Part 2

Rastetter and his team at Summit know that many local landowners will never cooperate with their plan. With all that money on the line, Summit has turned to an insidious yet entirely predictable strategy – they intend to use their political connections to force property owners into compliance.
Eminent domain for private gain: Life in the new America
Last week Bloomberg published a long article about the proposed CC&S pipelines and the uphill battle that their developers face in convincing landowners who are unconvinced of the risk-reward ratio that high-pressure pipelines present to their land and livelihood.  However the Bloomberg article made no mention of the highly aggressive tactics that Summit has begun to use against non-compliant farmers in the pipeline’s intended path.
Summit has openly stated their intent to employ eminent domain against any landowners who oppose easement rights for their pipeline.  That is a tall order in Iowa, where the Des Moines Register recently reported that Summit has only obtained 40% of the 1,200 easement agreements that they need to sign in order to move forward.
The company has been undeterred by the lack of public support. In fact on May 3rd, Summit decided to make an example of a South Dakota farmer who had openly campaigned against the pipeline.  The farmer, Jared Bossly, had been an open and loud opponent of the pipeline until a local county judge had allowed Summit to survey private land without permission from landowners.
According to multiple news sources, a large convoy of Summit surveyors – flanked by hired security and local law enforcement – encroached upon Bossly’s property while he was away and began entering his buildings – an act which should have been considered outside the court order which allowed for survey drilling. Summit refused to provide comment to reporters outside of a prepared statement from the company’s regulatory affairs director. 
Bossly is convinced, and has publicly stated, that the Summit incursion was meant to provoke a confrontation.  As he puts it, “it was clear that they wanted to end the day with me in handcuffs.”  He has claimed to local reporters that he was targeted, and meant to serve as a warning to other local landowners.
Summit’s heavy-handed tactics appear to have backfired as public opinion has turned against the company since the Bossly standoff.  A recent demonstration in South Dakota’s state capitol building attracted over 700 local residents, who have called for a special legislative session to address their concerns regarding the pipeline.  Resistance is growing in Iowa and North Dakota as more farmers and local legislators voice their opposition.  Last week Robert F Kennedy Jr., who is becoming a dark horse in the Democratic presidential primary, called out Rastetter by name in a screed against ‘the corrupt merger of state and corporate power’, and publicly stated that he would shut down the Summit pipeline if he is elected.
If We Don’t Rob You, Then Someone Else Will…
When not threatening Midwestern farmers and landowners, Summit’s public relations campaign predicts economic disaster if they are not allowed to proceed with milking the American taxpayer for billions of dollars.
Central to their argument is a study that was published earlier this year by an Iowa thinktank called Decision Innovation Solutions.  That study’s finding was that, if Summit was not allowed to build its pipeline, that the economic impact to the state would be devastating within a decade since its local ethanol processing plants would lose out on a major stream of Inflation Reduction Act government funding (I can’t bring myself to call it “revenue”).  
The economists then argued that legislators in neighboring states like Illinois, who they presume are chomping at the bit to decree eminent domain over their farmers’ land, would thus build their own carbon pipelines and lay claim to billions of dollars in government handouts that the rubes in Iowa did not allow their own bureaucrats to claim. 
The study infers that this tidal wave of capital would distort the market and that Iowa-based ethanol plants would be unable to compete with the more politically savvy plants in Illinois.  All of that funding, once it begins flowing to the east side of the Mississippi River instead of to the west – would enable Illinois to pay above-market prices to farmers in Iowa, even after accounting for the cost of shipping that grain by rail. The study’s conclusion is that Iowa’s ethanol industry will be forced to fold within a decade because of the lost business that results from the state’s failure to claim the available government giveaways.
It doesn’t take a PhD in agribusiness to see how this survey’s findings are riddled with logical fallacies and unprovable assumptions.  The most obvious absurdity is that of the “zero-sum game” (e.g. if the pipeline is not built in Iowa then other states will claim all of the federal tax credits that Iowa’s ethanol plants could have claimed).  This is the classic yet highly flawed argument that claims that there is a fixed amount of capital in a market, and that the only way to make money is to take it from others in that market.  The zero-sum argument has been the justification for all types of bad behavior over the years, mostly to legitimize the redistribution of wealth from one class or group of people to another.
The obvious failure of zero-sum thinking is that it fails to account for the mutual gains that people and businesses enjoy when they trade with each other.  In this case, if Iowa refuses to allow Summit Carbon to build a pipeline then it is possible (though I assume also unlikely) that other states might decide to build it instead.  However, this transfer of government largesse to one state from another does not guarantee that business will dry up for Iowa’s ethanol plants.  There may, and likely will, be plenty of reasons for Iowa farmers to continue selling their corn locally.  It is equally possible and entirely feasible that other external factors – perhaps a new business opportunity or more market distortion through government legislation – might come into existence that bring the interstate grain markets back into equilibrium.
Setting aside this study’s specious and logically thin findings, it is also useful to look at how it was funded.  In this case, the study was commissioned by the Iowa Renewable Fuels Association, whose motives may not in this case be completely aligned with the public interest.  Asking the IRFA whether another unprofitable renewable energy project is needed seems rather like asking Raytheon whether Ukraine needs another $100 billion of the American taxpayer’s money.
Motives Matter
Climate change and proposed mitigation strategies like carbon capture are highly controversial and complicated topics.  Whatever your opinions on climate change and whether mitigation strategies are needed, it is clear that environmental impact is not remotely near the top of Summit Carbon’s list of priorities.  The Summit spokesman can’t exactly say “we want to rip up our neighbors’ fields so that we can extract billions of dollars in tax credits from the federal government and sell our business to an oil major”.  So they have to do what most rapacious American corporations do – that is, to make money at all costs while pretending that they care about the environment and their community.
The carbon capture opportunity is Summit’s raison d’etre not because of lofty enivronmental ideals, but because a stroke of Joe Biden’s pen enacted the Inflation Reduction Act and authorized $369 billion in ‘clean energy’ incentives, funded by the American taxpayer. Listed among those was the 45Q tax credit, which inflated the already artificial market for carbon from $50 per tonne to $85 per tonne – a 70% increase.  Previously these payments had been doled out as tax credits.  However the IRA provided further upside to carbon capture projects by enabling them to seek immediate cash payment from the US Treasury.
Summit estimates that, under the currently approved payment scheme, the company will be able to claim over $1 billion in tax credits annually, over a period of 12 years.  When coupled with a likely acquisition by ExxonMobil or Occidental, it is easy to see why Rastetter is pulling out all the stops to close this deal. 
Implications For the Rest Of Us
It is an uncomfortable truth in today’s America that government stimulus is designed to placate the masses with pennies while enriching those lucky few who are connected to the ruling regime.  I am unable to think of a more accurate example of this trend than what the people behind Summit Carbon Solutions are attempting to do today at the expense of their neighbors.
The Inflation Reduction Act reminds me a lot of the Patriot Act, for two reasons.  First, in retrospect their names could not be any more ironic.  Just as the IRA has actually propelled inflation HIGHER, the Patriot Act had nothing whatsoever to do with patriotism and everything to do with enriching the military-industrial complex in America.  It transformed Washington DC from a sleepy mid-Atlantic town into America’s wealthiest city per capita, and it did so by sucking trillions of dollars out of the American consumer’s wallet and depositing it with the employees and shareholders of America’s defense contractors.
Not to be outdone, Biden’s IRA aims to drive the American taxpayer further into poverty by transferring billions of dollars from taxpayers to projects like Summit, in the manner of ‘tax credits’ that Summit hilariously refers to as “revenue”.  The government-led transfer of wealth from the many into the hands of the few is unfortunately a bipartisan problem.
As of today’s publishing date, Iowa’s Utilities Board has just opened a hearing ahead of its expected September vote on Summit’s pipeline permit.  All signs indicate that the IUB’s unelected bureaucrats are in full support, and public opinion fully expects the outcome to be a ‘rubber stamp’ approval for Summit’s pipeline. There are many more obstacles to clear, though, and resistance is mounting in Iowa and in other states. It remains to be seen whether the “Rich Men of Des Moines” will be able to build their pipeline against such committed opposition from local voters.