Legislature Passes Attempted Balance between Landowners and Carbon Pipeline Project

by Joshua Haiar (South Dakota Searchlight) Supporters say bills protect farmers; opponents say they protect company -- Years of debate about a proposed carbon dioxide pipeline came to a head Wednesday at the state Capitol as lawmakers passed three bills intended to strengthen landowner protections while maintaining a regulatory path forward for the project.

The bills passed the state House of Representatives and Senate and now head to the governor’s desk for final consideration.

Governor Kristi Noem issued a statement saying she plans to sign the bills to “provide new protections for landowners and allow for economic growth to move forward through a transparent process.”

Rep. Jon Hansen, R-Dell Rapids, who voted against all three bills, said lawmakers should do more to protect landowners. He pointed to Democratic-dominated Minnesota, where he said carbon sequestration pipelines can’t use eminent domain to access land.

The bills are related to an $8 billion pipeline proposed by Summit Carbon Solutions, which is headquartered in Iowa. It would collect carbon dioxide from 57 ethanol plants in South Dakota and neighboring states and pipe it to North Dakota for underground storage.

The project would take advantage of up to $18 billion in federal tax credits that incentivize the removal of heat-trapping carbon dioxide from the atmosphere. Some ethanol backers have said the project is needed to reduce carbon emissions from ethanol production and keep the corn-based fuel viable in a future where governments and consumers are demanding lower climate impacts.

Summit plans to apply again for a permit in South Dakota after its initial application was denied by the Public Utilities Commission, in part due to conflicts with county ordinances that require minimum distances known as “setbacks” between pipelines and other features. The commission of three elected officials is responsible for pipeline permitting in the state.

What the bills’ backers have dubbed a “Landowner Bill of Rights” was recently added to the bottom of one of the bills. It lays out the new landowner benefits and protections offered by the three pieces of legislation.

Carbon capture pipeline operators will have to pay $500 for access to survey land. Counties through which the pipelines run could collect a surcharge of up to $1 per linear foot, with at least half of the surcharge allocated for property tax relief for affected landowners. The remaining funds could be used at the county’s discretion.

The bills ensure the pipeline companies, rather than landowners, are liable for damages caused by the projects. Companies also must submit an impact mitigation plan and bury pipelines at least 4 feet deep. One of the bills mandates public disclosure of modeling to gauge the impact of a pipeline rupture.

The final, approved version of the legislation says the commission’s permitting process overrules local setbacks and other local rules regarding pipelines, unless the commission requires compliance with any of those local regulations.

Meanwhile, the South Dakota Ethanol Producers Association applauded the bills and said they will “provide the nation’s first Landowner Bill of Rights along with needed regulatory certainty for CO2 pipelines.”

“We applaud the South Dakota legislators who supported farmers, landowners and ethanol with this compromise,” said Walt Wendland, the association’s board president. “This legislation is pro-landowner, pro-business, pro-farmer and pro-ethanol. It’s a win-win for all South Dakotans.” READ MORE

Excerpt from Iowa Renewable Fuels Association: JOHNSTON, IA – Today the South Dakota legislature passed a Landowner Bill of Rights that enhances landowner protections while providing regulatory certainty for CO2 pipeline projects. Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw made the following statement:

“Both sides came together in South Dakota to find an equitable path forward for carbon capture and sequestration projects. We applaud their efforts.

“It is our view that with a workable path forward in South Dakota and the regulatory process well on its way in Iowa and North Dakota, we can now see light at the end of the tunnel. Carbon capture and sequestration (CCS) cuts Iowa ethanol’s carbon score by more than half. It singlehandedly opens up a massive new 35-billion-gallon sustainable aviation fuel (SAF) market for Iowa corn farmers.

“Creating new demand at a time when corn supplies have swelled over 2.2 billion bushels and corn prices have dropped over 2 bucks isn’t just important for the next two or three years. Opening up the SAF market can literally power Iowa’s rural economy for the next two to three decades.”

Earlier this year, IRFA released the result of a comprehensive study detailing the impact of SAF on the Iowa and Midwest economies. You can find more information here.

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 42 ethanol refineries capable of producing 4.7 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 10 biodiesel facilities with the capacity to produce 416 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org. READ MORE