Corn price connection to carbon capture hard to pin down

The ethanol industry says capturing carbon emissions from ethanol plants and storing it underground is needed to help the industry keep up with the trend toward greener energy.

But it’s unclear what the direct benefit to the farmers who supply corn to the ethanol plant might be.

David Ripplinger, an associate professor at North Dakota State University, specializes in renewable fuels.

“So, everybody always asks me, ‘Well, what’s the price of carbon?’” Ripplinger said. “The problem is, there isn’t a single price of carbon."

“It’s not as if there’s a futures market or a spot market and transparency of a price, let alone what it might be for a particular farmer or rancher,” he added.

Two North Dakota ethanol plants are already capturing carbon, benefiting from being in the western part of the state where the right geology for underground storage is nearby.

There’s also the Summit Carbon Solutions pipeline, which the Iowa-based company calls the world’s largest carbon capture and storage project. The company hopes to connect 57 ethanol plants to underground storage sites northwest of Bismarck, ND.

The pipeline project is expected to benefit from huge federal incentives in the form of tax credits.

The tax credits go to the ethanol plant or to the pipeline developer.

“The ones who are investing billions of dollars are the ones who are going to benefit,” Ripplinger said.

While the investments may not be in the billions, investors in Summit’s $8 billion project include Continental Resources, an oil and gas company that operates in North Dakota; Gary Tharaldson, owner of Tharaldson Ethanol, the only North Dakota ethanol plant signed on to the project; and agribusiness giant John Deere.

At the Williston Basin Petroleum Conference in Bismarck last week, Summit Carbon Solutions co-founder Bruce Rastetter took the stage with Harold Hamm of Continental Resources to highlight the ag-energy partnership of the two companies.

“Profitability drives investment,” Rastetter said in attracting investors such as John Deere.

The three-member North Dakota Public Service Commission (PSC) is in the middle of hearings on the Summit pipeline as it reconsiders the company’s permit application. The PSC denied Summit a permit last year, but the company has made changes to its route and appealed that decision.

Summit Carbon Solutions CEO Lee Blank, in an interview with the North Dakota Monitor , said the ethanol plant partners will benefit from the project, but how much of a benefit it provides will vary from plant to plant. He said the plants should get a minimum benefit of 20 cents per gallon of ethanol.

But Blank would not offer an estimated price premium that could be passed on to farmers for the corn used to produce ethanol.

“It is still the concept of a rising tide lifts all boats,” Blank said.

Recouping investment

The two North Dakota plants that have developed their own carbon capture and storage systems are Red Trail near Richardton and Blue Flint near Underwood.

Jodi Johnson, CEO of Red Trail, said the carbon capture project was a $35 million investment that will take time to pay off. She said the project doesn’t mean it can pay a premium price to corn growers, but could provide a benefit to farmers who are partners in Red Trail.

North Dakota Agriculture Commissioner Doug Goehring is among those partners as a farmer southeast of Bismarck. He said he didn’t expect to see a benefit from carbon storage right away but hopes to down the road.

Ripplinger said an ethanol plant, such as Red Trail, forging ahead on its own has to bear those upfront costs.

“The ultimate benefit to farmers in the region would be a stronger local customer,” Ripplinger said.

Keeping up

For Andrew Mauch, president of the North Dakota Corn Growers Association, it’s not so much about expecting a price bump for corn with carbon capture, it’s about not getting left out of the low-carbon fuel market.

“If that market expands and we’re not qualified, our price is going to drop substantially,” said Mauch, who farms near Mooreton.

Red Trail is developing a program with farmers that may lead to a premium price for those who are able to document growing low-carbon corn that will help further lower the ethanol plant’s carbon-intensity score. But Johnson said it was too early to estimate what that premium might be.

Blank also noted that trend.

“I think, over time, we will see the farmer and the ethanol industry probably work much more hand in hand,” Blank said.

But Ripplinger said if those low-carbon practices become widespread, that premium isn’t really a premium anymore.

“So if it’s all low-carbon corn, but it’s not low-carbon corn anymore. That’s just corn,” Ripplinger said. “It’s kind of the idea of, if everybody’s special, nobody’s special.”

This story was originally published by North Dakota Monitor , which is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. North Dakota Monitor maintains editorial independence. Contact editor Amy Dalrymple for questions .