Ag Policy Blog: Carbon Pipelines Projects Face Permit Hearings, Litigation and Legislation

January 04, 2023

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by Chris Clayton (DTN Progressive Farmer) 2023 will shape up as a major year in the permitting and development of carbon pipelines across the Midwest and Plains states. The Minnesota and South Dakota Public Utilities Commissions each this week will examine the permits of major carbon pipeline projects.

The Minnesota PUC is expected on Thursday, Jan. 5 to hear a permit application by Summit Carbon Solutions to cross two counties in southwest Minnesota.

https://mn.gov/…

South Dakota's PUC also has hearings set on Jan. 5 for both Summit and the Navigator Heartland Greenway project.

https://puc.sd.gov/…

The actions come as Summit Carbon last week released comments from South Dakota ethanol producers who stated that South Dakota's PUC is slow walking the permit process in that state. Summit released a statement listing CEOs and board members for five ethanol plants in South Dakota calling for the state's PUC to hold Summit's permit hearing in April.

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Each company has contracted with roughly 30 ethanol plants, and other industries such as fertilizer. Summit and Navigator are each looking to sink between 12 million and 15 million metric tons of carbon dioxide annually. The ethanol industry sees the pipelines as a major opportunity to lower the carbon intensity of corn-based ethanol and achieve better scoring for carbon credits in states with low-carbon fuel standards.

Tax credits for carbon sequestration, known as 45Q, were increased from $50 per metric ton to $85 per mt. The bill also provided the Department of Energy with up to $40 billion in loans for carbon sequestration and transportation projects.

AgWeek reported that the South Dakota PUC on Dec. 20 had directed staff to look at moving the hearing dates back to at least next September, even though staff had suggested holding Summit's hearing in April or May. The South Dakota PUC wants at least ten days of hearings.

Litigation and local regulation are crossing paths with the projects as well. Summit has filed federal lawsuits against at least four South Dakota counties, the Aberdeen, S.D., News reported last month. The lawsuits come after Brown, Edmunds, McPherson and Spink counties in S.D., had each passed permit moratoriums blocking Summit's pathway. Alverson also has joined each of those lawsuits as a plaintiff with Summit.

Summit, however, also is facing dozens of lawsuits from South Dakota landowners, AgWeek reported.

In Iowa, more counties also are introducing ordinances to regulate carbon sequestration pipelines.

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Radio Iowa also reported last week that the Iowa Legislature will look at new rules for pipelines this year as well. READ MORE

Iowa GOP lawmaker pitches bills to restrict CO2 pipelines: Sioux Center Republican aims to ban eminent domain power (The Gazette)

PIPELINE SURVEY LAW ENFORCEMENT VARIES BY IOWA COUNTY (Iowa Capital Dispatch/Successful Farming)

Biden energy agenda exposes regulatory gap (E&E News)

What Is Permitting Reform? Here’s a Primer on the Drive to Fast Track Energy Projects—Both Clean and Fossil Fuel -- It’s a return to Washington’s biggest energy debate, with Democrats and climate advocates divided among themselves, and mostly at odds with Republicans. (Inside Climate News)

Iowa House looks to limit eminent domain for carbon capture pipelines. How it would work (Des Moines Register)

Iowa House looks to limit eminent domain for carbon capture pipelines. How it would work:
"It’s very important to those of us who signed onto this that we try to protect landowners," said Rep. Steven Holt. "Our issue is not with the pipeline but with the use of eminent domain…" (Des Moines Register)

Excerpt from Iowa Capital Dispatch/Successful Farming: From Lee County, in Iowa’s southeast corner, the pipeline would cross into Illinois.

The projects have prompted significant debate about property rights, primarily centered on whether the private companies should be allowed to use eminent domain to force easements with landowners. But some residents have also tried to prevent the companies from surveying their land.

Those surveys help determine the precise path and depth of the pipe, and Iowa law allows the surveys after companies have held informational meetings about their projects and have given landowners and tenants a 10-day notice of the surveys.

That part of the law is being challenged on two fronts in court: Some landowners have asked judges to decide that the law is unconstitutional. Also, a surveyor is charged with trespassing in northwest Iowa.

A motion to dismiss that charge is pending in district court in Dickinson County. In that case, a tenant and landowners rejected all mailed land-survey notices from Summit Carbon Solutions, and the sheriff’s office charged a surveyor with trespassing in August because a survey crew returned to the property after the tenant had turned another away.

The Lee County residents — who oppose the project — say their situation is different: They received notice of a required informational meeting but heard nothing about the surveys before they saw crews digging on their properties.

“Farmers take a lot of pride in their land, and we don’t feel they should have the right to come on our land and do what they want to do,” said Mark Meierotto, who farms near West Point. “We have never gotten notified about a survey.”

NAVIGATOR SAYS NOTICE WAS MAILED TO PROPERTY OWNERS

Andy Bates, a spokesperson for Navigator, said a survey notice was sent by certified mail to Meierotto on Jan. 26, 2022, but that the company has no signed receipt of its delivery.

“Transparency, communication, and respect of landowner rights are core to Navigator’s mission,” Bates wrote in an email. “We have, and continue to, work with landowners to obtain voluntary survey permissions, along with gathering the necessary contact information so landowners can be kept abreast of the work of the survey crews if they so wish.”

Another landowner in the area, Ray Menke, said he provided his phone number to Navigator during one of the informational meetings to help schedule a land survey but wasn’t called and didn’t receive written notice. He said a survey crew went onto his property in spring 2022, and Menke told them to leave. He agreed to let them come back to finish the work about a week later because of the state law that allows the surveys.

“They’re gonna be on there anyway,” Menke reasoned. “I just wanted to be with them.”

Another landowner in the area, Andrew Johnson, has pursued trespassing charges for the surveyors, who he says have gone onto his property at least three times. Johnson said he also has not received written notice of the surveys.

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Bates said Johnson and Menke were both mailed notices of surveys via certified mail in January 2022 and that the company has signed receipts indicating they were delivered three days after they were sent.

PROSECUTOR TELLS PROPERTY OWNER THE LAW CREATES ‘INJUSTICE’

County Attorney Ross Braden declined to comment, but Braden explained his legal dilemma to Johnson in an email in December. He cited Iowa Code that says: “The entry for land surveys shall not be deemed a trespass.”

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Braden did not rule out a trespassing charge and said he would work to ensure that Johnson is compensated for damage to his land from the digging. The law says the companies must pay for damage caused by the survey work.

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The Iowa Utilities Board, which governs the pipeline permitting process, has not received any reports or complaints from landowners about a lack of notification for the Navigator surveys, said Don Tormey, an IUB spokesperson.

SURVEYOR CHARGED IN DICKINSON COUNTY

In northwest Iowa, the Dickinson County Sheriff’s Office filed a trespassing charge because it was unclear whether a landowner and tenant had been properly notified of the survey work.

“If you’ve been asked to leave, you’re supposed to leave, otherwise it’s trespassing,” Dickinson County Sheriff Greg Baloun has said.

Dickinson County Attorney Steven Goodlow, who is prosecuting that charge, has argued that Summit should have obtained a court-ordered injunction to gain access to a property from which its surveyors were barred. Final arguments about whether the case should be dismissed concluded this month, and a judge’s decision is pending.

Iowa law allows the pipeline companies to seek injunctions to get access to land. Court records associated with Summit’s injunction requests in regard to a handful of landowners show that the company sent at least two survey notices to the landowners via certified mail before seeking the injunctions.

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A northwest Iowa lawmaker introduced several bills last week that would change the rules for the pipeline companies. One would prohibit the companies from conducting land surveys without landowner permission. It has been assigned to a subcommittee but has not yet been scheduled for a hearing. READ MORE

Excerpt from E&E News: New liquefied natural gas export terminals and hydrogen projects — as well as thousands of miles of carbon dioxide pipelines — could be built before many federal regulations overseeing them are updated or put into place.

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For example, LNG, carbon dioxide pipelines and hydrogen are each generally covered by existing regulations administered by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which is part of the Department of Transportation, but there are no rules specifically on hydrogen pipelines. Current regulations for LNG terminals, meanwhile, were written in 1980 at the end of the Carter administration and don’t account for hazardous chemicals now used for exporting gas. PHMSA also says its standards for CO2 pipelines need updating after a pipeline ruptured in Mississippi three years ago.

But delaying new projects while the regulatory process catches up could hinder the Biden administration’s hopes for companies to deploy new technologies and create new jobs while reducing the effects of climate change. It could also cost companies billions and slow progress in cutting emissions.

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Experts in the three energy technologies industries say they’re not really so new, but are being talked about more because they’re being deployed more widely. Scientists, companies and regulators have been dealing with them for decades, albeit on a smaller scale, they say.

“They’ve been around a long time, and they have a pretty good safety record,” Xan Fishman, the director of energy policy and carbon management at the Bipartisan Policy Center. What’s dangerous, he said, is hindering action to rein in climate change.

“The clock is ticking on achieving net zero in time,” he said. “We have to start acting now.”

Some climate hawks, though, contend hydrogen, natural gas exports and carbon capture pipelines are the wrong response to climate change. Opponents say they’re really just ways for fossil fuel companies to respond to climate scrutiny without substantial changes to their business models. Others say all three could help cut emissions, including by displacing higher-emitting fossil fuels (Energywire, May 13, 2022).

The race between regulation and technological progress is well-known and closely watched in the regulatory world, said Cary Coglianese, a law professor at the University of Pennsylvania who heads the Penn Program on Regulation.

“It’s a standard debate over what we would call the precautionary approach,” Coglianese said. “We often have regulation follow technology after we’ve seen some of the problems.”

Under the precautionary approach, he said, the government blocks companies’ plans until proven safe, as with drug approval at the Food and Drug Administration. Under a lighter touch, regulators wait to tailor rules to the problems that develop after new technologies are deployed. It becomes a problem, though, if regulators fail to respond to problems.

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Carbon dioxide pipelines that carry gaseous CO2 at lower pressures are not covered by existing rules. And current regulations don’t require operators to notify regulators if they’re blending hydrogen into existing gas pipelines.

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Carbon capture

Pipelines that carry captured CO2 are an integral part of efforts by ethanol, fossil fuel and other smokestack industries to adapt their operations as pressure grows for a net-zero economy. Experts have said as many as 65,000 miles of such pipelines will be needed for the country to reach net zero by 2050 (Greenwire, May 30, 2022). The 2021 infrastructure law included billions in funding for carbon capture demonstration and pilot projects.

Most immediately, the drive to capture carbon from ethanol plants and store it permanently underground is driving three large-scale projects in the Midwest. Summit Carbon Solutions LLC, Wolf Carbon Solutions US LLC and Navigator CO2 Ventures LLC all have proposed thousands of miles to carry the greenhouse gas to injection sites.

It doesn’t appear that federal regulations will fully be in place to oversee those lines when they start construction.

Summit, which has said the Midwest Carbon Express would be the largest carbon capture system in the world, also said it is hoping to begin construction in 2024 on its Iowa-centered project, which includes 2,000 miles of pipeline.

Regulators at PHMSA aren’t expecting to have a first draft, or “notice of proposed rulemaking,” of potential carbon dioxide pipeline rules until October 2024. In the meantime, though, agency officials say they’re working to provide new guidance and “lessons learned” that can be provided to companies more quickly.

Environmentalists and conservative farmers have mounted a resistance to the Midwest projects, protesting the likely use of eminent domain to condemn land for construction and raising safety concerns.

Opponents point to a 2020 rupture of a carbon dioxide pipeline in Satartia, Miss., that sent 45 people to the hospital. That line carried CO2, mixed with hydrogen sulfide. The rupture produced a plume of CO2 that crested a hill and reached the town. People in and around Satartia reported smelling the rotten-egg odor of hydrogen sulfide, then feeling dizzy or even passing out.

Critics have called for a moratorium on CO2 pipelines until revised federal regulations are completed. But that could be a long way off, and project developers don’t want to wait that long.

The Biden administration launched an effort last year to write new rules for the safety of CO2 pipelines, citing the Mississippi incident. Currently, there are roughly 5,150 miles of existing CO2 pipelines in the United States. Most, including the Mississippi pipeline that ruptured, ship carbon that will be injected underground to force crude to the surface through a process known as enhanced oil recovery.

Shipping carbon dioxide can create unique challenges. The pipelines operate at much higher pressures than natural gas transmission lines. A safety expert said last year that CO2 lines are more susceptible to ductile fractures that essentially “unzip” the steel and open great lengths of the pipeline.

Bill Caram, executive director of the Pipeline Safety Trust, an advocacy group, said most of the existing carbon dioxide pipelines run through remote areas, but that is likely to change as the technology grows.

“When you look at the scope it will take to make a difference on climate change, these pipelines will be much closer to people,” Caram said.

Carbon dioxide also is a colorless, odorless asphyxiant. Heavier than air, the fear is that it could form a cloud that would move along the ground, displace oxygen and envelop people who wouldn’t even realize the danger.

Carbon capture supporters say the fears are overblown and the safety record of the pipelines is good. CO2 has been shipped and used for years to force oil from underground under pressure. Matt Fry, senior policy manager for carbon management at the Great Plains Institute, a group dedicated to climate change mitigation, said it’s always good to revise and update regulations, but he also said carbon pipelines are safe.

“I feel like we’ve been capturing and transporting carbon dioxide over 50 years now,” Fry said. “I feel like the safety regulations are sufficient. I think we’ve proven that.”

Fry, who said he’s worked in carbon management for 20 years, said regulators might have more time to catch up than it appears.

“These projects don’t have permits in place,” he said. “Their timeline is probably not realistic.”

Hydrogen

With hydrogen, natural gas companies are looking to blend the fuel into existing gas lines and other infrastructure as a way to lower their carbon footprint. But experts haven’t reached a consensus on how to do so safely.

Hydrogen is not toxic and, when released, rises quickly away from the ground. But it can ignite more easily than natural gas and its flame is nearly invisible. It can also make steel brittle in pipelines, which can lead to leaks and ruptures.

The opportunities and dangers were highlighted recently when the Department of Energy’s National Renewable Energy Laboratory (NREL) released a technical report on blending hydrogen into the natural gas system.

“The concept of blending hydrogen into natural gas pipelines is not new and has been around for decades, but there remain large knowledge gaps,” Mark Chung, NREL’s hydrogen systems analysis lead, said in a news release.

The gas industry is already moving forward on its plans. One major gas utility — Southern California Gas Co. — is already pushing for construction of a hydrogen-only pipeline. The Angeles Link, as it’s known, would produce “green” hydrogen using wind and solar power in rural California and ship it into the Los Angeles Basin (Energywire, Dec. 19, 2022).

But a recent report released by the advocacy group Pipeline Safety Trust said, among other findings, that hydrogen should never be put into most existing gas pipelines (Energywire, Jan. 18). The American Gas Association sent Pipeline Safety Trust a rebuttal, vouching for the safety of hydrogen and noting that it is already being used in some pipelines.

PHMSA currently is overseeing the roughly 1,500 miles of hydrogen pipelines in the country under the general rules for gas pipelines. Safety advocates say they don’t account for important differences in shipping hydrogen, along with transportation by truck and other methods.

PHMSA hasn’t taken any formal steps to change regulations specifically for hydrogen. Agency officials note they are funding 10 research projects into hydrogen safety, from leak detection to integrity management. It is also funding research on CO2 pipelines.

The research on safety is scant comfort for Caram of Pipeline Safety Trust. In fact, he said it shows that basic questions about hydrogen remain unanswered even as utilities make plans to incorporate it into the fuel supply that serves homes and businesses throughout the country.

“If they really believe everything is fine, that there’s no new questions and they’re ready to go, they wouldn’t need to spend all this money on research” Caram said.

And the usefulness of the hydrogen research could be limited if rules were completed before the research is done. He noted that PHMSA has strict prohibitions on regulating pipelines already in the ground and facilities already built.

“We get all this research on the best way to prevent ruptures, and PHMSA will be prohibited from requiring any of that for pipelines already in the ground,” Caram said. READ MORE

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