Nancy Dugan lives in Altoona, Iowa and has worked as an online editor for the past 12 years.

Three Iowa women who rely on the Devonian aquifer for their water have filed suit in Polk County seeking to vacate a water use permit granted earlier this year, in connection with a CO2 pipeline project.

Kimberly Junker, Candice Brandau Larson, and Kathy Carter are suing the Iowa Department of Natural Resources (DNR), which on May 29 issued a water use permit to Lawler SCS Capture, LLC. The permit allows the LLC to withdraw up to 55.9 million gallons of water per year from the Devonian aquifer, at a maximum rate of 100 gallons per minute.

Formed in 2022, Lawler SCS Capture is one of myriad Delaware-based businesses affiliated with Summit Carbon Solutions, LLC. The well and associated carbon capture facility would be located on land owned by Homeland Energy Solutions, an ethanol plant and Summit Carbon partner in Chickasaw County. Bleeding Heartland was first to report last month that the DNR issued the Lawler permit.

Attorney Wally Taylor is representing the plaintiffs in his personal capacity. (He is also the legal chair of the Sierra Club Iowa chapter, which opposes Summit Carbon’s efforts to build a CO2 pipeline, but Sierra Club is not a party in this lawsuit.) Here’s the full text of the petition filed in Polk County District Court on October 18.

Two major carbon pipeline stories last week overshadowed the legal challenge to the Lawler SCS water use permit. Summit Carbon Solutions announced on October 18 that it had delayed its operational start date from 2024 to 2026, attributing its decision to regulatory hurdles. Navigator CO2 Ventures announced on October 20 that it was canceling its Heartland Greenway pipeline project, citing the unpredictability of the regulatory environment. Both developments received extensive media coverage.

The plaintiffs are seeking to vacate the Lawler water permit based on several factors, including the following:

1. Summit’s project would be a net emitter of carbon dioxide when all factors are taken into consideration, according to the direct testimony of Dr. Mark Z. Jacobson, which the Sierra Club filed with the Iowa Utilities Board on July 24. Jacobson is a professor of Civil and Environmental Engineering at Stanford University.
2. Summit witness James Broghammer’s deposition testimony does not support Summit’s claim that without the pipeline, the ethanol industry would leave Iowa.
3. The Lawler SCS application did not include information required by Iowa Administrative Code 567 section 50.6(1) to “identify the aquifer from which the water will be withdrawn, predict the effects of pumping with a reasonable degree of confidence, and information to determine any permit conditions for well interference.”
4. The Water Use Summary Report prepared by the DNR states the following: “The ability and intent of the applicant to devote a reasonable amount of water to a beneficial use seem evident.” The petition asserts there is no evidence in the record to support the conclusion that the beneficial use is “evident.”

SUMMIT CARBON’S POTENTIAL FOR EXPANSION

Navigator’s announcement prompted immediate speculation that Summit might purchase Navigator easements and sign on some or all of its business partners, as Donnelle Eller reported for the Des Moines Register. The timing of the announcements is notable, and the speculation is justified in light of Summit’s statement, quoted by the Register, indicating the company is “well positioned to add additional plants and communities to our project footprint.”

Navigator’s most prominent partner was Poet, which operates a dozen ethanol plants in Iowa. Summit Carbon’s Chief Operating Officer, James “Jimmy” Powell, testified before the Iowa Utilities Board on September 5 that water use rates for carbon capture at each facility will range from “20 gallons a minute to 120 gallons a minute.” The estimated withdrawal rate of 478,296,000 gallons per year (which Bleeding Heartland previously calculated) could easily double under a scenario that adds Poet’s twelve Iowa ethanol plants to the thirteen currently partnered with Summit. That’s nearly a billion gallons of water annually under what is likely a modest growth scenario if Summit succeeds in building its pipeline.

It is difficult to imagine Summit abandoning its Iowa plans, given the increasingly intense competition for CO2, which can be used to create sustainable aviation fuel in combination with abundant sources of electricity and water. As Bleeding Heartland reported in August, a company named Twelve plans to manufacture jet fuel from CO2 captured in nearby factories, including paper mills and ethanol plants, on the West Coast.

Twelve’s first commercial-scale production plant is under construction in Washington, but, according to a post at the Carbon Credits website, “The biggest challenge the company has in ramping up its SAF plants is the availability of power. They’re aiming to build their next facility in the American Corn Belt where ethanol facilities and wind farms abound.” Much like Summit Carbon Solutions’ capture facilities, it appears that Twelve’s aviation fuel production plants will require significant amounts of water.

Flying completely under the radar last week was the Iowa Utilities Board’s October 17 order denying Hardin County’s September 21 Motion for Declaratory Order. Hardin County had asked the board to declare the following regarding a carbon capture facility slated to be located on the premises of the Pine Lake Corn Processors ethanol plant:

1. The petition or a permit, HLP-2021-0001, does not include the SCS CR capture facility.
2. The SCS CR capture facility is not a utility or pipeline under Iowa Code 479B or 199 IAC Chapters 1-45.
3. The IUB has no jurisdiction over the SCS CR capture facility and does not preempt local ordinances or permitting requirements.
4. The SCS CR capture facility is not a hazardous liquid pipeline governed by PHMSA.

If the utilities board had granted the motion, the door would be open for local governments to restrict the carbon capture facilities through building permits or zoning ordinances.

But all three board members signed the October 17 order, which cited several reasons for denying Hardin County’s motion and noted:

In this case, there are a number of other persons with adverse interests who have not joined Hardin County BOS’ petition. This includes, but is not limited to Summit Carbon and also Carbon Removal, the latter of which is not even a party to the underlying contested case proceeding.

THE LLC SHUFFLE

The “SCS CR” in the Hardin County motion stands for SCS Carbon Removal, LLC, a foreign limited liability company formed in Delaware in December 2021. The utilities board alternately refers to this same LLC as Carbon Removal. Why the board did not adopt Hardin County’s abbreviated name in its October 17 order is anyone’s guess.

That order does, however, highlight the effectiveness of Summit Carbon’s intricate web of LLCs. That’s because even though the LLC in question shares an address with Summit Carbon Solutions, and Summit Carbon’s general counsel Jess Vilsack signed off on the LLC’s Certificate of Authority in Iowa, the board determined that SCS Carbon Removal, LLC was “not even a party” to the Summit Carbon proceeding.

Summit Carbon’s Chief Commercial Officer James Pirolli testifies on September 6 at the Iowa Utilities Board’s evidentiary hearing in Fort Dodge (screenshot from YouTube video uploaded by Bold Nebraska)

In his September 6 testimony, Summit Carbon Chief Commercial Officer James Pirolli, responding to questions from landowner attorney Brian Jorde, testified that the only Summit Carbon-affiliated LLC with any employees is Summit Carbon Solutions:

Q. And then Summit Carbon Solutions, LLC, that owns a company called Summit Carbon Project Holdco, LLC; is that right?

A. I believe so, yes.

Q. And then that company has three LLCs. One is SCS Carbon Removal, LLC, one is SCS Carbon Transport, LLC, and then one is SCS Permanent Carbon Storage, LLC; is that correct?

A. That’s correct.

Q. And the way this works is that SCS Carbon Removal, LLC, would own the capture equipment that’s connected to the ethanol plant that processes the CO2 and connects up to then the proposed transportation pipeline; correct?

A. Yeah, I think that’s a fair description.

Q. And then SCS Carbon Transport, LLC, actually owns the pipe through which you propose to transport the CO2 molecules.

A. Correct. Transport is the pipeline transportation company.

Q. And does that company have any employees?

A. I don’t believe so.

Q. And the only company – well, let me finish this out. And then third, at the level below, Summit Carbon Project Holdco, LLC, which is a level below applicant, the third one is SCS Permanent Carbon Storage, LLC. And that’s the entity that manages and operates and owns the permanent storage which you’re proposing for North Dakota; correct?

A. Yes.

Q. And the only entity with employees, of all of the ones we’ve mentioned, is Summit Carbon Solutions, LLC?

A. I believe that’s correct.

DNR TAKING COMMENTS ON DIFFERENT WATER PERMIT

The DNR has scheduled a public comment period and a virtual public hearing for 7:00 pm on October 24 to hear concerns related to a second water use permit, sought by Summit Carbon affiliate Goldfield SCS Capture, LLC.

Goldfield SCS Capture applied in August to construct a well located on or near property owned by Corn LP, an ethanol plant and Summit Carbon partner located in Wright County. The permit application seeks to withdraw water from the proposed Goldfield well at an annual rate of 27.60 million gallons per year, with a maximum requested pumping rate of 55 gallons per minute. The application identifies the aquifer type as “Mississippian.”

As Bleeding Heartland previously reported, the Goldfield permit hit a snag when Wright County Health Department Administrator Sandra McGrath raised questions about ownership of the well in an August 28 email: “I show owners as Corn LP. Is there an agreement with Corn LP on this property?” McGrath asked.

An October 16 email from Michael Anderson, senior environmental engineer with the DNR, confirmed that ownership questions regarding the Goldfield well have gone unanswered. “I do have indications that Summit is holding thoughts until the Goldfield public hearing on the 24^th,” Anderson wrote. “Both Wright County and we have some questions for them on the ‘ownership’ issue that I think you were the first one to raise. Have not received anything yet.”

Written comments on the Goldfield permit application are due to Anderson (michael.anderson@dnr.iowa.gov) by 11:59 pm on October 24. RSVPs to participate in the virtual hearing should be sent to DNR attorney Kelli Book (kelli.book@dnr.iowa.gov) by noon on October 24. 

Top illustration of water drop and hands is by LittlePerfectStock and available via Shutterstock.