Study: Carbon pipelines would boost corn demand, add nearly $6 billion to South Dakota economy

From a release:

Study: Carbon pipelines would boost corn demand, add nearly $6 billion to South Dakota economy

Estimates show 19 cent increase to local corn basis

ONIDA, S.D. (May 22, 2023) – Proposed carbon pipelines would raise the premium on corn for South Dakota farmers and inject nearly $6 billion in gross output for the state over a 10-year period, according to a study released today.

The report, commissioned by the South Dakota Ethanol Producers Association, seeks to quantify the economic impact of the proposed Summit and Navigator pipeline projects, which together would cross 25 counties in eastern South Dakota and connect to 13 of the state’s 16 bioethanol plants.

Findings in the study demonstrate that a 15 percent increase in biofuel production drives economic growth.

  • An average increase to the corn basis of 19 cents per bushel in South Dakota
  • Increased bioethanol production of 217 million gallons annually
  • Increase of 77 million bushels of corn demand
  • Increase in gross output of $5.92 billion for the state of South Dakota over a 10-year period
  • A total of 7,105 jobs from 2024-2034

“When you increase production at a bioethanol plant, it increases corn demand in the area around that plant,” said Walt Wendland, President of the South Dakota Ethanol Producers Association and President/CEO of Ringneck Energy in Onida, S.D. “When you apply that proven effect to these projects in South Dakota, the results for farmers are dramatic.”

The research, conducted by Dakota Institute in Sioux Falls, estimates the economic impact over the 10-year period from 2024-34 under different scenarios for increased bioethanol production. It looks at areas including employment, personal income, gross economic output and state GDP.

“The economic impact of these projects is significant for the entire state during both construction and operation. Our findings show increased economic activity in construction, retail trade, manufacturing and other industries,” said Jared McEntaffer, CEO of Dakota Institute. “On an individual level, the most profound impacts will be felt in areas near bioethanol plants.”

The Navigator and Summit pipeline projects would collect CO2 captured at bioethanol plants and transport it for long-term underground storage. This process, called carbon capture, utilization, and storage (CCUS), lowers the carbon intensity of bioethanol produced at those facilities.

CCUS allows bioethanol to better participate in low-carbon fuel markets and take advantage of national incentives. The research looked at three scenarios – 10, 15 and 20 percent – for increased bioethanol production in South Dakota. The mid-range 15 percent scenario was deemed the most likely scenario by bioethanol producers.

“Agriculture has changed the fuel landscape in the 21st century through bioethanol, and energy remains the best opportunity for growth” Wendland said. “These projects will have an immediate impact on both bioethanol and agriculture and position our industries for an even brighter future.”


39 thoughts on “Study: Carbon pipelines would boost corn demand, add nearly $6 billion to South Dakota economy”

  1. What a load of tosh. You, producer, might get a $0.19 kick per bushel at the ‘mom and pop’ ethanol plant just down the road, but that is only if you fall within the 1% margin for corn that is just dry enough, for corn that has just the ‘right’ protein yield, the perfect amount of residual starch, and just a pinch of Free Amino Nitrogen. Frankly, I have yet to meet an operator that has not seen their contracts paid without deductions. Truth be told, ethanol plants are akin to meat packers, and we are just the grist that continues to take the grinding.

    1. I can’t think of the last time they didn’t call my corn #1 yellow corn and no dock. What you are saying is simply false.

  2. How does it work?

    Like, does it control the weather or something so socialist crop insurance business plans become relegated to the past?

    For the record, farmers just want to farm. They didn’t pollute our free markets or bring about Monsanto, or lock down the land or foster socialism. Like the rest of us, we’re trying to live what our hand, and hope for a better hand next deal.

  3. That’s all great, but why should a private business purpose be entitled to use eminent domain, which is supposed to be for a public good?

    We allow private companies to use eminent domain to build a power line or a water pipeline because they are necessary to serve the general public.

    Your own posts explain that this benefits private companies and their clients/customers.

    Imagine another example. California adopts some regulation that requires ethanol to be refined in some new way to make it cleaner (I’m not a chemical engineer so don’t worry about the details here). This new regulation requires ethanol plants to build big new facilities, adjoining their current plants.

    Do you think the ethanol company should be able to use eminent domain to seize the neighbor’s land so they can build this addition to their plant? Or, should they have to negotiate a sale with the neighbor?

    Keep in mind – this new addition to the plant is necessary for them to stay competitive in business, and building it will benefit all the SD farmers who sell them corn and will benefit the SD economy.

    It’s an identical argument.

    1. Your comparison of buying neighbors land and building a pipeline are not comparable situations.

      In the former, there is one negotiation where they can freely enter into an agreement or not based on terms etc. On the latter, a few greedy farmers at the end can hold out to extort prices which if given to everyone renders the pipeline non-feasible. Extortion is never in the public’s interest, stopping extortion is in the public interest, and because pipelines have public benefits (safer and cheaper form of transportation), they have been considered public goods regulated similar to a public utility for literally 100 years.

      The opponents who oppose pipelines are nothing more than grifters like Sharpton.

      1. But the pipeline needs to be a public use, usually a utility like water, sewer, electricity, broadband, etc.

        Couldn’t the “greedy farmer” next to the ethanol plant in my scenario also “extort prices” from the ethanol plant? Clearly yes. Yet we do not allow eminent domain – the taking of another person’s property – in that scenario.

        All these posts about how much these pipelines benefit ethanol companies just prove that they are not a public good, they are a private use by a private company. It’s funny to me because they are defeating their own argument.

        1. Public good, not public use. Like electricity. Nice attempt to change words to deceive.

          And nice false comparison between the person not wanting to lose access and use of his property vs the person only giving up an easement.

          Clearly, liars gotta lie. It is what leftists do.

  4. Willing buyers equals a willing seller…pay the farmer what he believes the easement is worth to is how the free enterprise system works. Eminent Domain should be reserved for government, if at all.

    1. What “LAND” is being taken away?

      How many truck loads of dirt will go missing?

  5. ^– Terry nailed it. And a big emphasis on the “if”.

    I’ve often given Bell, Dan and Pat the benefit of the doubt, but if they’re going to stand behind the actions of their mutual client, they might as well start representing cattle rustlers and horse thieves. Stealing land is shameful, no matter the economic benefit. I don’t care if it’s “just” easements. The right to private property is one of the cornerstones of America.

    1. There is always going to be “takers” and the “taken.” Watch who is standing at this trough on this one .

    2. You are smarter than this. I never thought you were an unthinking ideologue. It is unbecoming of libertarians, they know the fights to fight and understand easement is not loss of property.

      1. If the farmer was planning for a future structure on that easement, then it sure is a loss of property. You can’t put a building over a pipeline.

      2. At least this “unthinking ideologue” can sign my name to my ad hominem attacks, ya pigeon-hearted recreant. 🤪

        As someone below pointed out, loss of usefulness of property is tantamount to loss of property. Just because it may be used as cropland today, it’s nobody’s business but the rightful owner’s what it’s used as tomorrow.

        1. That should be “above”, not below.

          OK fine — when it comes to spacial reasoning on WordPress forum comments, you may refer to me as an unthinking ideologue. 🤣

  6. Sounds to me like a lot of money is going to be made because of this pipeline and I would guarantee you not one 10th of one percent is going to landowners. I dealt with the Keystone XL people, and I found one thing to be true if their mouth was moving they were lying

  7. The other issue is has this sequestration been tried before.? With what long term effects? No one has seen fit to answer..

    As long as other nations continue to increase carbon emissions, anything the US does makes really very minimal difference. Then why the push????

  8. Walt is spot on. We built 3 shuttle losing elevators in central South Dakota. Every one documented a 20 cent or better price increase per bushel. Ethanol not only does that but also allows farmers to participate in additional profits as equity owners. Capturing carbon is not only the right thing to do but will also increase owners return on investment. There is no downside to carbon capture.

    1. “There is no downside to carbon capture.”

      Until something goes catastrophically wrong.

      1. If’s and but’s drive me nuts…

        If the sky falls tomorrow then does anything really matter? No, but until the sky does fall we should do what we think is best with the knowledge we have at hand.

      2. There is no downside to millions of cars on the road — Until something goes catastrophically wrong.

        There is no downside to nuclear power lines being harnessedt — Until something goes catastrophically wrong.

        There is no downside to using space shuttles — Until something goes catastrophically wrong.

        There is no downside to the discovery of electricity — Until something goes catastrophically wrong.

        There is no downside to postal employees sorting mail — Until something goes catastrophically wrong.

        and on and on and on.

  9. This is 100% about the money and has nothing to do with “saving the environment” or reducing pollution. In fact ethanol increases pollution.

  10. There is no downside to millions of cars on the road — Until something goes catastrophically wrong.

    There is no downside to nuclear power lines being harnessedt — Until something goes catastrophically wrong.

    There is no downside to using space shuttles — Until something goes catastrophically wrong.

    There is no downside to the discovery of electricity — Until something goes catastrophically wrong.

    There is no downside to postal employees sorting mail — Until something goes catastrophically wrong.

    and on and on and on.

  11. The people who want to ban fossil fuels and get rid of gas stoves have to be ecstatic to have so many unwitting people helping their endgame by banning the most efficient delivery and safe mechanism of fossil fuels and natural gas to consumers: Pipelines.

    I grew up where everyone had either a propane tank or fuel oil tank in their backyards. I guess we are going back to that. Will be expensive and beyond the means of the poor and elderly but, when they freeze to death, they can take comfort we have ended eminent domain.

    I’m also looking forward to the increase of fuel trucks on the highways too. Except of course, there are not enough truck drivers. Oh well, just more supply chain disruption, which is working out well for us.

    1. For the record, a lot of us are pro-pipeline but anti-eminent domain. I’d personally love to see the economic development the pipeline promises to bring, but I will NEVER support using the force of government to coerce a landowner into letting it cross their land. It’s immoral.

      This is America. We are supposed to err on the side of individual rights. The notion of “the greater good” is a truly noble pursuit, but when that pursuit is applied with force, it becomes a facet of collectivism. I’m going to risk sounding like a follower of Brother John Birch here, but, this is essentially communism.

      1. Gideon, to claim to be “pro-pipeline” and oppose eminent domain is the ultimate in deception.

        Never has and never will be a pipeline that crosses the land of more than 100 landowners be built without eminent domain.

        Libertarians used to be principled Americans who fought the hard fights on significant matters. Now they are paper tigers pandering by fighting on bromides and sound bites and “immorality.”

        Of course, the integrity of the high minded like Mr. Oakes won’t reject the existing benefits of the 3 million miles of pipelines already in existence in the US by throwing out their gas stoves, using only electricity from their own solar panels and windmills, not buying gas or diesel transported in pipelines, etc. If it were so immoral and they had the principles they claim to have, they’d do as those who boycott products made with slave labor from China, etc.

        Liars and phonies. How far libertarians have fallen.

        1. More anonymous ad hominem attacks. If you truly stand behind your baseless drivel, then sign your name to it, you coward. Bet you won’t.

          The defense of private property rights is about the most significant matter I can think of, right after life itself. So you can diddle right off with that “paper tiger” garbage.

          1. Renounce all benefits you get from pipelines and I’ll believe you sincere. Otherwise, you are just a typical politicians.

            PS. You need to learn what ad hominem means. I’m addressing directly the issue and pointing out what a phony you are.

            Liar, phony and not so smart either.

            1. Call me whatever names you want. Hopefully it’s therapeutic. At the end of the day, I’m not the one advocating for a practice only slightly better than horse thievery. Sounds like the farmers in Brown County feel the same way about it.

              1. Feelings. Lol. That is what the uneducated substitute for thinking.

                Nice hyperbole to compare it to horse thievery.

                You are an embarrassment to libertarianism.

          2. Pat gives the rules and we follow. Pat allows anonymous postings so get over it. If you don’t like the rules start your own blog. I’m this while mostly agreeing with you. But whining about the rules is very juvenile:)

            1. I’m not whining about the rules. I’ve whined about the rules plenty of times before, to uninterested ears, it would seem. In this case, I’m not criticizing the WarCollege platform, I’m calling out a spineless milksop* who refuses to debate on substance but rather hides behind the cloak of anonymity to fling their proverbial fecal matter then struts around like they achieved some sort of moral victory.

              * Yes, I’m ironically and purposely stooping to their level to make a point.

  12. I don’t know the processes that are involved in creating ethanol. But at first glance of this issue I find myself asking the question, why is this necessary? If there is that much CO2 created to produce ethanol that it has to be captured, then it seems to me there is a lot more energy being put into creating a gallon of ethanol than there is generated by burning that gallon of ethanol. Is this not defeating the purpose?

  13. Liberals, rich heirs, and people opposed to pipelines love to stand “on principle” while also standing on other’s shoulders and the benefits of their accomplishments.

    Pipelines, railroads, highways, and electricity transmission all are critical infrastructure to our economy and well-being. America would be a second world nation without this infrastructure and none would or could be built without eminent domain. Period.

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