A new law in South Dakota raises questions about the future of a $9 billion carbon dioxide pipeline project spanning five Midwestern states.
The Iowa-based company Summit Carbon Solutions wants to build a 2,500-mile pipeline network to transport carbon dioxide from dozens of ethanol plants and bury it deep underground in North Dakota. Summit and its supporters say sequestering the greenhouse gas will open the door to low-carbon fuel markets and bump up demand for corn.
But the project has faced strong pushback, largely over property rights, local zoning ordinances and safety after a carbon dioxide rupture in Satartia, Mississippi five years ago made national headlines.
South Dakota Gov. Larry Rhoden recently signed off on legislation banning eminent domain for carbon dioxide pipelines in the state. Shortly after, Summit Carbon Solutions asked South Dakota regulators to hit pause and extend the deadline for its application to build and operate its pipeline in the state.
According to Summit’s filing, South Dakota requires a company to have a permit application and the legal authority to use eminent domain to access private property for land surveys.
Rhoden said in a letter explaining his decision that he’s had hundreds of conversations with people on all sides of the proposed project. Banning the use of eminent domain for carbon dioxide pipelines does not kill Summit’s plan, he said, since the company could still move forward with voluntary easements.
“I encourage Summit and others to view [the new law] as an opportunity for a needed reset,” Rhoden stated.
Eminent domain is the legal right to use private property for projects that benefit the public. A court determines the landowners’ compensation. Many pipeline opponents argue Summit’s project is not a public benefit and that the possibility of eminent domain pressures landowners to sign easement agreements.
“South Dakota landowners feel strongly that the threat of involuntary easements for the proposed carbon dioxide pipeline infringes on their freedoms and their property rights,” Rhoden wrote. “I have said many times that Summit needs to earn back trust from South Dakota landowners.”
Emma Schmit is the director of Pipeline Fighters with Bold Alliance, a nonprofit that organizes against fossil fuel projects and eminent domain abuse. She said the new law is a “huge victory for landowners.”
“It’s going to be a long, hard road for [Summit] if they do continue,” Schmit said.
A large roadblock after several green lights last year
Iowa officials last year approved Summit’s phase one route permit and granted the right to use eminent domain. But they said construction in the state cannot begin until Summit files proof of agency approval from North Dakota and South Dakota.
North Dakota approved Summit’s route and sequestration permits last year. Commissioners for the route permit said the courts would decide whether the company has the right to eminent domain in the state.
Minnesota officials in December granted Summit a permit for a 28-mile pipeline that connects an ethanol plant to North Dakota.
Nebraska, the last state in the pipeline’s planned route, does not require state-wide approval, but Summit will need conditional use permits from each county with a zoning ordinance.
“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,” a Summit spokesperson stated in an email.
“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,” the spokesperson wrote.
In a press release, Summit said all options, including legal action, are on the table to move the project forward.
What are Summit’s options?
But Summit has few choices, said Jess Mazour, conservation program associate for Sierra Club Iowa Chapter. The organization is one of the groups that has rallied landowners opposed to carbon dioxide pipelines.
Summit could sue the state of South Dakota to try to overturn the bill or find a route in the state without using eminent domain, said Mazour. Another option is rerouting through Minnesota, but state law does not allow eminent domain for carbon dioxide pipelines.
“This is going to be a very tough path forward for Summit and likely require massive reroutes or massive lawsuits,” Mazour said.
Whether Summit pursues lawsuits or pipeline reroutes, Mazour said Iowa needs to move forward with its own legislation to protect landowner rights.
“We’re not changing the rules in the middle of the game, we’re protecting Iowans’ property rights,” Mazour said.
An Iowa bill banning eminent domain for carbon dioxide pipelines on agricultural land recently passed out of committee.
“It's similar to what South Dakota did, and it's fair,” Mazour said. “[Carbon dioxide pipelines] are not for the public good. These are privately owned projects, and we do not think eminent domain should be used for them.”
Similar legislation in the past has stalled in Iowa’s senate, but Mazour said the recent win in South Dakota adds wind to the sails of pipeline opponents.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said he views the new South Dakota law as a “de facto ban” on carbon dioxide pipelines in the state. Shaw said he, along with ethanol producers in the association, were disappointed by the decision, but he’s confident the project will move forward, even if it does not include South Dakota.
“There are lots of places you can sequester carbon in the United States, and there are lots of ways to get there that do not involve South Dakota,” Shaw said. “When you consider the massive opportunities that ultra low carbon ethanol has in markets, literally around the world, it's just so large that no one state's going to stop that from happening.”
One of these markets is aviation fuel, which Shaw said could drive demand for biofuels over the next two decades.
In 2021, the International Civil Aviation Organization set targets to reach net-zero carbon emissions by 2050. That same year, the U.S. launched the Sustainable Aviation Fuel Grand Challenge with the goals of producing 3 billion gallons of sustainable aviation fuel in the U.S. by 2030 and meeting all domestic aviation fuel demand by 2050.
“Sustainable aviation fuel alone could be 100 billion gallons worldwide,” Shaw said. “To put that in reference, we use 14 billion gallons to supply E10 to the entire United States.”
While Summit’s project comes with a lot of question marks, Shaw pointed to another one that’s moving forward. Tallgrass Energy is converting a natural gas pipeline to carry carbon dioxide from industries in Nebraska, Colorado and Wyoming for underground storage in Wyoming.
An ethanol plant in southwest Iowa may connect, as well.
“We're a little bit jealous watching what's happening to the west of us where the Tallgrass pipeline is under construction,” Shaw said. “It'll be operational in the third quarter of this year, and the plants on that pipeline are going to reap huge financial benefits.”
Tallgrass and Bold Alliance signed a “first-of-its-kind” community benefits agreement last year, which established landowner protections throughout the pipeline’s life cycle. This includes early project development through easement negotiations, operations and decommissioning.
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues.
