At the center of a global push to lower carbon emissions is a debate over the best ways to go about lowering carbon scores.
Following legislative session, South Dakota and its ethanol industry find themselves in the middle of that conversation as environmentalists debate the practicality of carbon sequestration.
Summit Carbon Solutions is hoping third time is the charm following the denial of its second application to the Public Utilities Commission.
Following the passage of HB 1052, a law banning eminent domain for carbon capture pipelines, many think the $8.9 billion project is impossible in South Dakota.
Whether Summit’s pipeline happens at all, at the heart of issue is a question of energy infrastructure’s future in South Dakota and what global renewable energy looks like.
“Countries around the world and companies around the world are setting decarbonization goals. There are regulations that have been passed, there are models that have been built to determine what the greenhouse gas emissions are of a lot of different products. But fuel is probably the number one thing that is being regulated at this point,” said Doug Berven, the Executive Director of the South Dakota Ethanol Producers Association.
Berven said that’s where ethanol comes into play.
He said carbon sequestration, by pulling CO2 out of the atmosphere and storing it underground, lowers carbon scores significantly for an ethanol plant and balances CO2 in the atmosphere. He said that creates opportunities for the industry to grow.
“That opens up the markets that are being regulated by all these different countries and companies like the aviation industry, like the marine industry,” Berven said. “So, what the pipeline means for ethanol is a tremendous amount of new markets around the world that really only ethanol can fill, from a greenhouse gas standpoint, and it can only fill those if we reduce our carbon score.”
He said carbon pipelines are the future of creating a fuel that doesn’t add significant CO2 emissions to the atmosphere.
But not everybody is buying stock in the idea that sequestering carbon is the future.
“The whole thing is set up in a way that sounds really good if you’re presenting in a ten-minute presentation to environmentalists: ‘Look how great this is gonna be.’ But when you dig into it, this is a pretty serious misdirect or pivot away from real climate solutions,” said Dakota Rural Action senior organizer Chase Jensen.
Jensen is the man deeply involved with the referred law campaign that struck down a previous bill which made carbon pipelines more feasible. This opened the door for HB 1052.
“Dakota Rural Action is deeply skeptical that carbon capture technology is truly about lowering emissions. We see the ties to enhanced oil recovery being the primary driver of this technology,” Jensen said. “Even if on paper emissions are being lowered, it’s only because there’s not a life cycle analysis being done.”
Jensen is referring to the idea that carbon captured and stored in the Earth could be used to produce more oil in a process called “enhanced oil recovery.” Many climate activists are skeptical that carbon sequestration would eventually be used to put more money in the pockets of gas and oil giants.
In fact, oil the industry is lobbying hard in Washington for this very thing. According to a NASDAQ April lobbying update, in 2025 alone Occidental Petroleum Corporation, a major US gas and oil company, lobbied nearly $2.5 million in Washington. Occidental used some of those funds to lobby in favor of carbon capture, enhanced oil recovery, and 45Q Tax Credit for Sequestered CO2.
Companies like Summit Carbon Solutions utilize the federal 45Q Tax Credit.
In 2018, the tax credit was expanded to include direct air capture projects. Since then, many of the financial tax incentives increased significantly. Most of those were done through the Inflation Reduction Act to drive the development needed.
President Donald Trump has been outspoken in his support of carbon capture and storage, citing it first s part of his key actions “promoting energy innovation for a healthier future” in a letter to the nation on Earth Day.
Dakota Rural Action’s Chase Jensen said Trump’s letter probably won’t move the needle for most.
“If you think that President Trump is the cutting-edge vanguard of climate change activism, then maybe that makes you trust carbon capture,” Jensen said. “I think if you’re a little bit more skeptical about the Trump Administration’s views on climate change and how cozy they are with the oil industry, seeing it as the first thing listed might give you pause about what this truly is.”
However, the ethanol industry doesn’t see the pipeline as an opportunity to help oil. In fact, Berven said it’s simply a way for the industry to grow.
“The ethanol industry supports CCS as a tool to open new markets for biofuels and ensure long-term demand for locally grown corn,” Berven said. “This project, and ethanol’s use of carbon capture, is designed specially to support ethanol production and farming families. It’s not about propping up oil. This is about advancing agriculture and strengthening rural economies.”
However, Jensen said right now he sees the oil and ethanol are industries are tied together because it’s beneficial to oil.
“Oil and ethanol are paired up right now because of that economic partnership, but the second that they could get the tax credit to be bumped up to make steel, to make fertilizer, cement plants more viable economically than they already are, I don’t think they’re just like married to ethanol anymore,” Jensen said. “It’s just a partnership of convenience right now.”
He adds the carbon capture sequestration technology is being “held out to all sorts of industries across the nation,” but ethanol is currently the cheapest industry in the nation to retrofit the 45Q tax credits.
Jensen said doesn’t think the pipeline is the “end all” for the ethanol industry’s success in South Dakota.
On the other side, Berven said he thinks the pipelines and their importance to ethanol are being misunderstood right now.
“Ethanol needs to reduce its carbon score even further, and the pipeline is the most elegant way to do that. And that’s why it’s so important. Agriculture needs more markets because technology and agriculture is greatly outpacing population demand,” Berven said. “So we have yields going up, we have prices stagnant and coming down and we have inputs getting more expensive. That leads to a potential agricultural crisis. We need more markets for agricultural products to balance those markets and keep agriculture strong.”
Berven said as for South Dakota specifically, ethanol markets are important to future growth. Without them, the industry will grow elsewhere.
“We don’t want to get into the politics of climate change. That’s not what this is about. This is about the reality of the models that are dictating the ability to get into different markets, the models and the regulations,” Berven said. “That’s all this is. Whether we like the game or not, that is what the game is. If you want to get into new markets in this world today, you have to reduce your carbon score. It’s that simple.”
