Carbon Capture Conundrum

This Week's Trend In Brief:

• This summer, state regulators in North Dakota and South Dakota rejected permit applications for two ambitious CCS pipeline projects.

• Despite being key green infrastructure solutions that could help achieve the Biden Administration’s ambitious climate goals, state regulators appear to have been swayed by a vocal coalition of environmentalists, farmers, and landowners skeptical of more pipelines crossing their communities, regardless of how green their cargo may be.

• Indeed, this opposition has been growing for several years, with the companies attempting to build the pipelines facing legal challenges from landowners and environmental groups, vocal concerns at public hearings, and even state legislative action.

• The projects’ setbacks are a reminder that energy industry public affairs teams need a proven playbook to assess risks and anticipate potential concerns – within communities or from outside groups – then leverage that information advantage to monitor activity and ensure their policymaker and stakeholder engagement is two steps ahead of the opposition.

Digging Deeper:

In August 2023, North Dakota regulators denied the permit application for Summit Carbon Solutions CO2 pipeline in, and a month later South Dakota regulators denied the permit application for Navigator CO2’s pipeline . Nearly four years after Summit began developing plans for its pipeline, the North Dakota Public Service Commission argued Summit failed to provide sufficient evidence that the location, construction, operation, and maintenance of the project would produce minimum adverse impacts. Similarly, nearly two-and-a-half years after Navigator CO2 announced its project, the South Dakota Public Utilities Commission determined Navigator’s proposal failed to meet regulators’ expectations, with commission chair Kristie Fiegen explaining, “Navigator’s burden of proof did not convince me.”

In their denials, state regulators claimed the companies had ample time and opportunity to address the concerns about the projects that were raised by vocal coalitions of environmentalists and local residents opposing the pipelines but failed to do so adequately. In denying Navigator’s permit, North Dakota Public Utilities Commissioner Sheri Haugen-Hoffart argued Summit “had ample time to address issues and information the panel was requesting in months of previous hearings.” Similarly, in denying Navigator’s permit, South Dakota Public Utilities Commissioners Chris Nelson and Gary Hanson argued “Navigator did a poor job of minimizing the public’s concerns about the project.” Criticism from the commissioners came after a sustained campaign against the project led by environmental activists, who accused both the companies of marketing the pipelines as “false climate solutions” and urged landowners impacted by the pipelines to voice their opposition to the projects. Indeed, landowners came out against Navigator calling the project “a hazardous pipeline” that could “could wipe somebody out,” while farmers and landowners opposed to Summit’s proposal made similar complaints, arguing against “building a pipeline that carries a hazardous product on or near their property.”

Long before regulators weighed in, opposition had been building against both projects, with a national network of activists using a battle-tested playbook from past pipeline fights. Jane Kleeb, a notorious anti-pipeline activist deemed the “Keystone Killer” by Rolling Stone, announced her organization Bold Nebraska would fight both Navigator and Summit’s projects two years ago. Bold Nebraska, which has access to a network of activism throughout the Midwest via Kleeb’s Bold Alliance, hosted briefings for its “Pipeline Fighters” targeting the CO2 pipelines and used their significant network and strategies to win landowners to their cause, a success that was replicated in the fight against Summit and Navigator. National environmental activist groups like the Sierra Club also aided the opposition, with local chapters of the organization leading on-the-ground activism. Both the Nebraska and Iowa chapters of the Sierra Club announced opposition to both projects alongside Bold Nebraska and were backed by significant legal and financial resources from the nation’s self-proclaimed “largest, and most influential” environmental organization.

Activists were far from alone signaling concerns and opposition years before these projects reached state regulators for a permitting decision. In February 2022, an Iowa state senator introduced legislation to “ban eminent domain use by private companies,” and specifically cited Summit’s pipeline plans. Around the same time, Minnesota regulators considered whether the two projects and others like them should face greater scrutiny. In 2021, as public meetings on Navigator’s proposed pipeline began, “affected landowners” have reportedly “voiced concerns about pipeline safety and disruption to farmland during installation,” with hundreds of attendees at various county informational meetings. In October 2022, an Iowa couple sued Navigator for attempting to survey their land, holding up surveying efforts by Navigator staff, becoming a potential model for hundreds of other landowners if they win. Indeed, their attorney worked with Sierra Club Conservation Program Coordinator Jess Mazour to “co-host weekly Zoom strategy sessions for landowners who oppose the pipeline.” Jorde also represented landowners in litigation against Summit, and Jorde and Marour directly lobbied regulators to delay permitting hearings.

Activists have a playbook, and so must energy infrastructure firms who want to avoid seeing their projects delayed and disrupted. Anti-CO2 pipeline activists in the Midwest are leveraging a playbook established by national activist groups in recent years that employs litigation to fight against new infrastructure, with notable climate activist groups like Earthjustice and the Sierra Club using lawsuits explicitly to stymie projects after “regulatory agencies fail to enforce environmental laws.” As activists increasingly utilize these tactics to influence regulators and bury projects in litigation, it is vital for public affairs professionals and the energy companies they represent to understand the reality of the policy landscape and the players who are driving it. The setbacks faced by both Summit and Navigator are a reminder that energy industry public affairs teams need a proven playbook to assess risks and anticipate potential concerns – within communities or from outside groups – then leverage that information advantage to monitor activity and ensure their policymaker and stakeholder engagement is two steps ahead of the opposition.

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.