SD lawmakers endorse hurdles for eminent domain and environmental studies for carbon pipelines
Sen. Jim Mehlhaff, R-Pierre, speaks on the South Dakota Senate floor on Jan. 21, 2025. (Makenzie Huber/South Dakota Searchlight)
PIERRE — South Dakota lawmakers advanced legislation Monday at the Capitol that would make it more difficult for carbon dioxide pipeline companies to use eminent domain and would subject their projects to required environmental impact statements.
The bills are among several filed in response to controversy over Iowa-based Summit Carbon Solutions' proposed $9 billion, five-state pipeline that would pass through eastern South Dakota.
Eminent domain is a legal process for obtaining land access from unwilling landowners with just compensation determined by a court, for a project beneficial to the public — traditionally for projects such as electrical power lines, crude oil pipelines, water pipelines and highways. A bill to ban eminent domain for carbon pipelines passed the House last month and is awaiting action in the Senate.
Meanwhile, a bill approved by the Senate 17-16 on Monday would retain eminent domain as an option. But it would require entities using it to first attend mediation with the affected landowner and to also have a state permit before commencing eminent domain proceedings.
The bill failed last week in a close vote with two members absent, and then passed Monday when it was reconsidered and will head to the House next. It is sponsored by Sen. Jim Mehlhaff, R-Pierre. He said the measure strengthens landowner rights in condemnation proceedings.
'What it simply does is it requires a developer to go through that process and get a permit prior to gaining the privilege to use eminent domain,' Mehlhaff said.
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Opponents said mediation could serve as a tool to force landowners into talks they don't want to have.
'If a landowner said no thank you, their wishes should be respected,' said Sen. Joy Hohn, R-Sioux Falls.
Some senators also hope to pass the ban on eminent domain for carbon pipelines rather than merely imposing new eminent domain restrictions.
The House Commerce and Energy Committee voted 9-4 to send a bill to the House floor that would require an environmental impact statement for carbon dioxide pipelines.
The bill, sponsored by Rep. John Hughes, R-Sioux Falls, mandates state utility regulators to prepare or require the preparation of the statements before approving a carbon pipeline permit. The statements are detailed documents required at the federal level to assess the potential environmental effects of some projects.
Lawmakers advance carbon pipeline moratorium and bill regulating land agents
'This is not an anti-pipeline bill,' Hughes said. 'This is a public safety bill and it's a bill that protects our resources.'
Opponents, including representatives from the South Dakota Chamber of Commerce & Industry, utilities, and Summit argued that the bill would add an unnecessary regulatory burden.
'It's hard not to see this bill as directed at Summit Carbon Solutions,' said Brett Koenecke, a lobbyist for the project.
Opponents also said the regulators serving on the Public Utilities Commission already conduct a rigorous permitting process.
'What we're doing is so much more robust than this process,' Koenecke said. 'We are doing the things that the sponsor wants us to do already.'
The Summit pipeline would capture some of the carbon dioxide emitted by 57 ethanol plants and transport it for underground storage in North Dakota. The project has received permits in Iowa, Minnesota and North Dakota, while its application is pending in South Dakota. Nebraska does not have a permitting process.
The project would be eligible for federal tax credits incentivizing the capture of heat-trapping greenhouse gases to mitigate climate change. Hughes said other states, including Minnesota, mandate extensive environmental reviews.
'This project, when completed, will generate over $1.5 billion in federal tax credits,' Hughes said. 'We've got to get this right.'
Among other pending carbon pipeline bills this legislative session is one that would put a moratorium on carbon pipelines until new federal safety rules are finalized, and another empowering landowners to sue pipeline companies for the alleged abuses of their land agents.
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