Well, surprise, surprise, surprise. Nothing like seeking to finance a project through federal CCS tax creditts, then turn around and use the sequestered carbon for enhanced oil recovery. As the article below notes very down column:
Summit's current focus on sequestration is in part due to the 45Q tax credit program, expanded by the Inflation Reduction Act, which offers $85 per ton of sequestered carbon and just $50 per ton for EOR.
Folks might have been clued in back in March 22 when AgWeek's Jeff Beach reported in Continental Resources ventures into carbon capture with 5-state ethanol project:
CASSELTON, N.D. — Continental Resources, which helped drive a resurgence in North Dakota’s oil industry, is investing in what is being billed as the largest carbon capture project in the world — taking greenhouse gas emissions from ethanol plants and storing it underground in North Dakota.
Iowa-based Summit Carbon Solutions on Wednesday, March 2, announced a $250 million investment from Continental Resources, which also will contribute it's expertise in North Dakota's geology.
In an interview, Harold Hamm, the founder of Continental Resources said the storage area in Mercer and Oliver counties west of Bismarck, is an "ideal place" for carbon storage, a key component of North Dakota's goal to be carbon neutral by 2030.
"We believe that this is the right thing to do for the right reasons, for the environment, for ag, for industry, for the country, and that's why we're here," Hamm said. . . .
Summit says it isn’t asking for any of the ethanol plants to help pay for the pipeline project, instead, it would take a percentage of the premium price that ethanol plants would get in the low-carbon markets, such as California. . . .
While liquid carbon dioxide can be used for enhanced oil recovery, Summit has said that is not in its business plan .
Maybe getting an investor from the oil industry was an advance signal that the times were a-changing. Or perhaps the business model was based on $50 per ton of carbon model to bring with.
From Reuters, via the Star Tribune, Leah Douglas reports in Despite past statements, Summit officials now say its Midwest CO2 pipeline could serve oil industry:
Summit Carbon Solutions, which is trying to build the biggest carbon dioxide capture pipeline in the United States to transport and bury greenhouse gases, has repeatedly pledged its project will not be used by drillers to boost output from oil fields.
But Summit has a different message for prospective clients, including North Dakota's oil sector, according to a Reuters review of state regulatory filings and recordings of public appearances by company executives: If you want to use our project for enhanced oil recovery (EOR), where gas is pumped into oil fields to increase production, just write a check.
The dual messages illustrate Summit's efforts to court broad support for its $5.5 billion project, which could capture as much as 18 million metric tons of CO2 annually from 57 Midwest ethanol plants and store it underground at a site in North Dakota. Part of the pipeline would cross southern Minnesota.
Whether Summit succeeds at its goal to break ground in 2025 and begin operations in 2026 is a major test for carbon capture and storage, a key tool in the fight against climate change but which faces obstacles like unproven scalability and public apprehension.
The ethanol industry wants Summit to sequester its carbon to drive down its carbon intensity and draw lucrative tax credits from state and federal clean fuel programs.
But the oil industry wants to use the pipeline for EOR, reflecting a belief among drillers in North Dakota's Bakken that oil recovery is necessary to reverse the once-booming region's flagging output. North Dakota oil players launched the group Friends of Ag and Energy in December to promote carbon pipelines like Summit's, including through thousands of dollars of radio ads. . .
Summit has long maintained, in both sworn testimony to state pipeline regulators and on its website, that it does not intend to use its project for EOR.
"The Summit Carbon Solutions project will not be used for enhanced oil recovery," the website reads. "Summit does not intend to ship CO2 for use in EOR," the company told the Iowa Utilities Board (IUB) last August.
But more recently, Summit officials have indicated that using the pipeline to ship carbon for boosting oil production is a future likelihood.
"Today, we don't have any shippers who want to ship CO2 for EOR. When that changes, we will likely move it for that purpose," said Wade Boeshans, Summit's executive vice president, at a Dec. 20 event held by Friends of Ag and Energy in Bismarck, N.D.
Summit attorney Bret Dublinske told the IUB in a Jan. 19 filing that the company "does not ultimately control" whether future customers would use the pipeline for EOR.
And Bruce Rastetter, chair of Summit's parent company, Summit Agricultural Group, also said on a North Dakota radio show on Feb. 7 that the company is open to EOR.
Environmental groups generally oppose EOR because of its potential to extend the life of the fossil fuels industry. . . .
Summit has faced setbacks in securing state permits, including in North Dakota, and land easements from some landowners along its route over safety, land rights and environmental concerns.
In a bid to build public support, Friends of Ag and Energy advertised on six North Dakota radio stations between early December and February, according to records maintained by the Federal Communications Commission. Invoices show that in December the group paid a total of $16,366 for 487 ads across the six stations. Invoices for other months were not available. . . .
Summit's current focus on sequestration is in part due to the 45Q tax credit program, expanded by the Inflation Reduction Act, which offers $85 per ton of sequestered carbon and just $50 per ton for EOR.
A shift in that policy could alter the company's priorities around EOR, executives and oil industry players said.
Jeepers, how times change.
Photo: An ethanol plant near Aberdeen. (Joshua Haiar/South Dakota Searchlight).
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