Summit opponents seek testimony from Bruce Rastetter

Bruce Rastetter, the influential co-founder of Summit Carbon Solutions, should be subpoenaed to testify to Iowa regulators in support of his company’s carbon dioxide pipeline proposal, according to the daughter of a landowner affected by the project.

The daughter, Kerry Hirth, has filed a motion with the Iowa Utilities Board seeking to compel Rastetter’s testimony. If she succeeds, the move has the potential to subject him to questioning from pipeline opponents on a variety of issues.

The political muscle of Rastetter, whose Summit Agricultural Group spawned the pipeline company, has been key to expediting a permit decision for the pipeline project in Iowa, opponents allege.

Those who oppose the project have been unsuccessful so far in fleshing out a clear view of the people and companies who own Summit Carbon Solutions. They sought more information from the company’s executives last week during the third week of testimony for Summit’s evidentiary hearing with the Iowa regulators, but those executives said they didn’t know much about the company’s owners.

“That’s a private investment,” said James Powell, chief operating officer of Summit Carbon Solutions. “I’m not part of that decision-making process.”

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Rastetter, an investor in Summit Carbon Solutions as well as its co-founder, might be able to provide those details.

Hirth alleges that Summit’s parent company has the ability to depress ethanol prices, undercutting its own justification for the project. “Mr. Rastetter’s testimony will help the board see the entire stage that Summit AG has set and understand whether or not Summit Carbon’s proposed pipeline is part of a larger corporate undertaking that violates” Iowa law, wrote Anna Ryon, an attorney for Hirth.

Hirth alleges that Summit Agricultural Group’s infrastructure in Brazil — which the company claims produces the “lowest cost, most sustainable gallon of ethanol in the world” — threatens the price of Iowa-made ethanol. Hirth also claims that Summit Carbon Solutions’ agreements with a dozen ethanol plants in Iowa contain “anticompetitive provisions.”

The details of those agreements are obscured from public view because of a confidentiality agreement that has restricted their disclosure only to the attorneys who represent groups who sought them.

Summit has said it has profit-sharing arrangements with the ethanol producers. Its pipeline system would transport captured carbon dioxide from more than 30 ethanol plants in five states to North Dakota for underground sequestration. The company and the ethanol producers would be eligible for generous federal tax credits, and the producers would be able to sell their ethanol in low-carbon markets at a higher price.

Summit has argued its project benefits the public — a key component of its hazardous liquid pipeline permit request in Iowa — by boosting profits for ethanol producers, an important market for farmers. More than half of the state’s corn is used for ethanol.

“Whether or not Summit Carbon’s proposed pipeline is part of a larger corporate enterprise that violates Iowa’s anti-competition law is highly relevant to whether the proposed pipeline promotes the public convenience and necessity,” Hirth argued. “It is necessary for the IUB to understand Summit Ag’s overall business model and how the various subsidiaries — including Summit Carbon — fit into that business model.”

The Sierra Club of Iowa joined Hirth’s motion to subpoena Rastetter to help determine whether the pipeline system will benefit ethanol producers.

“So Summit is therefore claiming that the support of the Iowa ethanol industry promotes public convenience and necessity,” wrote Wallace Taylor, a Sierra Club attorney. “But, as Ms. Hirth explains, Mr. Rastetter’s scheme will actually harm Iowa’s ethanol industry, to the benefit of Mr. Rastetter and Summit Agricultural Group.”

Summit declined to comment about the motion to subpoena Rastetter. A representative of Summit Agricultural Group said Rastetter was unavailable for comment. It’s unclear when the board will rule on Hirth’s request.

Summit suffers setbacks

Utility regulators in South Dakota on Monday denied Summit a permit to build its pipeline in that state. The South Dakota Public Utilities Commission said the project would violate several county ordinances that restrict where the pipeline can be built.

In North Dakota, regulators last month also denied Summit a siting permit. The company has modified its route and asked for a reconsideration. Its other options are to challenge the denial in court or to reapply. Two of the three commissioners in that state indicated they are open to a reconsideration, according to a recording of their meeting, because forcing Summit to reapply would result in a duplicative, lengthy process.

Summit has said it wants to start construction next year, but Powell, the company’s chief operating officer, testified that construction in Iowa would not happen without approval from the Dakotas.

This article first appeared in the Iowa Capital Dispatch.