Another attempt to block carbon pipelines from using eminent domain fails

Rep. Carl Perry, R-Aberdeen, hears testimony during a state House Commerce and Energy Committee hearing on Feb. 12, 2024. (Joshua Haiar/South Dakota Searchlight)

PIERRE — Another legislative attempt to stop a proposed carbon sequestration pipeline from using eminent domain failed Monday.

“It is up to us to defend South Dakotans’ property rights,” said Rep. Jon Hansen, R-Dell Rapids, the prime sponsor of the bill.

The legislation was rejected by the House Commerce and Energy Committee in a 7-6 vote. Similar legislation failed during last year’s legislative session .

An Iowa company, Summit Carbon Solutions, is proposing a multi-billion-dollar pipeline to transport carbon dioxide emitted by ethanol plants in multiple states, including South Dakota, to an underground storage site in North Dakota for long-term containment. The project would capitalize on federal tax credits that incentivize the sequestration of heat-trapping gasses, including carbon dioxide.

The legislation, if passed, would have prohibited the use of eminent domain by carbon dioxide pipelines if more than half of the transported carbon dioxide is intended for sequestration rather than commercial uses such as carbonated beverages or enhanced oil recovery. That’s when carbon dioxide is injected into aging oil wells to make it less thick, help it flow better, and cause the oil to expand toward the wells.

Poet’s ethanol plants shift to remaining carbon dioxide pipeline proposal

Eminent domain allows entities to forcibly buy access to private land for public projects — typically infrastructure such as roads, utilities and pipelines that serve the broader public interest.

Hansen argued that carbon sequestration does not meet the traditional definition of “public use.”

“None of us use buried carbon,” Hansen said. “The whole point is to not use it.”

He said the bill would not ban carbon pipelines outright, “as long as the main purpose is to use it for something that the public uses.”

Some critics of the Summit pipeline have alleged the CO2 will eventually be used for enhanced oil recovery in North Dakota.

The bill’s opponents said it would negatively impact the state’s ethanol industry and corn farmers if the pipeline isn’t built. Two-thirds of corn grown in South Dakota is sold to ethanol plants, and ethanol producers have said they need the project to stay viable in markets that require fuels to reduce their environmental impact.

David Owen, of the South Dakota Chamber of Commerce and Industry, argued carbon sequestration has already been determined to serve a public use because of its role in fighting climate change.

“We have decided as a nation that we don’t want carbon dioxide in the environment because of concerns about climate change,” Owen said. “I understand some of us in South Dakota would like to argue with that.”

Numerous entities worldwide, including the United Nations, World Health Organization, World Bank, International Energy Agency, and national governments including the U.S. have declared fighting climate change a critical priority.

Rep. Carl Perry, R-Aberdeen, asked Owen to explain why more carbon dioxide in the atmosphere is concerning.

“I suggest the information is generally available,” Owen said.

Also Monday, the committee rejected a bill that would have required the pipeline project to have voluntary easements with landowners on 90% of the route before attempting to use eminent domain for the rest.

Some other bills addressing carbon sequestration pipelines are currently making their way through the Legislature. Those bills aim to add protections for landowners rather than stop pipeline projects.

Landowner protection bills advance as carbon pipeline controversy continues

One of those bills stipulates that any person or entity looking to conduct an examination or survey on private property must have a pending or approved siting permit application with the state. Additionally, entities seeking to enter private property for surveys would have to make a one-time payment of $500 to the property owner as compensation for entry.

Another bill specifies that carbon dioxide pipeline easements would not be allowed to exceed 50 years and would automatically terminate if not used for the transportation of carbon dioxide within five years from their effective date. Landowners would be entitled to annual compensation for granting the easement, set at a minimum of $1 per foot of pipeline each year the pipeline is active.

Yet another bill requires entities using eminent domain to cover some legal costs for landowners under certain conditions . It says that if the final amount awarded to the property owner to access land is at least 20% higher than the offer made when the entity sued the landowner, the entity must reimburse the landowner for attorney fees.

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