Along the Route: Tax credits, the carbon economy and proper underground storage

There is no other technology that can lower the carbon intensity score of an industry more than carbon capture and sequestration.

SIOUX CITY, Iowa — That's the claim from Summit Carbon Solutions, a corporation that wants to construct carbon-capture pipelines through the central U.S.

Summit and Navigator CO2 Ventures want to take carbon dioxide, a current bi-product of ethanol producers, and compress it into a pipeline for underground sequestration.

"Carbon is a characteristic that is beginning to determine the value of the goods and services and materials that we're bringing to market," said Elizabeth Burns-Thompson, the Vice President of Government Affairs for Navigator CO2. "We are beginning to see carbon-based valuations put on those goods and services. And so businesses are beginning to look at, how do we invest in the critical resources, the process improvements, the infrastructure that is necessary to be competitive in this carbon economy that we have evolved into."

GOVERNMENT TAX CREDITS AND THE CARBON ECONOMY

That carbon economy is getting a big boost from the federal government in the form of tax credits. According to the United States Internal Revenue Code, Section 45Q provides tax credits for CO2 storage. The Carbon Capture, Utilization and Storage Tax Credit Amendments Act of 2021 (CCUS), and the Negate Emissions to Zero Act of 2021 (NET Zero Act) extend 45Q tax credits for Direct Air Capture projects.

Direct Air Capture (DAC) projects are for carbon technologies that can remove carbon from the atmosphere and store it, or sequester it, geologically.

While government tax credits for carbon sequestration began in 2008, the Net Zero Act and CCUS significantly boost those tax credits for these companies, offering a larger incentive to get these projects in the ground.

The NET Zero Act would extend the 45Q tax credit permanently for DAC projects with geologic sequestration and increase credits to $18/ton.

The CCUS would extend the credit for 5 years and at $120/ton. Enhancing tax credits ensures incentives for companies and developers to make carbon capture technologies at a faster pace.

"To me, carbon is the next great commodity and it's a commodity that we're going to trade and there's going to be all kinds of various markets globally that are going to emerge from this," said Summit CEO, Lee Blank. "There's what I call the new carbon economy."

I believe the carbon economy is real. I believe we're on the doorstep of it.

The goal is to take carbon dioxide that is currently scrubbed and released into the atmosphere and instead, compress it into a liquid-like state and sequester it, or store it deep underground in geologic formations in Illinois and North Dakota.

THE SCIENTIFIC SIDE OF SEQUESTRATION

"The emission of CO2 is the gas and so the first step is to capture that gas and then you have to compress it to the point where it turns into a liquid." Ryan Clark is a geologist with the Iowa Geological Survey. He's studied these projects and others like them.

"One term you'll hear thrown around is supercritical fluid or supercritical liquid. That's just a liquid under high pressure," Clark explained. "You have to, in order to maintain that CO2 as a liquid, you have to maintain that pressure. That's where the depth comes in."

So injecting it underground to a depth of at least about 2700 feet below the surface is sufficient to hold that CO2 in its liquid form.

And that depth is important in making sequestration work.

"And so 2700 feet is kind of the number that I've always operated under is that's your minimum depth of injection," Clark explained about carbon sequestration. "And so what then has to happen is you have to find a place where there are rocks that are porous, meaning they have open spaces within the grains, or they are the bits and pieces within the bedrock formation and that they're also permeable. So those pore spaces have to be connected to each other in order for them to accept large volumes of this liquified CO2."

These storage sites are also chosen for their relation to the water table we rely on every day.

"One of the main parameters that decide whether a bedrock formation or an aquifer is suitable for CO2 injections is if that groundwater is considered nonpotable, meaning it's too mineralized and the water quality is so poor that nobody would ever drink it," Clark explained.

There's a lot of separation between where they're storing this and where the drinking water sources are.

But I wanted to know, with this CO2 under so much pressure, is storing it underground really that safe?

"One of the major concerns is the pressure that you inject and that you're imposing on that rock formation," Clark said. "You've heard plenty about induced seismicity with fracking. That is a concern. So that's why the pressure within that injection reservoir is one of the things that they monitor."

One question that hasn't fully been answered is, what happens to the liquified carbon dioxide after it's sequestered underground?

As Clark explained, "It's meant to just get injected down there and stay there forever."

While pipeline construction or even sequestration isn't new, 'We've been injecting stuff underground for a very, very long time. It might be a new substance that we're trying, but it's certainly not a new practice."

FOLLOW FOR MORE

"Along the Route: A Pipeline Discussion" is a multi-part series of reports looking at everything from the companies that want to build them to those "for" and those "against" and a deeper dive into to carbon and ethanol industries at the center of the project.

Over the next several weeks, Siouxland News Anchor Katie Copple will be sharing a series of stories, which you will find linked below as they air every Tuesday and Wednesday evening on Siouxland News at 9 on FOX and Siouxland News at 10 on CBS.

Bookmark this story here to find the entire series as it airs on Siouxland News.

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