Congress believes that carbon capture, use, and storage (CCUS) is one path to decarbonization. As such, the bipartisan infrastructure bill includes $2.1 billion to establish a Department of Energy (DOE) program to provide low-interest loans to CO2 infrastructure projects and $2.5 billion to expand its Carbon Storage Validation and Testing program. Last year, the USE IT Act clarified that CCUS and CO2 pipelines are eligible for streamlined permitting review and ordered the Council on Environmental Quality to create guidance to speed their development.
Still, Congress failed to consider two fundamental issues of CO2 pipeline siting: who decides where these pipelines get built, and the degree of public input into the process –including hearing from landowners whose property will be taken for these projects via eminent domain. States control pipeline siting within their borders, so Congress is funding projects subject to very different regulatory requirements.
Illinois is one state that has crafted a CO2 pipeline and CCUS regulatory regime that considers landowner concerns. The Illinois Commerce Commission must notify affected landowners with details of the Commission’s initial hearing on the application within 30 days of filing, allowing landowners to participate in the process of someone asking for authority to take their property. The applicant must also obtain all necessary permits before construction starts. This saves landowners from the nightmare situation of a pipeline receiving the one permit to condemn and dig up their property– only for the project to be scrapped because it never obtains other necessary approvals.
Unfortunately, states with the greatest potential for CO2 storage are faring far worse than Illinois. CO2 pipeline applicants in Mississippi, Louisiana, and Texas do not need to obtain all necessary permits before starting construction. This creates the risk of CO2 pipelines taking private property and proceeding with construction without certainty that the project will ultimately be built.
Texas, for example, has no public hearing requirement for CO2 pipelines and no notice to landowners that the pipeline obtained permission to take their property. In Louisiana, the Office of Conservation must hold a public hearing for a CO2 pipeline application, after which any appeal from the Office of Conservation’s permit decision must be filed within a prohibitively narrow 10-day window.
Moreover, CO2 pipeline construction will presumably require eminent domain authority. This is problematic, as some states limit CO2 pipelines’ eminent domain authority to specific purposes. Illinois grants eminent domain authority for approved CO2 pipeline projects for both Enhanced Oil Recovery (EOR) and CCUS projects. Conversely, states like Mississippi only grant eminent domain authority for CO2 pipelines connected with EOR projects. And no state requires CO2 pipelines to provide landowners with the right to repurchase their property if the pipeline project is canceled.
Although Congress is deferring to state permitting rules, it can and should ensure that federal funding is limited only to pipelines in states with comprehensive permitting regimes that minimize eminent domain abuse and elevate landowner concerns and public engagement. Regardless of state permitting rules, federally-funded pipelines should have all necessary permits before using eminent domain, and include reasonable repurchase provisions in easement agreements if the project is never built.
What Congress contemplated in the infrastructure bill may only be the tip of the iceberg. According to Princeton University’s Net-Zero America study, almost 70,000 miles of CO2 pipelines are needed in all but one of the modeled pathways to net-zero by 2050. Such a vast interstate network raises the possibility that these will encounter the same problem that faced natural gas in the early 1900s: getting all states along the proposed route to agree on whether and where the project will be built.
Congress solved the natural gas problem with the 1938 Natural Gas Act. As companies started building interstate pipelines, conflicts between states led the Supreme Court to decide that states do not have jurisdiction over interstate pipelines. This created a regulatory “gap” that Congress stepped in and filled by giving the Federal Power Commission (FPC) the authority to site interstate pipelines (and the responsibility of regulating interstate gas transport and sales).
Because it is hard to imagine how this same problem will not plague interstate CO2 pipelines, Congress may eventually have to federalize siting authority for these. Both Congress and FERC should start thinking about this as soon as possible.
If CO2 pipelines are part of the decarbonization process, we shouldn’t ignore what we’ve learned about building other interstate infrastructure. Nor should we minimize the enormous sacrifice imposed on those forced to sell their property to get these pipelines built.