Summit CEO: Carbon Capture Critical

OMAHA (DTN) -- Pointing to some of the struggling economics of the agricultural economy right now, the chief executive officer of Summit Carbon Solutions is making the case that capturing, shipping and storing carbon will help boost farmers' bottom lines.

Lee Blank, CEO of Summit Carbon Solutions, gave ethanol producers at the American Coalition for Ethanol annual meeting an update on his company's plans to build a 2,000-mile carbon dioxide pipeline. The pipeline is expected to capture carbon from 57 ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota.

Blank then showed a video with farmers in South Dakota and Iowa talking about their challenges holding onto their farms and the value that local ethanol plants have provided to stabilize their incomes.

Blank also highlighted a chart showing the decline in U.S. corn exports over the past two decades as a percentage share of world total."

"South America is taking away our exports and it's not going to change." Blank added, "When you think about where the ag economy is heading, we have got to be proactive. We have got to play offense and we've got to move."

Blank also showed a chart stating Summit's footprint will touch more than 21.6 million corn acres, and nearly 59 million crop acres overall.

Pointing to the prospects of the domestic market for Sustainable Aviation Fuel (SAF), Blank said, "It's a massive market," but he noted one of the few SAF facilities operating right now is importing sugarcane ethanol from Brazil because of the lower carbon intensity score.

"That's an industry that is going to grow, and we're not going to get it unless we have our infrastructure in place to go get it," Blank said. "And the U.S. farmer needs us to get this done."

He added, "This infrastructure puts U.S. agriculture on offense."

Summit was initially created to capture the 45Q tax credit for carbon capture and sequestration. The Inflation Reduction Act, signed into law two years ago this week, expanded and extended the value of the 45Q credit. At the same time, ethanol plants are looking to quality for the 45Z Clean Fuels Tax Credit and the Sustainable Aviation Fuels (SAF) market.

As Summit has found, getting permits for carbon pipelines is not easy. Summit has faced organized opposition in multiple states and saw initial permit requests denied.

"Our company is going to be built on permits and we have to go get the permits, and that's what we're currently working on."

Blank said one of the problems with Summit's permits and county meetings is Summit staff didn't adequately explain why such a pipeline is needed.

"We didn't do well as a company early talking about the why," he said.

The American Carbon Alliance, created to help get carbon dioxide pipelines and storage facilities built, last week also pointed to "recent economic reports and layoffs" in agriculture as a reason to create new demand. The alliance stated SAF production essentially needs carbon sequestration, which could add $1.25-$2 to the price of ethanol as the market builds out.

PERMIT STATUS BY STATE

-- North Dakota has completed hearings to reconsider last year's permit denial by the state's Public Service Commission. North Dakota is critical because that's where Summit intends to sink its carbon into the ground.

-- Minnesota will start holding hearings on the pipeline's smaller cut through the state -- about 28 miles. Blank said a Minnesota environmental impact statement classified the pipeline as "benign." "If you can get a benign EIS in Minnesota, that says a lot," he added.

-- Nebraska doesn't have as stringent rules as other states. Blank said the process is much shorter in Nebraska, which is one reason there hasn't been as much activity there yet. "We will strategically get going in the state of Nebraska once it's time but we really do have a longer runway in Iowa and South Dakota than we will in Nebraska," Blank said.

-- Iowa will require a "restart" following three months of hearings in fall 2023. Summit has technically been issued an order for its permit with the Iowa Utilities Board. But Summit expanded its project to add 340 miles to connect more ethanol plants.

-- South Dakota voters in November will vote whether to support Senate Bill 201, a law Gov. Kristi Noem signed into law in March. The bill created more county and landowner protections, but also clears a pathway for pipeline permits to be approved. Opponents want SB 201 rejected, which keeps Summit more in limbo. Blank said Summit supports SB 201 and wants voters to pass it. So far, Summit has not refiled for a new permit after the state's Public Utilities Commission voted to reject its first permit application last year.

Blank said some of the landowner conflicts in South Dakota have led him to hold his own meetings with landowners who are opposed to the project. "It's a very much a process of moving through the state to find the most accommodating route." He added, "We're having great success in South Dakota working with the landowners."

Summit still has a timeline for pipeline construction to begin in 2025 and operations to start in 2026.

Also see, "Ag Secretary Vilsack Promotes Ethanol as Key to Sustainable Aviation Fuel Amid Policy Debates,"

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Chris Clayton can be reached at Chris.Clayton@dtn.com

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