Ethanol Industry Urges Reynolds to Veto Eminent Domain Bill

Iowa ethanol advocates and farmers are urging Gov. Kim Reynolds to veto a bill restricting carbon sequestration pipelines. 

The advocates said in a press conference Thursday the bill is “extremely problematic” to biofuels, farming, energy and Iowa economies.

The bill, House File 639, which passed the Iowa Senate May 12 and is awaiting a signature from Reynolds, would change definitions of a common carrier and increase insurance requirements for pipelines transporting liquid carbon dioxide. It would also set requirements for the Iowa Utilities Commission and expand who can intervene on dockets with the commission. 

Advocates and lawmakers in favor of the bill oppose the use of eminent domain by the Summit Carbon Solutions pipeline, which would transport captured carbon dioxide from ethanol facilities in Iowa, and neighboring states, to underground storage in North Dakota. 

Monte Shaw, Iowa Renewable Fuel Association’s executive director, said on the call that HF 639 does not protect landowners from eminent domain, but specifically targets carbon capture pipelines. 

“You hear a lot of talk about principles, but what we see are bills that are about preferences,” Shaw said.

Impact to other projects

Mike Jerke, the CEO of Southwest Iowa Renewable Energy, or SIRE, an ethanol facility in Council Bluffs, said the bill would impact his ability to connect to the Tallgrass Trailblazer carbon sequestration pipeline in Nebraska, even though he has been able to secure 100% voluntary easements for the project.

The project in Nebraska is operated by Tallgrass and converts an existing pipeline owned by the company into a carbon capture pipeline that is projected to be operational at the end of 2025. Jerke said SIRE has plans to start capturing its CO2 by mid 2026, following the construction of the technology. 

Jerke said even though he has no need nor intent to use eminent domain to connect to the pipeline in Nebraska, HF 639 would impact his project. 

HF 639 requires pipeline operators to carry insurance that would cover any loss or injury that occurs from accidental, negligent or intentional discharges from the pipeline. It also requires pipeline operators foot the bill if landowners have increased insurance premiums because of the pipeline. 

“So apparently, we need to go find a product, an insurance product, who will allow us to do something that would be in violation of the very permit that we’re applying for,” Jerke said. 

Jerke said his project, and future projects in the state, are also impacted by the provision in the bill that limits carbon sequestration pipelines to just a single, 25-year term, without an opportunity for renewal. 

“We’re making a significant investment — we have contracts in place for over $45 million to build the equipment on our site to capture and compress the CO2,” Jerke said. “Apparently, this is going to be, if this were to stand or be signed into law, something that we would only be able to operate for 25 years.” 

Shaw no one would built a house or a business on Main Street if they knew in 25 years, they would have to walk away from the project, without the ability to sell it, or renew the permit. 

“This fall, Iowa will no longer be the world’s most profitable place to turn corn into ethanol,” Shaw said. “The moment Tallgrass starts operating and the plants hooked up to Tallgrass in Nebraska can sequester, the premium they will get in the market … will make Nebraska the most profitable place in the world to produce ethanol.” 

Shaw said this will impact Iowa facilities, not just in terms of canceling planned carbon capture expansion, but could also lead to the closure of several plants. 

Vic Miller, a Fayette County farmer and member of Iowa Corn Growers Association, said the bill impacts the “very viability” of corn growers.

Corn farmers are projected to produce nearly 16 billion bushels in yield this year and have around 1.8 billion in carryout, or grain left after demand, according to U.S. Department of Agriculture data analyzed by National Corn Growers Association.

“It’s ahead of anything we’ve ever raised,” Miller said. “Once you get above that 2 billion mark in carryout, basis widens, everything just goes south.” 

Corn farmers and the ethanol industry see entry to ultra-low carbon markets, most prominently the sustainable aviation fuel industry, as the best opportunity to expand the market. 

Those in support of the bill, including the Iowa chapter of the Sierra Club and the Iowa Citizens for Community Improvement, have been celebrating the passage of HF 639. 

A press release from Bold Alliance and the Iowa Easement Team said the bill does not fulfill landowners’ primary goal of banning eminent domain for CO2 projects, but does “protect landowners” via the new insurance mandate and impact the Summit project via the change in definition of a common carrier.

“We still have work to do to ensure Iowa bans eminent domain for carbon pipelines,” Jess Mazour with the Sierra Club said in the release. “We will be back in 2026 to fight for a ban …. This will be a leading election issue.” 

The Free Soil Foundation, a citizen group opposing CO2 pipelines, urged Iowans to call the governor’s office and voice support for the bill, which it called “a major step forward in protecting Iowa landowners and preserving constitutionally-protected property rights.”

IRFA has also been urging its members to call the governor, who has not indicated if she will sign the bill or veto it. 

“What would happen if she signs it? I’m not willing to think about that yet,” Shaw said. “I’m only worried about how we can get Iowans to reach out and say, regardless of how you feel about CO2, this bill has really massive negative unintended consequences that will impact all forms of energy, all forms of economic development across the state.”

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