SIOUX FALLS, S.D. (AP) — A new law in South Dakota prohibiting the use of eminent domain to acquire land for carbon capture pipelines raises questions about the viability of a proposed 2,500 mile (4,023-kilometer) project snaking through five Midwest states.
Summit Carbon Solutions, the company behind the estimated $8.9 billion pipeline, vowed to keep pursuing the project despite South Dakota Gov. Larry Rhoden’s announcement Thursday that he had signed a bill into law that will make routing the line much more difficult. The law bans Summit from forcing South Dakota landowners to allow the pipeline through their property.
Plans call for the pipeline to carry greenhouse gas emissions from more than 50 ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to a spot in North Dakota, where it would be permanently stored underground.
Legal action is possible
It’s unclear whether Summit will pursue legal action but the company said in a statement that “all options are on the table” and the project “moves forward” in other states. The company promised it would have more news soon.
Large pipeline projects typically rely on eminent domain, with companies arguing that even if most landowners agree to grant access to their property, a project can be scuttled if only a few refuse.
Summit says the company, which has secured over 2,700 easements across the region, has approval for routes in Iowa and North Dakota and a leg in Minnesota.
Can the line be routed through Minnesota?
The current proposed route would cut through nearly 700 miles (1,126.5 kilometers) of South Dakota before entering North Dakota, so rerouting to the east through Minnesota would be a big challenge.
A Summit spokesperson did not respond to questions Friday about whether the company would consider a new route.
The sponsor of the South Dakota bill, Republican Rep. Karla Lems, said Summit could either reroute its pipeline through Minnesota into North Dakota or “negotiate with landowners in South Dakota” and go around opponents.
Gov. Rhoden said the South Dakota law wasn’t intended to kill the project and suggested Summit see it as “an opportunity to reset.”
Minnesota is a relatively small part of Summit’s overall project. The only segment approved in the state is a 28-mile (45-kilometer) leg from an ethanol plant near Fergus Falls to the North Dakota border. Summit’s project also includes two legs in southern Minnesota that would go into Iowa.
A Minnesota Public Utilities Commission spokesperson did not respond to phone or email messages.
The pipeline’s importance to the ethanol industry
The country’s transition to electric vehicles has been slower than many people expected, but most think a shift away from internal combustion engines will eventually happen.
Nearly 40% of the nation’s corn crop is brewed into ethanol, which is blended into most gasoline sold in the U.S. Midwest farmers and the ethanol industry therefore see it as essential to have new markets as less of the fuel additive goes to power cars.
They see passenger jet fuel as a potentially huge new market for ethanol. However, under current rules the process for turning ethanol into aviation fuel would need to emit less carbon dioxide to qualify for tax breaks intended to reduce greenhouses.
The carbon capture pipeline is a key part of achieving those goals, Iowa Renewable Fuels Association Executive Director Monte Shaw said.
Walt Wendland, who runs an ethanol plant in Onida, South Dakota, said the “ethanol industry is a margin business” and the new state law will put South Dakota ethanol producers at a disadvantage.
“Ever since I built a plant, I never wanted an advantage, just don’t put me at a disadvantage,” Wendland said.
Will the pipeline ever be built?
It has been four years since Summit proposed building the pipeline, along with two other companies that later abandoned their plans. It has been a challenging process for Summit, which dealt with lawsuits in Nebraska and elsewhere, opposition before a regulatory commission in Iowa and now the eminent domain ban in South Dakota.
In its statement, Summit expressed optimism about the future but didn’t offer specifics about how it could build a pipeline without eminent domain authority in South Dakota.
Since the pipeline was proposed, the federal government’s approach to climate change also has changed dramatically. Democratic President Joe Biden increased tax incentives under the Inflation Reduction Act and Bipartisan Infrastructure Law to encourage carbon capture as an effort to slow climate change.
However, Republican President Donald Trump has emphasized the need for more oil and gas drilling and coal mining, and has put far less emphasis on alternative energy. Trump has not indicated whether his views will lead to changing federal policy regarding carbon capture pipelines.
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Dura reported from Bismarck, North Dakota.
