Open Letter to Congress Calling to Suspend All Funding and Tax Credits to Summit Carbon Solutions and other CCS Projects

 

For the Attention of:

Senate Committee on Appropriations
Senate Committee on Energy and Natural Resources
Senate Committee on Environment and Public Works
House Committee on Appropriations
House Committee on Energy and Commerce
House Natural Resources Committee

Dear Chairmen and Chairwomen,

We are writing to urge the US government to stop subsidizing carbon capture and storage (CCS) projects, which constitute a dangerous and false solution to the climate crisis. The Oakland Institute’s new report, The Great Carbon Boondoggle: Inside the Struggle to Stop Summit’s CO2 Pipeline details the numerous serious concerns raised by the Midwest Carbon Express — the largest planned project in the US and in the world. The Inflation Reduction Act and the Infrastructure Investment and Jobs Act grant billions of dollars in tax credits to finance such projects, which in effect subsidize the fossil fuel and the ethanol industries.

Led by Summit Carbon Solutions, the Midwest Carbon Express intends to build a 2,000-mile pipeline to carry carbon dioxide across Iowa, Minnesota, Nebraska, South Dakota, and North Dakota, to eventually inject and store it underground in North Dakota. The Great Carbon Boondoggle unmasks the billion-dollar financial interests and high-level political ties driving the Midwest Carbon Express and exposes that its investors will be major beneficiaries of the federal 45Q tax credits for carbon sequestration, rather than the people and the planet.

Despite billions of taxpayer dollars spent on CCS to date, the technology has failed to significantly reduce CO2 emissions, as it has not been proven feasible or economic at scale. Crucially, the ability to capture and safely contain CO2 permanently underground remains unproven — a dangerous uncertainty given CO2 must be stored underground for thousands of years without leaking to effectively reduce emissions. This also risks permanently contaminating underground aquifers — poisoning precious drinking water for nearby communities.

To date, CCS has primarily been used to prop up the fossil fuel energy system. In the US, a dozen carbon capture plants are in operation — the majority of which are attached to ethanol, natural gas processing, or fertilizer plants — which generate emissions that are high in CO2. Over 95 percent of the CO2 captured by these plants is currently used for enhanced oil recovery (EOR) — where instead of storing the captured CO2, it is injected into depleted underground oil reservoirs to boost oil production in wells. Furthermore, ethanol is at least 24 percent more carbon-intensive than gasoline and comes from the polluting industrial production of corn. Subsidizing CCS projects like the Midwest Carbon Express will sustain the ethanol industry despite its devastating impacts on the environment and rural communities.

The report further uncovers that if the Midwest Carbon Express is built, residents across the Midwest will bear the environmental, health, and safety hazards associated with the pipeline, including potential leaks and ruptures, decreased property and crop values, and increased violence against Indigenous communities. By contrast, Summit Carbon Solutions and its powerful financial backers — a number of which have ties to the fossil fuel industry — stand to make billions of dollars in profit from project.

Despite constituting false climate solutions, the Biden administration has hailed CCS and carbon pipelines as vital infrastructure to meet climate targets and announced that the US needs 65,000 additional miles of pipeline by 2050. The 2021 Infrastructure Investment and Jobs Act provides over eight billion dollars as federal grants, loans, and loan guarantees for carbon storage and pipelines. The 2022 Inflation Reduction Act (IRA) substantially increases the already abundant 45Q tax credits for carbon sequestration, pouring large sums of taxpayer money into such projects. In Midwestern US, Summit Carbon Solutions, Archer-Daniel-Midlands (ADM), and Navigator CO2 Ventures are currently advancing three major CCS projects and will receive a combined US$40 billion in taxpayer dollars for the projects over the next 12 years. Summit Carbon Solutions itself will be able to claim over US$1 billion in 45Q credits annually — or US$12 billion over a 12 year period.

The 45Q tax credit scheme is subsidizing the fossil fuel and ethanol industries to produce more fuel. Federal funding should be repealed and repurposed to fund proven climate solutions. Instead of bankrolling CCS, taxpayer money should go towards the decisive actions that are urgently needed to address the climate crisis — phasing out all fossil fuels; rapidly and justly deploying clean renewable energy; developing infrastructure and services such as public transport; phasing out of industrial agricultural production; and protecting and restoring forests, prairies, and other ecosystems that naturally sequester carbon from the atmosphere.

We urge you to immediately suspend all funding and tax credits to CCS projects including Summit Carbon Solutions’. Without rapid Congressional action to tackle these costly false climate solutions and massive polluter handouts, more harm will be caused to communities and the climate crisis will only worsen.

Sincerely,

Anuradha Mittal
Executive Director
The Oakland Institute