MENOKEN, ND — Someday, the passenger planes that fly 35,000 feet (10.6 kilometers) over Dan McLean’s farm in North Dakota could be powered by corn grown on his land and millions of other acres in the Midwest.
It’s a vision that the U.S. airline industry embraces and that agricultural groups see as a key to ensuring strong future sales of ethanol, a fuel that consumes more than a third of the nation’s corn harvest and offers a cleaner-burning alternative to the country’s airlines.
But making that dream a reality hasn’t been easy, in part because even as farmers benefit from a huge new market for corn, the plan relies on federal tax credits triggered by capturing carbon dioxide in refineries and then moving the gas. for hundreds of kilometers. through oil pipelines that would cross the Midwest, including under agricultural fields.
Some of these farmers, along with environmental and property rights groups, appealed to regulators in several Midwestern states to oppose the lines, and often succeeded in at least slowing down the process. A major decision is expected soon in Iowa.
“This whole thing is a private industry — a rich private industry — that gets tax money, strictly tax money to bury these things,” said McLean, who opposes a line that would cross his farmland east of Bismarck. “This tax money is coming out of everyone’s pockets, and they’re going to abandon it, and we’re going to be left with a big poisonous pipe running across the country.”
Supporters have faced criticism of this kind for years as they seek approval of pipelines and tax credits. The credits would mean profits for refiners and help make the new fuel cost competitive with traditional jet fuel. But opponents see gas pipelines as a costly and potentially dangerous effort that tramples property rights and fails to reduce greenhouse gases.
Obtaining approval for pipelines has proven arduous.
Several companies abandoned their pipeline plans in the face of opposition and delay. The remaining lead company is Summit Carbon Solutions, which aims to build a 2,000-mile gas pipeline system through five Midwestern states — North Dakota, South Dakota, Nebraska, Minnesota and Iowa — with buried carbon dioxide emissions. underground in North Dakota.
North Dakota Regulators last year denied a location permit for Summit, but later agreed to reconsider. South Dakota Regulators in September rejected Summit’s requestbut company officials said they would file the lawsuit again.
Summit must seek approval from individual counties in Nebraska, and one county earlier this year denied the permit. In Minnesotaregulators are conducting an environmental review with future hearings planned.
An upcoming decision by the Iowa Public Utilities Board on granting a gas pipeline permit and approving Summit’s eminent domain requests will be critical to the larger effort across the Midwest. Iowa leads the nation in corn and ethanol production.
For the renewable fuels industry, the lack of pipeline approval could jeopardize a giant new jet fuel market that they believe will continue for decades into the future, even as electric vehicles gradually replace gas-powered cars and traditional vehicles become more efficient.
“There is a lot at stake here. We have a market that we can open up that can really sustain rural prosperity over the next two to three decades,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Essential to their efforts is a complicated formula that regulators have established to estimate how much each ethanol plant contributes to global warming. Ethanol production already produces less carbon than gasoline production, but the industry must reduce that amount further to qualify for tax credits that require the biofuel to have a carbon score at least 50% lower than gasoline.
The Treasury Department recently adjusted this formula, taking into account the role that agricultural practices, such as planting cover crops and using no-till techniques, play in reducing carbon output. However, the rules require farmers to take all of these measures, so it will likely still be difficult for ethanol to qualify without carbon pipelines or a combination of several other costly measures, such as ensuring that an ethanol plant is powered by renewable energy. or biogas.
That’s why many in the biofuels industry argue that carbon capture pipelines are the best option for obtaining tax credits.
Without a sustainable jet fuel market, Shaw and others say corn prices could ultimately collapse in the coming years as demand from motorists declines.
Currently, the nearly 200 U.S. ethanol plants have the capacity to produce 18 billion gallons of ethanol annually, although some are idle, so the industry produces about 15 billion gallons per year, according to the U.S. Administration. US Energy Information. Passenger planes now burn about 25 billion gallons per year and that number is expected to grow to 35 billion gallons annually by 2050.
And while most gasoline is now blended with 10% ethanol, sustainable jet fuel would utilize a 50% ethanol blend. It also requires about 1.7 gallons of ethanol for every gallon of jet fuel.
“We refer to carbon capture and sequestration as the key that unlocks the sustainable jet fuel market,” Shaw said.
Ethanol trade groups estimate that federal tax credits for sustainable jet fuel, combined with the existing credit for renewable fuels, could provide between $1.85 and $2.25 per gallon, depending on the carbon intensity of each plant. of ethanol. California, Minnesota and Illinois also have separate tax credits that can be added to federal credits for fuel sold in those states.
With one of the largest state tax credits of $1.50 in Minnesota or Illinois, some sustainable jet fuel could receive nearly $4 per gallon in tax credits.
There is also a separate federal tax credit available for carbon sequestration, but the rules will not allow producers to claim this credit simultaneously with the main federal credit for sustainable aviation fuel, resulting in a smaller total tax credit.
The largest ethanol trade groups — the Renewable Fuels Association and Growth Energy — say all the tax credits combined would help make sustainable jet fuel competitive with traditional jet fuel, which has been selling for about 2.5 to 3 dollars a gallon. And costs could fall if ethanol plants begin producing jet fuel on a large scale.
A small plant in Georgia now produces 10 million gallons a year of sustainable jet fuel from ethanol, but Geoff Cooper, president of the Renewable Fuels Association, said he expects the industry’s capacity to grow over the next five years to closer to 800. million gallons. annually.
Agricultural economists estimate that farmers would receive about $441 million more by 2050 if sustainable jet fuel increased demand for ethanol from the current 15 billion gallons to 28.5 billion gallons.
