Reuters has reported that US companies wishing to build CO2 pipelines within the country are contemplating attempting to acquire land through ‘eminent domain’ laws, causing consternation amongst landowners.
It appears that the first choice of pipeline builders is to come to an easement agreement with landowners, allowing the companies to install, operate and maintain pipelines. However, such agreements may not always be made, leaving the companies in a quandary. Eminent domain laws allow for the compulsory acquisition of land – with compensation – if a project is deemed in the public interest. In the past, they have been used to take land for the building of oil and gas pipelines, but their use for carbon dioxide pipelines has not yet been tested.
If pipeline companies do attempt to trigger eminent domain laws, it will produce an intriguing regulatory (and probably legal) judgement on the public interest value of carbon dioxide transport. One would expect that pipeline builders would cite federal support for carbon capture and storage as a signal of public interest, but according to the Reuters article, eminent domain laws are usually decided by state bodies (though states also often try to incentivize CCS). Landholders’ concerns tend to revolve around farmland productivity and land values after the pipeline is installed, something that will have to be addressed in compensation calculations (as they would also for easements), though there are also concerns that a fair deal would not be achieved through an eminent domain process.
The issue is highly significant, as evidenced by the plans of three companies – Summit Carbon Solutions, Navigator Ventures and Wolf Carbon Solutions – who together have proposed 5,874 km of CO2 pipelines to be built in the Midwest to transport carbon dioxide from ethanol and fertilizer plants to storage sites in North Dakota and Illinois. Summit has easement agreements in place with hundreds of landowners, but many have also refused them, and 52% of counties along Summit’s proposed route have filed objections with the Iowa Utilities Board (the decision maker on eminent domain in Iowa) regarding eminent domain. That figure is 41% for Navigator’s proposed route.
How regulators approach the issue will be highly influential as to the rapid development of the carbon capture and storage industry in the USA.