{"id":35027,"date":"2016-05-25T07:03:00","date_gmt":"2016-05-25T05:03:00","guid":{"rendered":"https:\/\/rss.nova-institut.net\/public.php?url=http%3A%2F%2Fwww.biofuelsdigest.com%2Fbdigest%2F2016%2F05%2F18%2Fentrepreneur-wants-warren-buffet-to-invest-1-billion-in-co2-pipeline%2F"},"modified":"2016-05-23T09:34:56","modified_gmt":"2016-05-23T07:34:56","slug":"businessman-wants-second-life-for-ethanols-leftovers-in-the-form-of-a-1-billion-pipeline-across-nebraska","status":"publish","type":"post","link":"https:\/\/renewable-carbon.eu\/news\/businessman-wants-second-life-for-ethanols-leftovers-in-the-form-of-a-1-billion-pipeline-across-nebraska\/","title":{"rendered":"Businessman wants second life for ethanol’s leftovers \u2014 in the form of a $1 billion pipeline across Nebraska"},"content":{"rendered":"

In one way, Scott Hornafius is like many of those who have come before him: He has a big idea, and he thinks Warren Buffett should take a good look at it.<\/strong><\/p>\n

In other ways, he is far different. One, Hornafius is himself the president of a company, Elk Petroleum, which is trying to wrest some profit \u2014 unsuccessfully so far \u2014 from some Wyoming oil wells. Elk is an Australian company whose U.S. office is in Wyoming.
\nWhile that is worlds away from Omaha-based Berkshire \u2014 one of the world\u2019s largest companies \u2014 Elk\u2019s latest idea is right in Buffett\u2019s power zone: tied to renewable energy and with an economic moat in the form of a monopoly.
\nHornafius, you see, wants to build a $1 billion, 1,000-mile underground pipeline across Iowa and Nebraska to Wyoming. The line would carry ethanol-plant production leftovers in the form of carbon dioxide \u2014 the bubbly stuff in soft drinks. The gas is valuable for use in stimulating production from old oil wells.
\nNow, all Hornafius needs is $1 billion and a pipeline company. Which, in Hornafius\u2019s view, could be where Buffett and Berkshire come in: Berkshire Hathaway is one of the nation\u2019s largest pipeline operators, owning Nebraska\u2019s Northern Natural Gas and Utah\u2019s Kern River Gas Transmission, which move about 10 percent of the nation\u2019s natural gas.
\n\u201cI think Mr. Buffett would be very interested and see it as a sound business proposition,\u201d said Hornafius, who for the past couple of years has been touting his pipeline plan at forums such as the Nebraska Ethanol Board\u2019s conference last week in Omaha.
\nTodd Sneller, administrator of the Nebraska Ethanol Board, said the idea was \u201canother way to increase the ethanol-related product portfolio.\u201d
\nInstead of simply letting the ethanol-production byproduct escape into the air, a pipeline would allow the carbon dioxide to be \u201csold into a new market,\u201d Sneller said.
\nHornafius said there is plenty of incentive to interest investors: It is related to California laws requiring motor fuels to be far less polluting than before. And there is some serious money at stake. The nation\u2019s oil companies operating in California \u2014 think of the major gasoline brands you see on every corner \u2014 are in a race to decrease the carbon output of their fuels.
\n\u201cIt is a live-or-die issue with oil companies in California,\u201d said Hornafius, who has a doctorate in geophysics and structural geology and whose r\u00e9sum\u00e9 includes experience with Mobil Oil Corp.
\nThat\u2019s where Iowa and Nebraska ethanol come in. They are the two biggest producers of ethanol, the alcohol-based motor fuel distilled from corn that oil refiners add to gasoline to lower carbon emissions. Iowa has 42 ethanol plants, Nebraska 25, and both are awash in the corn it takes to make the fuel.
\nBut the ethanol as a fuel additive is just part of the equation, as Hornafius sees it. As part of the distillation process, large amounts of carbon dioxide, or CO\u00b2, are produced. (It is a lot like making moonshine, but ethanol pros don\u2019t mention that very often.)
\nAnd there are ready customers for some of the bubble-producing gas, from beverage makers to chemical companies; North America is already dotted with CO\u00b2 pipelines. There are more than a dozen of them, running in a crooked line from Texas to North Dakota, many of them sourcing CO\u00b2 from natural deposits.
\nThe basic method is to collect CO\u00b2 where it is produced and then whisk it away in a pipeline, just as with natural gas, crude oil or aviation fuel.
\n(Hornafius said there has never been a leak other than from construction crews digging where they weren\u2019t supposed to. He also said CO\u00b2 is naturally occurring anyway, produced by every living organism, although it is considered a greenhouse gas.)
\nBut there are no CO\u00b2 pipelines serving the great Iowa and Nebraska ethanol belt, which runs from western Nebraska almost to Illinois. For most of those plants, the CO\u00b2 is just vented into the air, dollars wafting to the heavens.
\nAnd to Hornafius, that is an enormous waste, because right over in Wyoming, the old oil wells, such as those Elk Petroleum is trying to coax into giving up more crude, need a ready supply of CO\u00b2 to stimulate the last bits that resist primary and secondary extraction methods.
\n\u201cThe main limitation for us is alternatives to naturally occurring sources of CO\u00b2,\u201d Hornafius said.
\nThe U.S. Energy Department recognizes the challenge. The agency said in a paper last year that while \u201croughly 80 percent\u201d of pipelined CO\u00b2 comes from naturally occurring underground formations, currently planned new pipelines using industrial sources of the gas are expected to cut the percentage to 50-50 by 2020.
\nAnd then there is California. The largest market for private vehicle motor fuel in the nation is also home to the strictest motor-vehicle pollution laws in the nation. The way Hornafius figures it, therein lies another opportunity.
\nCalifornia has a low-carbon fuel standard that requires energy companies to reduce the emissions of the fuels they sell in the state. Part of the compliance plan by refiners is to use ethanol, which is considered by the California standards to improve the pollution profile of clear gas. California oil refiners and gasoline blenders, Hornafius said, are already the largest buyers of Iowa and Nebraska ethanol because they are the closest large-scale producers and conveniently linked by railroads.
\nBut Iowa and Nebraska ethanol would make an even bigger contribution to California\u2019s fuel standard if the states\u2019 producers sold their CO\u00b2 to oil wells. That\u2019s because more CO\u00b2 used in oil well stimulation remains sequestered underground than is given off by the fuel produced with it.
\nSo oil refiners that blend gasoline with ethanol whose CO\u00b2 has been captured and reused would dramatically improve their environmental report card with California, which leads the nation with 30 million motor vehicles, according to the U.S. Transportation Department.
\nBut so far, it is still just a dream, with no investors, no contracts, no right-of-way, no government approval for the CO\u00b2 pipeline that would be required to set all the complex machinery in motion.
\n\u201cThere is interest, there are conversations ongoing,\u201d is how Hornafius describes the state of play.
\nAs for Berkshire\u2019s end, Buffett didn\u2019t respond to email requests for comment on what would be a large investment in renewable energy infrastructure. (There\u2019s no indication that he shares Hornafius\u2019s enthusiasm for the project.) Berkshire\u2019s Iowa energy subsidiaries are already the largest wind power producers, and the company has made substantial investments in solar energy, calling itself the world leader, producing enough to supply 255,000 California households.
\nBerkshire\u2019s Omaha-based pipeline, Northern Natural Gas, isn\u2019t aware of the details of the CO\u00b2 pipeline plan but is monitoring industry trends, spokesman Mike Loeffler said. Houston-based Kinder Morgan, the largest U.S. pipeline company and a major stock holding of Berkshire Hathaway, declined to comment, saying \u201cit did not have anything to add about the proposed project.\u201d
\nThe idea comes during a down cycle in the notoriously cyclical ethanol business, with prices down and supply high. The industry has an economic impact of about $5 billion a year in Nebraska, according to an analysis by the University of Nebraska.
\nWhile detractors cite lower gas mileage and federal requirements for how much ethanol must be blended with clear gas to comply with environmental laws, supporters say the business has spawned a science-based, value-added industry that encompasses enzymes used in corn distillation and production of high-protein cattle feed from grain leftovers.
\nAs for objections, they seem to be a given for any major energy-related construction project. Sneller of the state\u2019s ethanol board said CO\u00b2 is not toxic and is benign. Hornafius said \u201cit does seem possible that there would be objections\u201d to the construction of the pipeline across the prairies and inhabited areas of the Great Plains.
\nBut in the end, Hornafius said the market incentives all align: Ethanol producers get a market for their gas, a pipeline company gets to collect a fee to transport it, the Wyoming oil wells get their poke in the ribs and the California refiners get their carbon-friendly ethanol.
\n\u201cBut when you really think about it, Nebraska and Iowa would be the big beneficiaries,\u201d Hornafius said.<\/p>\n","protected":false},"excerpt":{"rendered":"

In one way, Scott Hornafius is like many of those who have come before him: He has a big idea, and he thinks Warren Buffett should take a good look at it. In other ways, he is far different. One, Hornafius is himself the president of a company, Elk Petroleum, which is trying to wrest […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[5572],"tags":[],"supplier":[10769,1072,11236],"class_list":["post-35027","post","type-post","status-publish","format-standard","hentry","category-bio-based","supplier-berkshire-hathaway-energy","supplier-university-of-nebraskalincoln","supplier-u-s-department-of-energy"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/35027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=35027"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/35027\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=35027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=35027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=35027"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=35027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}