IUB orders Summit to turn over financial details of pipeline

By: - August 18, 2023 10:51 am

The Louis Dreyfus Company ethanol plant near Grand Junction would connect to Summit Carbon Solutions' pipeline. (Photo by Jared Strong/Iowa Capital Dispatch)

Summit Carbon Solutions must reveal the financial aspects of its agreements with ethanol plants to the attorneys for two groups that seek to verify the economic claims of Summit’s proposed carbon dioxide pipeline, the Iowa Utilities Board has decided.

However, the board agreed with the company in declaring that unspecified “critical timing-related provisions” of the contract should be redacted.

The Thursday order follows a dispute over whether the specific terms of the contracts with ethanol plants are germane to the state’s hazardous pipeline permit process. The IUB is tasked with approving routes of such pipelines, but it also must determine that Summit’s project promotes “the public convenience and necessity.”

Summit’s pipeline would span more than 2,000 miles in five states and connect to more than 30 ethanol plants. Those facilities would capture their carbon dioxide emissions and send the greenhouse gas through the pipeline network to North Dakota for underground sequestration.

The facilities would be eligible for generous federal tax credits for cutting their emissions or for producing low-carbon fuels, and they could gain access to new fuel markets. Summit has said it will take an unspecified portion of the new profits.

The company’s witness testimony in pursuit of an Iowa permit claims the ethanol producers might generate 10 to 35 cents of additional revenue per gallon because of the project.

For a facility that can produce 100 million gallons of ethanol each year, that equates to between $10 million and $35 million of additional annual revenue.

A study commissioned by the Iowa Renewable Fuels Association — which supports Summit’s project — had similar findings and said carbon dioxide pipelines have the potential to more than triple the profit margins of ethanol plants.

Because the economic benefits of the project are a consideration for whether it promotes “the public convenience and necessity,” an administrative law judge ordered Summit this month to provide unredacted copies of its contacts with ethanol producers to the Sierra Club of Iowa and the Iowa Farm Bureau Federation.

The IUB partially agreed: “The board finds that Summit Carbon has opened the door as to the economic benefits ethanol plants will receive as part of its proposed project, which necessarily creates a relevancy to the underlying information.”

But the board is allowing the company to redact two provisions of the agreements that it deems irrelevant to Summit’s permit and “determined the harm posed by dissemination would be substantial and serious.”

A South Dakota judge who considered the issue in December came to a similar conclusion that the two provisions “contain time sensitive conditions, restrictions, and obligations that could be used by competitors or opponents to tactically delay the pipeline project.”

The board ordered Summit to provide the contracts with the provisions redacted within two days. The company will use a data-sharing site to disseminate those contracts, where they can be viewed but not downloaded.

Summit requested that sharing provision after an attorney for several counties inadvertently filed more-heavily redacted versions of the contracts in Summit’s IUB electronic docket, in violation of a protective agreement. Those documents were briefly available online to the public on Monday.

The final evidentiary hearing for Summit’s permit is set to start Tuesday in Fort Dodge, although there are pending requests with the board and in district court to delay the proceedings.

The IUB recently published a schedule of witnesses for next week. They are landowners who declined to sign voluntary easements to construct the pipeline who are subject to Summit’s eminent domain requests.

The three who are set to testify on Tuesday are Marcia Langner of Clay County, Jessica Marson of Floyd County and Nelva Huitink of Sioux County.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.