News | November 24th, 2022
By Laura Simmons
Summit Carbon Solutions approached North Dakota land owner Kurt Swensonin August 2021, requesting to lease out Swenson’s land to sequester, or store, carbon dioxide underground in the pore space, which is the part of soil containing liquid and gas about one to two miles underground.
After reviewing the proposed contract with the help of attorneys, Swenson said that no attorney in the state of North Dakota would recommend signing it.
“We live out in the country on land that's been in my wife's family for 112 years now,” Swenson said. “The last thing that we want to do is disrespect those that toiled on the land and struggled over the many, many years to give us the gift of being able to live where we live.”
Swenson said the proposed contract would allow the company to install whatever they wanted on the surface of his land, there was poor insurance and the monetary compensation was low at $25 per acre. Swenson said this is about 200 times less than what the oil or gas industry would pay for similar acreage.
In January 2022, Swenson said he provided Summit with a counter-offer lease, but Summit has not yet provided formal changes to their originally proposed lease. Swenson said he thinks Summit is planning on forcing landowners to give up their pore space, using the 2009 Senate Bill 2139. The bill states that if a company has made a “good-faith effort” to get all landowners' consent and has obtained the consent of at least 60% of the landowners, then the North Dakota Industrial Commission can issue a permit and the non-consenting pore space owners will be “equitably compensated” for their land.
However, Swenson said because carbon sequestration is still fairly new, the market value of pore space has not been determined.
“The law that was written in 2009 that allows them to do this is unconstitutional,” Swenson said. “If Summit were to work with us to negotiate with us and answer and address our concerns, then they're not going to have to find out the hard way that [this law] is unconstitutional in court.”
Summit is planning to construct a 2,000-mile carbon dioxide pipeline through Iowa, Nebraska, South Dakota, Minnesota and North Dakota. The pipeline will capture and compress the carbon dioxide emissions from 32 ethanol plants and then ship it to western North Dakota to be sequestered.
Jesse Harris, Summit’s director of public affairs, said carbon sequestration is critical for the future of ethanol plants as it will open up previously barred markets in California and Canada, which have low carbon fuel standards.
This is important because the ethanol industry contributes $50 billion to the United State’s GDP, provides 400,000 jobs and purchases 40% of U.S.-grown corn, Harris said.
“Capturing 12 million tons of CO2 on an annual basis, that's the equivalent of removing about 2.6 million vehicles off the road every year,” Harris said. “Carbon capture is an important part of how we're going to reach net zero emissions and, from an environmental standpoint, there are clear benefits.”
Chris Boshart, general manager of Corn LP, an Iowa-based ethanol plant, said the partnership with Summit provides the company with a more certain future. He said the coronavirus pandemic, which reduced the usage of many cars, harmed the ethanol industry and the increase in electrical cars is a concern for the future of the ethanol industry.
A more stable future for Corn LP would also affect local farmers, who receive a higher market value for their crops from Corn LP, Boshart said.
“[Our company] was something that a lot of folks got excited about,” Boshart said. “We have local jobs, we're owned by local businesses and a lot of local farmers and we're processing local farmer corn.”
Dakota Resource Council (DRC); a nonprofit environmental advocacy organization; is concerned about Summit’s motives.
DRC Field Organizer Eliot Huggins said Summit’s income is coming from two main sources: the premium price they can put on “clean” energy and the tax credits the company could receive from the government.
The Inflation Reduction Act of 2022 makes the company eligible to receive $85 per ton of sequestered, or underground stored, carbon dioxide. This is up from the previous $50 per metric ton. The project has the capacity to sequester 12 million tons per year, letting the company make billions of dollars in tax credits.
“I don't think this is gonna be a very [long-term] project,” Huggins said. “I think it’s people trying to get rich quick on these tax credits.”
Sam Wagner, DRC Field Organizer, said “This is not a left or right issue. There's people of all stripes that are banding together. People that wouldn’t have had us in the same room with them are talking to us now. And that's a story in itself in North Dakota, how a lot of people are wising up to some of these tactics because it's affecting them directly.”
Eliot Huggins is also concerned about the safety of the pipeline. Carbon dioxide pipelines have a risk of rupturing. If this happens, it will impair the breathing of animals and people nearby because the carbon dioxide, being heavier than oxygen, will push oxygen higher into the atmosphere.
There are no federal regulations governing carbon dioxide pipelines. Following the rupture of a carbon dioxide pipeline in Mississippi in 2020, the Pipeline and Hazardous Materials Safety Administration is working to update regulations.
“We believe [carbon dioxide sequestration] is an untested technology at an untested company on an untested scale that puts rural communities and farmers at risk,” Huggins said.
However, Summit director Jesse Harris is confident in the safety of the technology. He said carbon capture, transportation and sequestration use technologies that have been proven to be safe.
As another line of defense, Harris said the system will be monitored constantly and, if there’s a change in pressure, it will be shut down.
“Safety is our number one priority,” Harris said. “We would not have initiated this project unless we had the highest degree of confidence it will be safe for landowners and communities.”
Summit is currently persuading landowners to sign 99-year easements, allowing the company to install the carbon dioxide pipeline in exchange for money. Harris informed HPR that Summit had crossed a “major milestone” November 8, reaching a majority of signed easement agreements along the proposed pipeline route.
Todd McMichael is one North Dakota landowner refusing to sign an easement agreement with Summit. McMichael said he didn’t sign because the indemnification and compensation portions were terrible. For example, if the carbon pipeline was to rupture and it killed McMichael’s own cattle, then Summit would cover the expenses; but, if the pipeline ruptured and killed his neighbor’s cattle, then Summit wouldn’t cover the damages, according to McMichael who said he should not have to be responsible for the damages caused by the rupture.
McMichael said he has convinced representative Alisa Mitskog, Senator Larry Luick, Representative Cynthia Schreiber-Beck, Senator Mark F. Weber, Representative Kathy Skroch, Representative Jeffery J. Magrum, and Representative Mike Brandenburg that eminent domain should not be used for Summit’s pipeline.
“Pretty much everyone I talked to I changed their mind, but they're all so afraid of Doug Burgum, about him pulling PAC money and stuff away from them that they don't want to challenge him,” McMichael said.
McMichael’s advocacy attracted the attention of Governor Doug Burgum, who approached McMichael after the Fargo National Cemetery Volunteer Committee’s Memorial Day service and tried to change his mind, according to McMichael.
“[Governor Burgum] was giving me all the talking points that Summit Carbon Solution gives, and I don't back down from it because I know I have all the facts, McMichael said. “This has not been a good project from the start.”
McMichael cited three main areas where the project would not be good for North Dakota. One, he said the low-carbon credit fuel market in California is too saturated. In January 2021, the average low carbon fuel credit cost $199 compared to October, 2022 when it was at an average of $106 per credit. Two, McMichael said only one of the 32 Summit ethanol plant partners are in North Dakota. Three, the project will not be taxed for the first 10 years due to N.D. Cent. Code 57-06-17.1. Four, the sequestered carbon cannot be extracted for enhanced oil recovery, according to McMichael.
“We just became a dumping station for 32 ethanol plants with only one in the state of North Dakota,” McMichael said.
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