Billions In Tax Credit Could Soon Pour In: The Midwest Could Soon See A Different Kind Of Pipeline Projects:

tax credit
Tax Credit

A different kind of environmental and economic fight has erupted over proposals for pipelines that would transport carbon dioxide from ethanol plants to underground storage systems. And it could bring billions in dedicated tax credits for residents. The big-dollar pipeline wars are back again. But this time there is a twist in the tale. The Midwest has seen bitter fights erupting over the laying of pipelines that stretched for thousands of miles. The lines over cattle ranches and pipelines were meant to transport crude oil, unlike now. 

This time around it is meant to save the environment. Two proposals that would carry carbon dioxide from ethanol plants to faraway underground storage have been proposed. And this led to a high-stake environmental and economic war. The pipelines could bring in billions of dollars in tax credits. While for over a decade, the Midwest was the battleground of bitter clashes over plans for thousand-mile pipelines.

But now the pipeline promises to bring in tax rebates as these projects would carry billions of tons of carbon dioxide. This would be transported through the pipelines and injected into underground rock formations rather than dispersed as pollutants into the atmosphere. 

The whole project threatens to turn into a very different form of environmental battle. It will be a huge test not just for landowners and farmers, but also for future technologies that are being promoted as a safe way to trap carbon that is warming our planet. 

But also at stake is the billions that it could bring in as tax rebates for the residents who are affected. The technology has garnered the backing of powerful political lobbies cutting across political lines. Major farmer organizations, a section of environmental groups, and ethanol producers have come out in support of the project. 

Tax Credit
Tax Credit

They have cited the economic benefits it will bring to the region by way of tax rebates. They have also said that it was the safest and most environmentally friendly way to dispose of harmful gases. The backers say that it is a win for both the environment and the economy, especially as it promises to benefit landowners through whose land the pipeline will pass. 

63% of the land has been accessed for the Summit route of the pipeline. The remaining 37% could come under legal hurdles as landowners have refused to be part of what they claim are emerging technologies. 

The Promise Of Carbon Capturing Brings Hope Both Ways

As climate change reshapes the world, the prospect of carbon capture is tempting both for the good it would do to the environment and also for the tax rebate that it will bring to the landowners of the Midwest region. 

Given the money it could bring to the region in the form of tax rebates, the technology has received support even from the Republicans. Several state-level leaders have backed the move. Even in Washington, the support has been bipartisan, where both the Trump and Biden government made laying the pipelines more lucrative for the region. 

Midwest Officials Debate Costs And Benefits Of Pipeline Plan

Proponents of the pipelines have touted the financial boon of the project as it will bring in billions of dollars in tax rebates even as critics are wary of the environmental costs. Ethanol energy plants dot the quiet prairie towns along the Minnesota River, producing tens of millions of gallons of ethanol annually. Its production is a vital part of the economy of the states in this region. 45% of the corn produced in the US is destined for the scores of ethanol plants that dot the farm fields. 

The proposed pipelines will move a major byproduct, carbon dioxide, and would crisscross the Upper Midwest. The metal pipeline will stretch across thousands of planned miles and would ink dozens of ethanol plants. 

The economics of the proposal promises to be a winning situation for all parties involved. For the energy industry, major farm groups, and other proponents, the prospect of storing carbon dioxide thousands of feet underground brings with it the promise of new ethanol markets. For the companies, it would mean snagging tax credits from the federal government even as it prevents carbon dioxide from being emitted into the atmosphere. 

Scope Of Tax Credit Hard To Determine

Despite the promises, the final scope of the potential tax credit is difficult to determine at this stage. The individual companies have claimed that the carbon pipelines would bring in billions of dollars annually in tax credits. 

Tax Credit
Tax Credit

One of the largest companies, Summit Carbon Solutions, has claimed that the project would store 18 million tons of gas annually. They propose to conned 34 ethanol plants across the states of Iowa, Nebraska, South and North Dakota, and Minnesota. Going by their claim, that alone would equal $1.5 billion every year at $85 to the ton from the sequestered tax credits. 

Another company that is seeking to build pipelines across Iowa is Navigator CO2 Ventures. The company has estimated it would transport around 15 million tons through the pipelines, earning $1.3 billion in tax credits.

Climate scientists have been generally positive about incentivizing carbon dioxide capture. They concede that it is one of the multiple solutions to the carbon dioxide in the climate. They say that major economies like the US should use a combination of such solutions to meet their international climate targets. 

Professor Daniel Sanchez of the University of California-Berkeley says that we would need to scale up renewable energy if we are to meet the climate goals. For that, we need to use all tools at our disposal to effectively decarbonize the transport sector. 

But resistance to the project remains among the residents of the areas that will be affected. They have questioned the rights of such companies to come in. The question of the right to property resounds among opponents and has cut across political lines. Even some supporters of the project are concerned about certain issues, and they need to be cleared, they say. 

The farmers of the Midwest have been there for generations. For them, even the promise of hefty tax credits is not enough to easily convince them to give up their land, or even allow pipelines to pass through, as in this case.