Government Ban on Eminent Domain for Carbon Capture Pipelines Makes It out of SD Committee

January 27, 2025

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by Joshua Haiar (South Dakota Searchlight) South Dakota lawmakers endorsed a bill 10-3 on Friday in Pierre that would prohibit the use of eminent domain for carbon dioxide pipelines.

The vote occurred in a Capitol committee room packed with people interested in the issue. House Speaker Pro Tempore Karla Lems, R-Canton, who owns land near a proposed carbon pipeline route and introduced similar legislation during past sessions, is proposing the bill. She’s one of several lawmakers who campaigned against eminent domain for carbon pipelines and has since risen into leadership. The bill now heads to the full House of Representatives.

Eminent domain refers to the power to take private property for public use, with just compensation to the owner determined by a court.

“This is a power that can be lorded over landowners to threaten or coerce them into something that they would not normally do if they had the freedom to say ‘no thank you,’” Lems said.

The bill’s passage would be a major victory for pipeline opponents who have been rallying against the use of eminent domain for a $9 billion pipeline proposed by Iowa-based Summit Carbon Solutions. That project aims to transport some of the CO2 emitted by 57 ethanol plants in five states, including eastern South Dakota, to an underground storage site in North Dakota. The project would be eligible for billions in climate-change-related federal tax credits, for preventing the release of heat-trapping carbon into the atmosphere.

Supporters of the bill said Friday that carbon sequestration pipelines should not qualify for eminent domain because the product they transport — captured carbon dioxide — does not serve a public use like pipelines that carry water, electricity or natural gas. They said a South Dakota Supreme Court ruling that Summit’s project has failed to prove its eligibility for eminent domain is proof of their argument. That case was sent back to a lower court, where Summit is still attempting to prove its project qualifies for eminent domain.

“Eminent domain is a power that should only be reserved for the government or in the rare cases where it serves all of us,” said Jeremiah Murphy, lobbyist for the South Dakota Stockgrowers Association. “Because it is a phenomenal power.”

Opponents of the bill said blocking the pipeline comes with broader implications for the ethanol industry and the two-thirds of South Dakota corn that’s made into the gasoline additive. They said carbon capture technology is needed for ethanol to meet regulatory requirements in climate-change-concerned markets around the globe.

“Eminent domain pulls people to the table and gets them to start talking so that we can engage in the kind of conversations that can result in success,” said Brett Koenecke, lobbyist for Summit.

Pipeline supporters also said the state will lose out on a proposed sustainable aviation fuel plant near Lake Preston if the eminent domain bill passes. The company proposing that project, Gevo, has said it needs the carbon capture pipeline to meet its sustainability goals.

“I don’t think a state that changes rules like this is going to be strong when it comes to inviting investment,” said David Owen, lobbyist for the South Dakota Chamber of Commerce and Industry.

Neither Gov. Kristi Noem nor Lt. Gov. Larry Rhoden — who will take over for Noem if the U.S. Senate confirms her nomination as secretary of Homeland Security — have signaled whether they would sign the bill into law. READ MORE

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Carbon pipeline company asks court to force SD regulator’s recusal due to alleged conflict -- Utilities commissioner’s relatives own land along proposed route (South Dakota Searchlight)
Ban on eminent domain for carbon pipelines passes SD House, heads to Senate (South Dakota Searchlight)
South Dakota House approves bill to prevent use of eminent domain in CO2 pipeline development (Ethanol Producer Magazine)
Eminent domain bill advances to SD Senate (Brownfield Ag News; includes AUDIO)
South Dakota bans use of eminent domain for carbon dioxide pipelines (Reuters)
Summit Carbon Solutions Responds to Signing of South Dakota’s HB 1052 into Law (Summit Carbon Solutions)
American Carbon Alliance CEO calls legislation banning use of eminent domain to build carbon capture pipelines in South Dakota a lost opportunity to “restore profitability” for farmers and ethanol producers (DRG News)
South Dakota governor signs bill to prevent the use of eminent domain in CO2 pipeline projects (Ethanol Producer Magazine)
Midwest carbon-capture pipeline could be delayed after eminent domain ban in South Dakota (Associated Press)
CARBON CAPTURE PIPELINE COULD BE DELAYED FOLLOWING EMINENT DOMAIN BAN IN SOUTH DAKOTA (WNAX)
Carbon Pipeline Company Seeks Pause in Permitting Schedule After SD Adopts Eminent Domain Ban (Successful Farming)
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Carbon-Capture Pipeline Faces Delay After S. Dakota Eminent Domain Ban (Insurance Journal)

Excerpt from South Dakota Searchlight: The South Dakota House of Representatives advanced a bill 49–19 that would ban the use of eminent domain for carbon dioxide pipelines, sending the legislation to the state Senate.

Eminent domain refers to the power to take private property for public use, with just compensation to the owner determined by a court.

Supporters of the bill attended the House debate Monday at the Capitol and cheered when the vote was displayed. House Speaker Pro Tempore Karla Lems, R-Canton, proposed the legislation and said it does not stop carbon pipelines from being built in the state.

“They just don’t get the supreme power of eminent domain to force their projects down the throats of South Dakota people,” Lems said.

...

Rep. Drew Peterson, R-Salem, said the bill could make South Dakota an impediment to President Donald Trump’s energy independence goals.

“Trump supports biofuels,” Peterson said. “We don’t get to affect federal policy, whether we want to or not.”

But House Majority Leader Scott Odenbach, R-Spearfish, said Trump is eliminating unwise environmental policies, and tax credits for carbon pipelines could be next. He said there were three reasons to vote in favor of the bill: voters sent a message in November with the defeat of a referred law perceived as helping carbon pipelines; carbon pipelines are hazardous when they leak; and the Legislature has a responsibility to clarify if carbon pipelines have eminent domain authority.

Gov. Larry Rhoden has not yet indicated whether he would sign the bill.

Attempts to ban eminent domain for carbon pipelines failed during prior legislative sessions, but supporters of the idea used grassroots efforts last year to get their candidates elected to the Legislature and installed in leadership positions, thereby improving the chances for this year’s legislation. READ MORE

Excerpt from Ethanol Producer Magazine: During the Jan. 24 hearing, Brett Koenecke, an attorney representing Summit Carbon Solutions, explained that Summit is seeking easements from landowners to bury a pipeline underneath the surface. “There is no land grab here,” he stressed. “No one’s farm is being taken. It’s an easement to bury a pipeline and allow most surface uses to continue.” Preventing the use of eminent domain would, however, eliminate the ability of Summit to bring landowners to the table that otherwise refuse to engage with the company regarding development of the pipeline.

The South Dakota House of Representatives debated the impacts of the bill prior to the Jan. 27 vote. During that discussion, Rep. Mike Derby spoke out in opposition of the bill, calling the language too broad and stressing the bill acts in opposition to the goals of the Trump administration. “The Trump administration supports CO2 pipelines and biofuels and [sustainable] aviation fuel” he said. “If this bill, the intention is to prohibit CO2 pipelines in the future in any way, shape or form, I’m against it."

Rep. William Shorma also spoke out against the bill, arguing it’s unnecessary because the South Dakota Supreme Court has already weighed in on the issue, preventing the use of eminent domain in the development of the portion of Summit’s pipeline project that spans areas within South Dakota.

Shorma also brought attention to the economic impacts of the proposed pipeline project, noting that the South Dakota economy is expected to gain $300 to $500 million annually if the pipeline is constructed. He also referenced a letter from Delta Air Lines committing to purchase 100% of the SAF produced in the state.

Also discussing the pipeline’s economic development potential, Rep. Mike Stevens stressed its not true that the only people set to benefit from the CO2 pipeline are private companies. He discussed the importance of the state’s ethanol industry in creating good jobs that support rural communities.

Rep. Greg Jamison argued the legislation changes the rules in the middle of the game. Summit has already spent millions of dollars working to develop its CO2 pipeline project. When the company embarked on that process, eminent domain was part of the rules of the development process. “This bill is attempt to stop that—change it—prevent them from going forward,” he said, adding “that sends a terrible message to the country.”

Like most of the lawmakers commenting on the bill, Rep. Tim Goodwin acknowledged emotions over this issue run high. However, he noted that Summit is not attempting a land-grab with the development of the pipeline and is offering fair compensation to impacted landowners.

Rep. John Hughes spoke in opposition to the bill, but said Summit should propose legislation classifying CO2 as a commodity if it wants to exercise eminent domain.

Rep. Rim Reisch noted that the bill won’t only impact Summit—it will also impact other companies, including Gevo, which is developing a SAF plant in his district. He called on lawmakers to keep state open for business and not shut the door on new industries.

A full replay of the lawmakers’ discussion is available on the South Dakota Legislature website. READ MORE

Excerpt from Brownfield Ag News: A bill banning the use of eminent domain for carbon pipelines in South Dakota will advance to the Senate floor.

On Monday, the South Dakota Senate State Affairs Committee voted House Bill 1052 out of committee and it’s expected to be heard in the Senate Tuesday. House Bill 1052 would add a new section to existing right-of-way carrier law preventing the use of eminent domain for pipelines carrying carbon oxide.

If the bill passes the Senate it will go to Governor Larry Rhoden’s desk for a signature. Rhoden tells Brownfield “we’re waiting to see what lands on my desk and we’ll make a decision based on what that bill contains.”

Rhoden says he’s always supported private property rights and he believes it’s possible to balance that and grow the state’s ethanol industry.

“I don’t think any of the legislation out there right now would completely shut them (Summit Carbon Solutions) down, but that would be for them to determine.”

However, Rhoden says Summit Carbon Solutions needs to earn back trust from landowners.

“I think a huge part of our problem is based on that lack of trust,” he says. “My motives are to protect landowner rights, but also, protect the opportunity for South Dakotans and South Dakota’s producers.”

Hear Brownfield’s full interview with Rhoden.

Another eminent domain bill, Senate Bill 198, is also expected to be re-considered in the House State Affairs Committee this week. READ MORE; includes AUDIO

Excerpt from Reuters: South Dakota Governor Larry Rhoden signed a bill on Thursday (March 6, 2025) banning the use of eminent domain, which allows private land to be taken for public use, for the construction of carbon dioxide pipelines, potentially endangering a $9 billion project proposed by Summit Carbon Solutions.

Summit's pipeline would carry captured carbon dioxide from ethanol plants in five Midwest states to an underground storage location in North Dakota. It would span 495 miles (796 km) across South Dakota.

Some landowners in the states have challenged the project, arguing that it is unsafe and that using the right of eminent domain to build it violates their property rights. Summit has sought approval from states to use eminent domain to build the project, in cases where landowners refuse to voluntarily sign agreements.

"It's very unfortunate that, despite our approvals in Iowa, North Dakota, and Minnesota, South Dakota changed the rules in the middle of the game," Summit spokesperson Sabrina Zenor said in a statement.

"As for legal action, all options are on the table," Zenor said.

Summit's construction permits were approved in Iowa in June, in North Dakota in November and in Minnesota in December. The company was denied a permit in South Dakota in September 2023, and reapplied last fall.

Groups that have opposed the Summit pipeline cheered the new law.

"We are proud of all the hard work that we’ve done over the last four years. It shows that when people unite around a common cause, we are unstoppable," Jess Mazour, a leader of the Iowa chapter of the Sierra Club, which opposes the pipeline, said in a statement.

Rhoden said in a letter to the state's House of Representatives that he has had hundreds of conversations about the Summit project and that landowners see the threat of eminent domain as an infringement on their freedoms.

"I have said many times that Summit needs to earn back trust from South Dakota landowners. Unfortunately, once trust is lost, it is a difficult thing to regain," the letter said.

In September 2023, Summit secured voluntary easements for 73% of its right-of-way in South Dakota. The company did not provide an updated figure. READ MORE

Excerpt from Summit Carbon Solutions: It’s very unfortunate that, despite our approvals in Iowa, North Dakota, and Minnesota, South Dakota changed the rules in the middle of the game. 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. 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 governor has made it clear that HB 1052 targets one company – Summit Carbon Solutions. It’s unfortunate that a piece of legislation has been framed around a single company rather than addressing broader infrastructure and economic policy. As for legal action, all options are on the table but we remain focused on working with stakeholders to support the long-term success of the ethanol industry and support the President’s goals of American energy dominance.

About Summit Carbon Solutions:

Summit Carbon Solutions is driving the future of agriculture by expanding economic opportunities for ethanol producers, strengthening the marketplace for Midwest-based farmers, and creating jobs. In developing the largest carbon capture and storage project in the world, the company seeks to connect industrial facilities via strategic infrastructure to store carbon dioxide safely and permanently in the Midwest United States. For more information, visit www.SummitCarbonSolutions.com. READ MORE

Excerpt from Ethanol Producer Magazine: The Iowa Renewable Fuels Association is also speaking out against HB 1052. “We are disappointed in today’s news from South Dakota,” said Monte Shaw, executive director of the IRFA. “An unnecessary roadblock has been thrown up between Midwest corn farmers and much needed new markets. The South Dakota law effectively bans carbon pipelines in the state. While this is horrible for South Dakota and unfortunate for nearby states, there are numerous opportunities to sequester and ways to get there that don't include South Dakota. The demand for ultra-low carbon ethanol around the globe is so massive that, at the end of the day, no one state will be able to stop the ethanol industry from accessing that market.

“Despite the rhetoric, this bill had nothing to do with protecting property rights,” Shaw continued. “If the authors wanted that they would have had it apply to all projects. They did not. This specifically targeted CO2 pipelines in direct opposition to President Trump's stated energy policies to ensure American energy dominance. While I feel bad for my friends in South Dakota, Iowa will keep working.” READ MORE

Excerpt from Associated Press: The company behind an $8.9 billion carbon-capture pipeline proposed for five Midwestern states said Wednesday it wants to indefinitely delay its plans after South Dakota passed a law limiting its ability to acquire land for the project.

But even as it filed a motion to suspend its pipeline permit application timeline with the South Dakota Public Utilities Commission, the Iowa-based Summit Carbon Solutions said it remains committed to the pipeline.

Summit attorney Brett Koenecke said the action was needed because the legislation approved by South Dakota lawmakers and quickly signed into law by the governor changed the company’s ability to survey the route.

“The resulting delays in obtaining the surveys mean that the timelines involved in Commission action on this application are unrealistic,” Koenecke wrote in the motion. If the commission approves the motion, they can set a new deadline for the permit application.

...

The project had approvals in Iowa, Minnesota and North Dakota. But in South Dakota, a new law banned the use of eminent domain — the government seizure of private property with compensation — specifically for carbon-capture projects.

...

North Dakota Gov. Kelly Armstrong said Tuesday he doesn’t know how Summit will get its pipeline into North Dakota given South Dakota’s eminent domain ban.

Armstrong said he is concerned because officials and industry leaders were hopeful of eventually using carbon dioxide to extract oil. North Dakota is the No. 3 oil-producing state in the country, producing about 1.2 million barrels of oil per month.

Summit has already spent more than $1 billion on the project, Summit spokesperson Sabrina Zenor said. Despite the South Dakota suspension, “all options” are still on the table, the company said.

“Summit Carbon Solutions remains committed to working through this process and advancing the project in states that support energy and innovation,” the company said in a statement. READ MORE