Back in February, Summit Carbon Solutions announced that biofuel maker Gevo planned to ship carbon dioxide from its proposed and well-subsidized biofuel plant in Lake Preston through Summit’s proposed carbon sequestration pipeline. When the Public Utilities Commission nixed Summit’s first permit application for that pipeline last month, Bob Mercer warned us that Gevo would figure heavily in Summit’s next permit push.
Sure enough, Gevo is now saying no CO2 pipeline, no billion-dollar biofuel plant:
We believe that carbon capture and sequestration is going to be the competitive standard in SAF [sustainable aviation fuel] production given the potential economic impact and the measurable reduction of the carbon footprint. So if a CCS pipeline is not available to the Lake Preston Net-Zero-1 plant, this facility will be economically disadvantaged to other locations we are actively looking at to develop across the country. So failure for the Summit pipeline to be built in South Dakota puts our Lake Preston project at severe risk of being relocated to a more advantageous location that has the availability of CCS [Kent Hartwig, comments to Brown County Commission, transcribed from audio in “Gevo Introduces Themselves to the Brown County Commission,” Hub City Radio, 2023.10.03].
Gevo PR dude Kent Hartwig made that threat yesterday to the Brown County Commission, which is one of four counties whose pipeline moratoria prompted the PUC’s spurning of the Summit pipeline. Funny—Hartwig and Gevo didn’t seem to mention that a carbon-capture pipeline was a make-or-break element of its project when Lt. Gov. Larry Rhoden came to help them break ground in September 2022 (although the ground broken a year ago appears to have been entirely ceremonial and somewhat premature, as as of May, Gevo had yet to begin real construction), in December 2022 when they persuaded the state to give them $18.85 million in tax breaks, or in May 2023 when Governor’s Office of Economic Development approved a $187-million livestock nutrient management bond for a company that will run no cattle and produce no livestock nutrients (the state euphemism for cow poop). The Brown County Commission asked Hartwig why they were speaking up now about the cruciality of Summit’s pipeline to their project, and Hartwig hemmed and hawed about working in multiple states but assured the commission that Gevo hasn’t “been shy about” the need for a CCS pipeline and has had conversations with the Legislature “on working towards seeing solutions for getting the pipeline built.”
Governor Kristi Noem said (once, without much follow-up) last summer that she has “always” stood with landowners who opposed the Summit pipeline. But she’s also said (often, with great self-contradictory fanfare) that Gevo is a super-big deal for South Dakota’s economic development. If Gevo makes the Governor choose between landowner rights and a big shiny economic development medal, I suspect she will choose the latter.
Oh no! The earth will keep spinning…
You can buy gevo stock for $1.10 if you like bet’n.
I’m still not convinced that natural gas turned to corn/soybeans turned to fuel is any better than just natural gas directly turned to fuel.
Gevo is great with press releases, memorandums of understanding, and off take agreements. Not so good with actually doing anything. Many moons ago they proposed retrofitting an ethanol plant in Redfield to produce isobutanol. It never happened. Recently CEO Patrick Gruber stated that Gevo was looking to conserve cash and retrofitting existing (ethanol plants) rather than building a greenfield facility like Lake Preston. In other words, looking for an excuse to bail out. Another thing Gevo is great at is incinerating investor cash.
Was Gevo registered as a foreign corporation? Seems like all ethanol plants related to Summit were registered as foreign, but all came back to same location.
Investing in GEVO’s Lake Preston, SD biofuels to aviation fuel project entails certain risks that potential investors should carefully consider. Here are some key factors to examine:
1. Regulatory and Policy Risks: The viability and success of the project are influenced by government policies and regulations. Changes in regulations concerning biofuels, aviation fuel standards, or subsidies can impact the market demand, pricing, and profitability of GEVO’s product. Investors should monitor policy developments and assess how it could affect the project.
2. Market Demand and Price Volatility: The demand for biofuels, including aviation fuel, is influenced by various factors such as oil prices, consumer preferences, and government mandates. Fluctuations in oil prices can impact the competitiveness of biofuels, while shifting consumer preferences or weakening government mandates could affect market demand. Investors should assess the stability and growth potential of the market to evaluate the project’s long-term viability.
3. Technology and Production Risks: The success of the project heavily relies on the efficiency and scalability of GEVO’s technology for converting agricultural feedstocks into aviation fuel. Investors should evaluate the technological readiness, scalability, and cost-effectiveness of the production process. Any technical issues, delays, or cost overruns could impact the project’s profitability.
4. Feedstock Supply and Price Risks: GEVO’s project relies on securing a reliable and affordable supply of feedstocks, such as corn or other agricultural products. Factors like weather conditions, geographic limitations, competition for resources, and price volatility can impact the availability and cost of feedstocks. Investors should assess the project’s resilience in securing long-term feedstock supply agreements and consider the potential impact of fluctuating feedstock prices on profitability.
5. Financial Stability and Capital Requirements: Assessing GEVO’s financial stability, track record, and access to capital is crucial for evaluating the project. The biofuels industry often requires substantial upfront investments and ongoing capital injections for research, development, and production scale-up. Investors should evaluate GEVO’s ability to secure funding, manage costs, and generate sufficient revenues to sustain the project without significant financial strains.
6. Competitive Landscape: The biofuels and aviation fuel industries are highly competitive, with multiple players striving to meet sustainability goals. Investors should analyze GEVO’s competitive advantages, technological differentiators, and market positioning. Assessing the company’s ability to differentiate its product, secure customer contracts, and withstand competition from existing and emerging players is important.
7. Environmental and Social Considerations: Evaluating the project’s environmental and social impact is crucial for investors concerned with sustainable investments. Assessing the project’s alignment with environmental regulations, potential carbon reduction benefits, and social acceptance within the local community are important factors to consider.
It is important for potential investors to conduct thorough due diligence and seek advice from financial professionals to assess the specific risks associated with GEVO’s Lake Preston project. They should consider their risk tolerance, investment objectives, and diversification strategies before making any investment decisions..
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Yet we can’t afford to pay teachers and we have too much pride to feed kids with tax dollars? These thieves belong in a chain gang cleaning up CAFO dookie. Isn’t KN’s son in law with that outfit as well? Boy, who can we give a $100 million to next? Enron?
This project reminds me of the shrimp farms in Madison, SD. The one that got State dollars 6 years ago and has never been built. Gevo moved some dirt at its Lake Preston site 2 years ago and has done nothing since then. Someone baled hay there this year.
Don’t let the door hit you in the backside on the way out.