BISMARCK -- North Dakota lawmakers brought forward a slew of bills at the state Legislature this week that would likely make building carbon capture and storage projects more difficult if passed.
The bills come during the same week that a state agency told the governor's office the state should be "moving as quickly as possible" to bring these types of projects to North Dakota so that there is infrastructure in place that would allow the carbon dioxide to be used for pumping hard-to-recover oil from the state's aging fields in the coming decades.
Legislation introduced this week would eliminate a 10-year property tax exemption for carbon dioxide pipelines, remove carbon capture project operators' ability to take private land for public use under eminent domain, and make it easier for people to take out a claim against a pipeline operator if they are harmed as the result of a CO2 pipeline break.
Supporters of the bills say they are needed to protect property rights and safety.
Opponents of the bills, including numerous business interests, say the projects are safe and that the laws would kill development.
The proposed legislation highlights a divide in the Republican-dominated North Dakota state Legislature between lawmakers -- including leadership -- who see carbon capture as the future for the state's emissions-heavy industries and those who are skeptical of the need for projects and are opposed to how the projects are permitted and make money -- largely through federal tax credits.
Carbon capture mechanically separates climate-warming CO2 gas from power production, industrial processes, and sometimes the air.
The technology has been around for decades, but it has seen renewed interest from policymakers as scientists have raised increasing concern at the rate and consequences of global warming. Simultaneously, oil companies see a future using captured CO2 in fields where traditional recovery methods are projected to result in increasingly-reduced oil output without new recovery methods like using CO2 for enhanced oil recovery (EOR).
Many environmental groups question the technology's climate benefits both due to the interest from the oil and gas industry along with the fact that broadly, it has not scaled to significantly limit pollution from larger emitters because of how expensive it is. Some safety advocates say federal regulations are lacking.
In the Midwest, projects have also sparked backlash from landowners due to the potential for eminent domain -- the taking of private property for public use with just compensation.
The introduction of the bills this session follows the approval of the North Dakota route of Summit Carbon Solutions multi-state pipeline project last year that took two years to permit and faced vocal opposition. Other projects have faced controversy, too, while a few have gone off mostly without much of a hitch.
Though once pitched by former Gov. Doug Burgum as a means to make the state "carbon neutral" by 2030, Burgum and many others in the state government have mostly pivoted from that language and emphasized what carbon capture could mean for oil production.
A presentation by state Tax Commissioner Brian Kroshus and the Energy and Environmental Research Center at the University of North Dakota earlier this week showed that using just CO2 from state-based facilities, EOR could yield between 300 million and 1 billion barrels of additional oil over a 20-year period, and bringing in between $2.9 billion and $9 billion of tax revenue over a decade. That is dependent on two proposed, expensive carbon capture projects at state coal plants actually getting built along with a coal-to-products refinery continuing capture operations.
Importing CO2 will be necessary for more oil to get extracted -- potentially yielding 5-8 billion barrels, according to EERC estimates. The viability of EOR in North Dakota's shale oilfields is still being studied by scientists, but industry maintains that CO2 storage for now is needed as a means to prepare infrastructure for EOR if and when it is viable.
Supporters of carbon capture projects also say that despite efforts to pull back climate laws from new President Donald Trump, a number of markets are still demanding lower-carbon products.
"It really is a race for capital dollars and where they are going to be deployed," Kroshus said.
North Dakota Gov. Kelly Armstrong expressed support for the efforts.
"This is generational wealth for North Dakotans ... we're still leaving about 85% of (the oil) in the ground," he said.
The study was cited by carbon capture supporters multiple times in testimony this week.
State Sen. Jeff Magrum, R-Hazelton, who sponsored multiple anti-carbon capture bills this week, said he is not against using CO2 for EOR, but he does not want eminent domain or state subsidies to be used for storage projects, which he opposes, calling it part of the "Green New Deal" -- a term used by some Republican lawmakers to describe policies aimed at mitigating climate change.
Summit says the project is not for EOR right now, but has not ruled out EOR in the future. It has investments from the oil industry.
"I would like to see it used in the Bakken for EOR," testified Dave Nehring, a Summit representative at the House Energy and Natural Resources Committee on Thursday.
A through-line in the opposition to the projects has been concern over property rights and pipeline companies' ability to use eminent domain.
CO2 pipelines' are classified as common carriers; the term refers to utilities that are given the right of eminent domain because their service suits a public need.
Three bills introduced this week would change that. Two of the bills also target hydrogen, solar, and wind projects -- the latter two cannot practice eminent domain as it is.
State Rep. Jeremy Olson, R-Arnegard, expressed skepticism about removing the common carrier status for CO2 lines, noting it was established in 1993.
"That was established because of a need to bring CO2 up to Canada for (enhanced oil recovery)," he said, referencing a pipeline leaving the Great Plains Synfuels Plant.
According to documents submitted through the pipeline permitting process, Summit has secured voluntary lease agreements on around 80% of the landowners on the route through North Dakota.
The company and other industry representatives say there is broad support for these types of projects and without the power of eminent domain, a small group of opponents -- or landowners who do not respond -- can block otherwise popular projects.
"In (some cases), you had 98% of landowners agreeing to projects. The 98% has rights too," said Jonathan Fortner from the Lignite Energy Council, a coal industry group.
But Magrum, and other supporters of the reforms, argue that threats of eminent domain are often held over the head of landowners who don't have the financial means to challenge a company.
Magrum also pointed to Minnesota, where Summit has been able to secure voluntary lease agreements for 100% of one segment of its proposed route -- it has two separate routes there -- because eminent domain for CO2 lines is not legal in the state.
Another bill he introduced -- Senate Bill 2320 -- would repeal a 10-year property tax exemption for interstate CO2 pipelines.
Like the common carrier status for CO2 pipelines, the property tax exemption came to support the line from the Great Plains Synfuels Plant to Canada, Magrum said.
Summit and industry groups opposed to the bill, said it was arbitrarily targeting CO2 lines. They say the lines do serve a public use.
"The state of North Dakota enacted this section to encourage pipeline development. It worked. Summit Carbon Solutions has invested hundreds of millions of dollars in North Dakota to strengthen the (agriculture) economy by helping 57 ethanol plants across the Midwest to access new markets for corn ethanol," said Charlie Adams, a Summit representative.
Another frequent concern brought up by project opponents has been safety.
A CO2 pipeline rupture in Satartia, Mississippi, in 2020 sent 45 people to the hospital; at high concentrations, the gas can be hazardous and how it spreads depends on local atmospheric conditions. There were no fatalities and Denbury, the company that operated the line -- now owned by ExxonMobil -- incurred a multimillion-dollar fine due to regulatory violations.
Summit, and other project supporters, say that CO2 pipelines are safe and the issues in Satartia were a result of Denbury violating pipeline rules, evident by the fine.
They also point to the broader record of CO2 lines, including a 200-mile pipeline in western North Dakota.
Still, Summit has requested -- and been allowed by state regulators -- to keep its study on how a CO2 plume would spread in the event of a leak under a protective order, citing concerns about terrorism.
House Bill 1210, introduced by state Rep. SuAnn Olson, R-Baldwin, would give people within 25-mile of the line the right to file a claim for damages against a company in the event of a rupture.
"If the pipeline is safe, then this bill doesn't alter anything (for the company)," Olson said.
Olson, in the bill, referred to the distance of 25 miles as a "kill zone."
Large levels of CO2 exposure has caused deaths, though there are no documented cases of those deaths where the exposure was the result of a broken CO2 pipeline.
Summit and other industry groups, said the bill would deter investment, and called it "unprecedented" and "chilling."
Jeff Skaare, director of land with Summit, pointed to the company's state regulatory approval that found liability would not be an issue for landowners since the company would hold them harmless unless a landowner deliberately damages a pipeline.
He said this bill would create rules more stringent than those governing nuclear power plants, fuel storage and anhydrous ammonia.
Skaare said Summit's 2,500 mile pipeline would be the safest CO2 pipeline ever built and pointed to the 5,300 miles of CO2 lines already in operation that shows an incident rate historically smaller than for natural gas or oil pipelines.
Natural gas and oil pipelines respectively comprise 3 million miles and 230,000 miles, however and a dispersion expert previously told the Tribune that limited miles of pipe means data is also limited.
State Rep. Jorin Johnson, R-Fargo, called Skaare's testimony, "just a little offensive."
"Accidents can happen. ... Isn't this going to be the biggest (CO2) pipeline ever built? No wonder you haven't been able to deal with (these types of regulations) before," he said.
Jean Schafer, a lobbyist with Dakota Gasification, which operates the CO2 pipeline from the synfuels plant going to Canada, said CO2 pipelines are heavily regulated.
But whether the bill passes, some safety advocates since the Satartia incident have said that federal regulations need updating as the industry expands.
In response to the Satartia incident, federal pipeline authorities began making changes to regulations a few years ago.
Those regulations were released in the middle of January, but face an uncertain fate as Trump has frozen numerous recently-enacted rules and regulations.
Groups representing the carbon capture industry voiced support for the federally-proposed rules before they were later frozen.
Kenneth Clarkson, spokesman for the Pipeline Safety Trust, a Washington-state based pipeline watchdog group, told the Tribune that while there were certain provisions that the group felt were missing from the proposed rules, the regulations that had been recommended by the Biden administration were a good start to making CO2 pipeline development a lot more safe.
"There were a lot of solid requirements, clear things, that it improves upon from a safety perspective," he told the Tribune.
Summit said it would comply with the rules in a statement to the Iowa Capital Dispatch.
Clarkson said if a project is built before the rules are final, only parts of them can be enforced when they officially become regulations.