South Dakota’s governor signed a bill into law Thursday that bans the taking of private property for building carbon dioxide pipelines, a blow to a sprawling Midwest pipeline network that ethanol producers see as key for their future.
The new law muddies the waters for Summit Carbon Solutions and the planned $8.9 billion, 2,500-mile (4,023-kilometer) pipeline that already has approvals in three other states.
Republican Gov. Larry Rhoden said the measure restricting eminent domain “does not kill” Summit’s proposed project, and he encouraged the company to view the bill as “an opportunity to reset.”
“I made my decision based on my own consideration of the facts, the policy arguments, legislative history, my own opinions and experience and my judgment about what is best for South Dakota,” Rhoden said.
In a statement, Summit lamented the bill signing as changing the rules in the middle of the game. The company is seeking approval from South Dakota regulators for its proposed route in the state.
“This kind of regulatory uncertainty creates real challenges — not just for our project, but for the ethanol plants in South Dakota that now face a competitive disadvantage compared to their counterparts in neighboring states,” the company said. “While this presents obstacles, our project moves forward in states that support investment and innovation, and we will have more news on that soon.”
The company’s proposed pipeline system would transport planet-warming emissions from dozens of ethanol plants in five states for burial deep underground in North Dakota.
The project has generated intense opposition from landowners who fear a taking of their land for the pipeline and the dangers of a potential pipe leak.
Property rights have been a passionate issue in South Dakota, where voters last year rejected a suite of regulations that opponents said would deny local control over such projects and consolidate authority with state regulators. Supporters called it a “landowner bill of rights.”
The bill states: “Notwithstanding the provisions of any other law, a person may not exercise the right of eminent domain to acquire right-of-way for, construct, or operate a pipeline for the preponderant purpose of transporting carbon oxide.”
Eminent domain is the taking of private property with compensation to the owner.
Summit has approvals for its routes in Iowa and North Dakota, a leg in Minnesota and underground storage in North Dakota. In 2023, South Dakota regulators rejected Summit’s permit application. New proceedings are underway.
It isn’t clear how Summit would move forward with its project if it could not build in South Dakota.
Supporters see carbon capture projects such as Summit’s pipeline as a way to fight climate change and to help the ethanol industry. Opponents question carbon capture’s effectiveness at large scale and say it allows the fossil fuels industry to continue with little meaningful change.
Carbon capture projects are eligible for lucrative federal tax credits intended to encourage cleaner-burning ethanol and potentially result in corn-based ethanol being refined into jet fuel.
Some opponents argue the amount of greenhouse gases sequestered through the process would make little difference and could lead farmers to grow more corn despite environmental concerns about the crop.
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Dura reported from Bismarck, North Dakota.