After heavy debate, SD House passes bill to lay the groundwork for Summit Carbon's pipeline

After nearly two hours of emotionally charged debate, South Dakota lawmakers passed a bill to help lay the foundation for Summit Carbon's CO2 pipeline to come to the state.

The South Dakota House of Representatives on Wednesday heard Senate Bill 201, a bill which provides new regulations on pipeline transmission infrastructure and also allows counties to charge carbon dioxide pipeline developers $1 for every linear foot of pipe that runs in the county.

The bill passed the House on a 40-30 vote, reinforcing the language on federal preemption of local ordinances and regulations affecting carbon dioxide pipelines. This makes it easier for pipeline developers to make the case that any county ordinance based on zoning or safety rules — which invariably have been in South Dakota — are overruled by similar standards already set in federal law.

According to the current statute, if the South Dakota Public Utilities Commission does not determine that a carbon dioxide company's pipeline route is "unreasonably restrictive," proposed pipeline routes, like those by Summit Carbon, cannot violate county ordinances and local zoning and building rules.

The law, as it stands, has allowed some counties along Summit Carbon's pipeline project to implement a spectrum of restrictive setback ordinances. Minnehaha County passed a 330-foot setback for carbon dioxide pipelines in June, while Brown County approved a 1,500-foot setback in April — the latter of which was considered especially restrictive by pipeline developers.

A previous version of SB 201 would have removed the affected counties' ability to enforce any standing setback ordinances affecting gas or liquid transmission pipelines, but this provision was amended out of the passed bill.

Dozens of South Dakota House lawmakers spoke for and against SB 201

The pipeline bill drew constant, and often divided, input from lawmakers about a host of topics, with some spurning the removal of language from the state's standing local land use laws and others touting the economic boost proffered by the income generated through Summit Carbon's pipeline and Colorado-based Gevo's planned sustainable aviation fuel facility in Lake Preston.

Opposing lawmakers largely centered their pleas for "no" votes on the bill's intended effects on county-level pipeline ordinances.

Rep. Brandei Schaefbauer, R-Aberdeen, told the legislative body SB 201 would "destroy" local decision-making on gas and liquid pipelines.

"We are talking about the fundamental change that will take place in South Dakota with the passage of this bill," Schaefbauer said. "If we are truly a state that prides ourself [sic] in freedoms and personal responsibility, then we must … leave the people who are elected to represent those counties, towns and municipalities the ability to do what is best for the people that live in that area."

Other lawmakers, like Rep. Stephanie Sauder, R-Bryant, argued the bill creates regulatory certainty for ethanol companies, which would benefit low-carbon fuel standard tax credits that only come by lowering the product's carbon intensity score.

Similarly, proponents of the bill also said SB 201 creates a framework for future pipeline projects to come into the state.

Sauder said the revenue generation the carbon capture pipelines could bring cannot be ignored.

"With fingers in my face, I have been told to follow the money. You're darn right I'll follow the money," Sauder said. "It'll be going in many directions. It'll be going to the counties as they collect surcharges on the pipelines to our corn producers, because of the greater markets for ethanol, to industries involved in value-added agriculture, and others who will operate in South Dakota, because of the opportunities ethanol and the pipeline can provide.

Rep. Will Mortenson, R-Fort Pierre, said the PUC would still have the authority to research and permit proposed linear transmission projects in the state.

He described the background work performed by the PUC while considering a permit as a heavily involved process, which includes hiring engineers, specialized attorneys and analysts to dive into the merits of a proposed project.

It's one the House Majority Leader trusts the PUC to continue handling but believes the scope is beyond that of county planning and zoning boards.

"I have a lot of good friends on planning and zoning boards. These are community leaders and great people. You hand them a stack of 300 pages of scientific research, and you're sending them on an errand they are not fit to fulfill," Mortenson said. "We're asking them to do something they're fundamentally not set up to do."

Because SB 201 was amended after passing its original chamber, the bill will be heard by a conference committee before it lands on Gov. Kristi Noem's desk to be potentially made into law.

Chase Jensen, a registered lobbyist for Dakota Rural Action, told the Argus Leader on Wednesday the group "was disappointed to see the bill move forward today."

However, Jensen said the currently-amended form of SB 201 is "likely … the least damaging version of the bill." He expressed concern the conference committee may bring back the more heavy-handed provisions affected local land use.

"If the bill is going to pass, we would rather have the Senate concur with the SB 201J than see it go to a conference committee, which would most likely result in a far worse version of the bill," Jensen said.

This article originally appeared on Sioux Falls Argus Leader: SD House passes compromise pipeline regulation bill to lay groundwork for Summit Carbon pipeline