Exploring Public Opposition to CCUS in the United States

The growing number of projects leads to greater public awareness of and exposure to the technology, sometimes creating significant challenges for investors.

There are currently 111 Class VI well applications pending approval by the Environmental Protection Agency (EPA), indicating strong investor interest and a potentially robust CCUS project pipeline over the medium-to-longer term. Over a dozen applications come from Louisiana, which is about to be granted primary authority over Class VI permits. The move is expected to reduce the burden on the EPA and accelerate project approvals. In the meantime, other federal agencies are working on regulations to improve CO2 pipeline safety and enable offshore carbon storage. The latest policy and regulatory developments, including the Biden administration’s CCUS and DAC funding announcements, highlight a favorable investment environment for carbon transportation and storage projects.  

However, political consensus about the role of CCUS in the country’s fight against climate change does not necessarily translate into widespread public support. Civil society groups, environmental justice communities, and landowners – they all have multiple concerns about CO2 transport and storage infrastructure that drive local resistance. Such opposition most frequently manifests itself in lawsuits against companies, but sometimes also comes in the form of restrictive actions by local authorities and/or legislative amendments that tighten regulatory requirements for CCUS projects.  

Safety is at the heart of concerns 

The 2020 incident in Satartia, when a landslide caused the rupture of Denbury’s CO2 pipeline leading to the hospitalization of 49 and evacuation of around 300 local residents, continues to haunt the CCUS industry. The federal Pipeline and Hazardous Materials Safety Administration (PHMSA) is reviewing CO2 pipeline safety regulations based on the lessons learned from the 2020 rupture. Updated regulations are likely to provide additional controls and alleviate public concerns, but new rules are not expected to be finalized until late 2024. In the meantime, the opponents of the ongoing expansion of the carbon transportation network insist on pausing any permitting for new pipelines until the PHMSA comes up with its update. Earlier this year, a two-year moratorium on CO2 pipeline approvals was introduced in the state legislature of Illinois. Establishing setbacks – minimum distances from pipelines to houses, schools and other public spaces – could partially meet the demands of local residents, yet there has been little progress at the state level. However, the PHSMA could introduce the requirement in reviewed standards. 

Here is more: in early August, the Sangamon County Board (Illinois) voted to ban the transportation and storage of carbon dioxide in the county until new federal regulations are in place. The decision represents an obstacle to Navigator CO2’s pipeline (part of the Heartland Greenway project) that would transport CO2 for geological sequestration in Sangamon County. 

Moreover, the Heartland Greenway project is also fueling concerns about the safety of the storage site, which is intended to sequester around 15 million metric tons per year. The issue is associated with the perceived risk of earthquakes resulting from CO2 injection and potential carbon dioxide leaks from the storage site. The reason is simple: no one has ever stored so much CO2 in one place, even though existing studies suggest that there is a very low likelihood of both events. In Indiana, a carbon storage project by Wabash Carbon Services LLC has triggered public concerns about groundwater contamination and CO2 leaks. The local residents also criticized the company for the lack of communication about the facility, which could be a major source of doubts and suspicions about the storage site. 

Landowners could create an avalanche of lawsuits 

Getting access to private land even for surveying activities has proven to be a huge challenge for CCUS project developers. Companies are negotiating voluntary easements with landowners, but can invoke eminent domain law in cases where local residents are opposed to CO2 pipelines crossing their property. While landowners are entitled to a just compensation when their property is usurped for public use, it does not mean everyone would agree to having a pipeline in the backyard that can affect the value of their property. An Iowa-based Summit Carbon Solutions (Midwest Carbon Express pipeline) has initiated over 80 eminent domain proceedings in South Dakota. In the meantime, some landowners also filed lawsuits against the company arguing that it lacks authority to enter their land or exercise eminent domain.  

In a separate case in Iowa, a district judge recently ruled that a state law giving surveyors the right of entry to private property is unconstitutional. According to the judge, the law does not provide for fair compensation for damages to landowners arising from the loss of the right to deny entry onto their land. While the company in question – Navigator – is expected to appeal the decision, it could still lead to similar lawsuits in other jurisdictions and may prompt legislative amendments.  

Project developers could also face opposition from landowners when it comes to securing carbon storage sites, where the issue of liability is likely to be of paramount importance. States that are seeking to develop CO2 storage capacity provide for the transfer of liability from an operator to a state regulator, usually 10 to 20 years after the end of CO2 injection. However, landowners may have doubts about the state’s ability to manage the storage site properly, especially if state authorities previously failed to help with plugged and abandoned oil and gas wells. This lack of trust between landowners and state regulators could create additional obstacles for project operators and complicate the search for suitable storage sites. 

Environmental and community impacts come to the fore 

In Louisiana, a potential low-carbon hub, opposition to CCUS projects is growing among local communities and authorities. The project at the center of the public debate is the $4.5-billion Louisiana Clean Energy Complex by Air Products that would produce hydrogen from natural gas and sequester 95% of associated CO2 emissions under Lake Maurepas. The potential impacts of a planned storage facility under the lake on tourism and fisheries — critical sectors for many communities around the lake — have triggered strong local resistance. In addition, there is a lack of trust in the oil and gas and petrochemical industries — major proponents of CCUS projects. Air quality and public health concerns are likely the reasons why Louisiana residents may not want ‘life extension’ for such industries. 

The association of a CCUS project with the oil and gas sector could also result in a negative public perception. In July, NextDecade Corporation took a final investment decision (FID) on its Rio Grande LNG project in Texas, which the company is planning to equip with carbon capture and storage infrastructure to produce lower-carbon LNG. Environmental activists and local residents oppose the project: they argue that it would result in greater air pollution; affect shrimping and tourism; and damage habitats for pelicans, ocelots and aplomado falcons at the project site on wetlands between Port Isabel and the city of Brownsville. In this context, the proposed CCS facility is perceived to be an exercise in greenwashing to secure necessary approvals from state and federal agencies. Still, earlier this year the Federal Energy Regulatory Commission (FERC) suspended the environmental review schedule of the proposed CCS project and it remains unclear how and when it will be finalized.  

Lack of administrative capacity 

It is probably a minor concern at the current stage of CCUS development, but could become a major argument for the opponents when more states obtain primacy over Class VI well permits. The critics of the EPA’s plans to grant Louisiana primary authority point to its track record of poor oversight of oil and gas operations and its potential inability to ensure robust monitoring of CCUS operations. In the meantime, the state announced that it would hire seven full-time engineers and geologists to implement new programs related to CCUS. Similar concerns have emerged in Texas, where the Railroad Commission, the state oil and gas regulator, would also oversee CCUS projects. The opponents point to the fact that a three-member commission would not have the capacity to process CO2 storage applications and could rubber-stamp them without proper consideration.  

There is likely a long road ahead before these concerns could be addressed to mitigate associated risks for local communities and investors. Protracted development of federal and state regulations is likely to extend uncertainty and pave the way for lawsuits. In the meantime, companies will likely need to improve their communication and public engagement strategies to highlight the benefits of their projects to affected communities. Until then, the number of legal challenges is likely to grow, elevating the risk of project delays that could also compromise the United States’ plan to achieve emissions reductions via carbon capture and storage.