Not in my backyard

Deadly pipeline ruptures. The risk of groundwater contamination. An excuse for fossil fuel producers to continue.

These are just some of the environmental and safety concerns expressed by landowners and residents in parts of the Midwest to the development of new carbon dioxide (CO2) pipelines. The furore is unlikely to be getting much attention outside of the United States, but it is something to pay attention to. The backlash could have implications far beyond the US, and threaten the growth of the entire global carbon capture industry.

To recap, carbon capture, utilisation, and storage (CCUS) involves catching concentrated industrial emissions at their source, preventing them from entering the atmosphere. The ‘U’ component of CCUS can mean that the CO2 is used as a feedstock for another industrial process (e.g. fertiliser, enhanced oil recovery, etc.). Other longer term uses for CO2 are being developed that could lock up the gas for a considerable period (e.g. construction materials), or at least ensure its net zero (e.g. Sustainable Aviation Fuels, or SAF). The ‘S’ component of CCUS involves permanently storing the carbon dioxide deep underground, by injecting it into saline aquifers or spent oil and gas reservoirs (see Everything carbon investors really need to know about carbon capture, use and storage (CCUS)).

Several companies have sought to develop the CO2 pipeline network infrastructure necessary to utilise the deep pool of underground sequestration options available in the US. Generous tax credits for CCS, announced as a part of the Inflation Reduction Act (IRA), are also a big driver. The most cost effective way to take advantage of this opportunity, at least in the short-term, is to help the ethanol industry capture its carbon emissions for use in other industries. Ethanol production emits a pure stream of CO2 and so lends itself well to carbon capture projects, while also allowing ethanol producers to position their product as a green fuel (see The carbon capture superpower: The United States will dominate global CCUS capacity).

Over the past few weeks a number of CO2 pipeline deals have fallen apart. Iowa-based Summit Carbon Solutions and Nebraska-based Navigator CO2 Ventures had proposed building a vast network of pipelines capable of siphoning carbon from ethanol plants located in the Midwest, and transporting it to underground storage sites in neighbouring states. The outcry over the risks is one factor that led to the rejection of the project’s permitting applications. Both pipeline companies have either delayed their projects (Summit has postponed their project until 2026), or forced them to cancel them altogether (in Navigator’s case).

Negotiations over the pipeline deals have also exposed an erratic regulatory position between states. According to the Sabin Center for Climate Change Law, few of the federal legal frameworks governing pipeline infrastructure were designed with CO2 pipelines in mind. Moreover, with individual states having authority over the regulation of pipeline siting, development, and operation, putting together a network of CO2 pipelines across state borders is fraught with difficulty. A recent paper from the Sabin Center identified four key barriers to CO2 pipeline development:¹

1. Ambiguous or patchwork governance regimes at the state and federal level;

2. Economic regulations of interstate pipeline networks often vary from state to state;

3. Responsibility for regulatory approvals, permitting processes, land assembly, and cultural and environmental responsibilities are scattered among different agencies, subject to different standards, and undertaken with different levels of rigor;

4. Gaps in the federal Pipeline and Hazardous Material Safety Administration’s regulations addressing the safety of CO2 pipelines.

The rejection of the pipeline applications throws a spotlight on the infrastructure challenge facing many countries as they look to hit net zero. CCUS will need to grow from 40 Mt CO2 in 2022 to 1 Gt CO2 by 2030 to be on course for net zero, according to the International Energy Agency (IEA). The agency’s NZE Scenario assumes that global capture of carbon will need to rise to 6 Gt CO2 by 2050, of which around one-quarter comes from bioenergy (BECCS) and direct air capture (DAC). Amid the outcry over its use by the ethanol and fossil fuel industries, it’s worth remembering that carbon capture is the only way that many heavy industries can decarbonise, at least on the timescales required to hit net zero (see Why Europe's heavy industry needs carbon capture and storage).

As the pipeline spat highlights, it doesn’t matter how much CO2 is sucked out of the sky or extracted from the chimney of a factory or power plant, it will be stranded unless there is adequate transport infrastructure to move it to where it can be used or stored. Transporting these huge volumes of carbon will require a massive expansion in pipelines - usually the cheapest way to transport CO2 - capable of carrying the gas long distances.

The IEA estimates that 600,000 kms of CO2 pipelines will be needed in their NZE Scenario. To put that into some kind of perspective, global CO2 pipeline infrastructure is currently estimated to be around 9,500 kms. To achieve net zero we will need pipeline capacity to expand 63 fold over the next three decades. As the IEA explain in their latest World Energy Outlook, that’s a similar order of magnitude to the 1 million plus kms of natural gas transmission pipelines that have been constructed over the past century.²

The cancellation of recent CO2 pipeline deals could be a harbinger of things to come elsewhere in the world. The challenge involved with laying thousands of miles of CO2 pipelines in densely populated parts of Europe and Asia is likely to be much more challenging than the US. At the very least, the episode should be a warning to other governments of the need to ensure that all the safety, environmental and bureaucratic procedures are in place. The decarbonisation plans for many heavy emitters depends on it.

1. https://scholarship.law.columbia.edu/sabin_climate_change/207/

2. https://www.iea.org/reports/world-energy-outlook-2023