Scott Syroka is a former Johnston city council member.
There’s something missing in the debate over Iowa’s proposed carbon capture pipelines. Too often the discussion breaks down along familiar frames of the pipeline companies against landowners, or labor unions against environmentalists. When we stop the analysis here, we lose sight of what the fight is really about: the role of monopoly power in Iowans’ lives.
To date, no politician of either party is making this connection. Some have gotten close in their critiques of the pipeline companies, but none have highlighted the role of corporate monopolies in enabling these proposed schemes to exist in the first place. It’s strange because, as prominent politicians like U.S. Senator Amy Klobuchar note, history is sitting right there in front of them.
Can you imagine how popular the first Iowa politician to take up this anti-monopoly argument against the pipelines would be? Someone on the side of the people going up against corporate monopolies and all the power and money behind them—no matter how improbable the chances of success? It sounds a bit David and Goliath-esque to me, and if anything’s clear, it’s that people love to root for a David.
Today, the Goliaths consist of three companies: Summit Carbon Solutions, Navigator CO2 Ventures, and Wolf Carbon Solutions. They’re attempting to construct carbon pipelines across the state as part of a sprawling web that would crisscross nearly the entire Upper Midwest.
In Summit’s case, they’re proposing to build the world’s largest carbon pipeline to capture carbon from facilities like ethanol plants around Iowa, pump it across the state and through South Dakota, and then dump it underground in North Dakota. Or it’d be used for ‘enhanced oil recovery’—a bit of technical jargon that means using the carbon that was going to be stored underground to extract more oil instead.
In the cases of Navigator and Wolf, they’re also proposing to build pipelines that would capture carbon from facilities around the state, but instead they’d pump it east across Iowa before dumping it underground in Illinois. (Wolf has said the company doesn’t intend to use eminent domain for any parcel of land in Iowa.)
Why? Well, the companies say one of the reasons is that the pipelines fight climate change by decreasing carbon emissions, which is questionable if we follow the science. Others like the biofuels lobby claim that without the pipelines ethanol will die, which GOP State Representatives Bobby Kaufmann and Helena Hayes made clear is false. Some backers argue the temporary increase in an unknown number of in-state union jobs make the projects worth it.
In reality, it’s math. These companies stand to make billions thanks to your tax dollars subsidizing them—safety concerns be damned.
PROJECTS BACKED BY MONOPOLY POWER
But the pipelines aren’t built yet. How did these companies raise enough money to not only propose such capital-intensive projects, but also spend hundreds of millions of dollars in lobbying and other efforts to try and secure their approval?
This is where monopoly power comes in. Each pipeline company has partnered with at least one corporate monopoly (in some cases, multiple!) on their projects.
These monopolies—which we’ll learn more about—use their power to price gouge us and depress our earnings to make maximal profits, and then funnel money back into politicians, lobbying, and other efforts that ensure their monopoly power goes unchecked. It’s wrong, it’s a morally dubious business model, and it represents the antithesis of truly free and competitive capitalist markets.
Before considering anything else about these pipelines—whether you think climate change is a problem, whether you think the pipelines actually fight climate change, or whether you believe the pipelines will create as many jobs as claimed—we must first address a more basic question.
Should we give corporate monopolies more power over Iowans’ lives?
For me, it’s an automatic no, but perhaps you’re on the fence for whatever reason. To answer our question, we must look at the pipeline companies themselves and then go further to learn about the monopolies backing them.
THE PIPELINE COMPANIES AND THEIR PARTNERS
Let’s start with Summit Carbon Solutions. Summit partnered with billionaire oil tycoon Harold Hamm and corporate monopoly John Deere on its proposed pipeline. That’s the same John Deere that used its monopoly power to keep farmers from repairing their own tractors.
Summit Carbon is an affiliate of Summit Agricultural Group, which self-describes as an “agribusiness operator and investment manager.” An important thing to know is Summit Agricultural Group is led by Bruce Rastetter, the guy who has been “often embroiled in local controversy,” because it turns out people don’t like it when you build large hog confinements that destroy the air and land, forcing them to move.
They also don’t like it when you promise local farmers increased corn prices as part of a proposed project, and then proceed to truck in feed from your own mills–a page straight out of the monopolist’s playbook. Former Davis County, Iowa resident Garry Klicker summed it up nicely: “Everything he told us was a lie.”
Next up, Navigator CO2 Ventures. They describe themselves as a “carbon management company,” which is quite the euphemistic phrase for a company that builds pipelines. Navigator teamed up with the oil giant Valero and the Wall Street investment firm BlackRock on its proposed pipeline.
Now, if those names sound familiar to you but you can’t place why, let me help. Valero is infamous for using its monopoly power to hike gas prices at the pump to record levels even as the price of crude oil dropped. In just the third quarter of 2022, they increased their profits more than 500 percent year-over-year on the backs of consumers.
In partnering with Navigator, Valero wants to profit from a flawed effort to “fight climate change”, which is a real problem as severe as it is because Valero repeatedly uses its monopoly power to block us from taking any serious action that would help fix it — like decreasing our reliance on oil and gas.
Valero perfectly encapsulates the scenario Anand Giridharadas, author of Winners Take All, describes where business and political elites try to take credit for helping fix what their own actions caused. As Giridharadas writes, it’s like “the idea of hiring arsonists to be firefighters because they, I guess, know a lot about fire?”
BlackRock is also infamous for using its monopoly power to screw working people. In the 1980s, now-CEO Larry Fink helped introduce a new asset to gamble with on Wall Street: something called “mortgage-backed securities”. These risky assets led to the collapse of the U.S. housing market that sparked the Global Financial Crisis. When that happened, the Federal Reserve actually hired Larry Fink and BlackRock to fix the mess they helped create.
BlackRock did such a bang-up job fixing things that Wall Street foreclosed on millions of Americans. David Dayen notes in his book, Chain of Title, that these foreclosures ran rife with fraud and were often illegal with no recompense. Wall Street firms, including BlackRock, then bought foreclosed homes at massive discounts before renting them out to the very people they displaced.
More recently, Fox News and the Wall Street Journal have reported that BlackRock is buying up entire neighborhoods of homes and blocking ordinary Americans from purchasing them and building their own wealth.
BlackRock also invested more than $15 billion in Saudi Arabia’s national oil company, Aramco, as recently as December 2021. That’s the same Saudi Arabia that the 9/11 Commission considered the primary source of Al Qaeda funding behind the September 11th attacks. It’s also Saudi Arabia whose government in 2018 orchestrated the killing and dismembering of Washington Post journalist, Jamal Khashoggi, because he dared to criticize government power.
Last, but certainly not least, Wolf Carbon Solutions, who is partnering with Archer Daniels Midland (ADM) on its proposed pipeline. Yes, this is the same ADM that has faced multiple lawsuits from other ethanol producers for allegedly using its monopoly power to control U.S. ethanol market prices.
ADM’s competitors said its actions violated Section 2 of the Sherman Act, which makes it illegal to monopolize. In her book, Monopolies Suck, expert Sally Hubbard writes, “Sherman Act Section 2 is long neglected, and in fact, it’s so underenforced that most Americans think illegal monopolization is just the way business is done.” No doubt, that thinking infected judges like the one who eventually dismissed the case against ADM.
As we can see, in the case of each proposed pipeline, it’s monopoly power behind them all.
The same monopoly power that restricted the right of Iowans to repair their own tractor in Kossuth County is the same monopoly power that depressed the price of ethanol that Iowans rely on in Clinton County.
It’s this monopoly power that exploits us, extracting what are essentially private taxes to fund the pro-pipeline efforts that Iowans strongly oppose. The irony would be funny if it weren’t so tragic.
BATTLE MOVING TO IOWA UTILITIES BOARD
The bad news for the pipeline companies is Iowans aren’t stupid. As a result, the companies are struggling to convince enough people whose land the pipelines would cut through to voluntarily sign over their property rights. That’s incredible, considering the pipeline companies use textbook monopoly power tactics to try and coerce Iowans into doing so, as reported by others like Democratic State Representative Sharon Steckman.
Without Iowans’ land, the companies can’t build, which means the landowners’ refusal to sign is a threat to these companies’ potential windfall profits.
Now, two of these companies (Summit and Navigator) are turning to eminent domain to push their pipelines through. Eminent domain is the ability of governments to take private property if there’s a public benefit and just compensation is provided.
For example, in the aftermath of the September 11th attacks, the federal government used its eminent domain power for federal agencies’ office space lost when the World Trade Towers collapsed.
Obviously, this is tremendous power that should be used extremely sparingly so as not to be abused. Unfortunately, the pipeline companies don’t agree. At least two of the three want the Iowa Utilities Board to transfer the public power of eminent domain to them – private companies.
The Iowa Utilities Board—with its three members appointed by Governor Kim Reynolds—now holds the power to approve or reject the pipeline companies’ requests to use eminent domain starting later this year.
The Iowa Utilities Board will consider arguments about pipeline safety, environmental impacts, job creation, crop yields, and more. These are all valid, yet they miss the point.
If Iowans are free because we have agency over our own lives, then what are we if the Iowa Utilities Board hands eminent domain power to corporate monopolies that seek to restrict that freedom?
It seems simple to me, but I’m just a man with a pen.
I know the odds are stacked against ordinary people in this fight, yet I continue to hope. Iowans are still out there, slinging their rocks against the Goliaths like David. And the good thing about being a David is we just need one of those rocks to land—no matter how great the odds against us.