SIOUX FALLS, S.D. (KELO) — South Dakota could lose its largest proposed economic development project if the carbon dioxide sequestration landscape doesn’t change, Gevo’s chief executive officer said this week.
“If we don’t have resolution, say, in six months, I think I better move to another state. That’s what I think. I need to have a line of sight that it’s gonna happen for real,” Dr. Patrick Gruber, the CEO of Gevo, said Monday in KELOLAND News interview.
Gevo, based in Colorado, plans to build a sustainable aviation fuel facility near Lake Preston. Governor Kristi Noem has called the plan the largest economic investment in the state’s history. The project is called a Net-Zero 1 facility.
Gruber said the investment as of Oct. 30, would be at least $1 billion.
But it’s unlikely that investment will happen without a carbon dioxide pipeline that will transport captured CO2 for sequestration, Gruber said.
Producing sustainable aviation fuel (SAF) from carbohydrates, via ethanol, is the most cost effective way and it also has the lowest carbon footprint, Gruber said.
The South Dakota Public Utilities Commission has denied two permit applications for CO2 pipelines. Summit Carbon Solutions has said it would re-apply. Navigator announced in October it canceled its proposed CO2 project. Both projects would transport CO2 captured at ethanol plants and other sites for burial. Summit would bury CO2 in North Dakota. Navigator would have buried CO2 in Illinois.
Gevo planned to work with Summit as CO2 from the plant would be transported in the Summit pipeline. The plant site would include an ethanol plant and a hydrocarbon plant.
Gruber said Gevo has already invested at least $100 million in the state and wants to stay here. Yet, the existing landscape makes it more difficult to secure investors, he said.
“We have looked at other places. It’s our obligation…,” Gruber said. “People want to go where the economics are best. If the economics are best in an another state, then that’s where we have to go, to the other state.”
Gruber said there is worldwide demand for carbon abatement. The marketplace and government policies are rewarding products and producers for reducing CO2.
The reward can be several cents a gallon for fuel.
CO2 pipelines and sequestration have met resistance in South Dakota, but it’s part of the future of carbon abatement and renewable and sustainable fuel, he said.
“People need to understand this ship has left. It has left,” Gruber said. “Sequestration is going to happen. Does South Dakota want to participate or not? That’s it. That’s a fair choice for everybody.” The choice does need to be made with a full set of information, Gruber said.
While the future of CO2 pipelines is critical to Gevo, Gruber has been dealing with another issue that has hampered investment.
The aviation fuel industry is still waiting for the federal government to determine a model that applies to its industry.
The Argonne GREET model applies to transportation fuel and includes all methods of carbon dioxide abatement, Gruber said. If aviation fuel is placed under the Argonne GREET model that would include all ways of reducing carbon, including sequestration of biogenic carbon, he said.
The answer to a model should come in December, Gruber said.
Gruber said there is a belief by some around the world that row crops should not be used to produce sustainable aviation fuel. Ironically, that’s influenced by European environmentalists which grandfathered themselves in to allow row crop use. There is work being done to fix that, he said.
Gevo would benefit from a CO2 pipeline but so would the state’s farmers and ethanol plants, he said.
Carbon index (CI) scores are tied to how much carbon is produced and removed from product or the development of renewable fuel.
Capturing CO2 for sequestration is the most cost-effective way to reduce the carbon footprint of fuel, he said.
Capturing CO2 from ethanol plants and burying it, is worth 30 CI points which is applied as reduction in the overall CI score, Gruber said.
If the CI score can be reduced to below 50 that’s worth about 2 cents per gallon ethanol, Gruber said.
“Just imagine ethanol plants that don’t have access to CCS (carbon capture and storage) here. Just imagine what happens to them competitively when other (plants) do?” Gruber said.
Over time, ethanol plants will be less and less competitive, Gruber said.
The CO2 pipeline situation has prompted Gruber to visit the state with the specific mission of talking to people about the importance of CO2 pipelines and sequestration.
Gevo also plans to use locally grown feedstock such as corn for its plant. Gevo has also been working with farmers in the Lake Preston area on carbon capture production. This includes sequestration of carbon in the soils being used by farmers. Gruber said the applications have promise and will help to reduce carbon, but it’s just one piece of the overall plan.
In May, the state Economic Development Finance Authority approved the application for a livestock nutrient management bond by Gevo Net-Zero 1, LLC for up to $187 million.
KELOLAND News emailed Ian Fury of Governor Kristi Noem’s office on Tuesday morning seeking comment and/or an interview with the Governor or Lt. Gov. Rhoden on the Gevo plant. KELOLAND News is continuing to seek comment from lawmakers.