CO2 pipelines can’t use eminent domain under new SD law

Last week, South Dakota Governor Larry Rhoden signed a bill banning the use of eminent domain for carbon dioxide pipelines. The Iowa House is considering a similar bill.

It’s a hot-button issue brought to the spotlight by the Summit Carbon Solutions Pipeline project, which has faced controversy and opposition from private property owners along the route.

The Associated Press reports:

The new law muddies the waters for Summit Carbon Solutions and its planned $8.9 billion, 2,500-mile (4,023-kilometer) pipeline that already has approvals in three other states.

Republican Gov. Larry Rhoden said the measure restricting eminent domain “does not kill” Summit’s project, and he encouraged the company to view the law as “an opportunity to reset.”

“I made my decision based on my own consideration of the facts, the policy arguments, legislative history, my own opinions and experience and my judgment about what is best for South Dakota,” Rhoden said.

In a statement, Summit said South Dakota has “changed the rules in the middle of the game.” The company is seeking approval from South Dakota regulators for its proposed route in the state…

The project has drawn intense opposition from landowners who fear a taking of their land for the pipeline and the dangers of a potential pipeline leak.

Property rights are a passionate issue in South Dakota, where voters last year rejected a suite of regulations that opponents said would deny local control over such projects and consolidate authority with state regulators. Supporters called it a “landowner bill of rights.”

The new law reads simply:

Section 1. That a NEW SECTION be added to chapter 49-7:

Notwithstanding the provisions of any other law, a person may not exercise the right of eminent domain to acquire right-of-way for, construct, or operate a pipeline for the preponderant purpose of transporting carbon oxide.

The Summit Carbon Solutions pipeline has approvals for its routes in Iowa, North Dakota, Minnesota, and underground storage. South Dakota rejected its permit application in 2023, but the company made adjustments to the plan and reapplied.  

The company had previously argued before the South Dakota Supreme Court that they are a common carrier and ought to be allowed to invoke eminent domain. The Court rejected that argument and said it was “premature to conclude that [Summit Carbon Solutions] is a common carrier, especially where the record before us suggests that CO2 is being shipped and sequestered underground with no apparent productive use.”

The Iowa House Judiciary Committee advanced a similar bill last week to prohibit the use of eminent domain for carbon dioxide pipelines. The Iowa bill specifically clarifies that a carbon dioxide pipeline cannot exercise eminent domain because it doesn’t fit under the definition for “public use, public purpose, or public improvement.”