What legal issues could decide Summit’s carbon pipeline permit request? We asked an expert.

Source: By Donnelle Eller, Des Moines Register • Posted: Sunday, August 20, 2023

Will Summit Carbon Solutions’ planned $5.5 billion carbon capture pipeline across Iowa provide a public benefit to the state and its residents?

That will be the question at the heart of a monthslong hearing scheduled to begin Tuesday in Fort Dodge as Summit seeks a permit from the Iowa Utilities Board to build the 700-mile Iowa segment. The planned pipeline would transport liquefied carbon dioxide emissions from ethanol plants and other agriculture-based industries in Iowa and four other states to a deep subterranean sequestration site in North Dakota.

Jennifer Zwagerman, a Drake University law professor and the school’s Agriculture Law Center director, says a core legal consideration as the board decides whether to grant the permit will be whether it promotes “public convenience and necessity.”

Landing a permit would be the first step to Summit winning eminent domain powers to force unwilling landowners in the project’s pathway to sell the company access to build the pipeline. Summit has said about 480 property owners rejected easement overtures.

Possibly helping Summit is the last controversial hazardous liquid pipeline state regulators considered. In the 2016 Dakota Access case, the utilities board determined it could weigh a pipeline’s public benefit beyond Iowa as it granted developers a permit to build the $4 billion crude oil pipeline that cuts a diagonal northwest-to-southeast path across the state.

“The board will consider all benefits of a proposed hazardous liquid pipeline, regardless of whether they are Iowa-specific benefits,” the board said in that case.

Zwagerman, though, says it might be trickier for Summit to demonstrate the pipeline would benefit more than just ethanol producers.

“The IUB will want to see a general benefit to the public,” Zwagerman says.

Here’s what she had to say about the legal issues likely to emerge in the weeks ahead.

Does public “convenience and necessity” in the Summit project differ from Dakota Access, the 2016 crude oil pipeline project that sparked widespread opposition in Iowa?

While “it wasn’t always popular, there was a pretty strong history of natural gas and oil pipelines having a big public benefit,” Zwagerman says. Products made from crude oil heat homes, fuel vehicles and power jets, among other uses.

Proving the public benefit of carbon capture and sequestration could be more challenging, since its track record isn’t as well established, Zwagerman says. Summit and its experts will press the idea that the project will have “greater climate and environmental benefits to the public” by reducing the carbon footprint of Iowa ethanol producers and farmers, she says, while the opponents’ experts will question whether it will have the claimed climate benefits or if better options than sequestration are available.

Summit says the project will sequester 18 million tons of CO2 annually, a calculation critics say is exaggerated, based on a Texas company’s past efforts to capture emissions at a coal-fired power plant. The company used the carbon emissions to extract oil.

Will the economic benefits of the project play a role in deciding its public benefits?

The Iowa Utilities Board said in the Dakota Access decision that the added safety of transporting crude oil by pipeline instead of by rail, along with the project’s jobs and economic impact, outweighed environmental risks and intrusion on private landowners’ property.

An economic study that Summit commissioned says the project over the five states involved will create about 11,430 jobs each year during construction, with $2.1 billion paid to workers, contractors and suppliers. Landowners are expected to receive $309 million for right-of-way access, the report says.

After the pipeline is built, the project would employ 1,170 people, with $71 million paid to suppliers and contractors, Summit says. And the company is expected to point to the viability of ethanol, which absorbs half of Iowa’s annual corn crop. The industry says ethanol adds about $4.5 billion to the Iowa economy and supports about 44,000 jobs in the state.

But opponents say the project wouldn’t be feasible without lucrative federal tax incentives, which could reach $100 billion, according to a Bloomberg report. And critics have pointed to the added costs local governments will face if they must respond to a leak or rupture.

Summit and other pipeline developers say they will train and equip local emergency responders. But some local first responders complain they haven’t been contacted.

How will safety play out in the hearing?

The Sierra Club’s Iowa chapter, along other groups and government officials, are pushing Summit to release dispersion modeling showing the homes, businesses and communities that might be in the plume of a rupture or leak in the pipeline. An administrative judge agreed with the Sierra Club and other groups this month, ordering Summit to release the modeling.

Summit is appealing the decision to the utilities board. The company says safety falls within the oversight of the federal Pipeline and Hazardous Materials Safety Administration and that Iowa regulators should follow North Dakota’s decision and prevent the release so bad actors couldn’t use the information to damage or sabotage critical infrastructure.

The Sierra Club and other groups say Iowa regulators play a role in safety oversight, given the three-member panel’s authority over the pipeline’s route. Counties also argue that concerns about the pipeline will hamper their ability to grow.

In a filing, Neil Hamilton, former director of Drake’s Agriculture Law Center, pointed to Rockford, southeast of Mason City, which he says feels “the potential health, safety and environmental concerns of the pipeline will be a deterrent for future growth” in an “already struggling small community.”

And opponents point to a rupture three years ago in a carbon dioxide pipeline near Satartia, Mississippi, that forced the evacuation of 250 people and sickened 45. Some residents continue to struggle with health issues. As a result, the Pipeline and Hazardous Materials Safety Administration said it would strengthen carbon capture pipeline safety oversight. Pipeline critics say projects should be halted until the federal agency has completed its work.

Summit and other pipeline companies say they’ll meet and exceed federal pipeline regulations.

Zwagerman says the utilities board will have to weigh which arguments are stronger as part of an “overall balancing test,” used to make its decision.

Will North Dakota’s denial of Summit’s pipeline permit request be an issue in the Iowa case?

North Dakota’s public service commission on Aug. 4 denied a pipeline permit request there, saying Summit had “not taken steps to address outstanding legitimate impacts and concerns expressed by landowners or demonstrated why a reroute is not feasible. The Commission also requested additional information on a number of issues that came up during the hearings. Summit either did not adequately address these requests or did not tender a witness to answer the questions.”

Summit says it will reapply for the permit, addressing regulators’ concerns, and several groups have requested the Iowa hearing be postponed until there is a decision. Zwagerman, however, says she doubts their request will be granted.

If state regulators were to approve a permit for Summit, Zwagerman says, she thinks they will make construction in Iowa conditional on getting a permit in North Dakota.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457