Pipeline to 'nowhere': Navigator CO2 routes in flux as Illinois resists project

If Navigator Heartland Greenway wants to build its sprawling, multi-billion dollar carbon dioxide pipeline system across the Midwest, more than anything, the company needs a site to store the hazardous gas.

As it stands, Navigator doesn't have one.

Public documents filed with the Illinois Commerce Commission, a state public utility regulator, show the carbon capture company has made little progress in securing its proposed sequestration sites.

Navigator's Heartland Greenway System, a $3.2 billion endeavor, has a proposed 1,350-mile route through Illinois, Iowa, Minnesota, Nebraska and South Dakota.

The project is expected to run through about 111.9 miles of eastern South Dakota farmland and will connect to five ethanol plants under POET, one of the largest biorefiners in the U.S., as well as a Valero Renewable Fuels plant. If built, about 291.4 miles of pipeline will route through western and central Illinois.

The company plans to build two carbon dioxide sequestration facilities in Illinois' Christian and Montgomery counties. These facilities are essential to the project, as they would facilitate the disposal of the gas that's collected from ethanol and fertilizer plants attached to the pipeline.

But according to a June 15 testimonial from Mark Maple, ICC's senior gas engineer, Navigator has only acquired a few of the permits or approvals necessary to construct the sites.

Just as well, the unpopularity of the project among Illinois landowners is unprecedented among pipeline projects. According to a June progress report from Navigator, the company has only secured a mere 13.4% of the necessary easements it needs across its 291-mile route in Illinois after nearly a year of negotiating with landowners.

"They've been having a hell of a time here," Pam Richart, co-founder of Illinois-based Eco-Justice Collaborative and anti-pipeline advocate, told the Argus Leader. "They've been at it for a year. So I think that's a testimony to the opposition that they are facing here in Illinois. Land owners don't want it, plain and simple."

Related: Farmers say Summit Carbon Solutions using ‘intimidation’ while targeting McPherson County land

The slow progress on courting landowners is emblematic of the project's lack of popularity in the Prairie State, but the developments in Illinois have implications for South Dakota and other states where the pipeline is routed. If Navigator's sequestration sites are not permitted and alternative sites are not identified, the entire pipeline project could be scrapped.

Navigator, storage LLC still need more than a dozen permits

Navigator, for its part, has acquired the necessary land rights to construct the sequestration facilities in the two counties, Maple noted. This means the company only needs to the right permits to build the facilities at those specific locations, which would also ensure the current pipeline route remains mostly unchanged.

However, the company has so far only acquired two of the 14 necessary federal, state and local permits or approvals to build the sequestration sites. Of the 14 prerequisites, Navigator received an Operator Identification Number ― a standard industry ID that's relatively easy to acquire ― in November 2021, and an Agricultural Impact Mitigation Agreement was signed with the state's Department of Agriculture on April 7.

According to filings from Navigator, the company anticipates receipt of some of the 12 remaining permits in late 2023. A few of those permits, however, are expected to come in early 2024, and one permit associated with the Illinois' State Antiquities Act is scheduled for Q4 2024.

Navigator's sequestration company, HG Carbon Storage, LLC., also needs to obtain two Underground Injection Control Class VI permits from the U.S. Environmental Protection Agency to inject carbon dioxide underground in both counties.

If Navigator is unable to obtain the EPA permits for each of its sequestration sites, the company won't be able to sequester carbon dioxide in the first place. Navigator would then have to look to other counties for sequestration.

Iowa, South Dakota unlikely options for carbon sequestration

The Nebraska-based company has options in that event. Maple noted the company could relocate its sequestration sites to the Mount Simon Formation, an expansive region between Illinois and Indiana with a large underground reservoir. Archer Daniels Midland Company, one of the world's largest agribusiness companies, and other organizations already inject carbon dioxide in the sandstone formation through the Illinois Basin-Decatur Project.

But this would also require the company to reroute the project, "perhaps only a few miles or perhaps entirely out of Illinois," Maple said. In that case, a new group of landowners would be pulled into the pipeline debate on short notice, considering they not have a chance to participate in the original certification process last July.

"Without a sequestration facility in place and the end point being uncertain, the entire route remains in flux, and consequently, in my opinion, it is not a benefit to the citizens of Illinois nor in the public interest," Maple said in his testimony.

Richart said it would be unlikely for Navigator to consider building sequestration sites in Iowa or South Dakota, because the geology isn't as prime for sequestration unlike parts of Illinois or North Dakota ― a state where Summit Carbon Solutions, one of Navigator's competitors, already has sequestration sites lined up.

Other Midwest public utility boards are maintaining a general awareness of the proceedings in Illinois. Iowa Utilities Board Communications Director Don Tormey told the Argus Leader the board is aware of Navigator's intent to sequester carbon dioxide in Illinois but added the IUB can only rule based on what is filed in their Navigator docket.

Kristen Edwards, staff attorney for the South Dakota Public Utilities Board, told the Argus Leader the situation over the sequestration sites has been "something in the back of our minds," but it's not something being formally looked at.

"It's outside of our jurisdiction. I don't know that we have any data requests on that to Navigator. [We] had just conversations with Navigator on the plans for their project and plans for construction, because, obviously, without those sequestration sites we have essentially a bridge to nowhere. It wouldn't be a viable project."

This uncertainty, however, does not appear to deter Navigator. In a statement to Argus Leader, the company said it believes it has enough time to have the project operational by 2025 and it continues to "make progress every day throughout the project footprint."

"We do anticipate continuing to expand the sequestration region into more, additional areas throughout central Illinois and are having some constructive conversations with landowners and local leaders throughout a variety of counties," the company wrote in a statement to the Argus Leader. "The geology throughout the region is specially suited for this type of activity."

Navigator, by its own admission, has chosen to wait until it has received all 14 permits and approvals to begin construction of its pipeline. The lack of permits doesn't necessarily prevent Navigator from receiving a certificate of authority, a document that would enable the company to build the pipeline system, but the company would be prohibited from starting construction until the permits are granted.

Some of these federal permits, like the U.S. Army Corp of Engineers' Nationwide Permit 58, which covers construction and other activities leading to discharge of material in U.S. waters, also are crucial for applications outside of Illinois. Edwards said one of the PUC's permit conditions is that applicants "acquire all other necessary permits."

Any procedural or permit-related delays could dampen the economic impact of the project. Navigator, Summit Carbon and other carbon capture companies are on a deadline to have its pipelines operational by Dec. 31, 2024, the first day of a two-year window for the 45Z New Clean Fuel Production Credit, a tax credit introduced in the Inflation Reduction Act of 2022.

According to a recent study from Dakota Institute, South Dakota ethanol plants that hook up to either Navigator or Summit Carbon's CO₂ pipelines can expect to earn, respectively, $1 and $1.75 per gallon of ethanol-based transportation and aviation fuel produced with lowered-carbon scores ― a dollar figure that adds up substantially, considering the average ethanol plant in the state will make about 96 million gallons annually.

Navigator and Summit Carbon did not disclose their individual business dealings for the study, but the carbon companies could also take a slice of the earnings through transmission fees as operators of the pipelines.

More: Study reveals new data on how Summit Carbon, Navigator pipelines would impact SD's economy

In Montgomery County, Navigator has yet to apply for the EPA permit. They plan to submit by Q3 2023 and receive the permit by Q1 2025. The company submitted its UIC application last June and expects to receive the permit by Q4 2023.

Navigator's negotiations have an 'extraordinarily low success rate'

Maple's testimony comes with his recommendation that the ICC deny Navigator's application for a certificate of authority to build the pipeline.

Part of Maple's reasoning is that Navigator's pipeline is inconsistent with the state's Carbon Dioxide Transportation and Sequestration Act, or CO₂ Act. This law enables carbon capture companies to build their CO₂ transportation, storage and injection facilities in Illinois and allows them to acquire property through eminent domain ― only if they are also granted a certificate of authority.

Maple argued Navigator's project doesn't fit the bill, which requires pipeline projects to be "consistent with the public interest, public benefit and legislative purpose" of the act. By law, carbon dioxide pipelines used for sequestration and other purposes are already considered a "public use" and therefore in the public's interest and benefit.

In terms of public approval, the sentiment of Illinois landowners is overwhelmingly negative at the moment. Since filing the original application in July 2022, Navigator has only signed 148 out of 1,104 easement agreements needed along its Illinois route, a mere 13.4% of all easements, according to June update document sent to ICC staff.

Navigator, albeit slowly, has continued to work with landowners. According to Richart, the company was sitting at 6% of signed easement agreements in December before earning another 82 signatures by the end of May.

Related: Summit Carbon drills on land of South Dakota farmer who allegedly threatened surveyors

But the company has already made offers to virtually every Illinois landowner along the pipeline route, according to the June update.

"I cannot recall another pipeline construction docket involving eminent domain where the percentage of easements obtained was anywhere near this low at this point in the negotiation process," Maple said in his written testimony. "The current percentage, 13.4%, is an extraordinarily low success rate given the time that has elapsed."

In that same vein, if Navigator also fails to secure permits for its Christian or Montgomery sites, Maple said the project would not be considered a public interest, because it wouldn't serve its basic function of sequestering carbon dioxide.

Navigator, in a written statement, told the Argus Leader it would not withdraw its application to the ICC despite the unpopularity of the project.

"Navigator CO₂’s Heartland Greenway project continues to follow the robust local, state, and federal regulatory processes for large-scale infrastructure projects," the statement read. "We look forward to continue working with Illinois landowners and regulators developing a safe and responsible project."

Dominik Dausch is the agriculture and environment reporter for the Argus Leader and editor of Farm Forum. Follow him on Twitter and Facebook @DomDNP and send news tips to ddausch@gannett.com

This article originally appeared on Sioux Falls Argus Leader: Progress of Navigator’s CO2 project has slowed: What this means for SD