Midwest CO2 Pipeline Rush Creates Regulatory Chaos

by Mike Soraghan (E&E News Energywire) A complicated question is looming in the Midwest over plans to build thousands of miles of carbon dioxide pipelines: Who would regulate them?

The answer could affect the Biden administration’s hopes for a massive buildup of carbon sequestration projects, which would in many cases be supplied by those pipelines. Safety advocates say there are loopholes in federal safety regulations that could leave the lines largely unregulated.

Pipelines being converted from shipping natural gas to carrying CO2 aren’t covered by current rules, for example. Existing standards to move carbon dioxide for enhanced oil recovery also may not be adequate for new pipeline projects, critics say.

Pipeline companies scoff, saying the Department of Transportation, through its Pipeline and Hazardous Materials Safety Administration (PHMSA), has clear jurisdiction over the lines planned in the Midwest.

“There is a misconception that somehow we would not be subject to new regulations, and that is just not the case,” said Andy Bates, a spokesperson for Navigator CO2 Ventures, which is seeking approval from regulators in several states to build the Heartland Greenway, a 1,300-mile pipeline network that would take CO2 captured from biofuel makers across the Midwest to a sequestration site in central Illinois.

But uncertainty about PHMSA’s jurisdiction is adding to backlash against Navigator and two other Midwest pipeline projects. Opponents have been pushing for a moratorium on construction of the projects until new federal regulations for carbon dioxide pipelines are completed. PHMSA has begun an overhaul of its existing rules, but the agency isn’t projecting a first draft before October 2024. And PHMSA regulations often take years.

The jurisdiction issue is creating confusion for some state regulators. In January, the Illinois Commerce Commission, which is weighing approval of Navigator’s project, sent a formal request asking PHMSA whether the federal agency would regulate the pipeline once built.

Commission spokesperson Victoria Crawford said it also asked “whether and to what extent PHMSA inspects such pipelines.”

A PHMSA spokesperson said the agency is reviewing Illinois’ request, adding that it will “need to investigate the characteristics of the pipeline facility.”

Other state bodies, however, have taken a definitive stance. Members of the Iowa Utilities Board last month said their agency is preempted by federal law and regulation from getting involved in safety matters (Energywire, Dec. 15, 2022).

While opining that PHMSA has jurisdiction and determining that the safety information doesn’t need to be turned over for now, the Iowa board said Summit Carbon will still need to submit evidence in the future to gain approval of the pipeline.

Eminent domain, Congress and the ‘supercritical’ phase

The three companies have proposed thousands of miles of pipelines to deliver carbon dioxide captured from ethanol plants and other facilities to permanent underground storage sites. Such projects got a boost from the 2021 infrastructure law, which included billions in funding for carbon capture demonstration and pilot projects.

The companies have also filed at least four federal lawsuits against local governments in Iowa and South Dakota challenging zoning and permitting regulations adopted in response to the projects.

The jurisdictional issue stems in part from the unique characteristics of how carbon dioxide behaves when transported.

PHMSA’s existing regulations cover pipelines carrying carbon dioxide in a “supercritical” phase. That’s a liquid-like phase that requires high pressures and certain temperatures. The developers of the Midwest pipelines say the carbon dioxide in their lines will be in that state at certain points of its journey, such as the beginning and end.

In between, as temperatures and pressures change, it wouldn’t necessarily stay in that supercritical state. For that to happen, the CO2 would need to stay above 88 degrees Fahrenheit. But it doesn’t.

It hasn’t been much of a question up to now. There are about 5,000 miles of carbon dioxide pipelines in the country. Most ship carbon to be injected underground to force crude oil to the surface through enhanced oil recovery.

Experts have said as many as 65,000 miles of carbon pipelines will be needed for the country to reach net-zero emissions by 2050 (Greenwire, May 30, 2022).

The Biden administration is promoting carbon capture projects as an important part of its plans for cutting greenhouse gas emissions.

But the projects face resistance from landowners and environmentalists who question the value of carbon capture and sequestration in fighting climate change, and object to the prospect that some of the companies might seek to condemn land under eminent domain.

Tallgrass Energy LP is converting its Trailblazer natural gas transmission pipeline in Nebraska and Wyoming to carry carbon dioxide for storage at a site near Cheyenne, Wyo. But because the pipes that carry natural gas can’t handle the pressures needed for supercritical CO2, it won’t be in a supercritical state. So PHMSA’s regulations currently won’t cover it.

Trailblazer spokesperson Steven Davidson said the “vast majority” of the pipeline’s permits still apply, including state permits for air quality and environmental protection.

“The pipeline has been operated safely in natural gas service for nearly 40 years,” Davidson said. “It is important to definitively restate our expectation that as PHMSA determines any expanded future regulations for CO2 pipelines, our pipeline will not be exempt from those regulations.” READ MORE