CO2 pipelines rejected by regulators in the Dakotas, putting Minnesota status in limbo

Two carbon dioxide sequestration pipeline proposals for the Midwest were rejected by regulators in the Dakotas in recent days, threatening to sideline the projects sought by the ethanol industry in Minnesota and nearby states.

The Omaha-based company Navigator's Heartland Greenway — a CO2 pipeline that would start in North Dakota and run through South Dakota, Minnesota and Iowa on its way to sequestration sites in Illinois — on Wednesday received a unanimous rejection by regulators in South Dakota.

"The burden of proof is on the applicant," said Kristie Fiegen, chair of South Dakota's Public Utilities Commission. "They have raised their hand and preferred not to comply and asked for an exemption from local laws well before they have even tried to work with the counties to comply."

It has been similar a tough road for Carbon Express C02, a sequestration pipeline being proposed by Iowa-based Summit Carbon Solutions. Summit has sought permits — including in Minnesota — to draw carbon dioxide from ethanol facilities across the Upper Midwest and deposit the heat-inducing gases underground in North Dakota.

Last week, a board in Oliver County, N.D., rejected the company's application for injection wells. Earlier this month, the state's top regulators also rejected Summit's bid for a route permit in the state.

Both companies are vowing to fight on.

In a statement on Wednesday, Navigator said it was disappointed by the South Dakota regulators' decision and would await the written ruling before determining next steps.

"Our commitment to environmental stewardship and safety remains unwavering, and we will continue to pursue our permitting processes in the other regions we operate in," Navigator officials said in an email.

After North Dakota regulators rejected Summit's application last month, the company announced a plan to ask the board to reconsider. The company is also in an ongoing evidentiary hearing over its application in Iowa.

Opposition to the pipeline has largely been driven by skepticism over the pipelines' environmental benefits and ire toward the companies' abilities — in some states — to secure eminent domain authority to cross the pipeline across private land despite landowners' objections.

Ethanol proponents say the pipelines will boost the fuel additive's standing in both the domestic and Canadian marketplaces, as buyers increasingly seek fuels with lower greenhouse gas emissions.

So far in Minnesota, Navigator — which plans to run at least one branch of the pipeline into far southern Martin County, west of Fairmont, to draw C02 from a Valero plant — has yet to apply for a route permit from the state.

Last week, Minnesota's Public Utilities Commission approved a scope of survey over the Summit application for a pipeline running from the North Dakota border to an ethanol plant outside Fergus Falls.

"This is going to give them [Navigator] pause before submitting their application in Minnesota," said Hudson Kingston, legal director with CURE, a Montevideo-based environmental group. "That doesn't mean they won't try."

One distinction in Minnesota from many of its neighbors is a state statute that does not give eminent domain authority to CO2 sequestration pipelines. Nevertheless, the companies say they have received the bulk of easements through voluntary negotiations with landowners.