Why is Summit planning to sequester carbon instead of monetizing it?

Nancy Dugan lives in Altoona, Iowa and has worked as an online editor for the past 12 years. 

A small plane with the tail number N215TS has been making routine flights in Alaska in recent months. Its owner is Eagle Wings, LLC, and its Federal Aviation Administration registration shares an address with Summit Agricultural Group in Alden, Iowa.

When looking at Alaska’s carbon initiatives, one may wonder: Is the Summit project part of a larger plan? Might its pipeline one day transport oil or natural gas?

Eagle Wings’ near daily flights are a tenuous, unsubstantiated link, a pipe dream if you will. But even if these flights are unrelated, other evidence suggests that the Summit Carbon project and Alaska’s aggressive push to advance carbon management and sequestration legislation may not be a mere coincidence.

A vote of confidence from North Dakota's governor

North Dakota Governor Doug Burgum was an early advocate of the Summit project. Radio Iowa reported on August 10 that speaking to journalists at the Iowa State Fair, Burgum expressed confidence that the pipeline would advance, despite the state regulator's decision early this month to deny a permit.

“I have every expectation that pipeline is going to to approved in North Dakota,” Burgum said. “There is going to be a reconsideration of that process I’m sure and as they have done in the past, they’ve been super accommodating in routing around. If you’ve got a farmer that doesn’t want a big check for an easement, their neighbor probably does and they’ll keep making adjustments.”

North Dakota already has carbon pipelines, according to Burgum, including one that’s been running for 22 years. “Every one of your kids that’s got an expensive new bike they’re going to tell you. ‘What’s it made of?’ ‘Oh, it’s super lightweight. It’s super strong. It’s made of carbon fiber,'” Burgum said. “Carbon is not the devil element on the periodic table.”

Burgum made those comments at a media availability, not during his speech on the Des Moines Register's Political Soapbox. And his message likely wasn’t directed to Iowans; according to an Iowa Poll by Selzer & Co, conducted earlier this year for the Des Moines Register, 78 percent of respondents oppose eminent domain for the pipeline.

It’s more likely Burgum was sending a message to Summit investors or a potential buyer for the project, which now stands at an estimated cost of $5.5 billion. There's been no public word from Summit about where all this money will come from since mid-2022, when the company announced it had raised just over $1 billion to fund the project.

Summit quickly amplified Burgum’s remarks on its Twitter account, linking to the Radio Iowa story.

Burgum’s comments also demonstrate his knowledge of carbon dioxide and its growing uses, which undermines the case for sequestration.

Appearing on ABC’s This Week with George Stephanopoulos on August 6, Burgum spoke of America’s potential to dominate the energy market. “It’s not just independence,” he said. “It could be American energy dominance.”

Another major Summit Carbon investor

Continental Resources, now privately owned, is a major investor in the Summit Carbon project. In January 2023, Continental’s founder, Harold Hamm, announced plans to donate $50 million to the proposed Theodore Roosevelt Presidential Library in western North Dakota. Hamm is a renowned billionaire wildcatter who recently took Continental private after a $4.3 billion buyout of the small percentage of shares not already owned by the family.

Continental has done business with South Korea-based SK E&S, another substantial Summit Carbon investor, in the past. It announced plans in October of 2014 to enter into a joint venture with SK E&S to develop the Northwest Cana Woodford gas assets in Oklahoma. The companies expanded their agreement in 2017 to include the possible development and export of liquid natural gas.

SK E&S is one of many companies comprising the SK Group, South Korea’s second-largest chaebol, which has faced a multitude of legal problems in recent years, both in the U.S. and South Korea. SK Engineering and Construction, another SK Group company, pleaded guilty to defrauding the U.S. Army in June 2020 and was fined more than $68 million. It has faced myriad other legal battles in the U.S.

Summit's sustainable aviation fuel business

On May 15, Summit Next Gen Holdings, LLC, another Summit Agricultural Group business, announced plans to develop an ethanol to jet (ETJ) sustainable aviation fuel facility, to be built at an unidentified location along the U.S. Gulf Coast. Summit has said it will use Honeywell’s ETJ technology at the facility.

Oddly, according to a May 10 article in ESG Today, Honeywell “announced today the launch of UOP eFining technology, a new processing solution aimed at enabling the production of sustainable aviation fuel (SAF) from captured CO2 at scale.” The company also identified its first customer of the technology, HIF Global, which announced plans to recycle approximately 2 million tons of captured CO2 to produce 180 million gallons of SAF per year.

The same article quoted Renato Pereira, CEO of HIF USA, as saying:

Honeywell and HIF Global together will transform recycled CO2 into a useful feedstock to replace fossil fuels in the very hard to abate aviation sector. At HIF Global, we view Honeywell’s UOP eFining technology as the new frontier in sustainable aviation fuels and we look forward to deploying it to decarbonize over 12 billion air passenger miles per year.

This, too, belies the argument for sequestration. Even if the proposed Summit Next Gen plant will use different technologies and processes than those employed by HIF Global, the existence of alternative, value-added uses for captured carbon dioxide, in industries in which Summit operates, defies logic.

Adele Peters reported for Fast Company on July 12 that a Washington state company called Twelve will build the first-large scale U.S. factory to make jet fuel from CO2. The article further states, “Nearby factories, including paper mills and ethanol plants, will supply the captured CO2.” Peters quoted CEO and cofounder Nicholas Flanders as follows:

Flanders believes that most jet fuel will eventually be made with electricity and captured CO2 instead. Other companies are also beginning to make jet fuel with clean energy and CO2, including Air Company, a New York-based startup. And there’s plenty of CO2 available to use, which Flanders notes is essential: “Really, for the scale of the aviation industry, we need to look to something that’s a virtually unlimited source of carbon.”

If carbon dioxide is rapidly becoming a valuable commodity, then why is Summit advancing a plan to permanently sequester it? Will the perceived need for carbon sequestration soon become obsolete?

Alaska's carbon initiatives

Alaska Governor Mike Dunleavy announced in a May 23 press release that he had signed Senate Bill 48, which “gives the State of Alaska authority to develop carbon management projects on state lands and sell carbon offset credits and to lease state lands for carbon management purposes. The law will generate new revenue for the state, enable more active forest management, and ensure continued public access and use of state lands.”

A flurry of new businesses have sprung up in Alaska since discussions surrounding carbon legislation began in earnest, well before the start of the 2023 legislative session. These include Alaska Carbon Solutions, registered with the Alaska Secretary of State on July 11, 2022, and five related companies, Alaska Carbon Solutions 1-5, registered on July 19, 2022.

In March, Dunleavy lauded the U.S. Bureau of Land Management’s decision to approve “an alternative for ConocoPhillips’ Willow Project on the North Slope that permits three drill pads.” That same press release quoted a different Alaska official lambasting the Biden administration over its decision to prohibit future oil and gas development in nearly 16 million acres in Alaska.

“Once again the Biden Administration is offering up Alaska as a sacrifice to appease the cult of climate extremism,” said Department of Natural Resources Commissioner-Designee John Boyle. “Forestalling development across 16 million acres to atone for an energy project barely 500 acres is emblematic of an environmental fanaticism that should concern all rational people. We Alaskans are left hoping for a future day when federal policy isn’t served with a pitcher of green Kool-Aid.”

The Alaska Beacon documented Dunleavy’s entrenched views on carbon emissions in a January article.

Dunleavy has long rejected the scientific consensus that those emissions are causing climate change, and in his first interview detailing his carbon plans, he made clear that his views haven’t changed. But, rubbing his thumb and forefinger together, he said the growing markets for carbon storage offer the state something it needs: money.

The push to restore U.S. energy dominance

In his new book, Game Changer, released in August 2023, Continental’s Hamm calls for increased oil and gas exploration in the U.S. Last year, Hamm announced his support for Alaska Republican Senate candidate Kelly Tshibaka, former commissioner of the Alaska Department of Administration, who campaigned on a platform to promote expanded oil and gas drilling in Alaska. Tshibaka lost to incumbent moderate Republican Senator Lisa Murkowski in November 2022.

Like Governors Dunleavy and Burgum, Hamm is an outsize proponent of drilling, pushing for changes in energy policy that will boost U.S. oil and gas production.

All of the players in this messy affair have their own agendas, and they may well believe that they are doing what is best for the U.S. But there is entirely too much secrecy. Offtake agreements between Summit and partnering ethanol plants are closely guarded and remain the subject of an ongoing battle between Summit and opposing counsel. What if these agreements allow for alternative uses of CO2, including sustainable aviation fuel? What if these agreements outline alternative plans for carbon capture in the event of a pipeline shutdown or failure?

It is hard to watch affected landowners and other concerned Iowans struggling to make sense of a project that doesn’t add up, pouring their laments into an increasingly fraught Iowa Utilities Board docket. It is hard to read letters from landowners decrying the degradation of farmland they sacrificed so much to secure.

It is also hard not to try to make sense of it all by imagining an oil or natural gas pipeline eventually extending down through Alaska and Canada, into North Dakota, perhaps near the “sequestration” site, traversing further south through the fertile farm fields of the Midwest.

Perhaps, once again, such a thought is merely the product of an overactive imagination, a pipe dream. But if, on the off chance, the powers behind all this believe that such a plan is best for America, then surely they should bring us along for the ride and share that plan with the public.

Final note: SK’s quest to acquire a U.S. ESG company

In late February 2022, the SK Group filed documentation with the SEC related to the formation of SK Growth Opportunities Corp. According to its Prospectus, filed on June 24, 2022, “SK Growth Opportunities Corporation is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination.”

On numbered page 5 of the Prospectus, SK Growth Opportunities Corp. identified carbon capture, utilization and storage as one of its areas of interest.

In a quarterly report filed with the SEC on May 12, SK Growth Opportunities Corp. stated the following: “The Company will have 18 months from the closing of the Initial Public Offering to consummate an initial Business Combination, or December 28, 2023 (or 21 months if the Company has executed a definitive agreement relating to an initial Business Combination) (the Combination Period).”

A June 15 article in Forbes explained the intricacies of these controversial blank check companies, also known as special purpose acquisition companies, or SPACs. “According to SEC rules, SPACs have a lifespan of two years. If a special purpose acquisition company is created but is unable to close the deal with the target company within two years, the SPAC has to be liquidated.”

To date, SK Growth Opportunities has not publicly announced a target company. There has been no public indication that SK is considering acquiring or merging with Summit Carbon Solutions or any another business.

Top image of pump-jack mining crude oil with the sunset is by Zbynek Burival and available via Unsplash.

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