Banned Like a Book
My eight hours with the Guthrie County Landowners and Residents Against Carbon Pipelines
It all started with when I saw a Facebook post:
“The pipeline is going in 2 miles west of G C it effects the town if it bursts the c02 erupts and goes into low lying areas G C is the low lying area you die in seconds as it cuts off your air. Affects farmers yes it affects you too! Join our Facebook page! Guthrie County Landowners and Residents Against Carbon Pipelines. Invite your friends! We need to stick together to fight this evil!”
It seemed a bit sensational. It also seemed a bit wrong (Guthrie Center sits on a hill). Fearmongering, one might think, but it had an invitation and there are conversations worth having. I joined the Facebook group. It was about ten in the morning.
I didn’t see much conversation worth having. I saw lots of posts about how dangerous a CO2 pipeline would be. I saw lots of posts about land rights and eminent domain. I didn’t see any examples of situations with other pipelines in the area. I didn’t see anything about some very real economic implications with respect to the pipeline decisions they faced. A lot of minds had apparently been made up before much research was done. Those minds appeared to be taking it upon themselves to scare other minds into agreement.
I should have left right then, but I have some interest and background in the subject. At Iowa State University, I was involved in two ethanol studies and one inventory of Iowa energy. I supervised Iowa’s first economy-wide economic impact study of agriculture and directly related industries. I was a witness for several Iowa landowners’ associations opposing the Dakota Access Pipeline. Over the years, I have done contract work for the Iowa Soybean Association, the Iowa Corn Growers, the National Pork Producers’ Council, the Coalition to Support Iowa’s Farmers, John Deere, and Farm Rescue. I have worked with a California energy consultant to optimize Iowa ethanol’s position in earning California’s carbon credits in an effort to increase Iowa farm income. As part of the State of Iowa’s due diligence in this pipeline process, the Iowa Economic Development Corporation commissioned a study of the industrial CO2 market in Iowa. I did that study. Oh, and my parents lived two miles south of Guthrie Center, Iowa.
I posted a map of pipelines in Iowa from the Iowa Department of Commerce’s Utilities Division. You can find it here.
https://iuc.iowa.gov/sites/default/files/documents/2021/11/iowa_map_pipelines_1999.pdf
It’s a little dated – from 1999 – but pipelines don’t get built very often. The only thing I know of that is missing is the Dakota Access Pipeline moving crude oil through the state from North Dakota to Illinois.
I pointed out that CO2 is relatively benign compared to natural gas, anhydrous ammonia, petroleum, and other hazardous chemicals running under people’s feet across the state and within Guthrie County. This received two responses. The first was simply a question about whether eminent domain had been invoked to build the existing pipelines (almost certainly, but I am not familiar with every case). The other was to suggest that I had no idea of the special volatility and hazard that accompanied the pipeline transport of CO2. When I asked for examples, I got none. I suspect there are none. Catastrophic pipeline failures in the U.S. are quite rare, but I didn’t follow up with any dedicated research on CO2 pipeline failures.
I decided to delve into the economics of pipeline decisions. While there were lots of general posts about the evils of eminent domain, there was nothing on the site about the long-term economic implications that accompany either building or not building the pipeline. I had been through most of this, so I posted.
Iowa produces about 4.5 billion gallons of ethanol per year. At 5.7 pounds of CO2 per gallon, this generates about 25.5 billion pounds of CO2 (about 12.8 million tons). At about 2.8 gallons of ethanol per bushel, this consumes approximately 1.6 billion bushels of Iowa’s annual corn crop, which was estimated at 2.5 billion bushels in 2023.
Four Iowa ethanol plants currently capture raw CO2 and sell it to Air Products for processing and resale into the industrial gas market. They collect between 375,000 and 425,000 tons of raw CO2 annually. They are paid between $5.50 and $8.50 per ton for total ethanol producer revenue between $2.1 million and $3.6 million annually.
It is expected that the federal subsidy for clean energy will generate up to $175 per ton of raw CO2 captured in the ethanol production process. It is also expected that half of this will go to the pipeline operator and half of this will go to the ethanol producer. You can read all about the estimates in a study done for the Iowa Renewable Fuels Association by Decision Innovation Solutions at
The expected $87.50 per ton that will go to ethanol producers will be available to any producer that connects to the pipeline. At the time I did the industrial CO2 market study in 2023, all but four Iowa ethanol plants had indicated a commitment to attach to a pipeline if possible. If pipelines connected all ethanol plants, this could generate revenue of about $1.1 billion annually for Iowa ethanol producers. That is equivalent to about 44 cents for every bushel of corn grown in Iowa during the 2023 season.
Increasing the return to the ethanol producer for every bushel of corn processed will increase their demand for corn. This is because plants that are not at capacity will move towards capacity and lower ethanol prices will no longer immediately generate production cuts. Increased demand for corn will bid up corn prices. The result is that some portion of that $1.1 billion will make it into increased corn prices paid to the farmers.
For example, if increasing corn prices consume a quarter of the ethanol producers’ premium, that would be 11 cents per bushel statewide. On 200-bushel corn, this would be $22 per acre. To put this into perspective, over the past five years (2018-2022) farm earnings net of government payments per acre farmed in Guthrie County ranged from a loss of $5.26 per acre to $253.26 per acre. The five-year average was $98.13 per acre.
This is the basic trade-off with property rights that affected farmers and community businesses need to consider. This is real. Horror stories of catastrophic pipeline failures are very remote.
This generated several responses. The first was a statement that pipeline landowners would not get all of the increased corn income, so they should not have to shoulder the burden. This is precisely what eminent domain is all about – making certain that things which are good for the community as a whole get done. The street in front of your house, the electricity running your refrigerator, and the water in your bathtub are all, quite likely, dependent upon eminent domain.
Next was the argument that defending property rights was important enough to forego the benefits that might come from the pipeline subsidy. That led to a discussion of the other side of the coin. Just as there are upsides to local farm income if the pipeline goes through, there are downsides if a local pipeline is stopped but other states approve pipelines.
That would make investments in Iowa ethanol less profitable than similar investments elsewhere, resulting in declining ethanol production capacity in Iowa. Additionally, if Iowa does not capture CO2 and other states do, Iowa ethanol will be at a disadvantage in states where fuels are carbon scored. This includes most of the West Coast and an increasing number of jurisdictions elsewhere. This will further reduce the profitability of Iowa ethanol production and further reduce capacity to produce.
It is estimated that every billion gallons of ethanol produced in the nation increases average corn prices by 2.5 percent. There are about 15 billion gallons of ethanol produced in the nation, so it is reasonable to assume that 35 to 45 percent of corn price is a derivative of ethanol production. Iowa, being the leading producer of both corn and ethanol, certainly captures the lion’s share of this premium. Declining ethanol production will directly cut Iowa farm income by up to 35 to 45 percent of the prevailing corn price.
The response I received for this was that a byproduct of ethanol production, dried distillers’ grains, is utilized in livestock feed, particularly for beef cattle. The idea was that corn not going into ethanol production would be directly repurposed as feed with no decline in corn prices. This ignores the fact that the distillers’ grains are a byproduct that is generally shipped to out-of-state feeders. Without the primary ethanol production and earnings, farmers would lose both their ethanol premiums and shipping costs.
At this point (about six o’clock in the evening) a member of the group posted that I appeared to know way too much to be on their side, so I must be a paid shill for Summit Pipeline. It was further suggested that I be banned from the site. A few minutes later, I was expelled and blocked without further explanation.
No one ever suggested that what I contributed was untrue. No one ever provided information to contradict my evidence. I was banned because I knew too much, and it was assumed that no one could know that much unless they were a pipeline company plant. I shudder to believe that everyone in the group assumed they were incapable of knowing these things.
So, this morning as I write this, I am receiving notes from other acquaintances telling me how riled up the Facebook group is about me. I have been asked if I worked for Summit Pipeline. My wife has been informed that she has become a subject of the group conversation (she had nothing to do with my contributions). I have gotten a personal note to the effect that my mother would be disappointed in me. It isn’t threatening, but it is nasty.
And all I really wanted to do was point out that this is not just a bunch of horror stories about catastrophic death and the usurpation of property. There are very real economic tradeoffs and consequences to be considered. This is not rocket-science. Anyone who wants to spend a little time with Google and do a little multiplication and division can easily derive the conclusions presented above.
For deriving them, I have been banned like a book.
Oh, well…..
P.S. For the record, I have never, to my knowledge, done contract work for a pipeline operator or developer of any type.
P.P.S. For the record, I am ambivalent about the pipelines. I believe that if we produce ethanol we need to deal with the resulting CO2. So, if we produce ethanol, pipelines are probably necessary.
The other side of the coin is we don’t need to produce ethanol. I participated in my first ethanol study in the early 1990s. Senator Grassley had it read into the Congressional Record. I have been convinced since that time that we only produce ethanol to use up the unneeded corn we grow because of a subsidy system that has increasingly perverse consequences (ethanol, CO2 pipelines, erosion, nutrient pollution, increasingly critical surface and groundwater issues that are increasingly linked to health issues on the farm and downstream).
U.S. farm policy is like the acrobatic clown at the circus climbing an unsupported ladder. He goes up a few rungs, makes the ladder wobble in the air, and looks terrified. Instead of going back down and finding support for the ladder, however, he runs up another couple of rungs to get further from the ground, repeating the whole process.
We are getting close to the top of the ladder. The whole process that led to the pipeline proposals has been part of a long-term effort to subsidize farm income. The way the pipeline effort is designed and is being implemented is also to maintain and support further subsidized income to farmers and the agribusiness that serves them. But we have gotten to the point where the farmers themselves are violently opposed to supporting the process of subsidizing their own incomes.
I once saw a sign over a CEO’s desk that read,
“My job is to make the agony of decision-making so intense that critical thought is the only way out.”
We might want to heed that advice. It might be time to come down the ladder.