No pipeline, no plant.
That’s the word from the CEO of Gevo, the company behind a proposed billion-dollar corn-based jet fuel plant near Lake Preston.
This comes after South Dakota lawmakers passed legislation that brings the viability of a proposed carbon sequestration pipeline into doubt.
Gevo said its alcohol-to-jet-fuel plant is projected to bring upwards of $100 million annually to the Lake Preston area. Former Gov. Kristi Noem called it the largest economic investment in South Dakota history.
But its future in the state is in question.
“For sure we’re going to look at other places, absolutely,” said Gevo CEO Patrick Gruber.
His words come after the Legislature passed a bill prohibiting use of eminent domain specifically for carbon dioxide pipelines.
This caused Summit Carbon Solutions, the company looking to build a pipeline across South Dakota, to pause its PUC application, raising questions over the future of the pipeline in the state.
Gruber said he understands concerns over eminent domain, but he believes this a public energy infrastructure issue. He said although no deal is done, the pipeline is vital to Gevo’s involvement.
“If there’s no hope of a pipeline ever getting there? Yeah, no way. We won’t build that plant. If, on the other hand, we think there’s a chance that eventually it’ll get there within a few years, or five years or something, yeah, that might be okay still. Tolerable. But it’s a big dang deal,” Gruber said in an interview with SDPB News.
Gevo received a conditional loan guarantee from the Department of Energy totaling nearly $1.46 billion for the project. But that loan is dependent on the company proving it can hit certain carbon reduction thresholds. Gevo said to do that, it needs carbon sequestration.
The company has long stressed the importance of the pipeline to the Lake Preston project, but recent actions are backing talk of moving the plant. Gevo bought an ethanol plant in North Dakota with its own CO2 sequestration site.
“We have a great site up there in North Dakota," Gruber said. "There's a large sentiment that just says we should just build it up there and forget it all in, in South Dakota.”
Gov. Larry Rhoden signed the bill into law this session and said there has been no communication from Gevo indicating a move elsewhere.
He said the intent of the bill isn’t to drive away businesses, but to protect South Dakotans.
“I think the people that brought that forward felt that eminent domain was violating their property rights. And, for me, the choice was standing with the property owners and property rights.” Rhoden said.
In addition to the eminent domain issue, supporters of the bill also raised concerns over safety of a CO2 pipeline. The bill ended up passing both chambers with broad support.
“They had to devote their time, their energy. It was physical and mental stress. All of these things that we brought on the people that we shouldn’t have had to walk through," said Republican Rep. Karla Lems, who sponsored the bill, while speaking in support of it on the House floor. "But, since we’re here and we’ve gotten this far, now is the time to do what’s right for South Dakota.”
Gruber said he believes some landowners were misled over the potential dangers of a CO2 pipeline. He said these pipelines are safe, noting they've never been responsible for a death.
"People in South Dakota got played. It's really sad and unfair, but it was compounded by the issues around eminent domain," Gruber said. ""We're going to do our best, because that's what we believe in. We love the people that we've met in South Dakota and that we've worked with around Lake Preston, and the farmers. They're really, really good. I want to see them do better."
As for the future of the project in Lake Preston, he said the company needs to "see how the dust settles."
"This should have been a no-brainer," Gruber said.
