Minnkota inks deal with Iowa company on carbon dioxide storage
Leaders say the partnership agreement creates the chance to cooperate instead of compete on a goal they both desire – the reduction of carbon emissions, and the success of rural communities.
GRAND FORKS — Minnkota Power Cooperative and Iowa-based Summit Carbon Solutions have signed a partnership agreement for an ambitious carbon dioxide storage plan in the state.
On Thursday, April 28, leaders of the two companies met at Minnkota’s Grand Forks facility for the event, which was attended by several local business leaders and state lawmakers, including Lt. Gov. Brent Sanford. Leaders say the partnership agreement creates the chance to cooperate instead of compete on a goal they both desire — the reduction of carbon emissions, and the success of rural communities.
“We are joining two of North Dakota’s most prominent industries — agriculture and energy — to substantially lower C02 emissions, while helping preserve American energy security,” said Mac McLennan, Minnkota President and CEO. “If our nation is to stay competitive during the energy transition, it will require multiple states and industries working together. Our hope is that this effort can serve as a blueprint for the collaborative thinking that is needed to drive energy innovation forward.”
The agreement provides Summit access to Minnkota’s 100-million-ton underground C02 storage facility near Center, North Dakota, which is the largest of the three permitted sites in the United States. The two companies will also jointly pursue developing additional storage sites nearby, sites Minnkota says can store more than 200 million tons.
Company leaders say the agreement will speed up the timeline for financing and construction of the pipeline and storage project. Also, working jointly should lend operational flexibility to the project.
Summit is planning to build 2,000 miles of pipeline in five states that will link dozens of ethanol plants, to transport and store C02 underground in North Dakota.
Bruce Rastetter, Summit Agriculture Group CEO, praised North Dakota’s regulatory climate, and said the project to reduce carbon emission for agricultural producers makes sense for rural America. Summit Carbon Solutions operates under the umbrella of Summit Agriculture Group.
“We're excited about it, we're excited about our partner,” Rastetter said. “We have the capital raised to be able to do this. We also feel very good about North Dakota, the work ethic and the people that we are associated with. You can expect us to reflect that as well as we move forward.”
According to a Summit release, the North Dakota portion of the plan is expected to cost about $898 million, which the company says would yield $61 million in taxes paid to state and local coffers. The total construction investment for the project in North Dakota, South Dakota, Minnesota, Nebraska and Iowa is expected to be $3.7 billion.
Rastetter said the project is beneficial to corn farmers, because it provides another opportunity for revenue. Corn sold to an ethanol plant yields the fuel, a byproduct for cattle feed and C02, which is released. But in certain markets — the west coast and soon Canada — low carbon fuel is desirable, and regulated. Storing C02 underground and selling the fuel makes that ethanol plant more profitable, which in turn benefits the farmer, by effectively creating another market for C02, Rastetter noted.
“You’re talking about actually increasing the opportunity for corn farmers because of that market being more profitable for the ethanol plant,” he said.
On its own, Minnkota is working to create a carbon capture and storage project — Project Tundra — which aims to install carbon capture technologies at the Milton R. Young Station northwest of Bismarck. According to the company, the project is expected to cost $1.4 billion. Efforts are underway to explore how to finance the project, and if they bear fruit, construction could begin sometime in 2023.
Sanford said working together on C02 storage can help lower the costs of two expensive projects.
“It's all coming together in this project, (agriculture) and energy together,” Sanford said. “It’s a really exciting day.”