Applying a risk framework to CO2 pipelines

Guest blog by Climate Land Leader and Iowa landowner Angie Smith Harris, who worked in several areas of risk and project management throughout her professional career, including analyzing the financial stability and viability of bank holding companies and developing risk control frameworks and mitigation plans for Fortune 500 companies.

In late July I received a certified letter from Summit Carbon Solutions LLC (SCS) outlining a proposed carbon pipeline project. The pipeline will enable ethanol plants in Iowa and four other midwestern states to capture and sequester their carbon dioxide (CO2) emissions.

Angie Smith Harris (IA and MN)

The letter also stated the following: “Your receipt of this letter indicates that right of way on or near property in which you have a legal interest could potentially be affected by the construction of the pipeline. SCS Carbon Transport will be seeking permanent easements for its pipeline on or near your property, as well as easements for temporary construction workspace, access and other rights as may be necessary to construct and operate the pipeline.”

After reading the letter several times and having no understanding of what “permanent easement” or “other rights” meant, I decided it would be prudent to educate myself on CO2 pipelines. My assumption was that CO2 pipeline technology and safety was similar to gas and oil pipelines, which did not concern me as we have a natural gas line running through our Floyd County Iowa farmland. I have professional expertise in risk management, so I used a risk framework for my CO2 pipeline analysis. This assessment proved that my initial assumption is incorrect. I also discovered that SCS is intentionally keeping key stakeholders (landowners, counties, and the public) in the dark regarding the project’s challenges and risks. What follows is my new perspective.

In Summit’s pursuit of a quick profit through carbon sequestration tax credits, the company considers private landowner rights and the public’s common good rights irrelevant. The company is bulldozing their pipeline proposal through without disclosing the outstanding engineering risks or the pipeline leak risks to the public. Summit’s modus operandi is an unscrupulous sales pitch with a risk plan that transfers the future known and unknown risks to third parties, i.e., the landowners and the public. Therefore, Summit reaps the billions in tax credits with minimal future risk. Wow, if you are a Summit investor, this is a fail-safe lucrative business model.

Landowners and the public need to be aware that the Summit Pipeline Project has not answered questions relating to the project’s risk profile. In risk management we unleash our skepticism and generate questions to drive out the risk analysis facts. Here are some of the questions that I would like Summit to answer:

 

  1. SCS has never owned or operated a pipeline. How do they intend to manage this project, and what is the experience of the key individuals?  SCS’s plan is to build 2,000 miles of pipeline throughout five states.  his is a 40% increase over the existing 5,000 miles of CO2 pipeline that are in the US. The scale of this project and SCS’s inexperience in CO2 pipeline building and operations creates a high risk of execution failures.

 

  1. Currently, there are sparse regulations that exist specifically for CO2 Pipelines. This is a risk as CO2 pipelines behave differently than oil and natural gas lines due to the properties of CO2; CO2 has both gas and liquid properties1. What specifications will be used to build the pipelines? When will there be updated federal regulations on CO2 pipelines?

 

  1. The 700-mile pipeline project in Iowa is expected to use 3.36 billion gallons of water each year2. Is this annual use sustainable? Is there a risk of harming Iowa’s bedrock aquifers? From what I have read, that answer is unknown, and there needs to be a thorough study done to understand the water-related risk exposure to Iowans and Iowa industry before the pipeline project is started.

 

  1. What are the expected danger zones around the leak when a leak occurs? CO2 will flow to low lying surrounding areas such as a creek bed or river. CO2 displaces oxygen as it is heavier than oxygen, and people and animals will experience asphyxiation if they are in the danger zone. The maximum distance between safety valves is 20 miles. The company states the valves are closed in thirty seconds from a detection of an issue. How much CO2 can leak in 30 seconds from a 16-inch pipe or a 24-inch pipe?  Note: Testing of an 8-inch CO2 pipe in England resulted in a 3-to-4-mile danger zone3. SCS has plans to use a 24-inch CO2 pipe. Has the company conducted leak dispersion modeling on a 24-inch diameter pipe?

 

  1. Will SCS contribute funds for first responder equipment such as expensive respirator gear and electric vehicles, or will the counties and therefore the public need to foot this bill? Gas vehicles will not work in an oxygen deprived environment.

 

  1. What are the defined the future risks to the landowner – e.g., higher liability insurance, lower property values, what is the probability of a leak on a landowner’s property and the chances of a dead zone near their home or animals – and what are the risks to the landowner when the pipeline is decommissioned?

 

  1. SCS touts the project’s economic benefits to Iowans as a reason for the use of eminent domain. However, the facts and figures in SCS’s public materials are footnoted that SCS supplied all the numbers and analysis. Why hasn’t an independent analysis been done to verify the economic benefits, especially since the use of eminent domain has been approved by the Iowa Utilities Board? At a public meeting in August, I asked SCS approximately how many of the 550 plus hires during the construction phase would be Iowans. SCS responded that they will be working with the Iowa unions and refused to offer an approximate number or percentage. Will the majority of the project’s workers live out of state? Will they return home on the weekends spending their earnings outside of Iowa?

 

  1. What is the public’s opportunity cost regarding the large public investment in corn ethanol production, which is not a sustainable energy source? Might the public and our environment be better off if we invested our tax dollars to clean energy advances or to farm programs that promote crop diversity?

 

At this point in time, the bottom line for me is: I see this project as a company’s shameless attempt to make a significant profit at the expense of the landowners, the public, and the earth.

 

1 “Carbon Pipelines: A Disaster Waiting to Happen,” uploaded by Sierra Club Iowa Chapter, 9/29/2021, https://www.youtube.com/watch?v=1K_w5VzBZ6s

2 “Water Woes: Uncovering the True Cost of Summit’s Carbon Capture Project,” Sierra Club Iowa Chapter, 6/4/2024, https://www.sierraclub.org/iowa/waterreport

3 “Landowners Meeting: Carbon Pipelines in Nebraska,” uploaded by the Nebraska Easement Action Team, 2/2/2022, https://youtu.be/BuvGYbF-G7Q