Summit Carbon Solutions built its case for a five-state Midwest carbon dioxide pipeline around climate benefits and permanent underground storage. But as the $8.9 billion project collects approvals in some states and absorbs rejections in others, the company’s pitch is drifting toward a different selling point: enhanced oil recovery, or EOR, a process that uses captured CO2 to squeeze more crude from aging wells. That shift carries real consequences for how regulators, landowners, and environmental groups evaluate a project already mired in controversy.
A Patchwork of Permits Across Five States
Summit’s planned pipeline would span five states: Iowa, Minnesota, Nebraska, North Dakota, and South Dakota. The regulatory path in each has followed its own timeline and logic, producing a fractured approval record that complicates the project’s future.
In Iowa, the state’s Utilities Commission issued a pipeline permit to Summit Carbon Solutions under docket HLP-2021-0001 after the company filed required compliance documents. That permit, however, came with continuing conditions that must be satisfied before construction can begin, including safety and engineering reviews. The approval was a procedural win, but it did not hand Summit a blank check to start building.
North Dakota’s Public Service Commission also approved the North Dakota section of the planned pipeline, clearing the route through a state where oil production creates a natural constituency for CO2 infrastructure. The approval there moved faster in part because oil interests saw direct economic upside, a dynamic that would later feed into the EOR debate.
South Dakota told a different story. A state panel rejected a permit for the $8.9 billion pipeline, denying Summit’s route application. That rejection left a gap in the pipeline’s planned geography and raised questions about whether the project could function without full interstate connectivity. South Dakota’s decision also emboldened opponents in other states who had raised similar concerns about land rights and safety.
Minnesota and Nebraska remain pivotal but uncertain pieces of the puzzle. Without a continuous route, Summit must either convince holdout regulators to reconsider or redesign the project in ways that could undercut its original economic and climate rationale. The patchwork of decisions has turned what was pitched as a unified regional climate solution into a state-by-state political and legal fight.
From Climate Tool to Oil Recovery Asset
When Summit first pitched the pipeline, the framing centered on decarbonization. Ethanol plants across the Midwest would capture CO2 emissions, and the pipeline would transport that gas to underground storage sites, primarily in North Dakota. The project leaned heavily on federal 45Q tax credits, which reward companies for permanently sequestering carbon dioxide. That narrative aligned with climate policy goals and gave the project a green sheen that helped in early regulatory filings.
The trouble is that permanent geological storage and enhanced oil recovery serve fundamentally different purposes. In EOR, CO2 is injected into depleted oil reservoirs to increase pressure and push out crude that conventional drilling cannot reach. Some of the injected carbon stays underground, but the primary goal is producing more oil, not locking away emissions. The distinction matters because federal incentive programs offer different credit values depending on whether CO2 is stored permanently or used for oil extraction, and because the climate math changes when the end product is more fossil fuel.
In March 2024, Summit publicly pledged no oil recovery in the Bakken formation, a direct response to environmental critics who feared the pipeline would become a conduit for extending fossil fuel production. Yet that same reporting noted that Bakken drillers want oil recovery from the Summit project. The gap between Summit’s public assurance and the oil industry’s stated appetite for EOR created a credibility problem that has only grown as the project seeks financing and final approvals.
As markets and regulators scrutinize the economics, the tension between storage and EOR has become harder to ignore. Permanent sequestration depends on long-term monitoring, liability management, and stable policy support for climate incentives. EOR, by contrast, offers immediate revenue from additional oil production. For investors and some state officials, the latter can look more predictable, even if it undermines the climate case that originally justified the pipeline.
Why EOR Appeals to Oil Country
North Dakota’s Bakken formation has been one of the most productive shale oil regions in the United States, but output from many wells has declined as reservoirs deplete. EOR using CO2 injection can extend the productive life of these fields by years, making it an attractive proposition for drillers facing diminishing returns. For North Dakota regulators and lawmakers, a pipeline that delivers CO2 to oil country is not just a climate project. It is an economic lifeline for communities that depend on extraction revenue.
That economic argument helps explain why North Dakota approved its section of the pipeline while South Dakota, which lacks comparable oil production, rejected its portion. The states are evaluating the same infrastructure through different lenses. In North Dakota, the pipeline promises jobs, severance taxes, and royalties tied to revived oil production. In South Dakota, landowners and regulators saw mainly risk: construction disruption, property easements, and safety concerns without a clear local payoff.
This geographic split in incentives is reshaping Summit’s strategy. By emphasizing EOR potential in states where oil production matters, the company can build political support that pure climate arguments could not deliver. But that same emphasis alienates environmental groups and complicates the federal subsidy picture, since 45Q credits are more generous for carbon that is permanently stored than for carbon used in oil fields.
Environmental Groups See a Bait and Switch
Environmental organizations have long been skeptical of carbon capture projects that route CO2 toward oil fields. Their concern is straightforward: if captured carbon is used to produce more oil, the net climate benefit shrinks or disappears entirely. The emissions avoided at an ethanol plant get partially offset by the emissions from burning the additional crude that EOR extracts.
Environmental groups generally oppose enhanced oil recovery because of its potential to extend the life of the fossil fuels industry, a position that puts them in direct conflict with the oil drillers who see Summit’s pipeline as a supply line for their operations. Summit’s March 2024 pledge to avoid EOR in the Bakken was designed to thread this needle, but the company has not explained how it would enforce that commitment if third-party operators along the route choose to divert CO2 toward oil recovery.
The lack of a binding enforcement mechanism is the weak point in Summit’s assurance. Pipeline infrastructure, once built, serves whoever can secure capacity and meet regulatory requirements. Unless contracts and permits explicitly prohibit EOR, nothing prevents future owners or shippers from redirecting CO2 streams toward oil fields if market conditions make that profitable. That possibility fuels accusations from environmental advocates that the project is a Trojan horse for fossil fuel expansion rather than a genuine climate solution.
Regulatory and Financial Stakes
How regulators interpret Summit’s intentions will influence not only route approvals but also the project’s financial underpinnings. If agencies conclude that a significant share of the CO2 will ultimately support EOR, they may question whether the pipeline qualifies for the most generous climate incentives. That, in turn, could affect the willingness of investors and lenders to back an $8.9 billion build-out.
State utility commissions also must weigh landowner rights and public safety. Landowners in states like South Dakota and Iowa have raised concerns about eminent domain for private gain, emergency response plans in the event of a CO2 leak, and whether the public benefits justify the intrusion. Those questions become sharper if the project looks less like a decarbonization tool and more like an oilfield service line.
For now, Summit is trying to keep both narratives alive: a climate-friendly pipeline that can qualify for federal subsidies and a flexible CO2 network that offers optionality for oil producers. The unresolved question is whether regulators, communities, and environmental groups will accept that dual identity, or insist that the company choose between being a storage project and an oil recovery asset.
A Decision Point for the Midwest
The evolving debate over Summit’s pipeline is about more than one company’s business model. It is a test case for how the Midwest will handle carbon capture infrastructure that blurs the line between climate policy and fossil fuel support. As states revisit permits, courts hear landowner challenges, and federal agencies refine tax credit rules, the outcome will signal whether projects that rely on EOR can still claim the mantle of climate solutions.
For communities along the route, the stakes are immediate: property rights, local safety, and the long-term character of their economies. For the broader climate effort, the question is whether carbon pipelines become tools for phasing down emissions or lifelines for extending the oil era. Summit Carbon Solutions built its original case on the former. The more its fate becomes tied to the latter, the harder it will be to maintain that promise.
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*This article was researched with the help of AI, with human editors creating the final content.
