South Dakota regulators deny permit for Navigator CO2 carbon pipeline

By: - September 6, 2023 1:41 pm

South Dakota Public Utilities Commission members, from left, Chris Nelson, Kristie Fiegen and Gary Hanson participate in a meeting Sept. 6, 2023, at the Capitol in Pierre. (Photo by Joshua Haiar/South Dakota Searchlight)

PIERRE — In a unanimous decision, the three-member South Dakota Public Utilities Commission on Wednesday rejected Navigator CO2’s application for a permit to construct the Heartland Greenway carbon capture pipeline in South Dakota.

The commission also unanimously refused the company’s request to preempt county pipeline setback ordinances. The ordinances mandate minimum distances between pipelines and dwellings, schools and other places.

In public comments during Wednesday’s meeting at the state Capitol, Commissioner Kristie Fiegen listed a number of reasons for denying the permit, including what she described as a failure by the company to adequately disclose carbon dioxide plume modeling, and a failure to provide timely notices to some of the landowners along the proposed route. The commission conducted a hearing on the permit application from July 25 to Aug. 8.

“The burden of proof is on the applicant,” Fiegen said Wednesday.

That burden, she added, includes ensuring the project will not negatively impact the social, environmental and economic well-being of the public. Fiegen made the motion, which was supported by the other two commissioners, to deny the permit. The commission’s staff will now prepare a formal written order.

The route of the proposed Heartland Greenway pipeline. (Courtesy of Navigator CO2)

Opposing sides react

Navigator, which is based in Omaha, issued a statement after the meeting.

“While we are disappointed with the recent decision to deny our permit application in South Dakota, our company remains committed to responsible infrastructure development,” the statement said. “We will evaluate the written decision of the Public Utilities Commission once issued and determine our course of action in South Dakota thereafter.”

South Dakota’s denial of a permit for Navigator follows North Dakota’s recent denial of a permit for another carbon pipeline project, proposed by Summit Carbon Solutions, which would also cross into South Dakota. Summit has already altered its North Dakota route and is seeking reconsideration of that decision. Summit’s South Dakota permit hearing is scheduled to begin Monday, and a weeks-long hearing on Summit’s proposed route in Iowa is in progress.

Navigator has not yet pursued eminent domain to obtain land access from unwilling landowners in South Dakota, while Summit has already filed dozens of eminent domain court cases in the state.

When asked by South Dakota Searchlight if Navigator will seek reconsideration of the commission’s decision, Navigator spokesperson Elizabeth Burns-Thompson replied by text message that the company “will determine that once we have the chance to review the final written order on Sept. 26.”

Rick Bonander, whose rural Valley Springs land would be crossed by the pipeline, told South Dakota Searchlight on Wednesday that he is “extremely happy.”

“I was about 50-50 on what I thought would happen today,” he said. “Wow. Just, wow.”

Brian Jorde, an attorney representing landowners, apologized during Wednesday’s meeting for earlier comments he made that suggested a lack of faith in the commission to conduct a fair hearing.

“I was wrong,” Jorde said. “The parties had a fair process.”

Project details

Navigator applied for its state permit in September 2022, outlining plans for a $3 billion, 1,300-mile pipeline to transport carbon dioxide in liquid form from 21 ethanol and fertilizer plants across five states to an underground sequestration site in Illinois. In eastern South Dakota, the project would cover 111.9 miles in Brookings, Moody, Minnehaha, Lincoln and Turner counties.

When Navigator announced its plans in March 2021, it listed Valero Energy Corp. and BlackRock Real Assets as partners. Valero is an international gasoline, diesel and ethanol producer. BlackRock is a global asset management company.

I would note, not a single South Dakota farmer testified in favor of this project.

– Public Utilities Commissioner Chris Nelson

Part of the project’s attraction is its eligibility for annual federal tax credits of $85 per metric ton of sequestered carbon. The federal government offers the credit as an incentive to remove heat-trapping carbon dioxide from the atmosphere and sequester it, as a means of combating climate change.

Public Utilities Commissioners Gary Hanson and Chris Nelson said Wednesday that Navigator did a poor job of minimizing the public’s concerns about the project.

“I would note, not a single South Dakota farmer testified in favor of this project,” Nelson said.

County ordinances upheld

Yet Nelson also said some of the public’s concerns about the safety of the project are misinformed and exaggerated. The safety concerns involve the potential for a leak, which could release a toxic carbon dioxide plume. A 2020 carbon pipeline leak in Mississippi caused the evacuation of 200 people, including 45 who sought hospital treatment. Federal regulators are now reviewing carbon pipeline safety regulations for potential changes.

Safety concerns figured into ordinances adopted in Minnehaha and Moody counties in South Dakota requiring minimum setback distances for pipelines.

In June, Navigator filed a motion to preempt local county setback ordinances, citing a state law that allows the Public Utilities Commission to supersede local rules if they are found to be “unreasonably restrictive.”

Minnehaha County attorney Alex Hagen said Wednesday the attempt to overrule county ordinances was “an attack on local government.”

“The fact that you have that authority does not mean you need to exercise it,” he told the public utilities commissioners.

The commissioners determined the ordinances are not unreasonably restrictive, given that a company representative acknowledged previously during a hearing that although it would be more difficult, Navigator could still complete the project while obeying Moody County’s setbacks.

EDITOR’S NOTE: This story has been extensively updated with additional details since its original publication.

This story was originally published by South Dakota Searchlight, which is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. South Dakota Searchlight maintains editorial independence. Contact Editor Seth Tupper for questions: [email protected]. Follow South Dakota Searchlight on Facebook and Twitter.

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Joshua Haiar
Joshua Haiar

Joshua Haiar is a reporter for the South Dakota Searchlight, based in Sioux Falls. Born and raised in Mitchell, he joined the Navy as a public affairs specialist after high school and then earned a degree from the University of South Dakota. Prior to joining South Dakota Searchlight, Joshua worked for five years as a multimedia specialist and journalist with South Dakota Public Broadcasting.