2024-04-22 09:55:00
North Dakota’s oil and gas industry 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 to a drilled well.
“We don’t have any customers approaching us today regarding 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 pits northwest of Bismarck. The Department of Mineral Resources has institute 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 transport the greenhouse gases to the storage site.
The North Dakota Public Service Commission denied Summit’s application last year, but will consider a series of hearings Monday in Mandan began to reconsider that decision. There will also be hearings on May 24 in Wahpeton and June 4 in Linton.
Summit has made changes to its route, particularly through Burleigh County, moving further away from Bismarck, which has led some intervenors to withdraw from the PSC case. It also made changes avoid landslide and wildlife areas.
“What I’m hopeful regarding is that the company comes in and provides good clear evidence of how they address the deficiencies that were cited in the denial last summer,” said Randy Christmann, chairman of the three-person Public Service Commission. .
Summit said Chief Operating Officer Jimmy Powell and Executive Vice President Wade Boeshans will testify.
Christmann said there might also be landowner testimony on the first day of the trial. While the Mandan facility is reserved for the week, Christmann said the trial may not last that long.
In public hearings last year, the PSC heard from residents concerned regarding the safety of carbon pipelines, damage to drainage tiles and farmland, liability issues and effects on property values.
North Dakota Agriculture Commissioner Doug Goehring is a carbon sequestration skeptic who adds that Summit has gotten off on the wrong foot with landowners, saying people feel threatened and bullied by Summit agents trying to get elegant.
“It’s spreading like wildfire,” Goehring said.
Summit says it has acquired regarding 80% of the route it needs through voluntary service delivery, which landowners pay in return. Blank says that percentage will likely jump if Summit gets a permit.
Without a voluntary easement, Summit might try to use eminent domain and get a court order to force landowners to provide a right-of-way, though they would still receive some compensation.
Other opponents say carbon sequestration is unnecessary because they don’t see climate change as a real threat.
While carbon sequestration is seen by some as a way to address 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 take advantage of 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, will lower that score dramatically and by embracing other technologies, Ryan Carter of Tharaldson Ethanol at Casselton said the plant might get close to 0 or even below.
“If we don’t do the CCS, everything else we do to decarbonize our facility doesn’t 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 in terms of revenue,” Blank said. “Some years a nickel or a dime can be a good margin for them. So when you factor in the fact that it might add an additional 20 cents a liter or even more to their revenue streams, that gives you an idea of what that means for the cash flow.”
Tharaldson Ethanol remains the only North Dakota plant in the project. The project grew from 31 plants to 57 plants following another carbon pipeline project, Navigator CO2 Ventures, abandoned its plans.
Most of the plants are in Iowa, where Summit is based. Other plants are in Minnesota, Nebraska and South Dakota.
Why North Dakota?
If most of the plants are in other states, why store the carbon in North Dakota?
John Harju of the Energy and Environmental Resources Center at the University of North Dakota says the state has some of the best geology in the world for underground storage, with plenty of pore space to store millions of tons of carbon dioxide and cap rock to keep it underground.
North Dakota is also one of the few states that can 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 talks with a participant at a seminar on carbon capture in Fargo on April 15, 2024. (Jeff Beach/North Dakota Monitor)
Two ethanol plants in western North Dakota are using CCS, taking advantage of being near areas with the right geology for underground storage.
The Navigator project had planned to use a storage site in Illinois, but Blank said Summit had not considered that site or others.
“We may not have gotten everything right, but I think we’ve chosen 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 oil fields 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 used for oil production.
Summit officials said the pipeline might be used for enhanced oil recovery in the future with the right agreement with a customer.
The storage tax credits will expire in 12 years.
Goehring subsequently sees benefits for the state.
“I may not like how the whole pipeline issue played out, but I see value in it on the back end, which is following 12 years of them meeting their obligations,” he said.
Although using enhanced oil recovery in North Dakota’s Bakken shale formation is more difficult than in conventional oil wells, Harju says the technology is ready.
“It’s ready for prime time. It requires a lot of investment,” said Harju.
He said improved oil recovery might extend the Bakken oil field from 20 to 30 years of productivity to 50 years.
Harju said major producers of CO2 in North Dakota emit regarding 30 million tons annually. He said the Bakken system might use regarding eight to 10 times that amount for enhanced oil recovery.
But without improved oil recovery, Harju said wells that have declined in productivity will be limited and improved oil recovery will likely never be used on those wells.
“Now is the time, but our incentives are really stacking the deck once morest improved recovery,” Harju said.
Why ethanol?
Why are ethanol plants the focus of carbon capture projects?
The fermentation process to turn corn into ethanol produces carbon dioxide that is very pure and easy to compress and transport by pipeline – easier than other high carbon emitters like power plants. Tharaldson Ethanol’s Ryan Carter, left, and corn grower Andrew Mauch discuss the effects of carbon capture on the ethanol industry and agriculture on April 15, 2024 in Fargo. (Jeff Beach/North Dakota Monitor)
Ethanol is mixed with traditional gasoline made from fossil fuels and its use has become widespread.
Canada and some states, led by California, 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, an emerging market for the ethanol industry is sustainable aviation, with battery power not practical for aircraft.
Andrew Mauch of the North Dakota Corn Growers Association said he was only able to return 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 children a chance to keep the farm going.
“I think this sustainable aviation fuel and just the growing demand for ethanol is the next big thing,” he said.
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