An Iowa company seeking regulatory approval to run a carbon dioxide pipeline through South Dakota and four other states said a delay in its plan to re-apply for a permit has nothing to do with a November vote on the project.

After Summit Carbon Solutions gained approval from the Iowa Utilities Board in June, chief executive officer Lee Blank said that “the momentum will continue as we prepare to file our South Dakota permit application in early July.”

That did not happen.

And the South Dakota Public Utilities Commission has not received a timetable on when the application might come, which is common so staff can prepare for public meetings.

A spokesperson for Summit Carbon Solutions told News Watch that the delay is not tied to a citizen-led referral of Senate Bill 201, passed during the 2024 session as part of a legislative package known as the “Landowner Bill of Rights.”

Sponsors of the law trumpeted a series of landowner protections for potential pipeline negotiations. Opponents said the legislation paved the way for PUC approval of the pipeline by usurping the regulatory authority of counties.

Sabrina Zenor, Summit Carbon’s director of corporate communications, told News Watch that the law being referred to voters is not impacting the company’s permit application.

“We are committed to working with landowners to have a successful pipeline route in South Dakota, and we will file that application soon,” she said.

Giving voters say in pipeline policy

The timing of the application and the fact voters will have a direct say in pipeline policy highlights the emergence of carbon capture, ethanol advancement and “landowner rights” as political flashpoints in South Dakota and neighboring states.

Summit Carbon Solutions is pushing for a $5.5 billion, 2,500-mile pipeline that would carry liquified carbon dioxide gas from more than 50 ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to be stored deep underground in North Dakota.

The pipeline would address federal environmental standards for tax credits and is seen as crucial for a potential aviation fuel market for the Midwest-based ethanol industry, which buys roughly one-third of the nation’s corn crop.

A group called the South Dakota Property Rights and Local Control Alliance gathered enough valid signatures to place Referred Law 21 on the Nov. 5 ballot, giving voters a chance to either keep or kill Senate Bill 201.

The law, signed March 7 by Gov. Kristi Noem, mandated payments from carbon pipeline companies at the county level per linear foot. It also codified minimum depth requirements, liability on pipeline operators for damages and disclosures of pipelines’ plume models, which analyze how carbon dioxide might spread in case of a rupture.

In February 2020, a 24-inch carbon pipeline ruptured in Satartia, Mississippi, causing a “green gas” with a “rotten egg smell” to be emitted. No residents or responders died, but about 300 people were evacuated and nearly four dozen people were treated at local hospitals.

“I think everybody in this state firmly believes that if this pipeline is coming, we want protections in place, and we want real annual benefits to counties and landowners,” said Republican House Majority Leader Will Mortenson, who co-sponsored the legislation.

“If this pipeline comes, I understand that it would be good for ethanol, but that’s not enough. We need to make sure this is a good thing for every single farmer from the beginning of the route to the end of the route. And that’s what Referred Law 21 does.”

Law’s potential impact on eminent domain

Jim Eschenbaum, who chairs the property rights group, contends that Referred Law 21 sets the stage for land to be accessed involuntarily through “eminent domain,” though the law does not address that issue.

Eminent domain involves taking private property for public use while requiring just compensation.

Eschenbaum’s reasoning is that terms set forth in the law between pipeline companies and landowners make it easier for the three-member PUC as a state entity to supersede county zoning ordinances and setbacks, or for a judge to conclude that such action is within PUC authority.

“It will affect eminent domain if it goes into the court system,” said Eschenbaum, a semi-retired farmer from Miller, South Dakota, who serves on the Hand County Commission.

“It will be looked at as if negotiations have already been taken care of, which will help them to use eminent domain. In my opinion, legislators overstepped their bounds in negotiating monetary terms on people’s private property.”

Blank, Summit’s CEO, has said that the goal is to obtain 100% of the land it needs in South Dakota through voluntary easements, paying landowners in return. The company said it was at about 80% during its permit application hearing last year.

‘Activists sort of latched on to it’

Eschenbaum said that even though he personally opposes the pipeline, he won’t block Summit Carbon’s efforts as a county commissioner if the company only uses voluntary easements to obtain land needed for the project.

“I think this pipeline is a bunch of foolishness,” he told News Watch.

“I think the hysteria around climate change is a bunch of foolishness. But if they negotiate their way through freely and without the use of eminent domain, then my job as a county commissioner is to step out of the way and let this pipeline go through. But I will dig in my heels for that last very last landowner that doesn’t want this on their property.”

Eminent domain shifted the pipeline discussion into the realm of landowner rights, presenting a stark contrast between limited-government populism and pro-business pragmatism within the South Dakota Republican Party.

The libertarian Freedom Caucus and groups such as Dakota First PAC wielded the pipeline controversy as political leverage in the June 4 GOP primary. Of the 38 Republican legislative incumbents who ran to keep the same position, 11 were defeated, foiled in many cases by the property rights debate and their voting record on SB 201.

“I think the activists sort of latched on to it and formed an opinion before they read the bill,” Mortenson said of the anti-pipeline rhetoric and outreach surrounding what is now known as Referred Law 21.

The Associated Press contributed to this story, which was produced by South Dakota News Watch, a nonpartisan, nonprofit news organization. 

Read more in-depth stories at sdnewswatch.org. Contact Stu Whitney at stu.whitney@sdnewswatch.org.