Two pipeline bills passed a House committee. Landowners say their core concerns remain

South Dakota House lawmakers addressed the political elephant in Pierre by pushing forward two carbon pipeline-related bills.

House Commerce and Energy Committee passed Monday HB 1185 and HB 1186, two bills framed as "good neighbor" policies that would amend the state's laws on condemnation through eminent domain and property easements.

Both bills were drafted by Rep. Will Mortenson, R-Fort Pierre, and Sen. Casey Crabtree, R-Madison, majority leaders of their respective chambers.

This comes after a series of controversial surveys by Summit Carbon Solutions, an Iowa-based company with aims to build a 2,000-mile, $5.5 billion pipeline system through eastern South Dakota, Iowa, Minnesota, Nebraska and North Dakota.

Summit Carbon's project, the Midwest Carbon Express, is slated to pull hazardous liquid carbon dioxide from bioethanol facilities in the five states and transport the byproduct to a site north of Bismarck, North Dakota, for underground sequestration.

The legislative package is intended to codify new protections and concessions for South Dakota's rural landowners.

Companies and utilities with eminent domain authority, under the proposed bills, would need to provide more detailed notice to landowners and pay property owners $1 for every linear foot of working pipeline built on their land under the advancing legislation, among other changes.

Prime sponsor says survey bill is 'fair' to rural landowners, pipeline developers

Mortenson's bill, as amended, would provide landowners in the way of pipeline and utility projects with a descriptive outline of where and when a prospective transmission company survey or examination will take place.

Under the proposed law, companies would need to detail the specific portions of the property they would survey. They would also have to list the anticipated time and date survey crews will access the property, the duration of their intrusion, the types of surveys that may take place, and the contact information of the surveyors or their supervisor.

"I think these are things that, if I'm a landowner now, I look at this and I think, 'OK, at least I have a little bit better handle on what happens next,'" Mortenson told the committee in his opening statement. "It's the unexpected blow that lands the hardest, right?"

Developers would also need to have a pending or approved permit with the South Dakota Public Utilities Commission and provide the notice at least 30 days in advance.

Pipeline and utility companies use the results from surveys and examinations to determine whether the lands along their project's route can safely and adequately host new infrastructure.

Additionally, the bill would require developers to make a one-time payment of $500 and compensation for damages to the property owner.

"Right now, the law asks for $0. They are taking an aspect of your private property right now," the House Majority Leader said. "This would make $500 as compensation. Is that going to pay for it in every case? No. Is that going to be enough? Well, 'enough' is a subjective determination."

SD's major farm and biofuel groups say HB 1185 respects landowners. Anti-pipeline landowners contend the bill skips their core concerns

After the opening the floor to proponent testimony, the bill heard hesitant support from landowners affected by Summit Carbon's pipeline.

Betty Strom, a pipeline opponent from Lake County, told the committee she welcomed the updated notice requirements.

However, Strom expressed her frustration at the scope of the bill, which does not offer landowners the ability to refuse survey access outright akin to HB 1079, which was killed in committee.

"The notice to the landowner is better than what is currently required," Strom said. "(But) it doesn't address the core of the issue and what caused unnecessary worry, stress and confrontation last year, and that is any company's ability to conduct extremely invasive and destructive testing."

Lobbyists from South Dakota's largest farm and biofuel groups urged the committee to pass the bill.

Matthew Bogue, lobbyist for South Dakota Farm Bureau, said it was "necessary" for companies to be able to conduct surveys. HB 1185, he continued, would facilitate better communication to landowners while also leaving a company's right to survey unscathed.

South Dakota Corn Growers Association, South Dakota Soybean Association and South Dakota Ethanol Producers Association also supported Mortenson's legislation.

Matt McCaulley, lobbyist for SDEPA, framed his testimony around the needs of landowners and energy groups, which he described as intertwined.

"Landowners are looking for respect and property rights. They deserve that respect. Ethanol and energy and economic development is looking for certainty. They need that certainty to move forward," McCaulley said. "We're confident the legislature can find that path forward this session to facilitate both perspectives and keep us moving forward and keep the ethanol industry strong and growing."

Property rights advocates support HB 1185's notice requirements. They're still skeptical about whether it challenges the status quo.

Aaron Johnson, a Lake County farmer and tenant of Strom, asked the committee to reconsider passing the bill. Under the proposed legislation, companies would no longer be required to provide notice to tenants of landowners, which Johnson said would give companies "even less of a reason to develop an open and honest dialogue with the landowner."

Johnson said companies and utilities exercising eminent domain will eventually have to identify tenants to serve a condemnation claim or publish notice in a local newspaper.

Property rights advocates, Johnson among them, also have a key complaint in the effectiveness of the legislation.

During his testimony, Johnson pointed to the current survey notice statute, which already requires companies like Summit Carbon to provide notice to both landowners and tenants, though the codified language is not as detailed.

Similarly, a provision of HB 1185 would codify a landowner's right to challenge a survey or examination in circuit court.

In an e-mail prior to the committee meeting, Chase Jensen, lobbyist for Dakota Rural Action, said the bill he supported the bill's attempt to foster better communication with affected landowners.

Landowners demonstrated their right to challenge planned surveys last year after joining multiple lawsuits against Summit Carbon Solutions. After Summit Carbon provided notice of their intent to survey their rural lands, the owners sued the company to stop the examinations from occurring.

However, Fifth Judicial Circuit Judge Richard Sommers sided with the company in the cases and issued an order on April 21 to prohibit the landowners from interfering as the company completed said surveys. Landowners filed the appeal seven days later.

The bill's language "does nothing to change the status quo," Jensen added.

"It does, however, codify that the burden of initiating legal action to stop wrongful surveying rests upon the landowner impacted by it, rather than creating a process by which a company or entity can initiate a legal action to conduct a certain type of survey," Jensen said. "Landowners can already initiate lawsuits - the issue is that they have no legal basis to oppose extreme or invasive survey activities."

In an e-mail prior to the bill's first committee hearing, Mortenson addressed the intent of this bill. Asked why, in the context of the previous lawsuits against Summit Carbon, he chose to include a "right to challenge" provision in HB 1185, the House Majority Leader said the bill "provides clarity for the landowners."

"If they don't agree that a company should have survey access or don't think these requirements were met, we want to make sure they have the right to go in front of a judge," Mortenson said. "In the last few years, the access would take place and the owners would have to challenge after the fact through restraining orders and other types of petitions."

HB 1185, after passing on a 10-1 vote, will be heard on the House floor at a later date.

Mortenson's second bill creates easement terms, annual compensation for landowners affected by carbon pipelines

House Commerce and Energy Committee also passed on a 8-3 vote HB 1186, a bill which would institute new rules for the creation of carbon pipeline easements in South Dakota.

The proposed legislation would require such easements, which grant the right for companies to use land to transport carbon dioxide, to be filed with a county's register of deeds.

HB 1186 also limits the maximum duration of an easement to 50 years. This would prevent pipeline companies from signing a perpetual easement with landowners, which allows them to use their property for carbon transportation indefinitely.

The bill, if signed into law as is, would also require pipeline developers to pay landowners at least $1 for every linear foot of carbon pipeline on their property, with payments beginning on an annual basis once the pipeline comes in full operation.

Taking inspiration from wind tower easements, HB 1186 looks to level the playing field for landowner-developer negotiations

Mortenson, who is also the prime sponsor of this bill, took inspiration from wind turbine easements while drafting this legislation. He said the current legislative body is in the same predicament as the 1996 South Dakota Legislature, who had to tackle the looming prospect of the wind industry's investments in the state and similar property rights questions.

For today's South Dakota landowners, Mortenson said his bill would give them something of a bargaining chip when it comes to the carbon industry's push to bring their infrastructure to the state.

These new terms, Mortenson said, would benefit landowners when push comes to shove in the form of eminent domain, which he said creates a power imbalance between the two parties.

If a pipeline company doesn't like the terms of an easement, Mortenson added, they could obtain an easement without the landowner's cooperation through legal action. The company would still need to offer compensation for the easement, but, "often, that's just not very much money," he added.

"I generally believe that two parties that are on equal footing should be able to bargain on any terms they want," Mortenson said. "If we're going to have eminent domain, it should be used sparingly. This bill encourages sparing use."

As a means to an end, Summit Carbon, Gevo offer tentative support for HB 1186

HB 1186 received approval from landowners, farm groups and even Summit Carbon itself, though its support was met with some concerns by proponents.

Brett Koenecke, Summit Carbon lawyer and lobbyist, called the 50-year easement limit "objectionable" for pipeline projects.

Koenecke argued pipelines have "indeterminate" lifespans, owing, in part, to their underground installation. While wind towers are subjected to the elements and contain parts that need regular maintenance, he distinguished pipelines as infrastructure "fundamentally different."

"They exist underground, they're quiet, they make no noise, and they just do their job, generally calm," Koenecke said. "To apply an artificial 50-year deadline or termination point to something that can have an 80 or 100 or even further long lifespan seems, to me, to be wishing something on a next generation that I'm not sure they're going to be glad for."

This stance was echoed by Kent Hartwig, director of state government affairs for Gevo, a Colorado-based company with plans to build a $1 billion sustainable aviation fuels plant near Lake Preston.

Amid struggles to convert the U.S. fleet to electric engines by 2050, Hartwig argued, there will be a growing need to create a green aviation fuel source. If Gevo or other companies decide to expand their production, they could be handcuffed by the 50-year easement limit.

"Gevo has the need to develop more than the production of 65 million gallons annually to meet our customer demand of 350 million gallons a year," Hartwig said. "This includes identifying opportunities in South Dakota in the coming years, pushing production beyond the 50 year timeframe and the easement."

Hartwig offered his partial support of the bill, saying it could move Summit Carbon closer to receiving a permit to build their pipeline.

"If additional compensation is needed to bring the project to completion, we support that," Hartwig said.

Two other related pipeline-spurred bills killed by the House committee Monday.

HB 1190, a bill which would "establish public use criteria for purposes of condemnation proceedings," failed on a 4-7 vote and was later send to the 41 legislative day.

Similarly, HB 1193, a bill that would require developers to include a copy of their siting permit application when filing a condemnation claim, was also killed by a 4-7 vote and deferred beyond the legislative calendar.

Dominik Dausch is the agriculture and environment reporter for the Argus Leader and editor of Farm Forum. Follow him on X and Facebook @DomDNP and send news tips to ddausch@gannett.com.

This article originally appeared on Sioux Falls Argus Leader: Survey, carbon easement bills pass South Dakota House committee