Part 1

Reprinted with permission from Kevin Virgil. Virgil is a Sutherland, Iowa native, now living in New York City.
Authors Note: Normally I like to write about crypto and global macro issues, however the rising political turmoil here at home has suddenly made America a very interesting place! I will be writing about this and other relevant issues, and will continue to provide updates on the carbon pipelines.
For the past few days, a relatively unknown country music singer named Oliver Anthony has captured America’s attention with a breakout song called “Rich Men North of Richmond”, a cri de coeur that laments the sad state of America’s working class while the elites of DC enrich themselves:
Livin’ in the new world
With an old soul
These rich men north of Richmond
Lord knows they all just wanna have total control
Far away from Anthony’s hometown in central Virginia, those lyrics could easily apply to an ongoing drama that is playing out in the fields of rural Iowa.  Normally my home state only makes national headlines every four years, when aspiring presidential candidates descend on the State Fair and are compelled to endure the strange yet oddly satisfying ritual of eating fried food on a stick.  However today Iowa is becoming a battleground between a “Who’s Who” of the state’s political insiders who want to build three carbon capture and storage (CC&S) pipelines, and a grassroots resistance of local farmers who are pulling out all the stops to prevent it from happening.
Of the three pipeline projects, the most contentious is operated by a company called Summit Carbon Solutions.  Summit’s pipeline, if regulatory approval is received, would extend for 2,100 miles and operate under extremely high pressure in order to transport carbon dioxide (CO2) waste emissions from ethanol plants throughout four Midwestern states to a storage site deep underground in the remote oilfields of North Dakota, north of Bismarck.  
Summit Carbon is a subsidiary of Summit Agricultural Group, whose founder Bruce Rastetter is best known for raising capital from Wall Street in the 1990s to consolidate the pork producing industry and subsequently driving thousands of independent farmers out of business.  In the past couple of decades Rastetter has become highly influential in Iowa’s Republican party and now has his sights set on a much larger prize.
Today Summit intends to raise $4.5 billion from, among other investors, Morgan Stanley and Continental Resources.  The company will then be eligible to claim billions of dollars in tax credits from the US government in return for building the ‘Midwest Carbon Express’ pipeline, a green energy project that offers no discernible public benefit while carrying profound environmental risks for residents who live anywhere near its intended route.  Summit does not intend to offer royalty payments to affected landowners in return for the granting of easement rights.
The project’s risk-reward ratio is untenable for local landowners under whose property Summit intends to bury its pipeline – yet irresistibly high for Rastetter and his out-of-state financiers.
The ‘Rich Men’ (And Women) Behind Summit Carbon Solutions
Rastetter knows where to find the money he needs to build this pipeline.  More importantly, he also knows that political influence is a far more valuable asset that will facilitate his acquisition of the necessary permits and eminent domain rulings that will enable him to seize property from its rightful owners against their consent.  He has pulled no punches in this regard, and has built relationships with the region’s most connected politicians:
Kim Reynolds.  Iowa’s governor is serving her second term, and as of March 2022 has accepted over $174,000 in campaign donations from Rastetter.  According to public records, Rastetter is her largest individual donor.  Reynolds recently appointed a new chairman of the Iowa Utilities Board (IUB), a committee of three unelected bureaucrats who will ultimately decide whether Summit will receive a permit to build in the state of Iowa.  That incoming chairman, Erik Helland, was confirmed and immediately moved Summit’s permit request hearing two months ahead of schedule.
Terry Branstad.  Most recently served as the US ambassador to China; served as Iowa’s governor for five terms and appointed two of the IUB’s three members.  He is now Summit’s “senior policy advisor” and is well-known as an ardent supporter of the ethanol industry.
Jess Vilsack.  Summit’s general counsel. His father is current US Secretary of Agriculture Tom Vilsack, the former two-term governor of Iowa and also a committed supporter of the state’s ethanol industry.
Kristi Noem.  South Dakota’s governor is also in her second term, and carries a major conflict of interest with Summit – she is an investor in an ethanol plant that Summit lists as an active partner.  Noem has on multiple occasions refused to meet with constituents who oppose pipeline legislation.
Summit needs this political firepower because it must acquire easement rights from thousands of property owners – almost all of them farmers.  Here, then, is the company’s most significant obstacle.  The Inflation Reduction Act has created billions of reasons for Summit to build its pipeline, but the property owners in its path see no such benefits – and potentially enormous environmental and safety risks.
The risks of ‘carbon capture’
Carbon capture pipelines are a highly controversial ‘green energy’ initiative that have generally failed to ‘capture’ volumes anywhere near their intended targets.  Even within the broader renewable energy industry, where the vast majority of technologies (e.g. wind and solar power generation) cannot operate without tremendous government subsidies, carbon capture is a low-performing strategy.  The primary beneficiaries of CC&S pipelines are oil producers, who can use liquefied CO2 in a process called enhanced oil recovery (EOR) to extract higher volumes of crude from the Dakota oilfields. 
In this context, the business case for Summit’s pipeline becomes apparent – they want to connect producers of CO2 emissions in Iowa with buyers hundreds of miles away, in the oilfields of North Dakota.  The Biden Administration provides further incentives through billions of dollars in ‘green energy’ tax credits. 
CO2 pipelines transport liquefied carbon dioxide at extremely high pressures, and while CO2 is harmless in its natural state it can be deadly if released into the atmosphere under pressure.  The resultant cloud can block out oxygen, making it impossible to breathe or for rescue vehicles to operate since internal combustion engines require oxygen.
Recently this became all too apparent in Mississippi, where in 2020 a ruptured carbon pipeline created a blast that left a crater forty feet deep and released a deadly cloud of liquefied CO2 and hydrogen sulfide into the air.  The cloud, which was dense enough to block oxygen and asphyxiate people, swept over the town of Satartia and hospitalized 45 people.  The Mississippi pipeline’s operator, Denbury Resources, never admitted wrongdoing and quietly settled with many of the town’s residents.  
Denbury, it is worth noting, filed for bankruptcy shortly after the pipeline rupture and emerged later that year as Denbury Inc.  Last month it was acquired by ExxonMobil for $5 billion.  It now becomes clear that Summit Carbon Solutions has an exit strategy – a multi-billion dollar acquisition by a major oil company.

Part 2 next week