Federal judge says Shelby County can’t restrict CO2 pipeline locations

Ordinance is similar to one being considered for Floyd County

By Jared Strong, Iowa Capital Dispatch, and Bob Steenson, Charles City Press

An ordinance adopted by Shelby County that would severely restrict the placement of a proposed carbon dioxide pipeline conflicts with state and federal regulations and cannot be enforced, a federal judge ruled this week.

The judge granted Summit Carbon Solution’s request for a temporary injunction regarding the ordinance.

Many of the restrictions in the Shelby County ordinance are similar to a hazardous liquid pipeline zoning ordinance currently being considered by Floyd County. Both the Shelby County ordinance and the proposed Floyd County ordinance were developed with the help of the same law firm, Ahlers & Cooney, of Des Moines.

Two other counties, Story and Emmet, which passed similar ordinances developed with the aid of Ahlers & Cooney, have also been sued by Summit.

“It’s extremely disappointing,” said Steve Kenkel, chairperson of the Shelby County Board of Supervisors that approved the ordinance. “We have a duty as a supervisor to protect our county. How do we do this when other levels of government won’t support counties?”

He said he did not know whether the county will appeal the decision.

Summit, along with a Story County farmer who is a founder of an ethanol plant, has sued the three counties for ordinances that restrict how closely hazardous liquid pipelines can be located to cities, schools, livestock facilities, electric transmission lines, homes and other facilities, and set up other requirements.

The lawsuits seek declarations that the ordinances are preempted by federal and state regulations, permanent injunctions that prevent their enforcement and reimbursement of attorney fees.

The ordinances are not all identical, but like the Shelby County ordinance, the Floyd County ordinance – currently being considered by the county Zoning Commission – would set distance limits between pipelines and residences, cities, schools and many of the same other facilities in the Shelby ordinance, would set up conditional use permit requirements of the pipeline and landowners similar to the Shelby ordinance, and would require extensive safety information from the pipeline company similar to the Shelby ordinance.

Summit Carbon Solutions, of Ames, seeks to build a pipeline network in five states that connects to ethanol plants to transport their captured carbon dioxide emissions to North Dakota for underground sequestration.

The project includes more than 700 miles of pipe in the northwestern half of Iowa and would cross Floyd County. The people who own land for about 30% of the route have declined to grant Summit easements to build on their properties and will likely be subject to eminent domain proceedings with the Iowa Utilities Board starting next month.

The county ordinances were borne of the sometimes fierce opposition to Summit’s project and other carbon dioxide pipeline proposals by two other companies. Opponents worry about public safety if a pipeline ruptures, permanent damage to farmland, and say the private company projects shouldn’t qualify for eminent domain.

The ruling by Chief Judge Stephanie Rose, filed Monday in the federal Southern District of Iowa, said state law does not explicitly prohibit the Shelby County ordinance, but that such a prohibition is implied.

Rose noted the statutory role county supervisors have in land restoration after a pipeline is built, but not in pipeline placement.

“This omission is evidence that the Legislature did not envision a role for counties in regulating the location of pipelines,” Rose wrote.

“Common sense suggests these restrictions would eliminate all or almost all land in Shelby County on which an (Iowa Utilities Board) approved pipeline could be built,” the judge wrote. “This creates a serious possibility the IUB would approve the construction of the pipeline but Summit would be unable to build because it could not comply with the requirements of the ordinance.”

This would have the effect of a county prohibiting an act that state statute would allow.

“So long as this situation exists, the Ordinance is unenforceable under implied preemption,” Rose wrote. “The law does not expressly preempt county regulations of pipelines. Rather, the Iowa Code preempts the Ordinance to the extent it interferes with the construction of an IUB-approved pipeline. … Where compliance with state law is not possible because of a local ordinance, the local law is unenforceable under preemption.”

Rose also said the ordinance’s requirements for pipeline companies to submit safety plans, including CO2 dispersion models in case of leaks, to the county and to notify the county when use of a pipeline is discontinued conflict with federal rules.

“State and local agencies cannot regulate safety matters,” Rose wrote.

Kenkel said counties need early access to dispersion models of the Summit project that show what places are most likely to be affected by a pipeline breach. He said the ordinance was further meant to protect economic and housing development in the county’s cities by keeping pipelines two miles away from them.

Rose also found fault with parts of the ordinance that would require landowners who grant easements for a pipeline project to receive a conditional use permit from the county.

Such requirements interfere with the pipeline company’s legal requirement under Iowa Code to “make a good faith effort to negotiate with the owner,” Rose wrote, and had been used by the county to threaten landowners who had already signed easement agreements.

“Attempted enforcement of the provisions has stymied attempts by Summit to negotiate with landowners, as well as interrupted its relationships with current landowners,” Rose wrote. “To the extent the ordinance’s conditional use permit regime impacts this negotiation process, it is preempted.”

Kenkel said the project is unpopular in Shelby County because the pipeline is not connecting to any ethanol plants there. Affected landowners might be forced to give land easements through eminent domain “while serving no benefits to them,” he said.

In issuing the temporary injunction, Rose found that Summit is likely to succeed with its lawsuit against Shelby County. It’s unclear when the suit will conclude.

Judges have not made decisions about injunctions in the two other lawsuits, against Emmet and Story counties.

The Emmet County lawsuit is in the Northern District of the U.S. District Court in Iowa, under Chief Magistrate Judge Mark Roberts. The Story County lawsuit, like the Shelby County suit, is in the Southern District. So far Magistrate Judge Stephen Jackson is handling the Story County case.

“Summit Carbon Solutions is pleased the (judge) affirmed that federal regulations and state laws preempt ordinances at the county level,” Summit said Wednesday.

An attorney for Shelby County did not immediately respond to a request to comment for this article.

Shelby’s ordinance has requirements that hazardous liquid pipelines be at least two miles from a city’s limits; a half mile from churches, schools, nursing homes, long-term care facilities and hospitals; a quarter mile from public parks and recreation areas; 1,000 feet from occupied buildings, livestock confinements, electric generation and transmission equipment, and drinking water and wastewater treatment plants.

The proposed Floyd County ordinance has many of the same restrictions but some different distances.

The IUB is poised to start a final, evidentiary hearing for Summit’s project on Aug. 22. Although pipeline opponents have urged the board to delay the hearing, the chair of the board indicated earlier this week that it would proceed as scheduled. The hearing has the potential to go for months.

— Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com. Follow Iowa Capital Dispatch on Facebook and Twitter.