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The oil and gas industry in North Dakota wants more carbon but the company behind a giant carbon capture project says it remains committed to underground storage.
North Dakota’s oil industry sees strong potential in using carbon dioxide for enhanced oil recovery — pumping gas underground to force oil toward a drilled well.
“We don’t have any customers today approaching us about enhanced oil recovery,” Lee Blank, CEO of Summit Carbon Solutions, told the North Dakota Monitor in an interview.
The Summit plan is to store carbon dioxide emissions from ethanol plants in underground wells northwest of Bismarck. The Department of Mineral Resources has set a hearing for June 11-12 on that part of the project.
For the underground storage to happen, Summit needs permits in North Dakota and other states for pipelines to carry the greenhouse gasses to the storage site.
The North Dakota Public Service Commission last year denied Summit’s application but will hold a series of hearings beginning Monday in Mandan to reconsider that decision. There also will be hearings May 24 in Wahpeton and June 4 in Linton.
Summit has made changes to its route, especially through Burleigh County, moving farther away from Bismarck, leading some intervenors to withdraw from the PSC case. It also has made changes to avoid landslide and wildlife areas.
“What I’m hopeful of is that the company comes in and provides good clear testimony to how they’re addressing the deficiencies that were put forward in the denial last summer,” said Randy Christmann, chair of the three-person Public Service Commission.
Summit said Chief Operating Officer Jimmy Powell and Wade Boeshans, executive vice president, will provide testimony.
Christmann said there may also be landowner testimony on the first day of the hearing. While the Mandan facility is reserved for the week, Christmann said the hearing may not last that long.
In public hearings last year, the PSC heard from residents concerned about the safety of carbon pipelines, damage to drain tile and farmland, liability issues and effects on property values.
North Dakota Agriculture Commissioner Doug Goehring is a carbon storage skeptic who adds that Summit got off on the wrong foot with landowners, saying people felt threatened and bullied by Summit agents trying to obtain easements.
“That spreads like wildfire,” Goehring said.
Summit says it has obtained about 80% of the route it needs through voluntary easements, paying landowners in return. Blank says that percentage will likely shoot up if Summit is granted a permit.
Without a voluntary easement, Summit may try to use eminent domain, getting a court order to force landowners to provide a right-of-way, though they would still receive some compensation.
Other opponents say carbon capture isn’t needed because they don’t view climate change as a real threat.
While carbon capture is seen by some as a way of addressing climate change, the project is opposed by several environmental groups such as the Dakota Resource Council in North Dakota.
Supporters say the pipeline project is needed to support the ethanol industry and the farmers who supply ethanol plants with corn.
Farmers and industry leaders are trying to lower their carbon intensity score to tap into markets with a low carbon fuel standard, where a lower score can mean a premium price. The Tharaldson Ethanol plant at Casselton is the only ethanol plant in the state that is part of the Summit Carbon Solutions pipeline project. (Jeff Beach/North Dakota Monitor)
Carbon capture and storage, or CCS, would dramatically lower that score and by tacking on some other technologies, Ryan Carter of Tharaldson Ethanol at Casselton said the plant could get close to 0 or even below.
“If we don’t do the CCS, everything else that we’re doing to decarbonize our facility does not work,” Carter said Monday in a Fargo seminar on the topic, hosted by the Friends of Ag & Energy.
Blank said the benefits would vary with each ethanol plant but said the plants should get a minimum benefit of 20 cents per gallon of ethanol.
“The ethanol industry has been very up and down when it comes to income,” Blank said. “Some years, a nickel or a dime can be a good margin for them. So when you consider the fact that this could add an additional 20 cents a gallon or even more to their revenue streams, it gives you an idea of what that means to the cash flow.”
Tharaldson Ethanol remains the only North Dakota plant in the project. The project has grown from 31 plants to 57 plants after another carbon pipeline project, Navigator CO2 Ventures, abandoned its plans.
The bulk of the plants are in Iowa, where Summit is based. Other plants are in Minnesota, Nebraska and South Dakota.
If the bulk of the plants are in other states, why store the carbon in North Dakota?
John Harju of the Energy and Environmental Resource Center at the University of North Dakota says the state has some of the best geology in the world for underground storage, with a lot of pore space to store millions of tons of carbon dioxide and a cap rock to keep it underground.
North Dakota also is one of the few states able to issue its own permit for underground storage, rather than going through the federal Environmental Protection Agency. John Harju of the Energy and Environmental Research Center chats with an attendee to a seminar on carbon capture in Fargo on April 15, 2024. (Jeff Beach/North Dakota Monitor)
Two western North Dakota ethanol plants are using CCS, taking advantage of being near areas with the right geology for underground storage.
The Navigator project planned to use a storage site in Illinois, but Blank said Summit has not considered that site or others.
“We may not have gotten everything right, but I think we chose the right direction to take our CO2,” Blank said.
When Summit announced its project, there was speculation that the carbon dioxide would end up in North Dakota oilfields for enhanced oil recovery.
But Summit’s pipeline permit application specifies underground storage. And the federal tax credits, a major source of revenue for the project, are higher for storage than if the carbon were to be used for oil production.
Summit officials have said the pipeline could be used for enhanced oil recovery in the future with the right agreement with a customer.
The tax credits for storage are set to expire in 12 years.
Goehring sees benefits to the state after that.
“I may not like how the whole pipeline issue has transpired, but I do see value in it on the back end, which is after 12 years of them meeting their obligation,” he said.
While it is more difficult to use enhanced oil recovery in North Dakota’s Bakken shale formation than in conventional oil wells, Harju says the technology is ready.
“It’s ready for prime time. It needs a lot of investment,” Harju said.
He said enhanced oil recovery could extend the Bakken oilfield from 20 to 30 years of productivity to 50 years.
Harju said large producers of CO2 in North Dakota emit about 30 million tons annually. He said the Bakken system could use about eight to 10 times that amount for enhanced oil recovery.
But without enhanced oil recovery, Harju said wells that have declined in productivity will get capped and enhanced oil recovery will likely never be used on those wells.
“Now is the time, but our incentives are really stacking the deck against enhanced recovery,” Harju said.
Why are ethanol plants the focus of carbon capture projects?
The fermentation process of turning corn into ethanol produces carbon dioxide that is very pure and easy to compress and transport by pipeline – easier than other high carbon emitters such as power plants. Ryan Carter of Tharaldson Ethanol, left, and corn grower Andrew Mauch, discuss carbon capture’s effect on the ethanol industry and agriculture on April 15, 2024, in Fargo. (Jeff Beach/North Dakota Monitor)
Ethanol is blended with traditional gasoline made from fossil fuels and its use has become widespread.
Canada and some states, with California leading the way, have created a low carbon fuel standard, creating premium prices for fuel produced with a low carbon score.
While some see electric vehicles as a threat to liquid fuels, a developing market for the ethanol industry is sustainable aviation, with battery power not practical for planes.
Andrew Mauch of the North Dakota Corn Growers Association said he was only able to come back to the family farm near Mooreton because of ethanol.
“I only had that opportunity because of the ethanol boom at the time,” Mauch said during the seminar in Fargo.
He said corn-based fuel gives his kids a chance to keep the farm going.
“I think this sustainable aviation fuel and just the growing demand for ethanol is that next big thing,” he said.
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