Carbon pipeline permit hearing kicks off with clashes on multiple fronts

July 26, 2023

Joshua Haiar

South Dakota Searchlight

FORT PIERRE — A multi-day permit hearing for a proposed carbon capture pipeline got off to a tense start Tuesday at the Casey Tibbs Rodeo Center as participants clashed over the rules of procedure and aspects of the project including land access, county-level regulations, safety and data quality.

Brian Jorde, the attorney for some affected landowners, expressed concerns about the fairness of the proceedings.

“I hate to say it, but it seems like there is a foregone conclusion, at least in certain aspects of argument here,” Jorde told South Dakota Searchlight.

He said he was referring to a perceived bias in favor of the project on the part of some Public Utilities Commission staff members. The staff is assisting the three elected commissioners, Kristie Fiegen, Gary Hanson and Chris Nelson, who will ultimately decide whether to grant the permit.

The proposed 1,300-mile Heartland Greenway pipeline, with a projected cost of more than $3 billion, is proposed by Navigator CO2. The pipeline would link more than 20 ethanol plants and several fertilizer plants across five states. There would be 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.

The pipeline would capture carbon dioxide emitted by the plants and transport it in liquefied form for underground storage in Illinois, and 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 Heartland Greenway is one of two proposed pipeline projects that would pass through the state. But unlike the other project proposed by Summit Carbon Solutions, Navigator CO2 has not yet used eminent domain – a court process to gain access to land when an agreement can’t be reached with a landowner.

During Tuesday’s hearing, Jorde asked a Navigator CO2 executive if the company will use eminent domain.

“We strive to not go down that path,” said Jeff Allen, founding member and chief financial officer of the company.

“So, the answer is no?” Jorde replied. Allen did not directly answer.

Navigator has thus far struck access agreements — called “easements” — with about 30% of the owners of land the pipeline would cross. Jorde argued the lack of agreements with 70% of impacted landowners is a reason for regulators to deny a permit.

Jorde asked Elizabeth Burns Thompson, Navigator’s vice president of government and public affairs, if any landowners will testify in favor of the project.

“My understanding is no, we don’t have a landowner as a witness,” Burns Thompson said.

The Public Utilities Commission’s attorney tasked with administering the hearing, Adam de Hueck, found himself at the epicenter of confusion and frustrations concerning the ground rules.

Proposed rules included limiting testimony to people that signed up within the allotted window, and barring items such as some testimony from people who are not directly impacted, testimony about a court case in another state, a submitted question asking if state regulators are “familiar with the Fifth Amendment,” and some news articles.

Navigator was in favor of the proposed rules.

“While it’s a public proceeding, it’s not an open forum,” said James Moore, an attorney for the company. “It’s a legal matter.”

Rather than adopt all of the staff’s recommended rules at once, commissioners voted on each rule individually.

At times, de Hueck participated in voting on the rules with the elected commissioners; at other times, only the three commissioners voted. Sometimes they all agreed. Sometimes the vote was split. And on another occasion, the attorney forgot to call for a vote.

“You gotta count votes down here, Mr. de Hueck,” Nelson said after the staff presented one rule and de Hueck declared it adopted.

During voting on the adoption of another rule, two commissioners abstained, and de Hueck and Hanson cast opposing votes. Hanson told de Hueck, “My vote overrules yours.”

Opponent landowners who are impacted by the project – including Kay Burkhart of Valley Springs – expressed concerns to South Dakota Searchlight about the process. She said regulatory staff appeared to have already decided they are for the project.

“At the beginning, there was an inequality as far as what testimony would be accepted by Navigator versus that of the landowners, and the landowners were being shorted,” Burkhart said. She and some other opponent landowners expressed appreciation for the three elected commissioners pushing back on some of the staff’s recommendations.

The hearing – which garnered the attendance of only about a dozen members of the public trickling in and out throughout the day – carried on with more debate and testimony after the rules were settled.

One subject that caused heated debate had to do with recently adopted Minnehaha County and Moody County ordinances regulating the distances that pipelines can be from certain buildings and other property.

“Counties don’t have authority to do anything,” Moore said. The company asked that the commission use its authority to preempt county zoning ordinances.

But the commissioners said it was wrong to make that decision without hearing from Minnehaha County officials, who were unable to attend on Tuesday.

“The burden is on Navigator to prove the statute should be invoked by us,” said Commissioner Chris Nelson. The commissioners determined they would postpone consideration of the county issue until Thursday.

William Taylor, representing labor unions that would be contracted to build the pipeline, said that was not appropriate.

“First of all, Minnehaha County has been aware of this proceeding since the proceeding began,” Taylor said. “Minnehaha County is crisscrossed by pipelines.”

Ryan Cwach, an attorney representing opponents, pushed back.

“Navigator doesn’t have a magic wand where it can take away laws cemented in place at the local level,” he said.

Testimony also touched on the economics and safety of the project.

Moore argued the pipeline will create more jobs and boost economic prospects for the state’s ethanol industry.

“It’s important to the business community, it’s important to agriculture,” he said.

When commissioners asked the company’s Chief Financial Officer Jeff Allen if he would feel safe living next to the project, he replied, “I would have no reservations to living near a CO2 pipeline.”

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.

In a debate over data provided to the commission, Burns Thompson said the data is reputable and unbiased.

“I object,” Jorde said, pointing out Burns Thompson’s investment in the company. “She is not qualified.”

de Hueck overruled Jorde’s objection, but was soon after stopped by Commissioners Fiegen and Nelson, who agreed with Jorde that some data should not be included in the record.

Tuesday’s proceeding was the first of nine days of scheduled testimony and deliberation. Wednesday and Thursday are scheduled to continue with more testimony and cross examination of Navigator’s witnesses. Testimony from the opponents is scheduled next week.

The commission vowed to consider all available information and expert opinions before delivering a final decision on the permit.

“This room is like a courtroom, so we want to treat it like a courtroom,” Fiegen said.

Hearings for the other pipeline, proposed by Summit Carbon Solutions, are scheduled to begin Sept. 11.