Once Upon a Time in the Midwest

By: Chris Johnson

The classic Western film, “Once Upon a Time in the West,” begins with the brutal murder of a simple homesteader and his family. As the story unfolds, we realize that the man and his murderer were the only ones who realized that there was a fortune to be made on the seemingly worthless desert homestead as a railroad was being built and coming straight through the property. He’d planned to build a waystation in that wilderness – a guaranteed windfall, if he’d survived to see it through.

The physically weak railroad baron in the film, Mr. Morton, who relies on his hired gun to clear the route for his planned railway came to mind as I read this comment from BlackRock CEO, Larry Fink, to the CEOs of companies his firm – the largest – has invested in: “I believe the decarbonizing of the global economy is going to create the greatest investment opportunity of our lifetime. It will also leave behind the companies that don’t adapt, regardless of what industry they are in. And just as some companies risk being left behind, so do cities and countries that don’t plan for the future.”

Film critics surmised that the director, the legendary Sergio Leone, was really telling a story about the death of the Old West, that those who were not preparing for the future were doomed to be left behind while those who understood the changes battled it out in cutthroat fashion.

Mr. Fink’s own plans for the future mirror the film’s antagonist’s: not in stealing land to build railroads to prepare for Westward expansion, but in using eminent domain laws to force landowners to sell so that he can build pipelines across the Midwest to prepare for a coming “net zero transition.”

To be fair, BlackRock isn’t the only investment firm to come up with this scheme, they share the role as they partner with Summit Carbon Solutions and a Canadian company, Wolf.

How do some of the world’s foremost businessmen plan to make money by constructing a massive pipeline across multiple states only to permanently store their product underground? CO2 can, with relative ease, be converted to methanol and especially in its essentially pure form as when it’s captured from the ethanol production process. Methanol is used in a myriad of helpful chemicals and cleaning solutions, as well as being a means of storing energy, a gasoline and diesel additive and a clean burning fuel source in and of itself.

But the market’s demand for CO2 doesn’t touch the amount that ethanol plants produce, so why are these preeminent money-makers spending billions of dollars to build 3,300 miles of pipelines for the purpose of moving this unwanted resource across multiple states?

Because they are taking advantage of Biden’s Build Back Better plan.

Amended to the BBB plot was the “Inflation Reduction Act, ” which includes a tax credit which, “incentivizes the use of carbon capture and storage – a climate solution that the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) have found is likely to play a vital role in efforts to address climate change,”  according to the Clean Air Task Force.

BlackRock, Summit, and Wolf have all submitted proposals to capitalize on this tax credit, by building pipelines which would transport pressurized CO2 from Iowa’s ethanol plants to facilities in southern Illinois and North Dakota where some of it would be sold, and some of it would be permanently stored underground.

CO2 is a biproduct of burning carbon, which means that finding efficient uses for it would only give life to carbon burning industries, which is to say the oil industry and industrial farming. Ironically, environmental extremists are even against storing the CO2 in what they would consider to be a beneficial way, because that would make these industries more efficient and take away from the “green” campaign to smear the industries as environmentally harmful.

Nevertheless, the Biden administration, with its arbitrary goal to be “carbon neutral” – by 2050, came up with this incentive: For each ton of permanently stored CO2, these companies will receive $85 through the 45Q credit. That doesn’t sound like much, but Steve King reports that, “The three projects published on their websites their CO2 sequestration projections. Their projections total 39.6 million tons x $85\Ton = $ 3.366 billion dollars a year. The 45Z credit (alongside the 45Q credit) which is the “clean fuel production credit” is directed toward each qualifying plant and pays up to $ 1.00 per gallon of ethanol produced. Actual ethanol production will be less but, projected ethanol production is calculated by plant capacity, using a ratio of 360 gal\MtTn CO2. Ethanol plant capacity is 14.256 billion gallons = dollars\year at $ 1.00 per gallon with Summit negotiators reportedly claiming 60% of the 45Z credit. The projected annual outlay from the federal government just to the two moguls is $ 8.127 billion with Wolf picking up the remaining $ 3.793 billion. The total share for all the ethanol plants, contracting with the three CO2 pipeline companies, is projected to be   $ 5.702 billion. The total annual projected reckoning for the American Taxpayer for these three projects is $17.622 billion per year.”

Returning for a moment to our movie, if Mr. Fink is Mr. Morton, former congressman Steve King is the “Man with a Harmonica.” Or at least, the carbon capture opponents hope so. Mr. King is heading up a coalition consisting of those from both the left and the right, who are opposed to the scheme for many reasons. Some resist the proposed use of Eminent Domain laws to force landowners – sometimes multigenerational – to sell the property the pipeline would go through. Some are opposed to the idea of a highly pressurized pipeline running across the country. One such pipeline burst in a tiny village in Mississippi in 2020, causing 45 people to be hospitalized. As mentioned above, some on the left don’t want the plants to become more efficient, lest they lose their talking point that they are harming the environment. But many are opposed to the idea of giving up the tax revenue from the largest monetary funds in the world just for the sake of shooting CO2 into the ground.

In the film, it’s the no-named “man with a harmonica” who foils Mr. Morton’s plot. In the real world, Mr. King and his allies have a much more tangled mess to unravel. Fink’s scheme has the support of well-placed, highly connected advocates throughout state and federal government.

To quote the New York Times, “Powerful figures from both parties have signed with the pipeline companies, including Terry Branstad, [Governor] Reynolds’s predecessor, and Jess Vilsack, the son of another former Iowa governor and the current Democratic secretary of agriculture, Tom Vilsack. Agriculture giants like John Deere and A.D.M. have invested in the efforts.”

And from Mr. King’s view, “For two back-to-back sessions, the Iowa Legislature willfully and intentionally slow-walked every piece of legislation that might have protected the property rights of those in the path of Rastetter and Fink. Two legislative sessions ended with the adjournment, “sine die”, without a single piece of property rights protection legislation receiving serious consideration in the Iowa Senate.

“The Senate did find the time and interest to confirm two of Governor Reynold’s hand-picked appointments to the Utilities Board. These two, unvetted fast tracked appointments, are now vested with the power under Iowa law to confer eminent domain authority. They would insist they will get up to speed, read and listen to both sides, and make an unbiased objective decision. We already know their decision. The rest is a charade orchestrated by the “Puppeteer of the Prairie” and the “Wizard of Davos” who plan to bulldoze their way through farms and property rights in five states.”

In the previously quoted letter to CEO’s, Larry Fink asked them these questions: “How are you preparing for and participating in the net zero transition? As your industry gets transformed by the energy transition, will you go the way of the dodo, or will you be a phoenix?”

Either way, it’s clear he means to see the industries die. Asked in a podcast interview what people could do to help, Steve King says the best hope is in a Supreme Court decision, and he asks for prayers for that effort. To follow the story as it continues to develop, you can also check out freesoilcoalition.com.

 

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