With CO2 pipelines planned, landowners call for additional state protections

Two companies plan hundreds of miles of pipeline to carry liquid carbon-dioxide captures at ethanol plants

By: - March 5, 2022 5:45 am
Sign protesting XL Keystone pipeline on a storefront in Polk, Nebraska

Signs protest the Keystone XL crude oil pipeline, which was abandoned by TC Energy in 2021. (Andrew Burton/Getty Images)

LINCOLN — With carbon dioxide pipelines planned across Nebraska, some landowners are asking the state to adopt additional protections for them when such pipelines are abandoned.

Meanwhile, a recent Wall Street Journal article raised questions about whether carbon sequestration projects — which would be fed by the pipelines — can be done successfully.

Some of the same groups that opposed the Keystone XL pipeline testified in favor of the pipeline proposal, Legislative Bill 1186, at a public hearing last month.

The bill would require pipeline companies to remove abandoned pipe and would allow landowners to reclaim easements across their property. It would also set up a reclamation fund, financed by pipeline firms, that would pay for the removal. 

Similar to laws elsewhere

The bill, advocates said, contains some of the same protections that have been adopted by the States of Iowa and Minnesota. Even Canada — home of the Keystone XL developer TC Energy — requires pipeline firms to contribute to a fund that would finance pipe removals.

State Sen. Eliot Bostar
State Sen. Ellot Boster of Lincoln (Craig Chandler/University Communication)

“Landowners know best what’s best for their land, and should be able to control what happens after the inevitable abandonment of pipelines,” Ken Winston, of Bold Alliance, told members of the Legislature’s Natural Resources Committee. Bold Alliance is an environmental group that includes Bold Nebraska, which led the opposition to the Keystone XL.

State Sen. Eliot Bostar of Lincoln, who introduced LB 1186, said the proposal would allow landowners to reclaim an easement granted to a company, once a pipeline is abandoned. It would also facilitate reclamation of the land once the pipe is removed, he said.

Winston called the bill a “property rights protection” measure that is especially important now that at least two high-pressure, carbon-dioxide pipelines are being planned that would cross the state.

But representatives of the Nebraska Ethanol Board and Nebraska Farm Bureau opposed the bill, saying it could harm the state’s ethanol industry.

Make ethanol greener

Nebraska is the nation’s second largest producer of the corn-based fuel, and the industry is looking for ways to make ethanol more environmentally friendly to enhance sales in states like California and Oregon that desire green products.

Ethanol plants consume about 40% of the nation’s corn crop but are seeking to ship off carbon emissions via pipelines to make their product more environmentally friendly. (Scott Olson/Getty Images)

To do that, ethanol plants are seeking to sequester, or store, their carbon-dioxide emissions in deep, underground caverns, instead of releasing the emissions into the atmosphere. Advocates say such carbon sequestration will be essential to make ethanol competitive in a future that is expected to see a shift to electric vehicles.  

Dawn Caldwell of Renewable Fuels Nebraska said at least two Nebraska ethanol plants may sit atop suitable geologic formations that would allow them to sequester CO2 produced by the plants on their site.

But the state’s other plants, she said, will need to utilize pipelines to transport the carbon dioxide, liquified and under high pressure, to sequester sites. LB 1186 would discourage development of pipelines and sequester sites, Caldwell said.

One firm, Iowa-based Summit Carbon Solutions, plans to build a 2,000-mile network of pipelines crossing five states, including Nebraska, as part of a $4.5 billion carbon-capture project based in North Dakota.

On Wednesday, the company held a press conference in North Dakota — attended by Nebraska  Gov. Pete Ricketts — to announce a $250 million investment in the project by an oil company. CO2 has been used to extract oil by pumping it deep into marginal oil fields and pushing the crude to oil wells.

Governor gets donations

Nebraska Gov. Pete Ricketts
Nebraska Gov. Pete Ricketts (Rebecca S. Gratz for the Nebraska Examiner)

Ricketts, according to WZFG radio, called the project an “innovative approach” to reducing ethanol’s carbon footprint “without sacrificing production vital to a secure economy that fuels America and beyond.” The governor has been a major supporter of ethanol, and the industry has been a major supporter of Ricketts. 

In 2020, ethanol interests contributed $46,500 to Ricketts’ campaign account. Ricketts was not up for election in 2020 and is barred from running for re-election this year because of term limits. Bruce Rastetter, who funded Summit Carbon Solutions and is a former member of the Iowa Board of Regents, contributed another $10,000. Rastetter is a major donor to conservative Republicans.

A second company, Navigator CO2 Ventures, is planning 1,200 miles of pipeline across the Midwest for its carbon-capture project, including pipelines in Nebraska.

One landowner, Megan Hammond of York County, told the Natural Resources Committee that her family had tried unsuccessfully to get local ordinances passed to allow landowners to reclaim their land once a pipeline quit operating. She said her family’s property was once on the route of the Keystone XL and now is being eyed for a carbon-dioxide pipeline.

Study over interim

Bostar said Monday that it’s probably too late in the session to get his bill passed this year. But he said it’s a good idea that he hopes the Legislature will study over the interim to address the coming impact of carbon dioxide pipelines.

Nebraska has virtually no state regulation of CO2 pipelines, unlike Iowa, which requires companies to hold informational meetings and obtain permits to construct them from the Iowa Utilities Board.

In Iowa, the nation’s top ethanol producer, state lawmakers considered a bill to block carbon pipeline firms from using eminent domain to obtain right of way. But the proposal recently died in committee, according to the Iowa Capitol Dispatch.

Pipeline firms had portrayed it as a killer of their pipeline projects and unfair after they had invested millions in their development.

WSJ: Carbon-capture projects expensive, have no current economic use

The Wall Street Journal recently reported that 80% of the carbon-capture projects worldwide have failed, raising questions about the viability of CO2 pipelines and sequester projects in Nebraska.

A December report by the federal Government Accountability Office said the nation’s $1.1 billion investment in carbon-capture demonstration projects has produced “varying levels of success.”

The Feb. 8 Wall Street Journal article, referring to the GAO report, stated that the projects are generally very expensive and that there is no current economic use for the captured carbon.

Ken Winston of the environmental group Bold Alliance said that not only is carbon capture technology not proven, there’s very little experience with CO2 pipelines, “particularly not with the kind of volumes they’re talking about here.”

In addition, the switch to electric cars may collapse the market for ethanol, leaving abandoned CO2 pipelines crossing the state.

A spokesman for Summit Carbon Solutions, when asked to respond to the WSJ story, said the company’s project “will allow facilities to access new and emerging markets with low carbon fuel standards, while providing future generations of farmers with a stable corn market.”

The company pointed out that the ethanol industry supports “360,000 jobs and contributes more than $45 billion to annual U.S. GDP.” About 40% of corn produced in the U.S. is used for ethanol, which helps boost the price of corn. 

Carbon-dioxide pipelines, while not as dangerous as pipelines that carry gas or oil, are not without risks.

Last year, a pipeline carrying compressed carbon dioxide mixed with hydrogen sulfide ruptured near Satartia, Mississippi. A green haze descended on the town, rendering some some residents unconscious and others disoriented and gasping for breath. Forty-five people were sent to the hospital.


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Paul Hammel
Paul Hammel

Senior Reporter Paul Hammel has covered the Nebraska Legislature and Nebraska state government for decades. A native of Ralston, Nebraska, he is vice president of the John G. Neihardt Foundation, a member of the Nebraska Hop Growers and a volunteer caretaker of Irvingdale Park in Lincoln.