Summit Carbon Solutions Equity Campaign for 5-state Carbon Capture Project Reaches $1 Billion in Commitments

May 13, 2022

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(Forum News Service/Dickinson Press) Summit Carbon Solutions is proposing to build the world's largest carbon capture and sequestration project. Ethanol plants in Atwater and Granite Falls, Minnesota, are part of the project. -- Summit Carbon Solutions announced Wednesday that it has completed an equity fundraising campaign for its carbon capture and storage project.

It has resulted in more than $1 billion in total equity commitments, according to the company.

Summit is proposing a 2,000-mile pipeline to connect ethanol plants in Minnesota, Iowa, Nebraska, South Dakota and North Dakota. The Granite Falls Energy and Bushmills Ethanol plants in Granite Falls and Atwater are among the Minnesota plants that are part of the project.

The company had previously raised more than $600 million from investors including Continental Resources Inc. and Tiger Infrastructure Partners, and the company secured more than $400 million in additional commitments, including $300 million from TPG Rise Climate.

Summit Carbon Solutions recently entered into a joint venture with Minnkota Power Cooperative. That agreement will provide it with access to what it describes as the largest fully permitted permanent carbon dioxide storage site in the United States. READ MORE

Tiger Infrastructure Partners Welcomes TPG Rise Climate To Summit Carbon Solutions Following Completion of $1 Billion Equity Consortium (Tiger Infrastructure Partners)

The U.S. Finally Has A Real Climate Law. Get Ready For More Pipelines. (Huffington Post)

SUMMIT CARBON SOLUTIONS EXPANDS FINANCIAL ADVISORY ENGAGEMENTS (Summit Carbon Solutions/PR Newswire)

Summit Signs Easement Agreements for 73% of Proposed Carbon Pipeline in Floyd County (KCHA)

'Our horses are ready': Native Americans and white farmers form an unlikely alliance to oppose a pipeline in the Dakotas (NBC News)

Summit Carbon Solutions announces progress in North Dakota (Ethnol Producer Magazine)

SUMMIT CARBON SOLUTIONS ACHIEVES MAJOR PROJECT-WIDE MILESTONE: Company has secured easement agreements for more than 50% of the proposed pipeline route across its entire project footprint, or approximately 1,030 total miles (Summit Carbon Solutions)

SUMMIT CARBON SOLUTIONS PARTNERS WITH SOUTH DAKOTA LANDOWNERS TO ACHIEVE MAJOR PROJECT MILESTONE (Summit Carbon Solutions)

Letter: Why I signed an easement with Summit Carbon Solutions (Inforum)

Q&A: Summit exec on status, safety of Midwest CO2 pipeline -- In an interview with E&E News, the chief operating officer of Summit Carbon Solutions explained why he will "sleep much better at night" operating a CO2 pipeline, rather than an oil or gas one. (Politico Pro)

Excerpt from Huffington Post: The Inflation Reduction Act could spur a boom in carbon-capture technology, and all that CO2 will need somewhere to go ... He (Dan Tronchetti) rejected Summit Carbon Solutions’ offer of $90,000 for the right to build there last December, but the Ames-based company “would not accept no.” After months of what Tronchetti described as “harassing” calls and emails, the firm asked state regulators last week to seize portions of his land through eminent domain. The last time a controversial pipeline wanted to take private farmland from unwilling sellers, the powerful Iowa Utilities Board approved.

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If everything goes right, the Inflation Reduction Act could slash U.S. emissions by 40% below 2005 levels this decade by igniting a boom in solar panels, wind turbines, and carbon capture and sequestration. The latter technology, known as CCS, is designed to reduce planet-heating pollution by filtering it out of smokestacks.

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To boot, the U.S. may need as much as 30,000 miles of new pipeline — more than all the gas pipelines in California, New York and Pennsylvania combined — to affordably convey the carbon dioxide the new law incentivizes companies to start capturing. As one of three proposed CO2 pipelines currently being debated in the Midwest, the Summit project could deliver 680 of those miles in Iowa alone.

“As we see more interest from project developers, their No. 1 question will be, what do we do with the CO2? Where are we putting it? How are we transporting it?” said Jessie Stolark, a public policy manager at the Carbon Capture Coalition, a consortium of industry, labor unions, and environmental groups. “There is a tremendous interest in the clean-energy sector broadly to build a lot of things.”

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And, though scientists say the world’s first priority must be to stanch the gush of CO2 into the sky, preventing catastrophic global warming will require essentially vacuuming up a lot of the carbon dioxide already circulating in the atmosphere. The same pipelines and underground storage wells needed for CCS would likely play a critical part in that clean-up effort in the coming decades.

No energy infrastructure is immune to not-in-my-backyard opposition — an issue Senate Democrats say a “side deal” to reform federal permitting laws should help address.

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The main federal tool for promoting CCS is the 45Q tax credit, which allows companies to write off every ton of captured carbon. For years, the dollar amounts per ton were too low to make much of a difference. But carbon had value to oil drillers since the liquefied gas can be injected into older wells to extract hard-to-reach crude.

In 2018, Congress increased the 45Q payouts to $35 per ton for CO2 used for drilling, and $50 for carbon that went into storage.

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“It is now more valuable to store CO2 than to use it for enhanced oil recovery,” said Julio Friedmann, a research fellow at Columbia University’s Center for Global Energy Policy. “That was not quite the case in the last bill. It is unambiguously the case now.”

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Because of that, the most obvious sector to see a swift CCS boom may be ethanol. Refineries that make the corn-based fuel belch gas that’s about 85% carbon dioxide, making it relatively easy to capture. Analysts say 45Q’s old prices were enough for ethanol plants to break even on CCS. The new, higher payouts could translate into pure profit for “ethanol investors, including the asset manager BlackRock and a private equity venture led by the son of USDA Secretary Tom Vilsack, which are proposing to build thousands of miles of new carbon pipelines through the Midwest conveying carbon from bioethanol refineries into underground fields,” The American Prospect reported last week.

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“This project is a $4.5 billion total investment that will create more than 11,000 jobs during construction, 1,100 jobs once in operations, and generate tens of millions of dollars in new property taxes to help communities continue to invest in critical local priorities like education, road construction, public safety, health care, and more,” the company said in a statement.

The climate benefits of other CCS deployments are harder to debate.

With the new incentives in place, U.S. firms could be capturing as much as 200 million metric tons of carbon dioxide per year by the end of this decade, according to Princeton’s REPEAT Project study.

The bulk of the tonnage — some 110 million metric tons — would come from industrial manufacturers of steel, cement or hydrogen.

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“Just based on the economics of clean energy versus retrofitting a plant with carbon capture, we don’t think there’s going to be much, if any, carbon capture in the power sector,” said Robbie Orvis, the senior director of energy policy design at Energy Innovation, a San Francisco consultancy that carried out its own analysis of the IRA’s emissions cuts. “Our assessment shows carbon capture is going to be deployed primarily in the industrial sector.”

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In its own analysis of what the IRA would mean for emissions, the Rhodium Group, a New York consultancy, identified enough potential industrial-sector CCS projects to capture a combined 100 million metric tons of CO2 per year over the next decade. But only between 10% and 15% of the industrial projects with a clear case for CCS sit atop good underground storage. As for the rest?

“It’s going to require pipelines,” Dell said.

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U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration announced in May it would set new rules and standards for CO2 pipelines. The agency, known as PHMSA, is scheduled to unveil its new proposals later this year.

“Pipelines certainly aren’t easy to build, but there’s a lot of precedent for how long it takes to build and permit one,” said Peter Findlay, the principal CCS analyst at the energy consultancy Wood Mackenzie. “It’s more accepted and easier to predict.”

The hard part, he said, would be permitting permanent storage wells.

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Policymakers on both sides of the Atlantic are increasingly betting that a different type of carbon-capture technology, known as direct air capture, could deliver measurable CO2 removals at scale.

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But the $12 billion earmarked for carbon capture in last year’s Infrastructure Investment and Jobs Act, better known as the bipartisan infrastructure law, includes money for direct air capture projects. And the IRA mandates that the most lucrative 45Q credits go to carbon removal.

Every ton of carbon a direct air capture plant sells to an oil driller is worth $130. For CO2 stored underground, the maximum reward is now $180. READ MORE

Excerpt from Summit Carbon Solutions: The company has secured easement agreements for more than 50% of the proposed pipeline route in South Dakota; Summit Carbon Solutions has partnered with 400 South Dakota landowners to sign 650 easement agreements

Summit Carbon Solutions reached another major project milestone as the company has now secured easement agreements for more than 50% of the proposed pipeline route in South Dakota. Partnering with 400 landowners across South Dakota to sign 650 easement agreements, the company continues to make significant progress in advancing its carbon capture, transportation, and storage project and the $4.5 billion investment remains on track to begin construction next year and move into operations in 2024.

“Summit Carbon Solutions and our seven ethanol plant partners in South Dakota are incredibly pleased that landowners continue to embrace our project and support our efforts to maintain a strong, competitive ethanol industry,” said Summit Carbon Solutions CEO Lee Blank. “Securing easement agreements for a majority of the proposed pipeline route in South Dakota represents a significant step in advancing our project and driving growth in our ag economy long-term.”

Summit Carbon Solutions is partnering with 32 ethanol plants across the Midwest, including Dakota Ethanol in Wentworth, Redfield Energy in Redfield, Ringneck Energy in Onida, and the Glacial Lakes Energy plants in Aberdeen, Huron, Mina, and Watertown. The company’s $800 million investment in South Dakota will enable partner ethanol producers to sell their product at a premium in the growing number of markets (both states and countries) that have adopted low carbon fuel standards. Access to these markets is critical to the long-term viability of the ethanol industry that today purchases more than 60% of the corn grown in South Dakota and remains a key driver of commodity prices and land values.

While Summit Carbon Solutions has crossed the 50% mark statewide in South Dakota, there are several counties that have surpassed that pace, including Beadle County (78%), Clark County (86%), Edmunds County (68%), Hamlin County (60%), Kingsbury County (88%), Lake County (75%), and McCook County (100%). In each county where the project is proposed to be located in South Dakota, Summit Carbon Solutions will invest an average of $44 million during construction and pay an average of $650,000 in new property taxes every year once the system is operational. READ MORE