Tallgrass is converting the existing 392-mile Trailblazer natural gas pipeline into a carbon dioxide (CO2) pipeline stretching across Nebraska, Colorado and Wyoming. The $1.5 billion project will transport CO2 from ethanol production in Nebraska to be sequestered underground in Wyoming. In 2024, Tallgrass signed a first-of-its-kind community benefits agreement with Bold Alliance, which establishes a series of community initiatives as well as creates landowner rights protections throughout the pipeline’s life cycle, from early project development through easement negotiations, operations and decommissioning. One such initiative, which is unique in the development of CO2 pipeline infrastructure, is Tallgrass’ agreement to pay a 10-year, two-part, shared value program, where landowners and a community foundation both receive an annual endowment — equal to $0.10 per ton of CO2 sequestered on the system annually.
Context
- Project title: Trailblazer CO2 Pipeline
- Location: Beatrice, Nebraska to Eastern Wyoming
- Sector: Storage and transport for CO2 generated by ethanol plants
- Developer: Tallgrass
- Type of agreement: Community benefits agreement
About the project and involved stakeholders: Tallgrass is converting its existing 392-mile Trailblazer natural gas pipeline into a carbon dioxide (CO2) pipeline to decarbonize Nebraska’s ethanol industry. The $1.5 billion project will transport CO2 from ethanol production in Nebraska to be sequestered underground in Wyoming. The pipeline will be capable of storing 10 million metric tons of CO2 a year — the equivalent of removing 2 million passenger vehicles from the road every year. CO2 pipelines are an essential part of the carbon capture and storage, and carbon removal technologies advanced by the Biden administration to reduce CO2 emissions from industrial facilities and power plants.
In 2024, Tallgrass signed a first-of-its-kind community benefits agreement (CBA) with Bold Alliance, a group that builds unlikely partnerships to protect the environment — including property rights and water–and ensures the communities who shoulder energy projects are full partners. The CBA establishes a series of community initiatives as well as creates landowner rights protections throughout the pipeline’s life cycle, from early project development through easement negotiations, operations and decommissioning. Bold Alliance has served landowners in Nebraska since 2010 and has since expanded to help landowners nationwide fight fossil fuel projects on their properties and in their communities. Bold Alliance was instrumental in halting the Keystone XL Pipeline in Nebraska, South Dakota and Montana.
Engagement
In 2022, Tallgrass publicly announced the Trailblazer project to use the pipeline to sequester the CO2 byproduct of ethanol production in Nebraska, facilitating the continuation of the biofuels industry in a net-zero future. Around this time, several proposed CO2 pipelines in the Midwest had been canceled or postponed due to a combination of local opposition and state permitting decisions. Farmers and other landowners opposed these projects and viewed the process of securing project rights-of-way as a violation of their rights. In many of these cases, locals felt that concerns around safety were minimized by the pipeline companies rather than directly addressed. In one instance, local opposition delayed a project by more than two years and more than doubled its initial cost.
At the same time, the ethanol industry is a central component of Nebraska’s economy, supporting 6,000 full-time jobs and adding $4.5 billion to the state’s annual GDP. Decarbonizing the ethanol industry was, therefore, viewed by some as critical to create a viable future for the biofuel and sustainable aviation fuel industries overall, and ethanol in particular.
Bold Alliance approached Tallgrass in 2023 to propose the idea of putting protections and benefits into a formal CBA that included the concerns shared by dozens of other local organizations during Tallgrass’ engagement over the previous 18 months. Tallgrass determined that negotiating such an agreement could provide assurances to a broad swath of stakeholders. Representatives from Bold Alliance and Tallgrass said in interviews that reaching a CBA was a more financially and strategically prudent move than either failing to properly address concerns or potentially fighting years-long court battles over the pipeline.
Tallgrass is the first pipeline company to proactively engage with local communities to ensure benefits for landowners and successfully negotiate and execute such a written agreement. Its successful execution was informed by the company’s broader community engagement efforts, which included eight open houses, over a dozen community roundtables and nearly 1,000 stakeholder engagements, including direct engagement with large agricultural trade associations who represent the vast majority of landowners in the state. This proactive engagement, independent of the CBA, allowed Tallgrass to better understand and contextualize the perspectives raised by Bold Alliance, which contributed significantly to the company’s willingness to commit to the terms brought forth by Bold Alliance.
This engagement also informed the developer’s commitments within and outside the CBA, and demonstrated the developer’s commitment to safety, landowner rights and accountability. According to interviewees, for a CBA to be successful, the developer must authentically engage with groups who may be opposed to the project and be willing to commit to project changes to address community and stakeholder concerns.
While the CBA was signed by Tallgrass and Bold Alliance, it was also endorsed by 11 Nebraska-based organizations, including the Nebraska Farm Bureau, Nebraska Farmers Union, Nebraska Corn Growers Association, Nebraska Cattlemen, Nebraska Soybean Association, Nebraska Sorghum Producers, Nebraska State Dairy Association, Nebraska Pork Producers Association, We Support Agriculture, Nebraska State Volunteer Firefighters Association, and Renewable Fuels Nebraska. By endorsing the CBA, these groups expressed their support for the CBA, but are not legally party to the CBA.
Benefits
Bold Alliance agreed to not oppose the project so long as Tallgrass abided by the terms of the CBA.
Tallgrass agreed to substantial investments and efforts related to landowner protections, public safety and community investment.
Key benefits of the CBA include:
1) Landowner Protections
Landowner protections outlined within the CBA span from initial pipeline surveying work through pipeline easement negotiation, construction and decommissioning. For surveying, landowners are provided a standard 48-hour notice before their property is surveyed and, if a landowner gives survey permission, but the property is ultimately not used for the project, the landowner receives a $500 payment. As it relates to the easement negotiation process required to secure a right-of-way agreement, Tallgrass agreed to make any easement purchase offers at fair market value and to not use eminent domain until after a 90-day good-faith-negotiation period with landowners. Tallgrass agreed to view eminent domain as an option of last resort and to ensure any potential use of eminent domain was clearly communicated to landowners in writing. This solves for an ongoing issue identified by Bold Alliance in pipeline easement process where land agents often use threatening tactics that do not allow a fair negotiations process.
Tallgrass also agreed to offer landowners the option to choose between the traditional up-front lump-sum or an annual payment option for their easement payments. Over the last 14 years, Bold Alliance found that a large, upfront easement payment comes with a significant tax burden for landowners.
Additionally, Tallgrass established a 10-year royalty program —a first in the industry — which is set at 10 cents per metric ton of CO2 sequestered on the system, which at maximum pipeline capacity could result in $1 million a year flowing back to landowners along the right-of-way. Each landowner’s share will be determined by the linear length of the pipeline on that landowner’s property relative to the entire pipeline.
One of the key pieces Bold Alliance included in the CBA was a provision for decommissioning at the end of the project’s life. This allows landowners to decide to leave the pipeline in place on their land and to be compensated an additional $15,000, or to request Tallgrass to remove the pipe and have the land reclaimed.
2) Public Safety
To protect the public from health risks, such as headaches, nausea, increased heart rate and suffocation, associated with potential CO2 leaks, Tallgrass agreed to initially provide $400,000 to equip and $200,000 to train first responders on CO2 pipeline incident response. In addition, Tallgrass will expand its engagement with Local Emergency Planning Commissions and support their annual trainings for first responders in the counties associated with the project’s right-of-way. They also committed to provide additional funding of up to $40,000 a year to replace or replenish emergency equipment as needed.
To address concerns for residents who may be unaware of the pipeline, Tallgrass will mail annual public safety notices to all landowners within a three-mile radius of the pipeline. Finally, Tallgrass will work with the Nebraska Department of Emergency Management and provide $100,000 to develop a regional CO2 emergency alert system.
3) Community Investment
Tallgrass will make an initial $500,000 donation to a community fund to support counties along the right-of-way. This is in addition to an annual community endowment of up to $1 million per year based on the total volume of CO2 sequestered. Grants from the foundation are allocated by a neutral third party. Neither Tallgrass nor Bold Alliance are responsible for the dispersal of grants to the community. Instead, the community gets to decide who benefits.
Oversight and Enforcement
Bold Alliance hired a full-time staff member to oversee the implementation of the CBA. Community members can call Bold Alliance if they believe a violation has occurred, and Bold Alliance will work with Tallgrass to ensure the concern is addressed.
The CBA is legally binding, and non-compliance could result in a lawsuit to enforce the provisions. If either party breaches the agreement, there will be a 60-day written notice period to resolve the issue. Some provisions are in effect until the project begins commercial operations, while others will last the lifetime of the project.
Strengths of the CBA
All parties to the agreement were engaged and active participants in the local community. Bold Alliance has deep local ties and relationships with the Nebraska community and the fact that the CBA was endorsed by 11 community organizations is a testament to its organizational reputation. Tallgrass also has a strong local reputation because of its 18 months of proactive community engagement before the CBA negotiations began, its existing presence and track record via its natural gas operations and its local presence, with more than 100 employees living in Nebraska. According to an interviewee from Bold Alliance, these factors helped give assurances that Tallgrass was serious about community engagement and reaching a strong agreement.
Tallgrass and Bold Alliance each had one lead negotiator, facilitating the establishment of a strong relationship and trust between both parties. Both sides were able to educate the other on the difficulties they faced on pipeline projects and provide a new perspective on provisions in the agreement.
The CBA provided tailored, concrete community benefits, ensuring the CBA will improve the lives of affected landowners through direct payments and a new community foundation. Previous projects had made broad promises of job creation and local tax revenue that community members said couldn’t be seen, so Bold Alliance prioritized tangible and direct benefits. Additionally, interviewees highlighted how these benefits were tailored to the community, stressing that future developers and community groups cannot just follow a generic CBA template, but instead must customize it to fit local needs.
Endorsements from 11 local community organizations showed the magnitude of support. Getting validation from all sides of the ideological spectrum allowed greater buy-in from local residents. Interviewees shared that Tallgrass’ engagement with stakeholders other than Bold Alliance led to broad support for and endorsement of the CBA. Highlighting the importance of Tallgrass’ broad engagement, one interviewee said:
“We had nearly a dozen statewide NGOs endorse the agreement …They themselves had things they wanted to see, like some last-minute provisions related to liability and emergency response. It was an interesting negotiation process, because it was more or less with a dozen different parties. But I think that’s what helped make it a really valuable document with all the different perspectives that were in there. And I think it was really refreshing for them to see an infrastructure company, after some of their other experiences, that would come in and say ‘I know that this bothered you, and we’re going to address it in writing and make sure it doesn’t happen again.’”
The CBA established an in-community “accountability partner” in Bold Alliance, with Bold Alliance well-situated in the community to respond to any violations of the CBA. Tallgrass encouraged a high degree of specificity within the CBA to include clear accountability metrics to ensure it upholds what it agreed to. As a result, the CBA clearly lays out the terms of monitoring, reporting and enforcing provisions of the agreement.
The CBA was just one component of Tallgrass’ engagement with the community. Tallgrass held more than 600 stakeholder engagements in 2023 and will hold more than 1,000 in 2024. Tallgrass engaged with corn growers, cattlemen, trade associations, first responders, emergency managers, and other community members well before a CBA was proposed and has continued to communicate with stakeholders after it was signed. Tallgrass has three full-time employees tasked with engaging with public officials, community organizations, landowners and more. Beyond the CBA, Tallgrass worked with individual stakeholders and other organizations to address concerns and build trust. An interviewee highlighted the importance of ongoing community engagement, of which the CBA was just one small part, saying:
“And [the CBA’s] an element of an overall, broader community engagement effort, right? A company shouldn’t think that they can do a CBA and then, all of a sudden, they’ve checked the box and done their community engagement. The CBA is, to us, a very small, very important, and impactful piece. But if that’s all we focus on, or if that’s all a company focuses on, that should not be what they take away from this case. Again, [the CBA’s] an element that is indicative of the need for broader engagement throughout the life of a project.”
Challenges and Gaps of the CBA
Bold Alliance conducted limited community engagement in the development of the CBA. Despite Bold Alliance’s organizational reputation and that the CBA was supported by several local organizations, some community members said they felt left out of Bold Alliance’s process because the organization only involved the community with the CBA near its completion. However, with nearly two decades of experience fighting pipeline projects, Bold Alliance said it was already aware of the key community and landowner protections to include in an agreement and was positioned to negotiate a CBA on behalf of the local community.
Tallgrass would not agree to not use eminent domain to secure its right of way in the CBA, though, Tallgrass has generally worked with landowners and rerouted the pipeline to avoid the use of eminent domain. The use of eminent domain, according to interviewees, is often fiercely opposed by landowners, but Tallgrass would not commit to never using it. Bold Alliance agreed to compromise on this issue (and won all its other priority community protections and benefits). The CBA includes a provision that a notice of eminent domain would not occur until after a 90-day good-faith-negotiation period. An interviewee from Bold Alliance noted that other pipeline and right-of-way projects may continue to face concerns around the use of eminent domain, and this case reveals the challenges of attempting to ban the use of eminent domain outright.
In Nebraska, state protections do not require or encourage community engagement, as Nebraska has no authority over CO2 pipelines. These pipelines are operated under the federal jurisdiction and regulations of the Pipeline and Hazardous Materials Safety Administration (PHMSA), but there is no additional state regulation governing siting and decommissioning of CO2 pipelines. Instead, the safety and protection of landowner rights are left to the communities themselves. As a result, developers must willingly come to the table and engage with communities.
Tallgrass’ CO2 pipeline is based on converting existing infrastructure, making the CBA negotiation relatively simpler compared to negotiations related to new infrastructure projects. According to interviewees from both Bold Alliance and Tallgrass, new infrastructure projects that involve new rights-of-way would likely be more difficult to negotiate a CBA around while guaranteeing the same degree of benefits to landowners. However, large portions of the Trailblazer project still required new infrastructure and the permitting of new rights-of-way for the new pipelines to ethanol plants, which can provide insights for other right-of-way infrastructure projects being built around the country.
