Iowa Governor Vetoes CO2 Pipeline Bill
Iowa Governor Reynolds Vetoes Bill That Was Seen as Threat to CO2 Pipeline Projects
LINCOLN, Neb. (DTN) -- Iowa Republican Governor Kim Reynolds vetoed a bill on Wednesday that would have made it difficult to build carbon pipelines in the state.
Reynolds announced her decision to veto House File 639 in a letter to Iowa Secretary of State Paul Pete, saying the bill goes far beyond the use of eminent domain in the state.
"I respect both sides of the debate," Reynolds said in the letter. "I've consistently said that if eminent domain is used, it must be rare, fair and a last resort. But HF 639 isn't just about eminent domain. It goes much further -- and in doing so, sets a troubling precedent that threatens Iowa's energy reliability, economy and reputation as a place where businesses can invest with confidence."
Reynolds' veto clears the way for Summit Carbon Solutions to continue to move toward building a 2,500-mile carbon pipeline that connects to 57 ethanol plants across the Midwest.
The bill would have required companies like Summit to work their way through a more complicated and complex regulatory process to build pipelines. Biofuels and agriculture interests in Iowa conducted a campaign to convince Reynolds to veto the measure.
Reynolds said the bill would block a "major pipeline" project at Southwest Iowa Renewable Energy that "uses only voluntary easements." That project is in the final stages of connecting to a CO2 pipeline.
"Yet new insurance mandates and an arbitrary 25-year limit that HF 639 places on CO2 pipelines would effectively kill the project, despite the millions that have already been spent on its development," she said.
Reynolds said, while she shares in the bill's goal of protecting landowners, "good policy should draw clear, careful lines."
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REACTION TO VETO
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said in a statement that his organization was "deeply grateful" for the veto.
"This is a classic example of why our system of government has checks and balances," Shaw said. "Any thoughtful review of this bill would determine that it would lead to higher energy prices for Iowans, hamper future economic development, hold back job creation and stifle new markets for Iowa farmers."
Shaw said the veto isn't the end of the debate in Iowa. He said for three years the IRFA attempted to work with parties on legislation to strengthen property rights, improve the IUC permitting process and allow a path forward for CCS. "All attempts to find a middle ground were rejected by state legislators seeking only to kill CCS (carbon capture and storage) projects," Shaw said.
The Iowa Corn Growers Association said in a statement that Reynolds' decision was a "win" for Iowa corn farmers, ethanol producers and the economy.
"Participation in CCS projects will allow Iowa to capitalize on exciting new ethanol market opportunities like sustainable aviation fuels," the group said.
"Jet fuel demand is projected to be 120 billion gallons by 2035. If 10% of that market could be made into SAF from ethanol, this would equal nearly 19 billion gallons of new ethanol demand or nearly 6.5 billion bushels for new corn demand. Iowa's corn farmers have continued to face high input costs and decreased profit margins. They need expanded market growth and access to continue raising corn profitably, allowing them to continue growing Iowa's agricultural industry and economy."
Tom Buis, CEO of the American Carbon Alliance, said in a statement that the veto was important to the future of rural America.
"Her bold veto of HF 639 is a clear victory for Iowa's agricultural heartland, farmers and the ethanol industry," Buis said.
"It sends a strong message rejecting the misguided efforts of environmental extremists who pushed this legislation. These groups have done everything in their power to undermine agriculture, ethanol, and America's energy dominance with their anti-ag, anti-ethanol, and anti-energy agenda."
Jeff Broin, CEO and founder of ethanol producer Poet, one of many ethanol companies planning to connect to the Summit pipeline, said farmers need more markets at a challenging time in the industry.
"At a time when commodity prices are low, these CO2 investments will expand market access for Iowa corn, biofuels, and bioproducts across the globe, increasing the value of every bushel of corn and every acre of Iowa cropland," Broin said in a statement.
"This decision will bring benefits to Iowa farmers for generations to come," Broin said.
Read more on DTN:
"Iowa Bill Complicates CO2 Pipelines," https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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