[Kay Henderson] Ethanol, carbon sequestration, biodiesel, hydrogen.

We'll talk with two experts in these areas about the future of Iowa energy production on this edition of Iowa Press.

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♪♪ [Announcer] For decades, Iowa Press has brought you political leaders and newsmakers from across Iowa and beyond.

Celebrating more than 50 years on statewide Iowa PBS, this is the Friday, May 1st edition of Iowa Press.

Here is Kay Henderson.

[Henderson] Carbon sequestration and geological hydrogen are a couple of phrases you may have been hearing about lately.

Our two guests are sort of experts on these two issues, and they can help us better understand what's behind the policies that your policymakers are debating in Des Moines and Washington, D.C.

Let me introduce our guests.

Back at the Iowa press table is Monte Shaw.

He's executive director of the Iowa Renewable Fuels Association, which represents the state's biofuels industry.

And Ryan Clark is associate state geologist, energy and minerals with the Iowa Geological Survey.

He researches Iowa's potential for carbon sequestration, critical minerals and geologic hydrogen.

Gentlemen, thanks for being here today.

[Monte Shaw] Thanks for having us.

[Ryan Clark] Thank you.

[Henderson] Joining our conversation is Erin Murphy of the Gazette in Cedar Rapids.

[Erin Murphy] Monte, we want to start with you because we're fresh this week off a vote on the Federal Farm Bill at the U.S.

Capitol and a measure to require the availability of E15 ethanol year-round was pulled out of that bill at the last second.

There's now a promise from House Republican leadership that they will have a standalone vote on that bill later in May.

That promise has been made before on this.

And as I said, it was in the bill until it wasn't.

What's your level of confidence that that vote will actually take place in the U.S.

House?

[Shaw] Well, we're very confident because and I don't want to get too much into the technical weeds of how the House of Representatives runs, but there's a rule that governs their debates before they bring bills up.

And the rule that was passed actually requires a vote on the E15 package before the farm bill could be sent to the Senate.

So, everyone says the farm bill passed.

The House cannot send it to the Senate until they have an E15 vote.

That's different from all these other times that you've referred to where Lucy's taking the football and yanked it away from Charlie Brown for the last 13 years.

So, we actually feel that there will be a vote, probably May 13th, and we think we're going to win.

[Murphy] Well, and to that, what's the dynamic?

You obviously are talking to congressional members and everybody involved in this.

We're hoping you kind of describe the dynamic involved here.

President Trump has said he would sign that bill if it made it to him.

You actually have some oil companies that are fine with it.

Some of the mid-level ones are against it.

Yeah, yeah.

So, what are the forces at play and what's keeping this from happening?

[Shaw] Yeah.

I mean, right now, because the house is so evenly divided, it's very difficult to pass those rules that govern the debate.

Our challenge has always been to get through the Rules Committee to the floor, not the floor vote.

So, we think once we get a floor vote, will we lose a handful of Republicans that represent these, the foreign refiners that don't like the package that's been put together?

Yeah, we're going to lose those, but we're going to get a lot of support from Democrats.

It'll be, in our opinion, a strong bipartisan vote.

So Big Oil is kind of good with it.

It's truly, truly small.

Oil is kind of good with it.

There's just this small segment in the middle that was kind of gaming the current system for the reform, excuse me, the Renewable fuel standard exemptions that are out there, they were claiming to be small when they're not really small.

And that's the reform that they don't like.

So, they've been gumming up the works.

But you know, AG is for this.

I say 95% of oil is for this.

You know, we have this.

We're waiting for stuff from the Strait of Hormuz.

When gas prices are $4 in Iowa, not California, but Iowa, it's time to do something.

So, I do think there's this feeling that enough of this stuff.

We're going to move this forward.

And I hope so.

[Murphy] And that gets to you before we move on, because we don't want to leave Ryan alone here for too long.

But what's at stake here for farmers and consumers in Iowa?

[Shaw] Yeah.

I mean, so consumers you know, anyone in Iowa knows you can go to a station and you can get E15 for usually $0.15 a gallon less.

It depends.

I've seen it in Waukee at $0.40 a gallon less.

So, you can save money.

That's 30 -- That's $31 million a year.

Last year when it only made up 27% of our gas.

As E15 becomes the new normal that's like okay what's 30 times three.

I'm trying to do it in my head.

You know like $90 million right?

So, we're talking about tens of millions of dollars of savings for families.

That's real.

But then for farmers, it's huge.

It is the one near term market that we can unlock.

Now we're going to talk about probably some other future markets and other tools might unlock.

But the one thing we could do to help farmers right now is allow year-round E15 that could that could grind another two, 2.5 billion bushels of corn that could put corn back in the profitable range.

Farmers don't want emergency payments.

They want markets.

And this is the one that is right there in front of us.

[Henderson] Let's go to the expert, Ryan, and talk about carbon sequestration.

For those who may not be really familiar with it, how does it work?

[Clark] Well, carbon sequestration usually you'll see the acronym CCUS, and it stands for Carbon Capture, Utilization and Storage.

Now, when I'm talking about this in terms of Iowa, I usually toss out the U, the utilization part.

You know, there's only so much pop we can drink and we can use it for refrigerants and a whole lot of other things that industry needs to kind of upscale to catch up.

When we're talking about the volumes of CO2 that we need to capture and prevent from escaping into the atmosphere, it's really all about the storage.

And so, the storage part is literally injecting the liquefied CO2 deep underground, where it can no longer escape.

[Henderson] So, tell me, you mentioned a couple of uses for sequestered, sequestered carbon.

What are some of the other uses?

[Clark] Well, that's the use.

So, I should have started with CO2 is generated through various industrial processes.

Ethanol production, burning fossil fuels for electricity, for example.

And then it's in a gas form.

You then have to capture that and compress it, dehydrate it so that it turns into a liquid form, what's called a supercritical fluid.

So, once it's in liquid form, then you can do things like pipeline it or inject it underground, things like that.

The utilization part was, you know, instead of injecting underground.

[Shaw] So, there are some exciting things happening there.

I mean, I think at this point they need to scale up.

But so, when you're doing it like at one plant or something, you don't have a scale.

If that plant goes down, then what are you going to do in in Nebraska, they have a CO2 pipeline that's operating.

[Henderson] Yeah, we'll get to that.

[Shaw] There's already uses being put onto that.

[Henderson] But as policy makers have been discussing this, the reason they're discussing it is because there's a proposed pipeline that originally said it hoped to pipe all this stuff up to North Dakota.

And put it way underground.

Why does it have to be stored underground?

[Clark] You know, that's where we have essentially the space to store all of this material.

And the reason that we're talking about pipelines in Iowa and taking it to other states is because there are some of our neighboring states have already established the geological knowledge that says, we can store this here, these huge volumes of liquefied CO2.

We can do that here.

The problem with Iowa, the reason we're kind of behind the eight ball here, is we don't have that deep geologic knowledge.

I'm here to tell you that I do believe that the evidence that we have at hand suggests that we could do it.

And that's what I would like to see.

So, I think we could do some local storage here.

But right now, what's considered known are these other states.

And so, pipelines are needed to get them to get the CO2 from the sources here in Iowa to those injection sites.

[Henderson] So, what do you look for in an injection site?

[Clark] Well, it has to be below a certain depth.

So about 2,600 or 2,700 feet below the ground is the target depth.

So that the pressure is sufficient to keep that CO2 in liquid form.

If it's allowed to decompress, then it turns back into a gas and then you can't control it as easily.

So, there's that magic depth of about 2,700ft.

Right away.

We only have literally a handful of wells in Iowa that go that deep.

So, we don't really know what's at that depth.

So, we need that depth.

We also need rocks that have enough porosity and permeability.

So, kind of open space that that liquid can then flow into.

And then they can, you know, you can design the system so that that CO2 stays down there forever.

[Murphy] And we are going to bounce back onto possible uses for, for that stuff.

But while we're on carbon sequestration money, I wanted to ask you, because we're also winding down the legislative session this year as, as we sit here and it looks like and this isn't a prediction, because something could still happen after we record, but it looks like at this moment that we will not have any legislation passed regarding property owner rights, eminent domain, and these proposed pipelines.

Your group obviously is very supportive of the pipeline.

I'm assuming no legislation does pass this session.

Does that make this project inevitable?

Is that going to start?

Well, we're going to start seeing shovels in the ground in Iowa.

[Shaw] I mean, that's going to be up to the Iowa Utilities Commission and the investors and all of that.

I do think there's a path forward for the project.

We're also hearing not a lot of movement in the legislature.

Our we've been saying for three, almost four years now that we'd like to see a compromise.

We think the permitting process could be improved.

We think there's some landowner protections and restoration requirements that should be improved.

Most of our plants are locally and farmer owned.

They're landowners too.

And so, we would have liked to seen a bill if it was a good bill, a compromise bill.

But I don't think we're going to see that this year.

We'll see.

We're monitoring that situation.

And I'm sorry, I forgot the -- [Murphy That was it.

Then.

But if a bill doesn't pass, you know.

[Shaw] You know, for us, it's not about one pipeline.

I mean, there is the one project that's gotten the attention.

There's other people that might need to go, you know, 30 miles to get to a sequestration site, whether that's just over the border in Illinois or down the road in Iowa.

If we find that geology.

And so, we just want fair rules.

We would like a pipeline carrying liquefied CO2 to be treated just like a pipeline carrying petroleum, or just like a pipeline carrying natural gas or whatever.

And so that's, that's been our mantra is, is don't take away this tool.

You might say, well, why do you care about it?

The, the, the ability to capture carbon and put it underground, you know, where it came from, probably before we burned it as a fossil fuel helps lower our carbon score.

And that is what unlocks new markets around the world where they want low carbon fuels.

Now, some of your viewers probably are passionate about that.

Some of them probably think it's a scam or something.

I don't care.

I want to sell products that my customers want to buy, and there's huge new markets in the marine industry.

The airline industry, airfare, airplanes that are that want this low carbon fuel.

So regardless of your personal feelings about carbon, we just need the tools to compete and to grow this market and to keep us going.

[Murphy] Well, to those personal feelings and passion, I was curious to get your perspective, speaking of this debate, over the past few years, there's been a lot of very passionate property owners who have been at the Capitol asking for strong legislation and strong regulations on these projects.

If not, some of them would like to see the project not happen at all.

I'm curious if you think was there another way to have gotten to this point where landowners rights could have been addressed and not created this friction, this budding, or was this conflict inevitable?

[Shaw] You know, I think there probably could have been.

I don't have a time machine, but I, you know, I might put the blame not where most people would put the blame.

You have.

I would be remiss if I didn't start by saying 75% of the impacted landowners have supported the pipeline project by signing voluntary easements.

So, we do hear from the landowners who oppose the project.

There are some they have the right to have their voices heard.

I'm not denying any of that.

But they're not the landowners, right?

They're a small subset of landowners.

75% have signed voluntary easements.

I think I could put 2 or 3 things in a package, and if it was given a free vote, no arm twisting, no poison pill amendments.

I think we could have it be passed by the House and the Senate and go to the governor.

That's what we were hoping for this year.

It doesn't look like it's going to happen.

We're still waiting to see, but we've asked for people, hey, do you want a compromise that that fixes some of the permitting problems, enhances those landowner rights, maybe put some additional protections in.

And for three years the response has been crickets because they just want the project to die, in my opinion.

And I think they've said it themselves.

So, the finding compromise has been hard.

[Henderson] Ryan, let's talk about another thing, which is called a mineral legally, because it's underground hydrogen, because it's referred to as the mineral rights surrounding hydrogen.

Number one, why is hydrogen underground.?

[Clark] So, you know, recent research has shown that there are certain types of rocks that have been naturally generating gaseous hydrogen all along.

And so, once the rock type was sort of identified, then people started looking around the world where are these rock types?

And it turns out Iowa has quite a large volume of these, of these rock types that can generate hydrogen.

And to add on to that, there are some rocks that are kind of overlying, those that are generating the hydrogen that could potentially trap and seal and accumulate a pool or a reservoir of hydrogen.

[Henderson] So, a few years ago, I heard through a radio station in the Carroll area that there were sort of prospectors in the area trying to see if there was hydrogen underground.

How does that how do you go about finding that it's there?

[Clark] You know, I know of about half a dozen companies that are interested in hydrogen in Iowa.

The only reason I know about them, they're not required to let me know.

But most of these exploration companies realize that, well, they need to understand the geology of this area.

So, they go to the State Geological Survey first, and about half a dozen companies came to us first.

They asked us for any available data that we have insights.

They've even come to our core sample facility and take in rock samples of existing core that we have that they can run analyzes on to kind of give them some of that baseline information.

And once they have that, then they start building their models and kind of figuring out what are their next steps.

And one of the next steps is doing seismic surveys.

So essentially X-raying the earth from the surface, not drilling a hole or digging or anything.

And, you know, those can be quite expensive.

You know, I'm sure some of the viewers have actually seen some of these in action.

And so, once they put all that preliminary data together, then they've probably gotten to the point where they know I want to drill right here.

[Henderson] So, what is hydrogen used for?

[Clark] My understanding is the near-term market for hydrogen would be for fertilizer.

So that adds another benefit to if we can find it in Iowa, very agricultural state, there's some benefit there.

But in the long term, you know, it's viewed as a clean fuel source.

So, when you add hydrogen into a fuel cell, it generates electricity and its exhaust is pure water.

[Henderson] So how do you get it out of the ground?

Do you build a derrick?

[Clark] Well, you drill.

Yep.

You've got to drill.

In many cases it's going to be pretty deep.

You know, we're talking 3,000 or more feet below the ground.

And you've got to find the right rocks.

So, there's the potential to find a reservoir of hydrogen just sitting there.

Kind of like oil.

And gas is now.

But there's also the possibility of stimulating hydrogen from the right rocks.

So, you would still have to drill into them.

It you know, lab experiments show that you can just inject hot water into these rocks and they will generate hydrogen almost on demand.

So, we see that as an option too.

And nothing has been proven yet.

There has not been any hydrogen production from geologic sources in the United States to, to this date.

But there has been some active exploration in Iowa and in Kansas.

[Murphy] Ryan, as you have just described, this is this is kind of a very new thing for a in a lot of ways.

We cover the legislature, as we talked about, we have legislation up there moving, not necessarily to the bill itself, although if you are aware of it, I'd be curious your perspective on that.

But more broadly speaking, how important do you think it is for a state to have some kind of regulatory framework for this emerging industry?

[Clark] Yeah, I am very familiar with the bills that have been going through the legislature.

They started last year, actually, and so, yeah, I think it's really important.

You know, you're talking about a brand new industry, an extractive industry that we just don't have a history of, you know, other states like Kansas, for example, that have had a nice long history of oil and gas production.

They have an oil and gas commission, so they have a Department of Natural Resources, a geological survey, and an oil and gas commission.

You know, so they that's an example of sort of a system where you're managing and regulating these different extractive industries.

And that's something that I really do think that we need to really think long and hard about because from what I've been seeing, you know, what's going on now is the private sector is far ahead of where regulation and even where our state knowledge base is right now.

[Murphy] Do the bills that you're seeing, are they headed in the right direction?

Do they have the right idea?

[Clark] I think they're definitely trying to address some of the some of the interesting issues that are going to come up from a new industry like this.

You know, we've got we've got a really good set of existing laws right now.

And they were probably copied and pasted from some oil and gas regulations a long time ago.

They have not been stress tested.

We again, we've not had an oil and gas industry here that has, you know, put these laws to the test.

So, you know, the first thing I want to clarify is we do have existing laws that are doing the job right now.

You know, one company has already drilled four exploration holes in Iowa for hydrogen, and things have been going you know, the system has been working.

There are some things that I would like to see cleaned up, and I'm sure the DNR would like to see cleaned up.

So, to clarify, the Department of Natural Resources is the current regulatory body that handles any exploration, drilling of any kind.

The Iowa Geological Survey is non-regulatory.

Our job is to provide the citizens and the lawmakers of Iowa with geologic knowledge.

So, the reason I'm familiar with these bills is I've had several legislators reach out to me over the last couple of years asking for asking for my opinion on some of these things.

[Henderson] Monte, one of the things that has been introduced in the past few months is the idea of taxing these things that are being extracted from Iowa liquid carbon and hydrogen.

Is that a good idea?

[Shaw] Well, I can only say we're not involved in the hydrogen aspects of this.

So, I don't really have any opinions on that bill or how that industry, a lot of states do have what they call severance taxes, but a lot of those are when the state has claimed ownership of the minerals, and Iowa's does not claim state ownership of the minerals that that that's the property owner.

So, I but I'm not an expert in that.

So, on the CO2 side, I would like to see us get a system operating before we try to tax it out of existence.

You know, if we have a CO2 pipeline, it's probably going to be the largest property tax payer in that in that county right off day one.

So, if you want some property tax reform, maybe we need to do some things to create some new property tax payers.

And then, you know, we're putting it down in there.

So, it's not something that's being extracted and then sold.

So, I'm not a fan of starting there.

I would like to start with permitting reform and landowner protections and see if we can get these industries going, because it then attracts other investment.

The pipeline in Nebraska, I mentioned now that they're collecting it from multiple plants into what we would call a commercial scale, quantities of CO2.

They there's already a $2 billion investment coming in from Japan to not sequester or store the CO2, which some of it would be.

But this company will take it out and actually convert it into a green fuel, actually using hydrogen.

So, you can you can take hydrogen and CO2 and actually make what's called a methanol.

But in this case, it would be a renewable methanol.

They call it green methanol.

And there's a lot of interest around the world in the shipping industry and other places for that fuel.

So, if we can get this project going in Iowa or other projects, I think you're going to see the entrepreneurship come out and these new industries develop very quickly because CO2 has value to the environment if you store it.

But there's also opportunities to turn it into renewable chemicals and renewable fuels that could displace other things that are emitting pollution.

[Murphy] The clock winds down here before we run out of time, we wanted to ask you about the biodiesel industry has had a tough year.

What are the kind of summarize, if you could, the major headwinds and what needs to happen to those struggles?

[Shaw] Yeah, 2025 was just horrible for Iowa biodiesel producers.

We had an uncertain federal policy on the Renewable Fuel standard.

The levels didn't make sense.

The tax policy was uncertain because we were changing from the old policy to the new what's called 45Z clean production tax credit.

But the rules weren't out.

So, the whole the whole thing, just the you know, the clutch was pushed in, the brakes were pushed in.

We produced less biodiesel in Iowa last year than for a decade.

And we're the leading producer of biodiesel.

So, some of that federal stuff is starting to get back on track.

There is some legislation, maybe even by the time this this program airs, you're watching it, that maybe we'll move forward.

That would help with a little bit of a production incentive to help bridge that gap while the federal programs get back on track.

But we are number one in biodiesel, and I don't think we want to lose that.

It supports well over 1000 jobs in Iowa's economy.

So, we are looking for a little bit of what I would call bridge support to get through this.

But I think the industry still has a very bright future.

But it got thrown a lot of curveballs that were outside of its control last year.

So, a little bit of help would be would be nice.

[Henderson] Ryan, little less than two minutes left.

Sometimes I think about what's under the Earth's crust is a little bit about what's under the surface of the ocean.

We don't know a lot about it.

The U.S.

Geological Survey is starting to sort of map the aquifers, right.

And what else is underneath the earth that we don't know about, or that you could tell us?

[Clark] Yeah.

I mean, I think the number is more than 80% of Iowans get their drinking water from underground.

And so that's one of the things that, that we are the best, you know, entity in the state to handle is understanding where are those aquifers, you know, what's the water quality in those aquifers?

And if we don't have the subsurface data, we can't answer any questions about that.

[Henderson] What about we've seen some collapses because of old coal mines.

Where are all those maps because people may buy a property and have no idea that there's an abandoned coal mine underneath it.

[Clark] The Iowa Geological Survey that was in charge of scanning and digitizing all of the old coal mine maps.

And then that was when we were part of the DNR.

So, the DNR has an online web viewer where you can go on there and you can see where the, where the, the extent of the coal mine is.

Sometimes there's points that show you where there might be surface penetrations, like an air shaft or a regular shaft, things like that.

Because when you when you see subsidence issues with underground coal mines, it's not that the entire mine has, has dropped catastrophically.

It's usually that one of the surface penetrations just wasn't, you know, plugged up very well.

[Henderson] Monte, last question for you.

About 15 seconds.

Ethanol plants are requesting to use a lot of water.

So, our data centers, is that going to be a competition in the future?

[Shaw] I hope not.

I mean, when you say a lot of I mean, I think, you know, to do the ethanol and even to capture the CO2 and compress it, you're talking about and I, I didn't bring my little note card with me, but I mean, it's like one tenth of 1% of the annual rainfall on a county.

It's not a lot of water.

We need to make sure we're doing that sustainably.

Ethanol plants over the last 20 years have dramatically reduced their water use.

So, I think that can be done sustainably.

I'm not a data center expert.

I have read stories about that.

I've also read they have new technologies that aren't as water intensive.

So, but I do think that's something we want to keep it keep an eye on.

You know, like I said, most of our plants are farmer or locally owned and they like to drink water too.

[Henderson] I'm keeping an eye on the clock and we are out of time.

Gentlemen, thanks for joining us today.

Interesting subject.

[Clark] Thank you.

[Shaw] Thank you.

You may watch this episode and others at iowapbs.org.

For everyone here at Iowa PBS, thanks for watching today.

♪♪ [Announcer] Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation.

[Announcer] The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure.

♪♪ [Announcer] The Bob and Doreen Sheppard Family proud supporters of educational programming seen only on Iowa PBS.

[Announcer] Banking in Iowa goes beyond transactions.

Banks work to help people and small businesses succeed, and Iowa banks are committed to building confident banking relationships.

Iowa banks, your partner through it all.