David Owen: Carbon Capture, Sequestration Projects Vital to South Dakota’s Future
By David Owen, President of the South Dakota Chamber of Commerce & Industry (Originally published in the Summer 2023 edition of Tomorrow’s Market)
The multi-billion-dollar Summit Carbon Solutions CCS (carbon capture and sequestration) pipeline represents the future potential of agriculture, energy and ethanol in our state, along with prosperity of the businesses, communities and families that depend on them. This groundbreaking project will traverse 2,000 miles across Iowa, Minnesota, North Dakota, South Dakota and Nebraska.
The project, if approved, will spur tremendous economic growth in South Dakota, according to an analysis from the accounting firm Ernst & Young. During the construction phase, total South Dakota investment is expected to reach $795 million; total labor income in South Dakota is estimated at $440 million; and state and local taxes paid by SCS will reach $74 million. During the operations phase, annual income to South Dakota businesses and employees are estimated at $37 million, while state and local taxes paid by the project are anticipated to reach $15 million.
The South Dakota Chamber of Commerce and Industry has opposed proposed measures that are aimed at adding regulations to a process that has worked well to protect the interests of the citizens of South Dakota. This opposition could be applied to the proposed Minnehaha County ordinance Amendment #23-02. This amendment would create unnecessary and burdensome red tape for this and other pipeline systems in the state.
As the Pipeline and Hazardous Materials Safety Administration (PHMSA) notes, “Pipelines in South Dakota may include transmission lines carrying energy products long distances, as well as distribution lines delivering natural gas to businesses and households in your neighborhood. The energy products carried in pipelines fuel our lives and our livelihoods. They heat our homes and schools, power our industrial base and enable our daily commutes. Pipelines are by far the safest method for transporting energy products.
The goal of Summit Carbon Solutions, a member of the South Dakota Chamber of Commerce and Industry, is to secure voluntary easement agreements with landowners. That plan is working. The company has secured more than 880 easements with roughly 550 South Dakota landowners and 2,750 total landowners across the Midwest. Summit has negotiated terms with landowners, dispersing hundreds of millions of dollars for agreements, with more budgeted for future agreements. Securing agreements takes many months as each property is unique and land ownership is often complex.
Carbon capture and sequestration projects are essential to the viability of South Dakota’s ethanol industry and constitute the market for well over half of the corn grown by the state’s farmers.
California, Washington, Oregon and Canada have established policies that pay a premium for low-carbon fuels and many other states and countries are likely to follow with similar policies in the coming years. We cannot sell to these markets without carbon sequestration enabled by these CO2 pipelines. Changing the regulations governing an industry critical to South Dakota’s economic future in the middle of those regulations being applied —while millions of dollars are being spent following the existing regulations — is just unfair and wrong. In addition to their numerous economic benefits, carbon capture projects are safe, secure and closely regulated by the federal government. The first CCS facility began operations over 50 years ago, in 1972.
Natural gas plants have captured and stored more than 200 million tons of CO2.
The South Dakota Chamber of Commerce and Industry supports CCS projects because they are economic and environmental game changers for our state.
We hope you will join us and support these critical projects.