Noem is investor in ethanol plant partnered with carbon pipeline company

Gov. Kristi Noem is an investor in an ethanol plant that’s partnered with a company proposing a controversial carbon dioxide pipeline.

The ethanol plant is Granite Falls Energy in Granite Falls, Minnesota. Noem’s financial disclosures from her former service in Congress and her current time as governor reveal that she and her husband are investors in the plant. Summit Carbon Solutions, a company proposing a carbon pipeline through South Dakota, lists Granite Falls Energy as one of its partners. 

Noem’s congressional disclosure forms, which require only an estimated range of income rather than an exact amount, say she made between $25,006 and $70,000 in dividends from the plant between her first run for Congress in 2010 until the end of her service as a U.S. representative in early 2019. The state-level disclosures she’s filed since then only require the identification of income sources, not amounts.

The disclosures raise questions about Noem’s lack of support for anti-pipeline legislation, according to Ed Fischbach, an Aberdeen-area farmer whose land is near the pipeline route. 

“She and the people in her office wouldn’t even come talk to us when we came to the Capitol,” Fischbach said. 

Noem’s spokesman, Ian Fury, responded to a message from South Dakota Searchlight with a written statement saying Noem “invested in Granite Falls many years ago and has always appropriately disclosed her finances.”

“Governor Noem has always supported our ethanol industry,” Fury’s statement said. “Like many farmers and those who have made a living in agriculture, she puts her money where her mouth is.”

Ethanol is a fuel additive made primarily from corn. Summit’s multi-billion-dollar project would capture carbon dioxide emissions from 34 ethanol plants in the upper Midwest. The gas would be liquefied and transported by pipeline for underground sequestration in North Dakota.

The pipeline project would qualify for incentive payments from the federal government of $85 per metric ton of carbon sequestered, for removing heat-trapping carbon from the atmosphere. It could also allow participating ethanol producers to sell their products in states and countries with stricter emissions standards.

A similar project, the Heartland Greenway pipeline, would also pass through South Dakota on its way to a sequestration site in Illinois. That project is proposed by a company called Navigator CO2.

Noem’s actions, positions

Noem has been involved in carbon pipeline policymaking. In March 2022, she signed a bill that established taxes for carbon dioxide pipelines similar to oil and natural gas pipelines. Summit Carbon Solutions testified in favor of the bill. At that time, Granite Falls Energy was already a partner with Summit, according to multiple media reports.

About a month after Noem signed that bill into law, Granite Falls CEO Jeffrey Oestmann said the proposed pipeline is vital to the company’s survival.

“We can’t compete without it,” he said during a landowner meeting in Sacred Heart, Minnesota, according to the Alexandria Echo Press newspaper.

No bills addressing carbon pipelines reached Noem’s desk during the most recent legislative session last winter. The permitting process for the pipelines is being handled by the state Public Utilities Commission, whose members are independently elected and unconnected with the Governor’s Office. The PUC’s public permit hearings for Summit and Navigator are scheduled for later this summer.

Noem has talked publicly about the pipeline proposals lately, after taking criticism from landowners along the pipeline routes. Some say Noem is not doing enough to protect their property rights from eminent domain, which is a court process that Summit is using to obtain access to land from unwilling landowners (meanwhile, Summit says about 70% of affected South Dakota landowners have signed voluntary easements).

In a radio interview published earlier this week by KWAT in Watertown, Noem responded to that criticism by saying, “I’m with the landowners and always have been.”

She then referenced recent reports that Summit has been using heavy equipment to conduct surveys that damaged some farmland. 

“I’m shocked at some of those images and things that I’m seeing that’s happening to these farmers and landowners,” Noem said.

Her comments caused a backlash among some affected landowners and their allies. They have accused her of failing to support a bill last winter that would have prohibited carbon pipeline companies from using eminent domain. The bill passed the state House but failed in a Senate committee.

Fischbach, the Aberdeen-area farmer, said Noem not only failed to support the legislation but actively worked against it.

“Shoot, she had people in her office lobbying against the bill,” he said.

Fury, Noem’s spokesman, told South Dakota Searchlight that Noem “is particularly concerned about Summit’s use of eminent domain. She is also concerned about Summit’s financial ties to Chinese-influenced businesses.”

In her interview with KWAT, Noem alleged that Summit is benefitting from hundreds of millions of dollars in investments from China. Summit has denied that allegation in a subsequent statement to Sioux Falls-based television station KELO, but KELO pointed out that Summit secured a $300 million investment from TPG Rise Climate, and TPG Rise Climate has mentioned the Chinese Silk Road Fund as one of its investors.

Watchdog group criticizes Noem

On Thursday, a Washington, D.C.-based group called Accountable.US contacted South Dakota Searchlight with a tip and information revealing Noem’s investment in Granite Falls Energy. The website InfluenceWatch describes Accountable.US as an advocacy group on the center-left portion of the ideological spectrum.

“Gov. Noem stands to gain personally from this pipeline deal that robs a growing number of farmers of their land,” said Chris Marshall, spokesperson for Accountable.US, in a written statement. “If Noem is more committed to protecting her out-of-state investments, she should be upfront about her conflict of interest. If the governor really stands with farmers, action speaks louder than begrudging words of support.”

South Dakota Searchlight independently confirmed the information about Noem’s investment in Granite Falls Energy. Searchlight also found that while Noem was in Congress, she disclosed an investment in another ethanol plant, Glacial Lakes Energy in Watertown, which is also a Summit partner. She disclosed between $603 and $3,000 in income from that plant between her first run for Congress in 2010 until the end of her service as a U.S. representative in early 2019.

During her time as governor, Noem’s financial disclosures have not listed an investment in Glacial Lakes Energy. Noem’s spokesman, Ian Fury, told South Dakota Searchlight she is no longer invested in the Glacial Lakes plant. Not all of Noem’s state-level financial disclosures are readily available, because some of the links to the documents on the South Dakota Secretary of State’s website are broken.

But Noem has other connections to Summit Carbon Solutions. The company was one of five platinum sponsors for Noem’s second inauguration in January, along with ethanol company POET. The South Dakota Ethanol Producers Association was a gold-level sponsor.

And Noem’s son-in-law, Kyle Peters, is a registered lobbyist for Gevo Inc., which is building a plant to make jet fuel from corn in Lake Preston and plans to partner with Summit Carbon Solutions. Noem lauded Gevo’s project during her State of the State address to lawmakers in January.

“Gevo’s Net-Zero 1 Site in Lake Preston is the first ever billion-dollar investment in South Dakota,” she said. “They will literally turn corn into jet fuel, as impossible as that sounds.”

Some members of Noem’s own Republican Party are calling for a special legislative session – which can be called by the governor or two-thirds of the Legislature – to protect landowners along the pipeline route from eminent domain. Those Republicans, organized as the South Dakota Freedom Caucus, say they will stage a rally at noon Central on Thursday in the state Capitol Rotunda.

“The governor claims to be looking for a way to help the landowners,” said South Dakota Freedom Caucus Chairman and state Rep. Aaron Aylward, R-Harrisburg, in a news release. “Convening a special session would immediately address this crisis.”

Noem’s 2019, 2022-2023 state-level disclosures

Noem’s 2010-2019 congressional disclosures