Summit Carbon Solutions must reveal financial aspects of its agreements with ethanol plants to attorneys for groups seeking to verify the economic claims of Summit’s proposed carbon dioxide pipeline.
However, the Iowa Utilities Board (IUB) decision also allows the company to declare that unspecified “critical timing-related provisions” of the contract can be redacted.
The order follows a dispute over whether specific terms of the ethanol plant contracts are germane to Iowa’s hazardous pipeline permit process and if Summit’s project meets “the public convenience and necessity.”
Summit’s CO2 pipeline would span more than 2,000 miles in five states and connect to more than 30 ethanol plants, including Homeland Energy Solutions near New Hampton, Absolute Energy near St. Ansgar, Golden Grain Energy near Mason City.
The company’s witness testimony in pursuit of an Iowa permit claims ethanol producers might generate 10 to 35 cents of additional revenue per gallon because of the project. A study commissioned by the Iowa Renewable Fuels Association — which supports Summit’s project — said carbon dioxide pipelines could more than triple the profit margins of ethanol plants.
The IUB ordered Summit to provide the contracts with the provisions redacted within two days. The company will use a data-sharing site to disseminate those contracts, where they can be viewed but not downloaded.
The final evidentiary hearing for Summit’s permit is set to start Tuesday in Fort Dodge, although there are pending requests to delay the proceedings. The IUB recently published a schedule of witnesses including landowners, like Jessica Marson of Floyd County, who declined to sign voluntary easements for pipeline construction and are subject to Summit’s eminent domain requests.
State officials are recommending a water-rights permit for a carbon dioxide pipeline company, but some nearby residents who use the same aquifer fear they could be negatively affected.
The Summit Carbon Solutions pipeline route in South Dakota. (Courtesy of South Dakota Public Utilities Commission)
A corporate entity affiliated with Summit Carbon Solutions, called Redfield SCS Capture, has applied to drill a well that could take up to 21 million gallons of water per year from the Dakota Aquifer, which is an amount equivalent to about 32 Olympic-sized pools.
The well would be about 1,100 feet deep and located a few miles north of Redfield, in the same area as the Redfield Energy ethanol plant, which is a partner in the Summit pipeline project.
The state Department of Agriculture and Natural Resources said in a written statement to South Dakota Searchlight that the water will be used for “non-contact cooling.” The department provided no further information, and Summit did not respond to multiple Searchlight messages. Other sources interviewed for this story speculated the water will be used to cool pipes carrying pressurized carbon dioxide.
After its use, the water would be discharged into a local waterway, DANR’s report says. The report does not say which body of water, but the site is near Turtle Creek and the James River.
Summit Carbon Solutions wants to capture carbon dioxide emitted from ethanol plants in five states. The gas would be pressurized into a liquid form and transmitted via pipelines to North Dakota for storage underground, to prevent the gas from trapping heat in the atmosphere. For its purported value in helping to fight climate change, the $5 billion project would be eligible for up to $1.5 billion in annual federal tax credits.
Neither DANR nor Summit responded to questions about whether Summit will apply for new water rights and wells at other locations.
The water source, the Dakota Aquifer, is a porous rock and sand formation where water gets stored as it trickles underground. It underlies about 66,500 of South Dakota’s 77,000 square miles of land. A 1982 report cited by the state indicated the aquifer held about 124 trillion gallons of “recoverable water storage” east of the Missouri River in South Dakota.
In a June 29 staff report, state Chief Engineer Eric Gronlund recommended approving the application, saying there’s enough water available for it, it’s unlikely to harm existing water users and it’s for a useful purpose.
Permit gets contested
Because some nearby residents sent opposition comments to the state during a public comment period, the proposed permit will be the subject of a contested case hearing this fall.
One of those nearby residents is Debra Curtis, who ranches about 2.5 miles from the proposed Summit well and fears it would “reduce the water pressure and flow of my well.”
Dave and Stacey Marlow wrote to the department that their drive-in theater “will not have adequate water pressure to continue business” if the project is permitted.
“I was told that much water being extracted will create a cone-shaped vacuum into the aquifer,” Dave Marlow told South Dakota Searchlight. “And for wells only a mile or so away, like ours, there’s just not enough pressure.”
Pheasant City Drive-In is located 1 mile north of Redfield on Highway 281, about a mile south of a proposed well for the Summit Carbon Solutions pipeline. (Courtesy of Stacey Marlow)
Jay Gilbertson manages the East Dakota Water Development District, based in Brookings. He said Marlow was referring to a “cone of depression,” a term describing the shape that forms in the water table around a well when water is pumped out – like drinking a milkshake through a straw.
“When water is pumped out of a well, the water level closer to the well goes down,” Gilbertson said. “If too much water is taken out, it can cause problems for the wells in the surrounding area.”
Gilbertson also referenced language in the state staff report that says if problems with existing residential systems occur, the company has to stop or at least reduce its usage.
Bureaucratic processes
Dave Marlow said a state employee told him he could “see a drastic decline in pressure” and that a lot of paperwork and bureaucracy would stand in the way of stopping Summit Carbon Solutions from pumping.
“I know the guy’s name but I really don’t want to give it out,” Marlow said.
Debra Curtis said a state employee she declined to identify told her something similar. But when she tried to contact the employee again, she was unable and was later referred to Ian Fury, the governor’s spokesperson.
“He assured me that as a resident, we’d have priority over the company,” Curtis said. But she remains skeptical about how long it would take to force a large pipeline company to stop pumping water.
The Department of Agriculture and Natural Resources did not immediately respond to Searchlight questions regarding the claims from Marlow and Curtis about the state employee who spoke with them.
Marlow said he and his wife only found out about Summit’s water-rights permit application by reading the legal section of their local paper.
“Most people have no idea what’s going on or that it’s even happening, and I think they’re going to have a big problem coming down the road,” Marlow said. “Nobody reads the notices in the paper anymore.”
To oppose the application, comments had to be filed with the state’s Water Rights Program by July 24.
South Dakota Searchlight sent the Department of Agriculture and Natural Resources questions about the proposed permit on July 11, July 13 and Aug. 10, but didn’t get a response until Aug. 11.
“The public notice period for this application has closed,” department spokesperson Brian Walsh wrote.
He added that three people or entities — Curtis, the Marlows and another rural Redfield resident, Brad Hekrdle — filed comments that automatically triggered a contested case hearing, which will take place Oct. 4 in Pierre before the state Water Management Board.
Meanwhile, the state Public Utilities Commission’s hearing on Summit’s pipeline permit application will begin Sept. 11 and is scheduled to run 13 days at the Casey Tibbs Rodeo Center in Fort Pierre.
The commission has already conducted hearings on another carbon pipeline, proposed by Navigator CO2, and is expected to issue a decision on that project soon.
BISMARCK, N.D. — Public utility regulators in Iowa will begin a hearing today on a proposed carbon dioxide pipeline for transporting emissions of the climate-warming greenhouse gas for storage underground that has been met by resistant landowners who fear the taking of their land and dangers of a pipeline rupture.
Summit Carbon Solutions’ proposed $5.5 billion, 2,000-mile pipeline network would carry CO2 from 34 ethanol plants in five states to North Dakota for storage deep underground — a project involving carbon capture technology, which has attracted both interest and scrutiny in the U.S.
North Dakota regulators earlier this month denied a siting permit for Summit’s proposed route in the state, citing issues they say Summit didn’t appropriately address, such as cultural resource impacts, geologic instability and landowner concerns. On Friday, Summit petitioned regulators to reconsider.
Other similar projects are proposed around the country, including ones by Navigator CO2 Ventures and Wolf Carbon Solutions, which would also have routes in Iowa.
Carbon capture entails the gathering and removal of planet-warming CO2 emissions from industrial plants to be pumped deep underground for permanent storage.
Supporters view the technology as a combatant of climate change. But opponents say carbon capture and storage isn’t proven at scale and could require huge investments at the expense of cheaper alternatives such as solar and wind power, all at a time when there is an urgent need to phase out all fossil fuels.
Carbon capture also is viewed by opponents as a way for fossil fuel companies to claim they are addressing climate change without actually having to significantly change their ways.
“I think there’s a recognition even in the fossil fuel industry that, whether you like it or not and agree or not, [climate change] is a reality you’re going to deal with from a regulatory standpoint, and you’d better get out in front of it or you’re going to get left behind,” said Derrick Braaten, a Bismarck-based attorney involved in issues related to Summit’s project.
New federal tax incentives have made carbon capture a lucrative enterprise. The technology has the support of the Biden administration, with billions of dollars approved by Congress for various carbon capture efforts.
High-profile supporters of Summit’s project include North Dakota Republican Gov. Doug Burgum, a presidential candidate who has called the state’s underground CO2 storage ability a “geologic jackpot,” and oil magnate Harold Hamm, whose company last year announced a $250 million commitment to Summit’s project.
“Carbon capture and storage is going to be more and more important every day as we go forward in America,” Hamm has said.
The Iowa Utilities Board begins its public evidentiary hearing today in Fort Dodge, a hearing “anticipated to last several weeks,” according to a news release. The board’s final decision on Summit’s permit request will come sometime after the hearing.
Minnesota’s Public Utilities Commission has a hearing set for Aug. 31 in which the panel “will make decisions about the scope of environmental review” regarding Summit’s permit application for its pipeline in two counties, said Charley Bruce, an energy facilities planner with the commission.
A Summit attorney recently indicated to Minnesota that North Dakota regulators’ decision to deny a permit will not affect the company’s plans, including for other proposed routes in southern Minnesota.
The South Dakota Public Utilities Commission is set to begin its evidentiary hearing for the project on Sept. 11 and expects to make a final decision by Nov. 15.
Nebraska has no state-level regulatory authority for CO2 pipelines. Summit is working with counties individually in Nebraska.
Counties don’t approve or deny a route, but can institute ordinances’ setbacks for land-use purposes that can dictate where a pipeline may go, and can enter into road haul agreements and road crossing permits, said Omaha-based attorney Brian Jorde. He represents more than 1,000 landowners opposed to CO2 pipeline projects in four states.
Summit hasn’t hit “an insurmountable legal obstacle” in North Dakota regulators’ denial “because they literally said ‘try again,'” Braaten said.
“If they get over themselves I think that they could do it and get approved, but I think they certainly shot themselves in the foot and they’re making it much harder in those other states because they’re going to come in with those commissioners there looking at them with a certain level of skepticism because you literally just got denied a permit in North Dakota,” he said.
Landowners have raised concerns about the pipeline breaking, as well as eminent domain, or the taking of private land for the project, with compensation.
REGIONAL—Scores of people for and against the proposed Summit Carbon Solutions pipeline are making their final preparations before the CO2 project’s hearing with the Iowa Utilities Board set for Tuesday, Aug. 22.
Proceedings are set to start at 10 a.m., although protesters expect to show up at least an hour early at the Cardiff Event Center in Fort Dodge. The IUB will meet for at least a month, with every weekday adding to testimony.
The Iowa Farmers Union, one of several statewide groups organizing against Summit and similar pipelines, held a virtual meeting Thursday, Aug. 17, to discuss the hearing.
“It’s super important for people to take action,” said IFU president Aaron Lehman.
The hearing will start with Exhibit H landowners. These are people who are on Summit’s proposed route who have not signed a voluntary easement with the Ames-based company.
There are about 1,000 parcels still unsigned in Iowa, about a third of the route. The landowner total is likely smaller since one person can own multiple parcels.
While the critics are vocal, having a majority signed onto the project shows ample approval in the view of Summit spokesperson Jesse Harris.
“There is overwhelming support among Iowa landowners for this project and importantly more easement agreements are being signed every day and that will continue throughout the upcoming hearing,” Harris said
Hs could eventually be subject to eminent domain. After the hearing concludes, the three-member board will decide the scope of land seizures, if any, if it decides to grant Summit construction permission in the first place.
This anti-pipeline sign north of Sheldon is a larger than most in N’West Iowa. After more than two years of prelude, the Iowa Utilities Board will start its hearing on the Summit Carbon Solutions pipeline Tuesday, Aug. 22. Elijah Helton ehelton@iowainformation.com
“Ultimately, the IUB decides whether the applicant will be allowed to exercise eminent domain and, if so, exactly what rights can be condemned,” said IUB communications director Don Tormey.
After Exhibit Hs testify, it will be Summit’s turn to make its case in the hearing’s second phase.
The main argument is economic. The proposed five-state pipeline system would sequester carbon dioxide from 32 ethanol plants, including 13 in Iowa such as Siouxland Energy Cooperative near Sioux Center, and pump it underground to be stored indefinitely in North Dakota.
Keeping CO2 out of the atmosphere earns those plants a more climate-friendly rating, making the biofuels more profitable in green-conscious markets such as California.
Without CO2 pipelines, the Iowa Renewable Fuels Association said the state could lose up to 75 percent of its ethanol production within a decade, more than $10 billion.
Summit missed out on a permit Aug. 4 in North Dakota with a similar process to the IUB’s. That led some Iowa anti-pipeliners to argue the Hawkeye State should postpone its Aug. 22 hearing. They call Summit’s project “a pipeline to nowhere.”
“Rushing this only benefits Summit. It does not benefit any of the landowners who never asked to be a part of this process in the first place,” Jess Mazour said.
Mazour spoke to the IFU and its virtual audience Aug. 17. She is one of the leading public faces of the anti-pipeline movement in Iowa, working for the Sierra Club.
But postponement isn’t happening. Tormey said the IUB’s process is separate and unaffected by North Dakota.
“Any action taken by the IUB regarding this matter would be filed in the Summit Carbon docket that is pending before the IUB,” Tormey said.
Harris said everyone has had plenty of time.
“Our project was announced two and a half years ago. We completed county informational meetings nearly two years ago. We submitted our permit application more than a year and a half ago,” Harris said. “Having met those important regulatory milestones, scheduling a start date for the hearing in August is well within the typical timeline for projects such as this and clearly provides substantial time for participation by all stakeholders.”
The third phase of the IUB hearing features interveners. These are Exhibit Hs as well as outside actors, such as the IFU and Sierra Club, to argue for or against the project.
“Some of these Exhibit H landowners have intervened to participate at a higher level in the process and some haven’t. That’s fine. They’re all going to get their ‘day in court’ to testify in front of the IUB,” Mazour said.
IUB approval would not green light the entire project, although it would be the biggest state-level step forward for Summit. The company plans 720 miles of its 2,000-mile route to be in the Hawkeye State.
Summit has reapplied in North Dakota. Harris said the company is still on schedule to break ground in the first or second quarter of 2024.
“We look forward to starting the hearing next week and continuing to move the project through the regulatory process,” Harris said.
Besides North Dakota, the company faces a variety of processes in Minnesota, Nebraska and South Dakota, all with different CO2 pipeline approval rules.
But for right now, Lehman said, the fight is converging on Fort Dodge.
“We know that we are strongest when we have the best voice, when we all work together,” he said.
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.
We're fighting for our homes and our land, and for the safety of South Dakota communities just like yours. But we can't do this alone, we need your help, so if you can, pitch in and let's make some hay.
We're fighting for our homes and our land, and for the safety of South Dakota communities just like yours. But we can't do this alone, we need your help, by being informed and taking action when it matters most.
Summit Carbon Solutions must reveal financial aspects of its agreements with ethanol plants to attorneys for groups seeking to verify the economic claims of Summit’s proposed carbon dioxide pipeline.
