South Dakota legislators aiming to find 'compromise' in CO2 pipeline bills
Out of the hundreds of bills that will be introduced and debated throughout South Dakota's 99th Legislative Session, few will be based in as much controversy as those affecting carbon dioxide pipelines.
A preview of said bills came Monday, when hundreds of rural landowners and their allies gathered in the capitol building rotunda in Pierre to rally in support of several pieces of pipeline legislation.
Rep. Karla Lems, a Canton Republican, announced during the rally she will bring or sponsor three bill throughout the legislative session. These bills, Lems told her landowner base, will prevent companies like Summit Carbon Solutions from "abusing" eminent domain to complete their project.
The Iowa company is proposing to build a 2,000-mile, $5.5 billion pipeline through South Dakota and four other states. More than 400 miles of the pipeline would run through eastern and northeastern South Dakota if built
However, Bruce Rastetter, CEO of Summit Ag Group, Summit Carbon's parent company, told Bloomberg in October the project would be delayed until early 2026. This news came a little over a month after the South Dakota Public Utilities Commission unanimously denied the company's permit application for their Midwest Carbon Express pipeline.
Still, Lems and her legislative cohort won't be the only ones sponsoring bills on pipelines over the coming months.
Rep. Linda Duba, D-Sioux Falls, told the Argus Leader on Monday multiple "compromise" bills, or legislation written to offer certain concessions to landowners without dissuading prospective companies from looking to South Dakota to build their agriculture-adjacent projects, are in the works.
The specifics of the bills and their compromises are unknown, but Duba said at least three bills, outside of those previewed by Lems, are in the works by state House and Senate members.
Duba did not name who would be the main sponsors of the legislation, but she said it may come from the state's Republican leadership.
"I don't know that for fact," Duba clarified.
These alternatives are appealing to her, the representative said, because she believes they will benefit landowners while also keeping South Dakota's business interests at heart.
Strict pipeline bill, similar to previously unsuccessful bill, would exclude CO2 pipelines from eminent domain privilege, lobbyist says
Lems' legislation, as outlined in her Monday rally speech, will address three points of South Dakota's pipeline and eminent domain laws.
One bill, she said, is expected to prevent companies from accessing property for land surveys before a permit is granted by the South Dakota Public Utilities Commission unless a landowner consents to the intrusion.
This bill was spurred by lawsuits filed by landowners in Brown, Edmunds, McPherson and Spink counties in 2022. The landowners sued Summit Carbon to prevent the Iowa company from accessing their property to conduct surveys to route their pipeline.
However, a South Dakota judge ruled in Summit Carbon's favor in April and granted the company the right to access the property owners' lands without permission. The company later followed through on those land surveys, sparking criticism from property rights advocates, affected landowners and some legislators.
More: Senator Mike Rounds: Summit Carbon gave itself a 'black eye' after controversial land surveys
Landowners have since appealed the decision to the South Dakota Supreme Court. It remains to be decided whether the judicial tribunal will pick up the case, as Summit Carbon initiated a motion in December to have the case dismissed.
More: Summit Carbon wants pending SD Supreme Court appeal dismissed for procedural errors
Lems' also touted a second piece of legislation, which would prevent "condemnation of property owners before a permit is granted by the PUC."
Condemnation actions are among the "sting[s] of eminent domain abuse," as Lems described, that have threatened South Dakota property owners.
In April, Summit Carbon filed more than 80 condemnation lawsuits against property owners who refused to sign easement agreements to acquire their land through eminent domain, as the Argus Leader first reported. Another 80 were brought at a later date, but the company later vowed to dismiss all 160 proceedings against the landowners.
Proponents suggest 'compromise' legislation a more reasonable solution to South Dakota's pipeline issue
Lems' final previewed legislation, though broad in nature, would prevent the use of "eminent domain for private gain," the Canton native told rallygoers.
Last year, Lems brought House Bill 1133, which sought to bar CO2 pipeline companies from being considered common carriers, a privilege that permits the use of eminent domain. The bill was later rewritten to change what is legally considered a commodity that can be transported by common carriers by excluding products that would be sequestered underground or used to benefit from federal tax credits — both of which would qualify Summit Carbon's CO2 product.
However, the bill was deferred to the 41st legislative day by the Senate Commerce and Energy committee in February 2023.
Dakota Rural Action lobbyist Chase Jensen told the Argus Leader on Monday that Lems' upcoming "eminent domain" bill is likely to be similar to HB 1133.
"There were people who didn't like way that [HB 1133] bill was drafted and opposed it, so this will be a much more straightforward explicit statement that — and I don't have the language in front of me, but it would be something like … eminent domain is not allowed for CO2 pipelines specifically," Jensen said.
Lems did not respond to a request for comment for this article.
Duba went on to say she doesn't want to be in the "party of no," alluding to the legislation soon to be brought by Lems, which will likely be stricter on CO2 pipelines.
"This is an important industry. We also need to listen to the landowners, but we have to find a compromise position," Duba said. "We've got to find solutions. Just [saying], 'No, because I'm a landowner, and you're a big company,' doesn't fly with me. That's not a position to take. You roll up your sleeves, you go to the table and you work on a solution."
This is a stance Rob Skjonsberg, co-founder of South Dakota Ag Alliance, a recently formed agriculture and property rights group, concurred on. He told the Argus Leader on Monday the needs of landowners need to be protected in a way that doesn't also alienate large businesses looking to invest in South Dakota.
"If we're going to be a state that's open for business, we have to provide some level of certainty for businesses, whether they're domestic mom-and-pop shops, or people who are looking at coming into the state," Skjonsberg said. "We can't have an unstable government changing the rules of the game."
Teased legislation sparks early signs of clashing approaches to SD's pipeline problem
However, Jensen said the state needs fundamental protections for landowners. He suggested those supported by South Dakota Ag Alliance, which is pushing for middle-ground legislation on CO2 pipelines, are window-dressing to allow carbon pipelines into the state.
"The concern that Dakota Rural Action has about these groups is that they will present solutions to things that aren't the core problems, and then, you know, potentially be providing political cover for people to, quote, unquote, solve a problem," Jensen said.
To which Skjonsberg opined Dakota Rural Action's "swinging for the fences" approach to and support for legislation that strongly restricts carbon capture and sequestration companies from operating in the state would be overkill and hamper the state's agriculture industry.
"I don't think this is going to make everybody happy. But I think a reasonable solution will work for the vast majority, if we just concede a little bit more for the landowner," Skjonsberg said. "I have never been on the same page as Dakota Rural Action. I would be concerned if I were."
This article originally appeared on Sioux Falls Argus Leader: CO2 pipeline bills already making waves in South Dakota legislature
