The Green Plains Institute analysis below draws heavily on the EPA emissions data by facility, but correctly, in our view, identifies where CCS makes the most sense in the US. We still struggle with the pipeline distances associated with some of these ideas as CO2 disposal is still a cost for emitters and in any attempt to reduce costs, pipeline distances will be key. We have discussed the opportunity recently for massive blue hydrogen investment (including CCS) to replace industrial heating fuel and this would apply in all of the regions below. Note our conclusions in today’s ESG and Climate report that we expect renewable power installation goals to fall short – requiring more use of natural gas (for power generation or hydrogen production) with accompanying CCS.
The Navigator CCS announcement is extraordinary in its boldness and potential lack of any real chance of economic success. The idea of building 1200 miles of high-pressure CO2 pipe (See exhibit below) to collect small volumes from corn-based ethanol producers and potentially have multiple sequestration sites is extremely expensive and would not begin to be covered by the 45Q tax credit, which would easily be consumed by the compression and pipeline costs alone. If some of the ethanol is making it into the LCFS markets, each ethanol producer that has some material heading that way will want a piece of the pie and if each had to jointly file with CARB, with Navigator, for what would be small portions of the overall ethanol output, the administration might be overwhelming, as would be a chain of custody process which satisfies CARB. Navigator is not an altruist fund and consequently, must see a way to make a return on the idea. This may be based on the hope that LCFS or something like it will spread to other states.