South Dakota's governor has signed a bill prohibiting use of eminent domain for pipelines carrying carbon dioxide, throwing a wrench into Summit Carbon Solutions' project to build a pipeline carrying liquefied carbon dioxide to a sequestration site in North Dakota.
The new law injects uncertainty into Summit's plans, which include 2,500 miles of pipeline through Iowa, Nebraska, Minnesota and the Dakotas that would carry liquefied carbon dioxide from 57 ethanol plants.
The project aims to lower the carbon intensity scores of participating ethanol plants, which could help them qualify for federal and state incentives. A federal tax incentive offers $85/ton for permanently stored CO2.
But some South Dakota landowners have objected to the project, particularly the potential use of eminent domain to gain access to land when property owners do not want to sign voluntary easements with the company. Summit's original mapping plan for the state also was rejected by the state Public Utilities Commission.
In a letter explaining his decision to sign the bill, Gov. Larry Rhoden, a Republican, said landowners strongly feel that the threat of involuntary easements for the pipeline infringes on their freedoms and property rights.
“I have said many times that Summit needs to earn back trust from South Dakota landowners,” Rhoden wrote. “Unfortunately, once trust is lost, it is a difficult thing to regain.”
The law prevents carbon pipeline companies from acquiring land by eminent domain, or the right to access private property for projects that benefit the public. Eminent domain can be used for projects like electrical power lines, water pipelines and highways.
It passed the state Senate earlier this week in a 23-12 vote after it had already cleared the state House.
Rhoden said the bill does not completely end the proposed project. Instead, he hopes Summit uses this moment as an opportunity for a reset. He noted that voluntary easements will not be impacted, and without the “threat” of eminent domain, the company could have an easier time rebuilding trust with landowners.
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Summit called the move unfortunate and said in a statement that South Dakota changed the rules in the middle of the game.
“This kind of regulatory uncertainty creates real challenges — not just for our project, but for the ethanol plants in South Dakota that now face a competitive disadvantage compared to their counterparts in neighboring states,” the company wrote in a statement.
While the law is an obstacle, Summit plans to move forward with the project “in states that support investment and innovation.”
Brian Jorde, who represents several landowners along the route of Summit's project, called the moment "an epic victory" for landowners who have been fighting for nearly four years.
Jorde said it is possible for companies to have success in South Dakota without eminent domain, and cited solar and wind developments. He said Summit should take a break in the state, dismiss their PUC petition and lawsuits, and "show the state they are starting over."
"Can they swallow some pride and have an actual reset?" Jorde said of Summit. "If they did do that, there certainly are some folks out there that would be receptive to that, but they have some repair work to do and there's no indication yet at least that they're interested in that."
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