going to involve drilling some test holes.”

Once satisfactory sites are found, Cartlidge said carbon dioxide could begin to be stored within two years, depending on how long it takes to obtain permits from federal and state environmental agencies.

Another company, Navigator CO2 Ventures, plans to build a pipeline network encompassing 1,200 miles that would take liquified carbon dioxide from Nebraska and four other states and store it deep underground in the Mount Simon Sandstone Formation in central Illinois.

Navigator CEO Matt Vining said the Environmental Protection Agency has approved carbon sequestration in that area.

“From our perspective, it represents a great geologic candidate,” he said.

The proposed pipeline would be centered in Iowa but extend into northeast Nebraska, eastern South Dakota and southwest Minnesota.

According to Vining, the company expects to spend in excess of $2 billion to build the pipeline, which would become active in late 2024 and early 2025. Vining said Navigator will spend the next few years gathering information and seeking government permits.

“In a project that is this big, it’s not like a light switch,” he said. “Not everybody comes on at the same time. You have to kind of put it into service in phases.”

Vining said Valero, which operates about eight ethanol plants in the five states, including one in Albion, Nebraska, will be the pipeline’s anchor customer. Vining added that about a dozen other companies have expressed interest in connecting to the pipeline.

Investment management firm BlackRock will primarily finance the pipeline’s construction. Navigator said it doesn’t intend to seek public money.

The financial incentives are enormous. For every metric ton of carbon dioxide that is stored, producers get a $50 tax credit from the federal government. A plant that annually produces 75 million gallons of ethanol would produce at least 200,000 metric tons of carbon dioxide. So permanently storing that carbon dioxide would result in tax credits worth at least $10 million.

Additionally, energy producers that store their carbon dioxide will lower their carbon dioxide intensity score, which affects their ability to sell their ethanol. A lower score could allow a producer to sell to states such as California, which has stringent carbon dioxide regulations.

“If you’re an ethanol plant that has a very low carbon score, you’re going to be a lot more attractive to the California market and their regulators than any other seller of ethanol,” Flood said. “Reducing your carbon score means better prices and better returns for Nebraska farmers.”

The climate incentives are also significant. At full capacity, Navigator claims that its pipeline and underground storage would be the annual equivalent of removing 2.6 million cars from the roads or planting 550 million trees.

Joeckel cautioned that carbon sequestration is just one of the tools that is needed to fight climate change.

“It is one of several strategies that we will have to take if we really want to reduce the input of anthropogenic CO2 into the atmosphere,” he said.

Company officials contend that risks resulting from a potential pipeline leak are minimal. At worst, they say, any leaks would be released into the atmosphere as the carbon dioxide is now.

“Specifically for CO2, a leakage would mean that CO2 that was just going into the atmosphere anyway is now going into the atmosphere,” Cartlidge said. “It really would not be a such a change.”

Even so, officials say they plan to build pipelines to minimize the potential for leaks. As specified by LB 650, any company that seeks to build a carbon capture operation would also need to satisfy state requirements that ensure that any captured carbon poses virtually no risk of escaping into the atmosphere or putting people’s health and the surrounding natural resources at risk.

Company officials say they hope to avoid the controversies that have surrounded other pipeline projects, including Keystone XL and Dakota Access, in recent years.

“We have prided ourselves on being a good neighbor,” Vining said. “We’re very purposeful in our preliminary routing to avoid (sensitive) areas. ... We’re focused on doing this the same way we’ve always done it, which is the best way for all parties involved.”

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