MENOKEN, N.D. — One day, the passenger jets flying 6.6 miles above 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 is embracing 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 crop and offers a cleaner alternative to airlines. the country.
But realizing that dream hasn’t been easy, in part because even if farmers benefit from a huge new market for corn, the plan relies on federal tax breaks triggered by capturing carbon dioxide at refineries and then moving it gas over hundreds of kilometers. by pipelines that would snake through the Midwest, including under farmers’ fields.
Some of these farmers, along with environmentalists and property rights groups, have gone to regulators in several Midwestern states to oppose these rules, and often they have succeeded in at least slowing the process. A major decision is expected soon in Iowa.
“This whole thing is a private industry — a wealthy private industry — getting taxpayer money, strictly speaking, taxpayer money to bury this stuff,” said McLean, who opposes a border running through his farmland east of Bismarck. “That tax money is coming out of everyone’s pocket, and they’re going to walk away from it, and we’re going to be left with a big toxic pipe running through the country.”
Supporters have faced such criticism for years as they seek approval for pipelines and tax credits. The credits would generate profits for refiners and help make the cost of the new fuel competitive with traditional jet fuel. But opponents see the pipelines as an expensive and potentially dangerous venture that tramples on property rights and fails to reduce greenhouse gases.
Obtaining approval for pipelines has proven difficult.
Several companies have dropped their pipeline plans despite opposition and delays. The largest remaining company is Summit Carbon Solutions, which wants to build a 2,000-mile pipeline system through five Midwestern states — North Dakota, South Dakota, Nebraska, Minnesota and Iowa — ultimately burying carbon dioxide emissions underground. North Dakota.
North Dakota regulators denied last year a location permit for Summit but later agreed to reconsider. South Dakota regulators in September rejected Summit’s applicationbut company officials said they would file again.
Summit must seek approval from individual counties in Nebraska, and one county was denied a permit earlier this year. In Minnesotaregulators are conducting an environmental review and future hearings are planned.
An upcoming decision by the Utilities of Iowa on whether to grant a pipeline permit and approve Summit’s eminent domain requests will be critical to the larger effort in the Midwest. Iowa leads the nation in corn and ethanol production.
For the renewable fuels industry, failure to approve the pipelines could jeopardize a massive new market for jet fuels that they expect will persist 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 that can really support rural prosperity over the next two to three decades,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Key to their efforts is a complicated formula that regulators have created to determine approximately how much each ethanol plant contributes to global warming. Ethanol production already produces less carbon than gasoline production, but the industry must reduce this even further to qualify for tax credits that require biofuels to have a carbon score at least 50% lower than gasoline.
The Treasury Department recently adjusted that formula, taking into account the role that agricultural practices such as planting cover crops and using no-till techniques play in reducing carbon production. However, the rules require farmers to take all of these steps, so it will likely still be difficult for ethanol to qualify without carbon pipelines or a combination of several other expensive measures, such as ensuring 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 to obtain tax benefits.
Without the sustainable market for jet fuel, Shaw and others argue that corn prices could eventually collapse in coming years as motorist demand declines.
Currently, the approximately 200 U.S. ethanol plants have the capacity to produce 18 billion gallons of ethanol annually, although some are idled, so the industry produces about 15 billion gallons per year, according to the U.S. Energy Information Administration. Passenger aircraft now burn about 25 billion liters per year and that is expected to grow to 35 billion liters per year by 2050.
And while most gasoline is now blended with 10% ethanol, sustainable jet fuel would use a 50% ethanol blend. It also requires about 1.7 liters of ethanol for every liter of jet fuel.
“We see carbon capture and sequestration as the key to unlocking the sustainable aviation fuels market,” said Shaw.
Ethanol trade groups estimate that federal tax credits for sustainable jet fuel, combined with the existing renewable fuels credit, could generate between $1.85 and $2.25 per gallon, depending on the carbon intensity of each ethanol plant. California, Minnesota and Illinois also have separate tax credits that can be added to the federal credits for fuel sold in those states.
With one of the largest state tax credits at $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 do not allow producers to claim it at the same time as the main federal tax credit for sustainable aviation fuel, resulting in a smaller overall tax credit.
The largest ethanol trade groups — the Renewable Fuels Association and Growth Energy — say all the tax breaks together would help make sustainable jet fuel competitive with traditional jet fuel that sells for about $2.5 to $3 a gallon. And costs could drop if ethanol plants start producing the 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 to nearly 800 million gallons over the next five years. annual.
Agricultural economists estimate that farmers would receive about an additional $441 million in 2050 if sustainable jet fuel increased ethanol demand from the current 15 billion gallons to 28.5 billion gallons.