Legislative Proposals to Regulate or Block Carbon Pipeline Development Fail in 6 States; Environmentalists, Politicians, Landowners Not Giving Up

By B.N. Frank

A growing number of Americans are refusing to grant land rights for carbon capture development due to risks associated with it (see 1, 2, 3). Additionally, local and state lawmakers have been taking action to regulate and/or block development (see 1, 2, 3); however, this fight is far from over.

From EE News:

Midwest CO2 pipelines push ahead as bills fizzle

By Jeffrey Tomich, Carlos Anchondo, Mike Soraghan

Companies planning carbon capture projects in the Midwest are defeating legislative proposals to add regulations or block them, increasing the likelihood that a sprawling network of planned pipelines to transport the greenhouse gas will move ahead.

The pipeline proposals, which envision moving carbon dioxide from ethanol and fertilizer plants to sequestration sites in Illinois and North Dakota, are viewed by supporters as pivotal for addressing climate change even as they are opposed by some landowners. The legislative debates in the Corn Belt are raising concerns about eminent domain and underground CO2 injection in the region.

Of more than two dozen bills filed in six states this year affecting carbon capture and sequestration projects, none has passed so far. Those measures that did advance later fizzled.

The Iowa House passed a bill related to eminent domain for CO2 pipelines, but the measure stalled last week when it didn’t clear a Senate committee in advance of a legislative deadline. And in the Dakotas, bills related to eminent domain and landowner protections passed one legislative chamber but died in the other.

Avoiding delays or additional regulations of projects to transport and sequester carbon dioxide is a win for the CO2 pipeline developers, Summit Carbon Solutions, Navigator CO2 Ventures and Wolf Carbon Solutions U.S. Inc., whose projects are spurred by low-carbon fuel standards on the West Coast and federal tax credits. In all, three proposed pipelines would reach more than 3,000 miles across the Dakotas, Nebraska, Iowa, Minnesota and Illinois.

But an unusual mix of opponents, including environmental groups and some conservative politicians and rural landowners, vow to keep pushing to adopt new, tougher regulations for CO2 pipelines and delay or block projects entirely even as state and federal regulators weigh permit applications.

Among them is Bud Jermeland, a farm equipment dealership manager in Iowa who chairs the Hancock County Republican Party.

He’s furious with the state’s GOP leadership for blocking bills that would restrict eminent domain and puts the blame squarely on Republican Gov. Kim Reynolds, adding that a lot of fellow Republicans in this solid red state feel the same way. He said he believes the governor pushed lawmakers to kill the bill.

“There’s a lot of ticked-off people — solid Republican people,” Jermeland said in an interview. “You can’t believe how many people in my party are worked up about this.”

A spokesperson for Reynolds didn’t respond to questions.

In Iowa and the Dakotas, much of lawmakers’ attention revolves around pipeline companies’ use of eminent domain for securing rights of way for pipeline projects — a sore spot for many farmers and rural landowners that’s not limited to CO2 pipelines, but also includes petroleum pipelines and electric transmission lines.

One analyst said whether it’s pipelines or transmission lines, it’s difficult to get 100 percent of a proposed route through voluntary agreements from landowners.

“While no project developer ever wants to utilize eminent domain, it’s kind of there for a particular reason, so I think that we just have to come to a conclusion as to whether these projects are for the public good,” said Matt Fry, a senior policy manager for carbon management at the nonprofit Great Plains Institute. “I think the reality is … they are.”

The bill that passed the Iowa House of Representatives last week would have prohibited the use of eminent domain for CO2 pipelines unless the developer secured 90 percent of the route through voluntary agreements, however.

The GOP-sponsored bill, House File 565, was stripped of a provision before it passed the chamber that would have prevented regulators from issuing a permit for CO2 pipeline construction until new federal safety standards are complete. The bill also would have required pipeline developers to get permits from other states before using eminent domain in Iowa.

But pipeline opponents’ celebration was short-lived. Days later, the vice chair of the Iowa Senate Commerce Committee decided the measure wouldn’t get a hearing in advance of a March 31 legislative deadline, meaning the bill was dead.

Sen. Mike Bousselot (R) said in a statement that he chose not to move the bill because there wasn’t a committee hearing scheduled that week.

“Senators have a wide variety of opinions on this issue and a consensus has not been found,” he said.

The North Dakota Senate and South Dakota House of Representatives each passed bills related to landowner rights and eminent domain. But the measures were voted down in the other chambers.

The South Dakota bill, from Rep. Karla Lems (R), would have removed CO2 from the definitions of commodities subject to transportation by common carrier pipelines under state rules, eliminating the ability to secure easements via eminent domain. Another South Dakota bill involved compensation paid to landowners in eminent domain cases.

In North Dakota, state Sen. Jeffery Magrum (R) also filed a pair of bills related to CO2 pipelines, one of which is planned to run through his district. S.B. 2251 would have required survey crews to get written consent from landowners or a court order before entering their property. The bill had broad support, including the backing of Summit Carbon Solutions.

The other, S.B. 2313, called for an optional legislative study of “fair and just” compensation in eminent domain proceedings. Summit opposed the bill, as did utility Otter Tail Power, the Lignite Energy Council and several North Dakota cities, among others.

Both measures cleared the Senate but died in House votes.

‘We’re not giving up’

Elizabeth Burns-Thompson, vice president of government and public affairs at Omaha, Neb.-based Navigator CO2, said the legislative discussions across the project’s five-state, 1,300-mile footprint have provided an opportunity to update policymakers on existing laws and regulations.

“There has been a robust amount of discussion related to these projects,” Burns-Thompson said. And through all the proposals, hearings and debates, bills have yet to pass because “there’s an acknowledgment that what we have in place now does provide protections and have worked for many years,” she said.

Burns-Thompson said lawmakers in Iowa brought in a representative from the federal Pipeline and Hazardous Materials Safety Administration to answer lawmakers’ questions directly. “I think that was a valuable conversation and important for just dispelling of misinformation,” she said.

Meanwhile, Summit Carbon, based in Ames, Iowa, in a statement said its project has strong public support in the company’s home state of Iowa as reflected by the fact that it has voluntary easement agreements with landowners representing almost 70 percent of the project’s proposed route in the state.

“This level of support is a clear reflection that Iowa landowners view the project as critical to supporting the state’s most important industries — ethanol and agriculture,” spokesperson Jesse Harris said in an email.

Harris cited a study by the Iowa Renewable Fuels Association that said without “viable access” to carbon capture and sequestration technology, Iowa could see 75 percent of its ethanol production move to other states. And the resulting loss of local corn demand would lead to more than $1 billion of lost income for the state’s corn farmers, according to the study.

Pipeline opponents are undeterred by the lack of success so far at the Iowa Capitol. They cite a Des Moines Register/Mediacom Iowa Poll released last month that showed 78 percent of Iowans oppose companies using eminent domain to build carbon capture pipelines across the state.

“We’re not giving up. There are still ways to get [a bill] through,” said Jess Mazour, a program coordinator at the Sierra Club’s Iowa chapter. “They want us to think it’s over, but we don’t accept that. Our opposition keeps growing every time we come back.”

The Illinois factor

While it’s unclear whether pipeline legislation can or will be revived in states like Iowa, legislative debate over carbon capture projects is still active in Illinois, which would host carbon sequestration sites for the Navigator CO2 and Wolf Carbon pipeline projects.

Two bills related to CO2 sequestration advanced out of the House Energy and Environment Committee a month ago. While neither has been heard on the House floor, lobbyists say the issue is still very much in play before the session ends in mid-May. The bills would affect the fate of the Navigator and Wolf Carbon pipelines, both of which would lead to sequestration sites in Illinois.

“I don’t think that the negotiating in earnest has yet begun” about the bills, said Alec Messina, executive director of the Illinois Chamber of Commerce’s Energy Council and former head of the Illinois EPA. “I think that there is still a desire from some folks to see what can be done. Whether that happens this spring or not is an interesting question, but I wouldn’t rule it out.”

Much like with landmark Illinois climate and energy legislation passed in 2021, debate over policies involving the future of carbon sequestration has drawn the interest of key energy players in the state, including pipeline and energy companies; business interests including the Illinois Chamber; and labor unions, environmental groups and agricultural interests.

The Illinois House and Senate energy committees are expected to hold a joint subject matter hearing on carbon sequestration after lawmakers return later this month from a two-week break.

Among the proposed bills is one from Rep. Ann Williams, the Democratic chair of the House Energy and Environment Committee, that’s supported by environmental groups and opposed by labor, business groups as well as Navigator.

H.B. 3119 would create the “Carbon Dioxide Transport and Storage Protections Act.” Among its numerous provisions, the bill would make sequestration operators “solely liable” for any damage caused by CO2 transported to a sequestration facility, regardless of who holds title to the CO2, pore space or surface estate.

The bill also includes provisions related to setbacks from carbon dioxide pipelines and permitting required for carbon capture.

The other measure, H.B. 2202, from state Rep. Jay Hoffman, the Democratic assistant majority leader, is backed by Navigator, labor unions, oil companies, the Chicago Chamber and the coal industry. The bill would create the “Underground Carbon Dioxide Storage Act” and includes provisions related to pore space ownership and liability.

One interested party that opposes both bills is the Illinois Farm Bureau, which adopted a policy position in December that supports pipeline transportation of CO2 from ethanol and fertilizer plants to favorable geologic formations for permanent storage if it’s done in accordance with federal safety standards.

Bill Bodine, director of business and regulatory affairs at Illinois Farm Bureau, said neither of the measures considered so far would “address [carbon capture and sequestration] appropriately to both protect our members and allow the development of the activity to occur in the state.”

If there is common ground between environmental groups and others seeking to block CO2 pipelines and the companies building them, it’s urgency to get policies in place and a desire for certainty.

That includes Navigator and its support of H.B. 2202 in Illinois, provisions of which are rooted in a study that the Legislature required a year and a half ago.

Burns-Thompson said the bill would not only help the company’s project, but also help “ensure that that carbon capture can advance in an efficient fashion for all the projects that are being contemplated both in Illinois as well as the region broadly.”