States Rush to Make Rules Governing CO2 Pipelines

This story was first published by Minnesota Reformer. Read the original article here. 

Sprawling Midwestern pipelines that would carry captured carbon dioxide from ethanol plants and other facilities would change little when they cross state lines.

The proposals would be constructed the same way in Iowa, Illinois, Minnesota, Nebraska and the Dakotas—with carbon steel pipe ranging from 4 to 24 inches in diameter with operating pressures of up to 2,200 pounds per square inch.

But the rules and procedures that determine whether they can be built in the first place vary widely among those states.

They range from seemingly no rules at all in Nebraska to Iowa’s robust system, which puts all regulation of the pipelines’ construction and operation into the hands of one governing body.

Yet, even in states with rules that give a measure of protection to people who own land in the path of the pipelines, there are calls to strengthen those protections.

Legislation failed in three of the states this year that would have restricted or prevented the companies from using eminent domain to gain land easements. It remains unclear whether regulators and courts in each of the states will decide that the projects are worthy of that forced power.

Some counties have adopted stricter rules about where the pipelines can be built, and landowners are arguing in court that merely allowing the companies to survey land without permission is unconstitutional.

“This is just the beginning,” said Vicki Hulse, a northwest Iowa landowner who is challenging Iowa’s survey law and alluded to further legal challenges as the permit processes advance. “There’s a long ways to go.”

The most prominent projects have been proposed by Navigator CO2 Ventures and Summit Carbon Solutions.

Navigator wants to build about 1,300 miles of pipe—mostly in Iowa—to transport the greenhouse gas to Illinois for underground sequestration or other commercial purposes.

Summit plans a route of more than 2,000 miles that would end with sequestration in North Dakota.

The Wild West

While Nebraska has laws concerning pipeline transport of hazardous liquids, such as crude oil, it has not adopted regulations or oversight of carbon dioxide pipelines.

A proposal in 2022, which failed to advance in the Nebraska Legislature, was aimed at requiring companies that build carbon dioxide pipelines to remove the pipe once the pipeline was abandoned.

In reaction to the controversial Keystone XL pipeline and its initially proposed route across the state’s fragile Sandhills, the Nebraska Legislature a decade ago passed laws governing the routing of hazardous liquid pipelines. But those do not pertain to carbon dioxide projects.

Right now, some counties are considering local ordinances concerning the pipelines, according to Jane Kleeb, founder of Bold Nebraska, the citizen group that led the opposition to the Keystone XL crude oil pipeline. She said at least 430 landowners are rejecting offers to sell right-of-way to carbon dioxide pipeline developers in the Midwest.

Omaha lawyer Brian Jorde, who represents many of those landowners, said he doesn’t believe the pipelines have the right to use eminent domain to obtain right-of-way under Nebraska law, an issue that will likely end up in court.

At this time, none of the companies planning a carbon-capture pipeline in Nebraska—Navigator CO2 Ventures, Carbon America or Summit Carbon Solutions—has filed any eminent domain actions in that state, according to Jorde.

“As long as they don’t try to use it against any of my clients, they’ll be fine,” he said.

Jorde thinks Nebraska’s lack of a permitting process for carbon dioxide pipelines will benefit landowners if they must fight against eminent domain. Other states with laws about the permitting process explicitly say that eminent domain is allowed for the projects. Nebraska has no such edict. 

Similar Processes

All the other states have a board or commission to review and decide whether to grant pipeline permits. Some have publicly elected members and others are composed of governors’ appointees.

North and South Dakota have three-person commissions with elected members.

The commissions in Illinois and Minnesota have five members appointed by their governors, although the Illinois Commerce Commission cannot, by law, have more than three members of the same political party affiliation.

The Iowa Utilities Board has three members who are appointed by Gov. Kim Reynolds, who recently named a new chairperson. That prompted the existing chairperson—who was still set to serve on the board for several years—to “step down.”

Each of the state’s permit processes share the goals of evaluating the need for the projects, the environmental impacts and the best routes.

Iowa, Illinois and South Dakota hold one final hearing to make those determinations, and Illinois’ commission has 11 months from the application date to make its decision about whether to issue a permit.

North Dakota’s commission holds four final hearings in different parts of the state, the last of which for Summit was held Tuesday.

Minnesota is an outlier: An administrative law judge presides over multiple hearings to determine the need for a pipeline and its proper route. The judge submits a finding of facts to the commission along with legal conclusions and recommendations. Then the commission decides.

Iowa is unique in that it is the only state to empower its board or commission with discretion over eminent domain. In the other states, eminent domain is handled by the courts after pipeline permits are granted.

Landowner Interactions

The states also vary widely in how they govern—or don’t—the communications among pipeline companies and affected landowners.

Those communications most often pertain to informing the public about the projects, surveying land to help determine a pipeline path, negotiations for easements and, potentially, eminent domain.

“All of these are state-by-state, uniquely different permitting processes,” said Elizabeth Burns-Thompson, vice president of government and public affairs for Navigator. “How and when we communicate with landowners. How and when we go about negotiation.”

In Iowa, the companies are required to hold informational meetings in each of the affected counties, after which they can begin negotiations with landowners and survey land without fear of trespassing charges—although that survey law was recently found by a district court judge to be unconstitutional.

There are similar rules for land surveys in the Dakotas, but in Illinois there is nothing in the law that forces the surveys until after a permit is issued and eminent domain is sought.

Negotiations for easements or rights of way can begin whenever in the Dakotas. In Illinois, the companies are required to send notifications by certified mail and can follow up in other ways if there is no response. The companies must generally show a “good faith” effort to negotiate before starting the eminent domain process. 

Legislation that ultimately failed in Iowa this year would have broadly curtailed the companies’ abilities to conduct surveys without landowner permission and would have prevented them from limitless contact in regard to negotiations.

Court Challenges So Far

Jorde predicted it will be at least three years before all the legal challenges related to the pipeline projects are settled.

Dozens of lawsuits have been filed in Iowa and North and South Dakota regarding the pipelines. Most of them have been initiated by the pipeline companies.

In North Dakota, Summit has sued landowners to get access to their properties for land surveys. A judge in that state recently upheld the law that allows the surveys as constitutional.

In South Dakota, there are more than 100 pending state and federal court proceedings related to the pipeline proposals. Summit has sued landowners to gain access to their property for surveys and counties for moratoriums and other actions that would block construction of its pipeline.

Recently, Summit initiated more than 80 eminent domain proceedings in South Dakota court. Each of those cases will likely take a year or more to decide and must conclude before construction can begin, Jorde said: “That’s a humongous roadblock.”

And some landowners have sued Summit, claiming the company lacks legal authority to enter their land for surveys or to exercise eminent domain.

In Iowa, Summit and Navigator have sued landowners and counties and also the Iowa Utilities Board to prevent it from releasing certain information they have provided to the board as part of the permit process.

The lawsuits against landowners have sought to obtain injunctions to gain access to their properties, and more than 10 suits are pending in different counties. The landowners are arguing that Iowa’s pipeline land survey law is unconstitutional, and there is the potential for multiple, conflicting rulings.

In the first case to be decided—one of Navigator’s lawsuits—a judge ruled that the law is unconstitutional because it does not provide compensation for the duress landowners suffer by the mere act of the forced entries onto their properties. The law provides compensation for actual damage caused to land, which Navigator has said satisfies a constitutional requirement that land cannot be taken without appropriate compensation. In another Iowa county, a judge upheld the constitutionality of the law. A decision by a third judge in another county is pending.

A trial is also pending for a Summit land surveyor who was charged with trespassing in Dickinson County. The Iowa Supreme Court recently declined to review a district court judge’s decision to let the case proceed to trial.