SIOUX FALLS — The Colorado company that aims to build a $1 billion sustainable aviation fuel plant near Lake Preston in South Dakota has announced a $210 million deal to buy a North Dakota ethanol plant and use it for the same purpose.
Gevo’s news release on the acquisition calls the Red Trail Energy deal “synergistic” with its plans in South Dakota, but also says the Richardton, North Dakota, facility is “an ideal Net-Zero site for future sustainable aviation fuel.”
The North Dakota facility, which produces about 64 million gallons of ethanol each year, was the first ethanol plant in the nation to voluntarily set up a carbon capture and sequestration operation.
The plant sits atop the Broom Creek Formation, the underground rock formation where Summit Carbon Solution’s proposed pipeline would transport liquified carbon dioxide for storage. That means Gevo would be able to sequester carbon from a jet fuel plant without the aid of the pipeline, if it isn’t built.
Gevo leadership has repeatedly signaled that it could move its home base for jet fuel production to another state unless the controversial carbon capture pipeline is approved. The company now plans to build out a jet fuel operation at Red Trail regardless of what happens in South Dakota. On Thursday morning, CEO Patrick Gruber confirmed in a statement that the North Dakota facility could become the jet fuel home base if the multi-state pipeline project falls through.
“If there is no hope of a CCS pipeline ever in South Dakota, we’d have to consider this,” Gruber wrote. “We currently believe that a pipeline in SD will eventually get done. This acquisition gives breathing room though.”
A Gevo investor relations presentation released Thursday says the North Dakota facility has the potential to increase its carbon sequestration fivefold.
The land has 5,800 acres of “pore space” leases for underground sequestration, making it possible to move from its current total of 160,000 metric tons of carbon sequestered each year to a million metric tons.
All staff will remain at the North Dakota plant, Gruber said, and the company will need to make additional hires to build out a jet fuel operation.
Uncertain future for pipeline a question mark for Lake Preston plans
Gevo’s proposed Net Zero-1 plant in Lake Preston would produce ethanol and transform it into low-emission jet fuel. The company hopes to secure a nearly $1 billion federal loan guarantee from the U.S. Department of Energy to fund its construction, and has spent millions to buy the land and prepare the site.
The company wants to cash in on sustainable jet fuel subsidies on offer from some states and from the federal government to help airlines hit their declared emissions reduction targets.
Gevo would unlock the emission reduction incentives through sustainable, digitally tracked farming practices from its contracted corn producers, a wind energy farm to power its Lake Preston operations, and by connecting to the proposed Summit Carbon Solutions pipeline.
But the pipeline remains mired in controversy across the Upper Midwest. Landowner opposition colored the losses of 11 of the incumbent South Dakota lawmakers ousted in the spring primary election, and sparked a ballot initiative that could undo a legislative compromise meant to maintain a path for its construction while boosting compensation for counties and landowners along its route.
The $8 billion pipeline would capture some of the carbon produced by nearly 60 ethanol plants across the Dakotas, Iowa, Nebraska and Minnesota, and sequester it underground in North Dakota, in the same area of Red Trail Energy’s ethanol plant. Summit hopes to capitalize on federal tax credits incentivizing the removal of heat-trapping carbon from the atmosphere.
Gevo donated $167,000 to support efforts to convince voters to support the pipeline law at the ballot box in November.
Acquisition moves needle on Gevo stock price
Summit was denied a permit from the South Dakota Public Utilities Commission after a similar project, the now-scuttled Navigator CO2 Ventures, failed to earn commission approval. Summit has stated its intention to reapply.
Iowa regulators approved a construction permit for Summit in August. This week, a group of that state’s Republican lawmakers announced a lawsuit seeking to block it.
Regardless of the outcome of that litigation, the South Dakota vote on pipeline regulations or the shape of Gevo’s future operations in Lake Preston, the news of its North Dakota acquisition has accomplished one of the company’s stated goals: boosting its stock price.
Gruber and other executives have spent months complaining of what they see as an unfairly low valuation during earnings calls and investor relations presentations.
Its stock price has hovered between 60 and 73 cents a share for more than a year, putting it at risk of ejection from the NASDAQ stock exchange for long-term failure to maintain a price higher than $1. Last month, the company got an extension from NASDAQ that gives it until Feb. 25 to stay at $1 or above for 10 consecutive business days.
As of 9 a.m. Thursday morning, Gevo’s stock price had jumped 10 cents from the day before, to 84 cents.
This story was originally published on SouthDakotaSearchlight.com.
______________________________________________________
This story was written by one of our partner news agencies. Forum Communications Company uses content from agencies such as Reuters, Kaiser Health News, Tribune News Service and others to provide a wider range of news to our readers. Learn more about the news services FCC uses here.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66e45468f8ea44c29456be499ceeec49&url=https%3A%2F%2Fwww.inforum.com%2Fnews%2Fsouth-dakota%2Fjet-fuel-company-with-plan-for-lake-preston-acquires-additional-site-in-north-dakota&c=3221480150453742398&mkt=en-us
Author :
Publish date : 2024-09-13 03:42:00
Copyright for syndicated content belongs to the linked Source.
