The South Dakota Supreme Court unanimously sided with landowners Thursday in ruling that CO2 pipeline developer Summit Carbon Solutions has yet to prove it's a common carrier, which limits its ability to do surveys without landowner permission.
Summit is planning a 2,500-mile pipeline that cuts across five states to transport carbon dioxide from Midwestern ethanol plants to a sequestration site in North Dakota.
The goal of the project is to lower carbon intensity scores of participating ethanol plants, which could make it easier for those to qualify for federal and state incentives. It could also open up new markets in products like sustainable aviation fuel.
While ethanol producers have called this project crucial for the industry, the project has run into resistance from many landowners, some of whom have filed lawsuits aiming to prevent survey access.
Specifically, the landowners challenged Summit’s status as a common carrier and argued that it is unconstitutional to conduct surveys that are more than minimally invasive, or above the surface-level viewing and work.
Originally, a circuit court granted Summit a summary judgment on all issues in the cases filed by landowners. The Supreme Court’s decision reverses this ruling, stating it is premature to conclude that Summit is a common carrier and the circuit courts “abused their discretion in denying Landowners’ request for further discovery.”
By not demonstrating itself as a common carrier, Summit lacks the power of eminent domain. Not having that authority prevents the company from performing surveys, minimally invasive or otherwise, without a landowner’s express permission.
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The court wrote that evidence does not show that Summit is “holding itself out to the general public as transporting a commodity for hire.” This is why it’s unable to prove itself as a common carrier, particularly as the record suggests “CO2 is being shipped and sequestered underground with no apparent productive use,” the court wrote.
Brian Jorde, an attorney representing some of the landowners in this case, said the Supreme Court decision is a major win.
“A landowner is always fighting a monstrous uphill battle when you're dealing against billion-dollar corporations that have politicians in their pockets and have greased the skids well in advance,” Jorde said. “To have the Supreme Court be on board with the way we view the law and the way we view the facts and evidence, it's just a huge boost for landowners, not only in South Dakota, but I've heard from them from across the country already today.”
Jorde said this decision would unravel Summit’s entire business plan, as the project was pitched on its environmental benefits. He said now the only way to get around the common carrier issue is to argue the carbon will be used for enhanced oil recovery. If they go this route, he said it would go against everything the company has testified to and would undermine the premise of the project.
In a statement, Summit said it is evaluating the Supreme Court decision and looks forward to providing information that reaffirms its role as a common carrier, and that CO2 is a commodity.
“The economic impact of carbon capture, utilization, and storage (CCUS) on rural America is significant, and will greatly benefit agriculture and farmers,” Summit said. “We are committed to ensuring that these benefits reach communities across our project footprint as we continue to be a valuable partner in this growing market, and look forward to progressing this project.”
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