Committee rejects bill to stop carbon pipelines from using eminent domain

A state Senate committee unanimously rejected a bill Thursday that would prevent two proposed carbon pipeline projects from using eminent domain.

The bill had already passed the House of Representatives 40-28, but it was defeated 9-0 in the Senate Commerce and Energy Committee.

Opponents of the bill said it would be unfair to remove the possibility of eminent domain for projects that are already being actively considered for permits.

“We can’t keep changing the rules,” said Sen. Lee Schoenbeck, R-Watertown.

Eminent domain is a legal process for obtaining access to land from landowners who aren’t willing to grant it.

Two proposed underground carbon pipelines, Navigator CO2’s Heartland Greenway project and another proposal by Summit Carbon Solutions, would pass through South Dakota. The projects would capture carbon dioxide emitted from ethanol plants in the Midwest and transport it in liquified form through multi-state pipelines, to be sequestered underground in Illinois and North Dakota, respectively.

Both projects are seeking approval from the South Dakota Public Utilities Commission.

Ethanol producers can get more money for their products in states with stricter emission standards by shrinking their carbon footprint. Sequestering carbon keeps it out of the atmosphere, where it traps heat and contributes to climate change. Ethanol producers would also benefit from a federal tax credit for sequestered carbon.

60% of South Dakota corn is used for ethanol

In South Dakota, ethanol plants are a major component of the agricultural industry.

“Sixty percent of the corn that we grow goes into ethanol plants,” said Sen. Casey Crabtree, R-Madison.

Current state law says “all pipelines holding themselves out to the general public as engaged in the business of transporting commodities for hire by pipeline” are common carriers. The law also says common carriers may exercise eminent domain.

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The bill would have removed carbon pipelines from the list of common carriers, and by extension, eliminated their ability to use eminent domain. Proponents of the bill argued carbon pipelines are different from oil, natural gas or water pipelines, which deliver a product used by the public.

Critics of the carbon pipeline proposals have argued that while the projects would capture carbon, they wouldn’t do anything to reduce emissions. Landowners along the pipeline route are also concerned about potential leaks.

Pipeline vote is ‘economic development over landowner rights’

After Thursday’s committee hearing, the prime sponsor of the bill described the committee’s decision as “economic development over individual rights, industry over farmers, and investors over landowners.”

“This is a precedent that should concern every property owner in South Dakota,” said Rep. Karla Lems, R-Canton, in a written statement to South Dakota Searchlight.

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When asked if she will attempt any procedural maneuvers to resurrect the bill, Lems replied, “That remains to be seen.”

Legislators can use a procedure known as a “smoke out” to bring a bill to the floor if it fails to pass out of a committee.

“Whether we smoke this out or not, the landowner rights issue will continue to be fought,” Lems said. “Our people are not against economic development.  They just want the choice to be part of a private project or have the ability to say ‘no thank you.’”