Editor’s note: This is a combination of two South Dakota Searchlight stories from this week about a permitting hearing before the South Dakota Public Utilities Commission concerning Navigator CO2’s carbon sequestration pipeline proposal.
FORT PIERRE – The “sensitive sites” potentially affected by a carbon capture pipeline will remain confidential, for now.
Meanwhile, modeling used to assess the impacts of a leak or rupture came under scrutiny Thursday, July 27 during the third day of a permit hearing before state regulators at the Casey Tibbs Rodeo Center.
There was no testimony on Friday, July 28.
Stephen Lee is the executive vice president of engineering and construction for Navigator CO2, the company proposing the Heartland Greenway pipeline. Lee introduced maps marked as confidential for their focus on vital infrastructure. One “map overlay” includes the environmentally sensitive areas – including wetlands and waterways – that could be affected during pipeline construction or in the case of an accident, Lee said.
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Lee said the maps should remain confidential because they could be dangerous “in the hands of the wrong individuals” like “terrorists.”
Brian Jorde, an attorney representing landowners, failed to convince the three elected members of the Public Utilities Commission to make the map overlay public.
“I don’t think this is the time or place to solve that specific issue,” Commissioner Chris Nelson said, adding that there’s too little time to debate the issue during the permit hearing.
Jorde was not satisfied.
“This is the appropriate time to deal with that,” Jorde said. “This witness hasn’t identified anything that would make this confidential.”
Commission staff attorney Kristen Edwards said knowing where the environmentally sensitive sites are would be informative.
“I would like to dig into that,” Edwards said.
James Moore, an attorney for the company, said the document was submitted on time and Jorde should have raised concerns prior to the permit hearing. Adam de Hueck, the commission attorney who is conducting the hearing, agreed.
“Mr. Jorde, I agree with Mr. Moore,” de Hueck said. “This was the whole point of pretrial conference.”
Nelson agreed with de Hueck, and acknowledged Edwards’ opinion that the information would be useful.
“For the purposes of today, for this hearing, whether it’s public or not doesn’t make any difference,” Nelson said.
Jorde continued to press Lee, asking, “Is it best practice to be transparent and provide the counties with the best information you have now?”
“I can’t answer that yes or no,” Lee replied. “I disagree with the premise of the question.”
“Do you think that attitude is something the commission should take into consideration?” Jorde said.
“I would say that’s up to the commission,” Lee responded.
The proposed 1,300-mile, approximately $3 billion Heartland Greenway pipeline would link 21 ethanol plants (including three in South Dakota) and several fertilizer plants across five states. The project would include 111.9 miles of pipeline in eastern South Dakota, crossing through Brookings, Moody, Minnehaha, Lincoln and Turner counties. The estimated cost of the South Dakota portion of the project is $142 million. An additional $37 million would be spent on capture facilities.
Carbon CO2 has preciously said it eventually wants to connect to the POET ethanol plant just west of Groton.
The pipeline would capture carbon dioxide emitted by the plants and transport it in liquefied form for underground storage in Illinois, or for commercial and industrial uses. The project would be eligible for up to $1.3 billion in annual federal tax credits, which are intended to help fight climate change by incentivizing the removal of heat-trapping carbon dioxide from the atmosphere.
The project would create about 430 jobs in South Dakota during the construction phase, 20 jobs during operation and $1.3 million in sales and gross receipts taxes during initial construction, according to a study commissioned by the company.
Lee testified that the company has offered landowners an average of $24,000 per acre in easement negotiations. Navigator has easements with about 30% of the owners of land the pipeline would cross. The company has not yet used eminent domain, a legal process to gain access to land when an agreement can’t be reached with a landowner.
The Heartland Greenway is one of two proposed carbon pipelines that would pass through South Dakota. A pipeline proposed by Summit Carbon Solutions is scheduled for a permit hearing in September.
At least for now, the Summit proposal is of more interest in the Aberdeen area as it will be in Brown, Edmunds, McPerson and Spink counties.
Plume modeling debated
Knowing where sensitive sites are is an important part of modeling the impacts of a potential rupture, according to John Abraham, a University of St. Thomas professor and expert in thermal fluid sciences. He testified that, compared to alternative modeling methods, the software Navigator CO2 used to model the impacts of potential ruptures or leaks is “less accurate and often underpredicts how far a plume would go.”
“The commission should not rely upon Navigator’s Phast modeling or the data and buffers that such flawed modeling provides,” Abraham said in written testimony. “Furthermore, newer, more accurate methods are available that can provide more accurate concentration calculations.”
Opponents have concerns about carbon dioxide plumes from potential pipeline leaks. In 2020, a leak in a carbon pipeline in Mississippi caused the evacuation of about 200 people and sent 45 to the hospital.
Moore said the models Abraham prefers are more time consuming and difficult. Abraham disputed that.
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“In some instances, they can be,” Abraham said. “But they are far more accurate, and in many cases, they are not time consuming.”
Abraham said unreliable modeling was a reason the Mississippi incident was as severe as it was, saying the model used for that pipeline underestimated the plume.
“If you are using a tool that’s been shown not to work, and better tools exist, then it’s either bad science or it’s not science,” Abraham told Moore when asked if the modeling submitted was scientific.
Pipeline hearing goes into private session
The hearing went into a private session during a line of questioning about materials the commission deemed confidential. Reporters and the public were required to leave the room.
Following that, Edwards asked Abraham if a setback of about 400 feet would be adequate. Setbacks are minimum distances between pipelines and areas such as property lines, buildings and infrastructure.
“It’s my opinion, that would be inadequate,” Abraham said.
In Brown County, setbacks concerning hazardous material pipelines are 1,500 feet.
Commissioner Kristie Fiegen asked Abraham how he would have conducted the modeling.
“I would contract with a university here in South Dakota,” Abraham said. “Why would you hire a guy in Minneapolis?”
Abraham later said, “If I knew a pipeline was in a certain area, that would impact my decision to move into that area.”
The company acknowledged the pipeline comes with potential hazards, such as ruptures.
“Could such an explosion be fatal to those nearby?” Jorde asked Lee.
“Any release of energy in a nearby vicinity could be dangerous,” Lee replied. He said the plumes would be “mildly toxic,” and “we have 24/7, 365 monitoring of our system.”
Federal regulators reviewing pipeline safety standards
Lee later said the company has already run more than 225 models, and the company will begin to incorporate the model Abraham suggested. However, the company has not yet selected who it will contract with to run the new software.
“We’re still early in the process,” Lee said, alluding to permit hearings that haven’t yet occurred in other states.
Federal regulators are reviewing the safety standards for carbon capture pipelines. The current rules for the pipelines are inadequate, said Carolyn Raffensperger, executive director of the Science and Environmental Health Network, at a separate, recent meeting about the regulations.
Jorde referenced the federal review and asked Lee, “Wouldn’t it be reasonable to wait for the federal regulators to weigh in on those standards?”
Lee said federal regulators are aware of the project and have not reached out with concerns. He said the company found the likelihood of an incident to be 0.0011% per mile, per year, based on federal data over the last 20 years.
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In addition to Thursday’s testimony, commissioners determined when they’ll consider preempting recently adopted Minnehaha County and Moody County setback ordinances. The commission will take up that issue Aug. 24-25.
Navigator CO2 thinks the distances the counties have settled on are too far, and is requesting the commission overrule those distances.
Attorney Alex Hagen represented Minnehaha County during Thursday’s hearing. He said the company could have chosen a route that would have met Minnehaha County’s setbacks for the pipeline. And he suggested the only reason it didn’t is because it would be expensive.
“Cost is just one of several things we assess,” Navigator’s Stephen Lee replied.
At the end of Thursday’s proceedings, the hearing recessed until Monday.
Economic projections questioned during second day of carbon pipeline hearing
The economic benefits of a proposed carbon capture pipeline came under scrutiny Wednesday during the second day of a permit hearing before state regulators at the Casey Tibbs Rodeo Center.
The project would create about 430 jobs in South Dakota during the construction phase, 20 jobs during operation, and $1.3 million in sales and gross receipts taxes during initial construction. That’s according to Jonathon Muller, a private economics and policy consultant. He testified about the economic benefits of the project before the state’s three elected public utilities commissioners.
Muller testified that landowners would receive about $10,200 per impacted acre, factoring in easement payments for the right of way and crop damage payments.
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“Unquestionably, it will increase personal income, employment, and output in South Dakota,” Muller said.
Jared McEntaffer is CEO of Dakota Institute, a nonprofit economic research organization that conducted an economic impact study on the pipeline. His study suggests the ethanol industry could grow, creating demand for up to 15% more corn if the state approves both of the carbon capture pipeline projects proposed to cross South Dakota. The other project is scheduled for a permit hearing in September.
“Based on our findings,” McEntaffer said, “yeah, it would have positive economic impacts.”
Brian Brinkman is the manager of the Valero ethanol plant in Aurora, which hopes to connect to the pipeline. He testified that not going forward with the project would leave the plant behind competitors.
“Low carbon fuels have better value,” Brinkman said. “If we don’t do this, other plants will.”
The proposed 1,300-mile, approximately $3 billion Heartland Greenway pipeline is proposed by Navigator CO2. The pipeline would link 21 ethanol plants (including three in South Dakota) and several fertilizer plants across five states. The project would include 111.9 miles of pipeline in eastern South Dakota, crossing five counties. The estimated cost of the South Dakota portion of the project is $142 million. An additional $37 million would be spent on capture facilities.
The pipeline would capture carbon dioxide emitted by the plants and transport it in liquefied form for underground storage in Illinois, or for commercial and industrial uses. The project would be eligible for up to $1.3 billion in annual federal tax credits, which are intended to help fight climate change by incentivizing the removal of heat-trapping carbon dioxide from the atmosphere.
Pushing back on pipeline’s economic projections
Commissioners and attorneys representing landowners critically examined the validity of the economic projections.
Brian Jorde, representing landowners, said the studies did not consider alternative carbon sequestration methods, like buying only sustainably grown corn for the production of ethanol.
“I thought about it,” said Muller. “It’s not in the report.”
Jorde criticized the Iowa-centric focus of Muller’s study, its reliance on data provided by Navigator or other sources, and Muller’s contract with the pipeline company to conduct the study.
“Yeah, I produce studies and people pay for them and use them however they like,” Muller said.
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Jorde also attacked Muller’s study for not taking into account the impact on future land values from the loss of business and housing developments, or the money spent by opponents to pay for lawyers or to attend hearings.
In an attempt to make his point, Jorde asked Muller if the money paid to a widow upon the death of her spouse is a “net economic gain.”
“It may be an economic benefit. I’d have to know what her husband was like,” Muller said, drawing some laughs.
Craig Schaunaman farms near Aberdeen and attended the hearing in opposition to the project, even though it’s the other pipeline — proposed by Summit Carbon Solutions — that would cross his land.
Schaunaman said he has new development popping up all around his property. He’s concerned about how a hazardous pipeline would impact the value of the property – potentially steering away would-be developers.
“Real estate is all about location, location, location,” Schaunaman told South Dakota Searchlight. “So a study that doesn’t take into play future development and expansions, it’s just like, come on. On our farm, we have a responsibility to ensure the best opportunities for future generations.”
Commissioner Gary Hanson said he’s not sold that the markets coveted by the ethanol industry, like California, are interested in the product. He cited the state’s mandate to replace gas-powered vehicle sales with electric vehicles and said he’s skeptical of some of the findings in the economic reports.
Kristen Edwards, a commission staff member, asked if Muller factored in the tax implications of the right-of-way payments to landowners.
“I did not,” Muller replied.
Near the end of Muller’s testimony, Commissioner Kristie Fiegen cited questions about the data and asked him, “What can commissioners rely on?”
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Muller replied that regardless of potential flaws, the point of the study is that it’s impossible to spend billions “and not have tremendous economic outcomes.”
When pressed by commissioners and Jorde about the accuracy of the Dakota Institute report, McEntaffer replied that no study factors in everything.
“We had to stop somewhere, so to speak,” McEntaffer said.
Jorde then asked McEntaffer where the corn would come from to feed the potential 15% higher demand for corn his analysis cites.
“We’re not turning 15% more land into corn, are we?” Jorde asked.
“I don’t think so,” McEntaffer replied. He said the new corn would likely come from increased yields with genetics. He said the state produced 660 million bushels of corn in 2022, and the ethanol industry would need 590 million bushels (about 90% of all the corn currently produced in South Dakota) to meet the demand created by both the pipeline projects seeking permits in the state.
“The amount of corn produced in the state is already sufficient,” McEntaffer said.
Pipeline safety discussed
Mark Hereth, the managing director of a pipeline consulting firm called Blacksmith Group, testified that pipelines are a safe way to transport liquified carbon dioxide, and the plan proposed by the company would meet federal regulatory requirements.
Opponents have concerns about carbon dioxide plumes from potential pipeline leaks. In 2020, a leak in a carbon pipeline in Mississippi caused the evacuation of about 200 people and sent 45 to the hospital.
Hereth acknowledged that “accidents happen,” but said that’s why any project should include planning for those “rare incidents.”
Jorde pushed back, asking Hereth about the Pipeline Safety Trust, a nonprofit promoting pipeline safety, which has declared carbon capture pipelines too unregulated and generally unsafe.
“I disagree with that,” Hereth said.
Navigator’s hearing continues
The Heartland Greenway pipeline is one of two proposed carbon capture pipelines that would pass through the state. But unlike the other project proposed by Summit Carbon Solutions, Navigator CO2 has not yet leveraged eminent domain — a court process to gain access to land when an agreement can’t be reached with the landowner.
When pressed by Jorde during the first day of the hearing, Navigator CO2 would not rule out eminent domain.
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“We strive to not go down that path,” said Jeff Allen, founding member and chief financial officer of the company.
Navigator has thus far struck access agreements — called “easements” — with about 30% of the owners of land the pipeline would cross.
Wednesday’s proceeding was the second of nine days of scheduled testimony and deliberation. Testimony from the opponents is scheduled for next week.
Hearings for the other pipeline, proposed by Summit Carbon Solutions, are scheduled to begin Sept. 11.
