Foreign Company With Troubled Past Buys Into Massive Midwest Carbon Capture Project

Epoch Times – by Beth Brelje

Midwest landowners fighting the construction of a 2,000-mile web of carbon-capture pipelines are upset to learn that the company seeking easements on their lands is funded by foreign investors, including at least one with a troubling history.

Summit Carbon Solutions aims to build a pipeline through hundreds of farms and other private properties in Iowa, Minnesota, Nebraska, South Dakota, and North Dakota.

The pipelines will take carbon dioxide (CO2) produced by more than 30 ethanol plants, liquify it, and send it to North Dakota to be buried in rock about a mile underground.

Epoch Times Photo
The Midwest Carbon Express is a 2,000-mile web of carbon-capture pipelines proposed by Summit Carbon Solutions. (Courtesy Summit Carbon Solutions)

It is new technology and not everyone is convinced the plan will be beneficial, especially in the longer term.

“God is in charge of the wind and the rain and the sun and—whatever amount of carbon they pump in the ground—it’s not going to change the climate. Nature can adapt,” Colin Hoffman, a third-generation cattle rancher in Leola, South Dakota, told The Epoch Times.

“Land landowners respect each other’s land in South Dakota. We know a fence line is a property line. We don’t go into our neighbor’s property without their permission. We don’t go digging in our neighbor’s property. Property lines mean something to us.”

But Summit is asking to cross a section of Hoffman’s 3,000 acre ranch with a permanent easement for a “carbon capture, utilization, and storage” project meant to save the earth from global warming.

Troubled Past

In May, South Korea-based energy company SK E&S announced it will invest $110 million to acquire a 10 percent stake in Summit Carbon Solutions as part of its strategy of transitioning to more supposedly environmentally friendly forms of energy.

SK E&S joined a consortium of investors, including Summit Agricultural Group and Texas Pacific Group, in this recent round of funding for Summit, a statement from SK E&S said.

SK E&S is a subsidiary of SK Inc., along with SK Engineering & Construction Co. Ltd., which pleaded guilty in June 2020 to wire fraud, in a scheme to obtain U.S. Army contracts through payments to a U.S. Department of Defense contracting official, and the submission of false claims to the U.S. government.

According to a statement from the U.S. Department of Justice, SK was sentenced to pay $60.6 million in criminal fines; $2.6 million in restitution to the U.S. Army; and serve three years of probation, during which time SK agreed not to pursue U.S. federal government contracts.

The Army suspended SK in 2017 from future contracting throughout the executive branch of the U.S. Government.

In 2008, SK got a U.S. Army construction contract at Camp Humphreys, South Korea, worth hundreds of millions of dollars. According to the DOJ, SK paid millions of dollars to a fake Korean construction company named S & Teoul, which then paid that money to a contracting official with the U.S. Army Corps of Engineers.

Then, to hide approximately $2.6 million in payments to S & Teoul, and ultimately to the contracting official, SK submitted false documents to the U.S. Army.

SK admitted that in April 2015, its employees burned many documents related to the contracts to hamper investigators. And the company admitted that in the fall of 2017, its employees obstructed a federal criminal proceeding by attempting to persuade an individual not to cooperate with U.S. authorities, a DOJ statement said.

SK did not respond to The Epoch Times’s request for comment.

In a different case, another SK subsidiary, SK Energy Co. Ltd., along with two other South Korean companies, GS Caltex Corporation and Hanjin Transportation Co. Ltd., plead guilty to criminal charges and paid a total of approximately $82 million in criminal fines for their involvement in a decade-long bid-rigging conspiracy that targeted contracts to supply fuel to the U.S. Army, Navy, Marine Corps, and Air Force bases in South Korea, a 2018 DOJ statement said, adding that, in separate civil resolutions, SK Energy and the other two companies agreed to pay a combined total of approximately $154 million. Of that, SK paid more than $90 million. 

Ed Fischbach is a farmer near Mellette, South Dakota, with a cow-calf and crop operation. Summit wants an easement on Fischbach’s land, who is skeptical of the company.

“I haven’t trusted this company before we found out they had foreign investors—just the way they’ve acted towards landowners from the very beginning. There’s no trust whatsoever,” Fischbach told The Epoch Times. Knowing SK’s background had made him feel even more skeptical.

The Epoch Times asked Summit what it had to say about landowners’ concerns about SK E&S.

“A wide range of individuals and organizations have invested in Summit Carbon Solutions because they share our view that there are significant opportunities to economically decarbonize the agricultural and ethanol industries, which will enhance their long-term sustainability,” Jesse Harris, a Summit spokesman, told The Epoch Times in an email.

“The company will continue to meet or exceed all federal, state, and local regulatory requirements, including financial requirements, as we work to open new economic opportunities for ethanol producers, strengthen the agricultural marketplace for farmers, and generating new revenues for local communities to support schools, hospitals, roads and more.”

For the project to go forward, hundreds of landowners in the five-state project would either have to agree to an easement or potentially face eminent domain.

“I don’t like it,” Kathy Stockdale, a crop farmer in Hardin County, Iowa, told The Epoch Times.

Her family is facing pressure from two companies, Summit and Navigator CO2 Ventures, seeking easements on their farm.

“As a Christian, I believe I’m a steward of my land and can take care of it. We’ve worked very hard at that. And to have some out-of-country investors in Iowa farmland … As a Republican, our platform says that we do not support foreign investment or eminent domain used by private companies. So it goes against everything that is Iowa and [myself as a] farmer.”

Financial Incentive

Summit’s pipeline project, and similar projects in works across the country, are being encouraged through the federal Carbon Capture and Sequestration tax credit, also called the 45Q, which pays up to $50 per ton for CO2 that’s captured and sequestered.

Construction on new carbon capture projects must begin before Jan. 1, 2026, to be eligible, so there’s an urgency for carbon capture companies to get their projects started.

The more CO2 captured, the more federal tax credits earned.

Once complete, Summit’s project will be the largest carbon capture and storage project in the world, the company’s website says. It will have the capacity to capture and permanently store up to 12 million tons of CO2 every year.

At that rate, Summit would get $600 million per year in tax credits that can use by the company and its investors to offset their tax bills, or sold to others for profit. There has been chatter in Congress about making these tax credits direct payments to further encourage such projects.

“Carbon capture and storage solutions are an important technology that can directly reduce carbon dioxide generated in the process of employing various energy sources, including biofuels and natural gas,” SK Group Vice Chairman and SK E&S CEO Jeong Joon Yu said in a statement.

“SK E&S is committed to actively supporting low-carbon energy projects in the U.S. to meaningfully contribute to the U.S. government’s goal of significantly reducing CO2 emissions by 2030.”

But the landowners who are being asked for easements through their properties don’t believe the tax credits should go to foreign investors.

“That’s the other issue that’s angering people,” Hoffman said. “Why do foreign people get to come in and take advantage of our federal 45Q tax credit at the expense of us taxpayers? We don’t believe they should be allowed use eminent domain on this because it doesn’t serve a public purpose … We don’t think that eminent domain should be used for a private company, and we don’t think that it’s a safe material to have in a pipeline.”

Stockdale says the project isn’t needed.

“They are wanting to use our taxpayer money to fund this pipeline, and those profits, if it is built, will not go back to the taxpayers,” Stockdale said. “It will be going to foreign investors. I mean, all the money that they’re making, it doesn’t help us as farmers at all.

“It’s all built on a false premise. It’s only for money.”

Brian Jorde, managing lawyer at Domina Law Group based in Omaha, Nebraska, is working in the involved states, with more than 500 landowners who don’t wish to allow an easement on their land. The cases aim to prevent easements through eminent domain abuse.

“It’s one thing if the government is doing it and, the theory is, that it’s for the greater good. But here, this is purely for financial enrichment of a private corporation,” Jorde told The Epoch Times.

“Our laws have moved away from public use. The trigger for eminent domain has to be a public use. Some guys just woke up one day and said, ‘Wow, there’s tax credits. Yeehaw! Let’s reverse engineer a business to grab those tax credits. And we take people’s land in the meantime if they don’t want to give it to us. What a great plan.’ I mean, it’s just absolutely outrageous.”

Epoch Times

One thought on “Foreign Company With Troubled Past Buys Into Massive Midwest Carbon Capture Project

  1. Putting the “fraud” issue aside, because almost all big enterprises like this have some kind of fraud going on, but… doesn’t this sound like bizarre science?:

    “The pipelines will take carbon dioxide (CO2) produced by more than 30 ethanol plants, liquify it, and send it to North Dakota to be buried in rock about a mile underground.”

    Geez. It sounds like Dr. Frankenstien doing one of his operations on the earth. Maybe I’m wrong, but I don’t think we were meant to do such doings. The simplicity of life is being swallowed by the complexity of greed, from FOREIGN companies to boot.

    .

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