The cancellation of a major carbon dioxide pipeline Friday rippled far beyond the Corn Belt, raising questions about the fate of similar projects and the viability of carbon capture technology at the scale envisioned by the Biden administration.
Opponents celebrated Navigator CO2 Ventures’ decision to scuttle the 1,300-mile Midwestern project weeks after a permit application was rejected by South Dakota regulators. Supporters lamented the company’s decision to cancel the Heartland Greenway pipeline — and at least one rival developer appears primed to pick up some of the pieces.
Less clear are the implications for the future of carbon pipelines, infrastructure viewed by many experts as a necessity to enable wider use of carbon capture and sequestration (CCS) and other emerging technologies. That’s in part because only certain regions of the country have geology required to sequester CO2 deep underground. The Department of Energy has said CCS is key to avoiding the worst consequences of climate change.
While federal regulators oversee most aspects of CO2 pipeline safety, state-level approval is key and has been a challenge for regulators in many states, said Martin Lockman, a fellow at Columbia University Law School’s Sabin Center for Climate Change Law. Permitting also can vary significantly from state to state, adding to the complexity and development timelines for multistate projects.
“The legal framework governing CO2 pipelines is heavily fragmented and often uncertain,” Lockman said. “In many states, it is unclear how existing laws should be applied to these kinds of projects, and many state regulators have very limited experience with CO2 pipelines.”
Lockman last month published a paper looking at the state and federal permitting for CO2 pipelines to support direct air capture hubs and barriers to their development.
“Uncertainty and delay around these permits can make financing expensive or impossible,” he said in an interview. “This can be absolutely fatal to pipeline projects.”
Advocates for carbon capture like Madelyn Morrison, director of government affairs at the Carbon Capture Coalition, said the technology and related infrastructure are vital to meeting the nation’s climate goals.
According to DOE, Biden’s goal of a net-zero U.S. economy by 2050 will require capturing and storing 400 million to 1.8 billion million metric tons of CO2 annually through CCS and carbon removal technology such as direct air capture.
DOE estimates 30,000 to 96,000 miles of pipeline could be needed to link capture sites with geologic storage. There’s only about 5,000 miles of CO2 pipeline in operation today in the United States.
Morrison pointed to the 2021 bipartisan infrastructure law and last year’s Inflation Reduction Act that provided incentives such as an increase in the federal 45Q tax credit for permanent geologic storage of CO2 to $85 per metric ton.
The tax credits, along with low-carbon fuel standards adopted in California and elsewhere on the West Coast, supercharged interest in CO2 capture at Midwest ethanol plants and developers’ plans to build pipelines from the plants to geologic storage sites.
Iowa-based Summit Carbon Solutions is planning about 2,000 miles of CO2 pipeline across five states. And Wolf Carbon Solutions U.S. is developing a 350-mile network in coordination with Archer-Daniels-Midland.
Plans for Navigator’s Heartland Greenway pipeline spanned 1,300 miles and five states. The company said its decision to scrap the project was based on the “unpredictable nature of the regulatory and government processes” in two of the five states it would cross: Iowa and South Dakota. The other states in the project included Illinois, Minnesota and Nebraska.
“The ultimate decision was largely a function of a lack of certainty in a viable pathway forward in state permitting processes across the board,” Elizabeth Burns-Thompson, vice president of government and public affairs at Navigator, said in an email. Discussion about potential CO2 pipeline legislation in Midwest states led to “more uncertainty,” she said.
Navigator’s pipeline would have linked to more than two dozen ethanol and fertilizer plants, mostly in Iowa. Those facilities are now “free to explore other carbon management ventures,” Burns-Thompson said.
‘Another headache’
Like Navigator, Summit’s project has faced opposition and delay. The company’s request for a permit in North Dakota was denied by the state’s Public Service Commission, though regulators did grant the company’s request for a rehearing. The company recently pushed back the estimated start date for operation of the project to 2026 from 2024.
Summit is undeterred by Navigator’s decision, and the company said in a statement that it may look to connect ethanol plants left without ways to transport CO2.
“We remain as committed to our project as the day we announced it,” the company said, adding that it is “well-positioned to add additional plants and communities to our project footprint.”
Wolf Carbon Solutions, a Denver-based affiliate of Canada’s Wolf Midstream, didn’t respond Friday to requests for comment on the possible impact of Navigator’s decision.
Nor did Valero Energy, which said in a September investor presentation that it would be the “anchor shipper” on the Heartland Greenway with eight ethanol plants in Iowa, Nebraska, South Dakota and Minnesota connected to the pipeline system.
Wil Burns, co-director of the Institute for Carbon Removal Law and Policy at American University, said Navigator’s cancellation decision wasn’t surprising given the “major headwinds” its project has faced.
Proposed CO2 pipelines have drawn opposition from an unlikely political alliance that includes the Sierra Club and other environmental activists, as well as cities and counties in the path of the projects and agriculture groups.
“That’s always dangerous if you’re a pipeline company,” Burns said. “It’s another headache for the carbon capture and storage and the carbon dioxide removal industries that already have plenty else to deal with.”
While carbon capture technology isn’t new, the trio of pipelines proposed in the Midwest represents a first for state regulators and landowners and communities in the path of the pipelines since no major CO2 pipelines currently exist in the region. The projects have raised a host of questions, especially when it comes to jurisdiction to regulate them.
Navigator’s Burns-Thompson said the company’s outreach and education efforts were met by “no shortage of misinformation being dispersed, largely by organized opposition organizations.”
Opponents, meanwhile, said the company treated landowners with “disdain and aggression.”
“Starting a negotiating process out telling landowners the corporation is going to take their land by eminent domain is a losing strategy,” Jane Kleeb, president of the anti-fossil-fuel group Bold Alliance, which opposes CO2 pipelines, said in a statement.
Tension between developers such as Summit and opponents is unlikely to ease. Not only do opponents of the Midwest CO2 pipeline projects challenge the process used to select a route, they also dispute the need for the projects, which they say aren’t about tackling climate change and instead aim to further the use of fossil fuels and take advantage of billions of dollars in federal subsidies.
In the meantime, supporters of carbon capture are searching for answers.
Burns-Thompson cited conversations around creating uniform federal permitting processes for CO2 pipeline projects with a multistate footprint similar to permitting structures for natural gas pipelines. “We believe those conversations should continue,” she added.
Lockman, the fellow at the Sabin Center for Climate Change Law, said federalizing the permitting process isn’t necessarily the answer — and that state-level governance can still work if policymakers develop “clear, coordinated and reasonable standards for siting.”
“Without that commitment, it’s going to be hard if not impossible to build the national network of CO2 pipelines that we need,” he said.
Peter Psarras, a research assistant professor at the University of Pennsylvania who studies opportunities to deploy carbon capture, said the cancellation of Navigator’s project represents an opportunity for companies, policymakers and academics to look at pipeline alternatives such as rail, barges or trucks.
Said Psarras: “If there is any silver lining to this, we might be inspired to get a little more creative on how we approach transport of carbon dioxide, and it could be an enabling factor for having more conversations about other options.”
