North Dakota Commissioners Say Counties Won't Be Able to Restrict Summit Carbon Pipeline

January 29, 2024

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by Donnelle Eller (Des Moines Register) The Ames-based company that wants to build a $5.5 billion carbon capture pipeline across Iowa and neighboring states got a boost as North Dakota regulators signaled cities and counties there will be unable to impose local restrictions on pipelines tougher than those the state already has in place.

Randy Christmann, chair of the North Dakota Public Service Commission, said during a work session Friday that North Dakota law makes it clear a state-issued permit for the construction of a pipeline "supersedes and preempts any local land use or zoning regulation."

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No date has been set yet on Summit's request to supersede local ordinances, Eberl said.

Summit proposes building a 2,000-mile pipeline that would be used to capture carbon dioxide emissions from about 30 ethanol plants in Iowa and four other states, liquefy it under pressure and transport it to North Dakota, where it would be sequestered deep underground.

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Iowa regulators are considering Summit's request to build about 640 miles of the hazardous liquid pipeline across the state. Regulators in North and South Dakota have rejected the company's permit request, although the North Dakota commissioners have agreed to reconsider Summit's request.

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With the commissioners reconsidering its permit request, Summit renewed efforts to bypass ordinances in Emmons and Burleigh counties, where Bismarck is located, that it says would unreasonably restrict where the pipeline is built.

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As part of its argument, Summit pointed to a federal judge's order that permanently barred two counties in Iowa, Shelby and Story, from enforcing local ordinances that would restrict the path of carbon dioxide pipelines. Summit said the court agreed that local setback requirements, along with other safety measures, are preempted by federal law. The counties are appealing the court's order.

Iowa counties have pointed to a letter from federal regulators to pipeline companies saying it recognizes local governments' authority to restrict "land use and development along pipeline rights-of-way through zoning, setbacks and similar measures."

But Christmann said North Dakota legislators changed state law in 2019 to make it clear that the commission's permit decisions on pipeline projects, "some of which may traverse several local jurisdictions," supersede local ordinances and regulations.

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The North Dakota commissioners haven't set a date to reconsider Summit's permit request. READ MORE

Related articles

Federal judge says counties can’t restrict carbon dioxide pipeline locations (Iowa Capital Dispatch)
Counties argue for local pipeline control; Summit seeks state preemption (Iowa Capital Dispatch)
North Dakota regulators hear arguments in CO2 pipeline local ordinances dispute (Bismark Tribune)
N.D. debates whether counties can restrict CO2 pipeline routes -- The developer of a major CO2 pipeline told regulators Thursday that local setback ordinances are "unreasonably restrictive." (Politico Pro Energywire)
Summit wins on local ordinance issue in North Dakota; permit hearings still weeks away (Nebraska Examiner)
North Dakota Republicans tackle eminent domain issue for carbon pipelines (Nebraska Examiner)
Summit says power supply, blackouts not a concern for pipeline (North Dakota Monitor)
Summit Carbon Wins at ND Supreme Court: North Dakota Supreme Court Rules Summit Can Enter Private Property Legally (DTN Progressive Farmer)
Summit pipeline hearings wrap up with more landowner complaints (North Dakota Monitor/Yahoo! News)

Excerpt from Iowa Capital Dispatch: The ruling by Chief Judge Stephanie Rose, filed Monday in the federal Southern District of Iowa, said state law does not explicitly prohibit the Shelby County ordinance in western Iowa but that such a prohibition is implied.

Rose noted the statutory role county supervisors have in land restoration after a pipeline is built but not in pipeline placement.

“This omission is evidence that the Legislature did not envision a role for counties in regulating the location of pipelines,” Rose wrote.

Further: “Common sense suggests these restrictions would eliminate all or almost all land in Shelby County on which an (Iowa Utilities Board) approved pipeline could be built,” the judge wrote. “This creates a serious possibility the IUB would approve the construction of the pipeline but Summit would be unable to build because it could not comply with the requirements of the ordinance.”

Rose also said the ordinance’s requirements for pipeline companies to submit safety plans to the county and to notify the county when use of a pipeline is discontinued conflict with federal rules.

“State and local agencies cannot regulate safety matters,” Rose wrote.

Kenkel said counties need early access to dispersion models of the Summit project that show what places are most likely to be affected by a pipeline breach. He said the ordinance was further meant to protect economic and housing development in the county’s cities by keeping pipelines two miles away from them.

The project is also unpopular in Shelby County, Kenkel said, because the pipeline is not connecting to ethanol plants there. Affected landowners might be forced to give land easements through eminent domain “while serving no benefits to them,” he said. READ MORE

Excerpt from Nebraska Examiner: Summit Carbon Solutions and other pipeline companies scored a victory Wednesday when the North Dakota Public Service Commission decided that state rules preempt local ordinances on pipeline zoning issues.

That decision paves the way for a rehearing on Summit’s application for a pipeline permit, which the commission denied last year.

Commission Chairman Randy Christmann said hearings on Summit’s revised application would be at latest four weeks away and may be longer.

On local ordinances, Christmann said state law, which was changed in 2019, is clear: “the approval of a route permit for a gas or liquid transmission facility automatically supersedes and preempts local land use or zoning regulations except for road use agreements.”

The three-member commission met in a work session Jan. 26 to discuss the issue, and commissioners indicated they would support an order giving state rules preemption over those set by counties and other local governments.

Wednesday’s unanimous vote confirmed the PSC’s position.

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The PSC denied Summit’s pipeline siting application last year. Summit has since proposed changes to its route around Bismarck, and an appeal is pending before the commission.

Christmann called the case file around the pipeline “enormous,” and said 2,000 pages of filings had been added just in the last eight days.

He said staff and commissioners need time to review those filings before more hearings can be set.

“It’s going to take some time. I don’t know how long yet,” Christmann said.

Summit in 2021 said it had planned to begin construction in 2023 and be operational by 2024 but it has yet to obtain the needed pipeline route permits.

Tharaldson Ethanol at Casselton is the only North Dakota plant on the pipeline route. Iowa-based Summit recently announced the addition of 17 ethanol plants owned by Poet, based in Sioux Falls, South Dakota, to the carbon pipeline network. READ MORE

Excerpt from Nebraska Examiner: The North Dakota Republican Party will vote on a resolution that backs the rights of landowners and objects to using eminent domain for carbon capture pipelines.

The resolution was one of several approved by a committee this month and targets a project that Gov. Doug Burgum and some Republicans have supported – the carbon capture and storage project from Summit Carbon Solutions.

While the project was not named in the resolution, it is the only large-scale carbon capture project in the state at the permitting stage, with the North Dakota Public Service Commission set to start a rehearing for the pipeline next month.

State Sen. Jeff Magrum, R-Hazelton, said he contributed much of the wording on the resolution that passed the Resolutions Committee. It was then approved by the State Committee.

He said he looks forward to a debate on the resolution at the Republican state convention April 5-6.

“Is our party still the party of property rights?” Magrum said in an interview.

Capitalizing on ‘false pretense’

While there may not be a formal debate on the 15 resolutions up for consideration, “the debate will take place in the hallways,” said Rep. Karen Karls, R-Bismarck.

The resolution says that “Corporations within the energy sector are capitalizing on the false premise of a looming climate apocalypse by introducing CCS (carbon capture and storage) projects into North Dakota” and “eminent domain is being considered to acquire the necessary land for the pipeline.” READ MORE

Excerpt from North Dakota Monitor: Summit is taking another run at obtaining a permit for its pipeline project after being denied by the PSC last year. Tuesday’s hearing was the first day of five days of hearings in Bismarck. Another public hearing is set for June 4 in Linton. Summit proposes to transport carbon dioxide captured from 57 ethanol plants in five states for permanent storage in North Dakota.

Attorneys Randy Bakke, representing Burleigh County, and Brian Jorde, representing landowners, asked Summit witnesses several questions about whether enough power generation exists for its pipeline project.

“You think another major competing electricity demander is a benefit to the rest of the citizens of North Dakota?” Jorde asked Dan Pickering of Pickering Energy Partners of Texas.

“I think, in aggregate, demand growth is generally a positive for the citizens of North Dakota,” Pickering said.

Summit’s Wade Boeshans, whose background is in the North Dakota coal industry and coal-fired power plants, testified that he didn’t understand concerns about the electric power demands of Summit.

“Our biggest challenge is we had more generation than we had demand for that generation,” Boeshans said. “Coal plants were running at less than full capacity because there wasn’t enough market or enough market demand.”

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Boeshans said electric co-ops approached him about placing pumps in their service area because the co-ops would benefit from the demand.

Powell testified that Capital Electric Co-op would be able to handle the load in Burleigh County. “They do need to make some infrastructure modifications that Summit will provide the capital for,” Powell said.

Summit’s second attempt at obtaining a route permit in North Dakota includes an altered route around Bismarck, farther from the city.

Boeshans said Summit has obtained voluntary easements from about 43% of the new route through Burleigh County.

Asked why some landowners are reluctant to sign an easement agreement, Boeshans said some landowners may want more money, some are watching the Public Service Commission permit process, and some still have safety concerns about the pipeline. He also said there may be disagreements among family members about the controversial project.

Overall, Summit says it has obtained more than 80% voluntary easements on the 353 miles of pipeline route through North Dakota.

With permit denials in North Dakota and South Dakota, Summit has fallen behind its original timeline. It has been sued by a pipeline supplier, which alleges Summit owes it $15 million.

Powell said Tuesday the company is working with three other pipeline suppliers and has other options if the dispute with Welspun Tubular of Arkansas is not resolved.

“We’re not solely dependent on Welspun,” Powell said.

Summit estimates the project cost has swelled to $8 billion, with some of the revenue to pay for the project coming from federal tax credits that reward carbon capture and storage.

If Summit is not able to obtain voluntary easements for its pipeline right-of-way, it could resort to using eminent domain, asking the court system to force landowners to provide that easement. Landowners would still receive some compensation under eminent domain.

The PSC has no authority over eminent domain.

When asked if Summit reserves the right to use eminent domain in North Dakota, Boeshans said, “that would be fair.”

Powell agreed.

“Condemnation is the last option,” Powell said, adding that, “we have a long runway to continue to negotiate.” READ MORE

Excerpt from DTN Progressive Farmer: The North Dakota Supreme Court on Thursday ruled Summit Carbon Solutions has the right to enter private lands to conduct surveys and examinations in preparation for the construction of a segment of a Midwest carbon pipeline in the state. The ruling followed an appeal filed by a group of landowners.

As part of a lawsuit filed by Summit against property owners, a district court in North Dakota granted a motion for summary judgment to Summit to allow it to enter private lands in the state. A group of landowners appealed the ruling to the state's highest court.

The district court ruled the state's entry statute does not "constitute an unconstitutional per se taking" of land or property. The court also ruled Summit was a "common carrier" that is "authorized to exercise eminent domain."

The North Dakota Supreme Court on Thursday affirmed the district court's judgement.

"We conclude the judgments do not expressly authorize any actions beyond the statute, and the statute does not authorize entry beyond the historical background principles of our property law," the court said in its 15-page opinion.

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The landowners in the case argued that Summit entering their properties constituted an unconstitutional taking because it has "no limitations on assignment or transfer and this right does not expire."

The North Dakota Supreme Court said it disagreed with the argument, and no matter how the entry statute is read, the district court's judgment did not grant "perpetual authority" for Summit to enter private property.

The court said it agreed with the district court in its conclusion that "if the examinations were conducted as proposed, they would not constitute an impermissible physical invasion."

The court said the district court's order did not grant the "functional equivalent" of an easement, either temporary or permanent.

"At this time, and on this record, we can only speculate whether Summit's entry onto landowners' property ultimately exceeds the limited scope permitted by the statute and the constitutional protections against uncompensated takings," the North Dakota Supreme Court said.

"Nothing we say here forecloses further proceedings if Summit enters the land and it is 'damaged' within the meaning of art, unnecessarily and unreasonably interferes with its ordinary use, or continues to occupy the land beyond the time reasonably needed to complete its examinations, surveys and maps." READ MORE