Can a CO2 pipeline developer change how farmers are treated?

By Mike Soraghan | 08/14/2023 06:54 AM EDT

The CEO of Summit Carbon Solutions says his company will treat landowners well. Critics say he’s making empty promises.

Lee Blank is chief executive of Summit Carbon Solutions.

Lee Blank is CEO of Summit Carbon Solutions LLC. Summit Carbon Solutions (Blank); Stephen Groves/AP Photo (ethanol refinery)

AMES, Iowa — The executive in charge of building the world’s largest carbon dioxide pipeline, billed as a boon to ethanol and corn production, is promising to do better by farmers than previous pipeline developers.

“We have committed to treat the landowner as fairly — more fairly — than the landowner has been treated in the past,” said Lee Blank, CEO of Summit Carbon Solutions LLC.

Winning over farmers is key to the success of Summit’s $5.5 billion proposal to pipe CO2 from ethanol plants across the Midwest to North Dakota for permanent disposal. Carbon capture projects like Summit’s are an important part of President Joe Biden’s plans to reduce the effects of climate change, as well as industry’s hopes for ethanol to survive in a low-carbon economy.


But the proposal has hit fierce opposition from farmers fuming about damage from past pipeline construction and wary of giving private companies the power to condemn land. A standoff in May between a South Dakota farmer and a crew surveying for Summit landed in court and became a rallying point for some opponents.

In an interview here at his company’s headquarters, Blank touted the terms Summit is offering to farmers for easements across their property. That includes a promise to repair intricate drainage systems for the life of the pipeline and paying for any accidental damage farmers might cause to the pipeline.

“There’s never been a more accommodating lease easement, I would say in the history of the infrastructure projects in the U.S.,” Blank said. “We’ve been very, very focused on that.”

Some of the terms Blank cited, though, are already required or common in agreements with landowners in the path of pipelines. Blank said it’s important that his Iowa-based company knows how to work with farmers and protect their land.

“I’m an agriculture executive,” Blank added. “I’m not a pipeline guy. My mission and goal for the company is to return the acre to how it was before.”

Critics say Summit’s easement agreement is still bad for farmers, and that the company is offering landowners far less than what they would get for wind and solar installations.

“There’s nothing good about this,” said Jess Mazour, a program coordinator with the Sierra Club’s Iowa chapter who is organizing opposition to CO2 pipelines in the Midwest.

Summit suffered a setback this month when its pipeline plan was rejected by regulators in North Dakota. The company has said it plans to reapply. The project would ship CO2 from ethanol plants and other industrial sites in Iowa, Minnesota, Nebraska and North Dakota to a site in western North Dakota to be pumped underground for permanent disposal.

Some farmers welcome the 2,000-mile pipeline network as what’s needed for corn-based ethanol to keep bolstering Iowa’s economy. In a recent news release, Summit also said the project will help “secure a market” for liquid fuels more broadly and the internal combustion engine specifically.

Others say any benefits of the pipeline aren’t worth the damage to farmland and the risk of catastrophic leaks of CO2, which can be an asphyxiant. Some landowners say crop yields have still not recovered in areas trenched for the Dakota Access oil pipeline in 2016.

Blank spoke to E&E News in late July in Ames, home of the state’s land-grant university, Iowa State, and a short drive from the state Capitol in Des Moines. The CEO said his company’s project will be different from other pipeline projects.

“I understand what it means to put the acre back the way it was, and we’re committed to it.”

What farmers get

Summit is telling farmers it will pay, upfront, 240 percent of the value of the crop that will be affected by construction of the pipeline. Pipelines generally require a 50-foot permanent easement, along with land on either side used temporarily for construction. That covers 100 percent of crop loss the first year, 80 percent the second year and 60 percent for the third year.

Blank said the company will repair the often-intricate drainage systems, called drain tile, underlying most Iowa farms during construction and for as long as the pipeline is there. It will pay for any accidental damage to the pipeline from farming, he said, such as hitting it with a plow. The company said its approach to restoration would apply to all landowners, including those whose easement land is condemned because they don’t sign an agreement with the company.

The company will fund inspectors for every county to prevent problems, Blank said, and separate vital topsoil from the less valuable clay underneath.

Beyond that, company officials note that Iowa strengthened the rules protecting landowners after construction of the Dakota Access pipeline, which was completed in 2017.

But state rules already require pipeline builders to fund inspection programs in each county crossed by the pipeline. And separating and preserving topsoil has been a requirement for many pipelines built in the past few years across the country. But some farmers say the topsoil requirement was often ignored.

The crop loss payments offered by Summit cover more than those documented in a study by Iowa State University for two years after the Dakota Access pipeline was built through the state. That study found yield declined 25 percent the first year after construction ended and 15 percent in the second year.

And Summit’s proposed payment ratio is in line with what was documented by researchers in Ohio, who found that pipeline companies generally offered payments of 250 percent of crop value across four years.

But that study found that losses continued after the payments stopped.

Other studies have documented losses in crop yields even 10 years after construction ends. Farmers along the Alliance pipeline in the upper Midwest have said in a lawsuit against the operator that they’re still suffering crop losses from a pipeline completed in 2001.

The Sierra Club’s Mazour, citing an unsigned copy of Summit’s agreement, which the Sierra Club obtained from a landowner, says it contains language that would allow the company to fudge on its commitments. For example, it says landowners’ fences would be restored to their previous condition “as nearly as reasonably practicable.”

“They have a lot of words that give them a lot of wiggle room,” Mazour said.

Wind and solar projects, she said, pay year after year for using farmers’ land. Those projects cannot use eminent domain to condemn land. Summit officials noted that wind and solar take land out of production, while farmers can usually keep growing crops above pipelines.

Navigator CO2 Ventures, developer of the Heartland Greenway carbon dioxide project in the Midwest, is offering to pay 250 percent of crop value up front to farmers in the path of the pipeline, said company spokesperson Andy Bates. It will also pay compensation for damage to their land, and fix drainage tile. The company said it will have contractors fix any damage to drain tile, or hire a preferred company at Navigator’s expense.

“Navigator has outlined a robust ag land restoration plan that accounts for soil segregation, preservation, and restoration,” Bates said.

Implicit in Summit’s pledge is that other pipeline companies didn’t treat landowners as well as they could have. In the future, developers might have to explain why if they’re offering less favorable terms.

During the pipeline-building spree of the past 10 years or so, farmers and other landowners across the country have complained pipeline builders left them with a mess. Farmers said construction blocked fields, crews tossed debris in trenches with pipelines and companies neglected their duty to restore land to its original condition.  

The Dakota Access project, developed by Dallas-based Energy Transfer LP, cut through the state in 2016, before the protests lead by the Standing Rock Sioux Tribe made national news. But it still looms large for many farmers who had pipe installed across their land.

“It destroyed 6,000 acres of Iowa farmland,” said Keith Puntenney, a farmer from Boone, Iowa, and a fierce critic of Dakota Access whose property was crossed by the pipeline. He said crews ruined topsoil, damaged crops by bulldozing water from construction zones onto cropland and tossed in construction debris when they buried the pipe.

Still others say they had few problems, if any.

“They did a good job on our property, and the payment was pretty good,” said Kelly Nieuwenhuis, a farmer in the western part of the state whose family farm now hosts a portion of the Dakota Access pipeline.

Asked about continuing complaints about crop losses from Dakota Access, Energy Transfer spokesperson Cassidy Lamb said in an email that restoring land is a “multi-year process for which landowners are compensated.” She said the company remains focused on restoring the land over the pipeline ”per our agreements with the impacted landowners.”

Industry leaders defend the past practices of pipeline builders.

“Pipeline operators are committed to treating landowners who may be impacted by critical energy infrastructure development fairly, responsibly and consistently,” said Lynn Granger, director of the American Petroleum Institute’s Midwest and Mountain West regions.

And they say the complaints of landowners should be weighed against the economic growth and other benefits that such massive projects deliver.

“The entire region will benefit from these CO2 pipeline projects,” said John Stoody, a vice president at the Liquid Energy Pipeline Association, “as will the individual landowners along their route.”