Attorney argues against 'destruction' of South Dakota way of life in Navigator pipeline hearings

In the first few days of Navigator Heartland Greenway, LLC's evidentiary hearing, a multi-week meeting that will decide whether a 111.9-mile pipeline is permitted to route through five counties in South Dakota, the parties involved are beginning to build cases for and against Navigator's application.

Navigator legal counsel and Brian Jorde, an attorney representing affected landowners opposed to the company's pipeline, each laid out initial legal arguments between Monday and Tuesday at the Casey Tibbs Rodeo Center in Fort Pierre.

So far, Navigator's team said it intends argue for preemption (whether South Dakota county ordinances are superseded in some form by state laws and federal regulations), while also touting the importance of the pipeline to the state as a whole.

Meanwhile, Jorde has started to build a case around the "disruption and destruction of the very way of life of thousands of South Dakotans," as he stated on Monday, by pointing to the more tenuous aspects of the pipeline and poking holes in the studies that support Navigator's claims regarding the economic benefits their project would bring.

Incompleteness of pipeline, related economic impact studies put under the microscope by opposition

Hours into Monday's hearing after a lengthy tiff regarding whether to allow certain testimony ― South Dakota Public Utilities Commission staff wanted to nix the various statements of two landowners they considered misleading or hearsay from being introduced in the proceeding ― Jorde, on behalf of dozens of affected landowners who filed testimony for the hearing, put the project's public opinion into frame.

"The project likes to speak about the importance to farmers. Not a single farmer is here to testify to that fact," Jorde told the commissioners. "They got along just fine without this, and they'll get along just fine when this application is denied."

Jorde also referred to the project's struggles in Illinois, where the company has not secured permits for the specific sites that would allow the transported CO2 to be sequestered into the earth.

"They have nowhere to go and no reasonable prospects to get there," Jorde said. "We have no business throwing landowners into eminent domain proceedings into a project that is never going to get built."

Previous Argus Leader reporting in June found Navigator had not secured permits for their sequestration sites and other necessary state and federal permits. The Argus Leader also reported the project remained unpopular among landowners in Illinois, with only 13.4% of the necessary easements it needs across its 291-mile route in the state.

Jorde argued the project is primarily to benefit the ethanol companies whose plants would be attached to the project, such as Poet and Valero.

His argument followed into a Tuesday cross-examination of Jared McEntaffer, president of the Dakota Institute, an independent economic consulting group who authored a study on behalf of South Dakota Ethanol Producers Association.

More: Study reveals new data on how Summit Carbon, Navigator pipelines would impact SD's economy

The study used data provided by Summit Carbon Solutions and Navigator to estimate the economic benefit of the companies' pipelines if built in South Dakota. This included conclusions that the pipelines could bring billions of dollars to South Dakota and raise the price of corn for farmers. This would be, in part, because of the increased demand for corn in the production of ethanol, the study posited.

Jorde pressed McEntaffer on a variety of topics, including the use of assumptions for the purpose of the study and whether the pipelines would have unforeseen consequences on consumers and even crop producers.

Asked by Jorde whether the increased demand for corn would be passed onto consumer products like corn flakes, McEntaffer said, "I don't think you can make that leap."

However, Jorde worked to poke holes in the origin of the study's information. Jorde said companies with similar pipeline projects have commissioned studies using their budget data ― data, he claimed, that has been inflated ― to influence state and county commissions.

McEntaffer responded, "We … took them at their word" for numbers provided for the purposes of the study.

A similar study conducted by Johnathan Muller, of Muller Consulting, also came under the microscope during Tuesday's proceeding.

Answering to PUC Commissioner Chris Nelson, Muller indicated a lack of knowledge of certain aspects of the pipeline. Muller said his study accounted for "federal tax credits," as written in the report, but he indicated he had not known the federal tax credits related to CO2 pipelines were broken into two forms ― 45Q and 45Z ― with different pay rates and criteria.

Muller also said the study did not take into account negative economic impacts pipelines could have on expanding municipalities like Sioux Falls and Brandon. He also admitted the study did not account for whether pipelines could affect property values.

Navigator's counsel used their own examinations to ask the economists to reiterate on the positive economic benefits proposed by the pipelines.

Preemption argument is a path to a permit for Navigator

Prominent among Navigator's arguments thus far is the company's stance that local counties ― namely, Minnehaha and Moody ― are preempted by state law.

A number of South Dakota counties touched by carbon dioxide pipelines have proposed or implemented ordinances instituting varying degrees of setbacks. These county-level regulations establish the distance between occupied buildings and pipeline infrastructure, among other things.

But the setback ordinances are "unreasonably restrictive," according to Navigator's motion on the matter.

James Moore, an attorney for Navigator, called upon the PUC to the subject similarly under a South Dakota law, which he argued allows a pipeline permit, if granted, to preempt local ordinances if seen as unduly burdensome by the commission.

"Counties do not have inherent authority to do anything," Moore said. "Their authority is derived from the state, and to the extent that that is true, county zoning authority, in this case, has to also comply with [South Dakota Codified Law]."

This came between requests from Minnehaha and Moody County to intervene in the case, and also temporarily suspend the company's preemption motion. He objected to either.

The belief that South Dakota counties are in some way preempted by state laws or federal regulations is not isolated to Navigator, however. A representative for Summit Carbon Solutions, another carbon capture company with a miles-long proposed route through parts of South Dakota, previously told the Argus Leader in July that county ordinances can be successfully argued into preemption by federal regulations after making such a case in Shelby County, Iowa.

Moody County State's Attorney Paul Lewis interpreted the statute differently, however, and said a county's ordinance should already be considered "valid" in terms of the law. This means, then, that it would weigh on Navigator to prove the ordinance should overwritten by the PUC permit.

The commission voted Monday in favor of allowing Minnehaha County and Moody County to intervene in the hearings but turned down the attempt to hold Navigator's preemption motion in abeyance.

The hearings are expected to last through Aug. 3 before the PUC is expected to make a ruling.

This article originally appeared on Sioux Falls Argus Leader: Pipeline studies scrutinized in South Dakota Navigator permit hearing