Solar panels gone; Gevo still in South Dakota - KELOLAND.com

Solar panels gone; Gevo still in South Dakota

SIOUX FALLS, S.D. (KELO) — The removal of solar panels from a site earmarked for a sustainable aviation fuel plant near Lake Preston does not mean Gevo has left the state or abandoned the project, a company official said on Friday.

Chris Ryan, the chief operating officer (COO) for Gevo said the company is committed to the site, in large part because it believes carbon dioxide (CO2) pipelines will be accepted in the state. Gevo would use Summit Carbon Solutions’ proposed CO2 pipeline to transport carbon from its proposed SAF site. The state public utilities commission (PUC) denied Summit’s application. Summit plans to re-apply for another permit.

“I don’t see us leaving…That site in Lake Preston is such a good site,” Ryan said. Once a CO2 pipeline is implemented the site will be “great” for developing sustainable aviation fuel (SAF), Ryan said.

Ryan’s comments differ from chief executive officer Patrick Gruber’s comments made to KELOLAND News about five weeks ago. Gruber said then“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.”

Ryan said his comments are an amendment to the earlier statements.

Meanwhile, “we do have six other sites in other places we continue to evaluate,” Ryan said. If any of those sites provide a higher degree of certainty for CO2 pipelines that may the site to develop a SAF plant, he said.

Lake Preston mayor Andy Wienk said city officials recently met with Gevo officials to discuss water and wastewater needs.

“I feel like the project is moving forward,” Wienk said.

An engineering firm removed the solar panels from the planned SAF plant site because energy is not being used, Ryan said.

“(Gevo) is not working on the site right now,” Wienk said.

The project is called Gevo Net Zero 1. It would produce 65 million gallons per year of jet fuel and other fuel. It would use sustainably grown plant-based feedstock and also produce corn oil and nutritional products.

No cash received

Gevo’s Net Zero1 project was approved for a $187 million bond under the state’s livestock nutrient management program. The city of Lake Preston has also approved a $500,000 grant to help with the cost of water infrastructure for the proposed plant.

Gevo has not received any money from these bonds, Ryan and an official from the state’s Governor’s Office of Economic Development (GOED) said.

Wienk and Ryan said Gevo has not received any payment from the approved $500,000 grant.

That money would be paid out in steps as the infrastructure project progresses, Wienk said “We don’t do it all at once…,” Wienk said.

The $187 million bond has not been issued, Sarah Ebeling from the GOED said in an email to KELOLAND News.

Also, the bonds are not funded by the state, Ebeling said.

“These tax-exempt bonds do not create a general obligation of the (state) to the project and the bonds have not been issued,” Ebeling said.

The bonds are sold to investors which creates the money Gevo can use for expenses such as sewage and solid waste management, Ebeling said.

“Gevo falls under this program due to their use of byproducts and not because of carbon capture,” Ebeling said.

“Gevo has not received any state money,” Ebeling said, but it has qualified for a state program.

“Gevo was approved for a reinvestment payment of up to $12,294,059 but not to exceed 65% of the state sales/use tax paid on eligible project costs. The reinvestment payment will be made upon completion of the project,” Ebeling said.

The project could potentially qualify for other state programs but the company would need to apply, she said.

Stock price for Gevo is low

Ryan acknowledge the stock price for Gevo is low.

“I think our stock price is low…one of the reasons it’s low is people think we have to use our own money to build this plant,” Ryan said.

Gevo is working with the U.S. Department of Energy for a $1 billion loan to fund the proposed SAF project, Ryan said.

The DOE application is tied to the Lake Preston site, he said.

On Friday, stockinvest.us said “Gevo holds several negative signals and is within a very wide and falling trend, so we believe it will still perform weakly in the next couple of days or weeks. We therefore hold a negative evaluation of this stock.”

CNNBusiness said this: “The current consensus among 4 polled investment analysts is to buy stock in Gevo Inc. This rating has held steady since November, when it was upgraded from a hold rating.”

MarketBeat described Gevo as a moderate buy, similar to some other analyst data, “Gevo has received a consensus rating of Moderate Buy.”

Ryan said about half of the Gevo investors are retail investors of which almost half are day traders. That 50% make up is not ideal, Ryan said.

But he’s confident that stock prices will increase with the success of Gevo’s biogas projects such as its renewable natural gas project in northwestern Iowa. The project generates natural gas from dairy cow manure and injects it into a pipeline for energy use.

Gevo is also working with farmers to better quantify carbon capture in raising crops such as corn, Ryan said.

The CO2 landscape

The opposition to proposed CO2 pipelines has been strong. Opponents have said CO2 projects to not fit the intent of eminent domain laws because these are projects for private gain. Opposition also opposes CO2 pipelines because it says they are a safety risk.

Navigator abandoned its CO2 pipeline proposal that would have run through several states including South Dakota.

Although dozens of meetings in opposition to CO2 pipelines have been held around the state and opponents have advocated successfully for county pipeline ordinances in several counties, there are signs of vocal support for CO2 pipelines.

A coalition called Protect South Dakota’s Ag Future was recently formed to “raise public awareness about the potential negative impacts on the state and its rural communities if we allow a small minority of objectors to continue blocking proposals like the carbon pipeline project. These actions could force current businesses and future development to relocate outside the state or shut down,” a Dec. 7 news release from the coalition said.

Wienk wrote a letter of support for Summit’s proposed pipeline as mayor of Lake Preston. A copy of the letter said the CO2 pipeline would benefit towns along the pipeline. Lake Preston would benefit from the Gevo project, Wienk said. Wienk said the Gevo project help start new housing development in the city.

Wienk said the Kingsbury County board also wrote a similar letter. The local governments are sending the letter to other local governments, Wienk said.

“I think more people are starting to listen, or at least hear…,” Wienk said.

Many opponents “were stuck on eminent farmers rights and eminent domain,” Wienk said. That is an important issue, he said.

But so is the economic benefit to the agriculture industry and rural communities, Wienk said.

Ryan said he’s not 100% certain why the CO2 landscape is experiencing some shifts.

One reason is the proposers of the pipelines are working at correcting some early missteps, Wienk said. There is more explanation about safety and concerns are being better addressed, Ryan said.

Proponents have also become more vocal, Ryan said, which has an influence.

The Argonne model

Gevo and other potential SAF producers would benefit if the U.S. Treasury adopts a policy that states the Argonne GREET model applies to SAF, supports of GREET model said.

Gruber pointed out in November that the Argonne GREET model is important. If aviation fuel is placed under the Argonne GREET model that would include all ways of reducing carbon, including sequestration of biogenic carbon, Gruber said.

Ryan said the Argonne GREET model is important beyond SAF because it take into account the sustainable farming practices in agriculture.

Various agriculture and renewable energy publications have reported on Argonne GREET and the SAF industry as well on its supporters. Recently, a group of 70 companies asked the U.S. Treasury Secretary Janet Yellen to adopt Argonne GREET for SAF.

“Unlike any new carbon-modeling regime that would invite further delay, recognizing Argonne GREET now gives SAF investors a well-settled, durable, and predictable framework for assessing program eligibility and risk without undercutting ongoing and future modeling updates,” the letter said, according to a story published by Progressive Farmer.