The South Dakota Senate on Tuesday gave final approval to a bill that would ban the use of eminent domain for carbon pipelines, marking the latest development in a battle over the world’s largest carbon sequestration project that has split Republicans across the Midwest.
Summit Carbon Solutions, an Ames, Iowa-based company, has proposed building a roughly 2,500-mile pipeline between 57 ethanol plants in Iowa, Nebraska, South Dakota, Minnesota and North Dakota. Once operational, the pipeline, which is estimated to cost $9 billion, will be capable of capturing and permanently storing 18 million tons of carbon dioxide every year in an underground repository in North Dakota. That’s the equivalent of taking 3.9 million vehicles off the roads annually, the company says.
Summit estimates the pipeline will create more than 12,000 jobs for the construction phase and more than $700 million in federal, state and local taxes. Once complete, the system would create more than 1,200 jobs and generate more than $200 million in tax revenue.
But tensions are running high in Iowa, North Dakota and South Dakota, where some GOP support the economic development and boost to the ethanol industry, while others have sided with some landowners who say they’re concerned the company will use eminent domain to force the pipeline through its current proposed path.
Under eminent domain, a state can seize land for public use.
Gov. Larry Rhoden’s (R) office didn’t say if he would sign the measure.
“Governor Rhoden is committed to protecting landowner rights and keeping South Dakota Open for Opportunity,” Rhoden spokesperson Josie Harms said. “He has a wealth of knowledge on both eminent domain and property rights issues, and he is well aware of all the arguments in this discussion. He will be carefully considering this bill in the coming days.”
Supporters said the bill would not block the pipeline, but only require that it go around landowners that don’t want it.
“This is not a kill shot,” said the bill’s sponsor, Sen. Mark Lapka (R). “This is simply a requirement that good negotiations in good faith are going to have to take place between a willing buyer and a willing seller.”
Opponents said the measure could kill the project and hurt the region’s ethanol industry.
Sen. Jim Mehlhaff (R) said eminent domain is “a tool that’s necessary, or you won’t have anything built in this country.”
“This is a bad bill and a bad precedent,” Mehlhaff said.
Sen. Casey Crabtree (R), who opposes the bill, said it would prevent the unleashing of American energy as called for by President Trump.
“I want our farmers and our main streets to be able to participate in President Trump’s energy revolution,” Crabtree said.
The move reflects a change in sentiment in the state against the pipeline. Last year the state enacted legislation to settle the pipeline issue by giving siting authority to the South Dakota Public Utilities Commission. But that law was overturned in a citizen-driven referendum, with 60% of voters calling for repeal.
The South Dakota Public Utilities Commission rejected Summit’s permit application in 2023. The company reapplied last year.
In Iowa, where most of the pipeline would reside, more than 25 pipeline bills were introduced this session, said Jess Mazour, of the Sierra Club’s Iowa chapter.
“In the House, we’ve got broad support [opposing the pipeline]; the Senate is where our challenge is,” Mazour said of the dynamic in the Iowa legislature.
The Iowa House has passed measures to ban eminent domain for the pipeline in the past two years, but the Senate didn’t take up the measures. A bill is currently pending in the Senate to block eminent domain for agriculturally zoned land, but no hearings have been held on the measure. Iowa House Speaker Pat Grassley (R) told KCCI earlier this year he hopes to find common ground with the Senate.
Last year, the Iowa Utilities Commission approved Summit’s construction permit, which allowed the company to use eminent domain. A lawsuit over the approval is pending.
In North Dakota, efforts to hamstring the pipeline have fallen short. Recently, bills failed to advance that would prevent the use of eminent domain for the carbon storage projects. A Senate bill was defeated 26-21.
“If we as a state legislature want to continue to support and promote industrial development, we must protect landowners from combative and predatory practices by taking away the big stick of eminent domain,” Sen. Jeffery Magrum (R) said during debate on the bill.
Tensions over the project come as carbon capture and storage legislation has been introduced in several states this session, including Oklahoma, Indiana and New York. In Wyoming, the House recently passed legislation to repeal a 2020 mandate that coal-fired power plants employ carbon capture technology by 2030 to extend the life spans of those plants.
Interest from states has been driven by $3 billion in tax credits for carbon storage projects under the 2022 Inflation Reduction Act and another $12 billion over five years for carbon management programs in the 2021 Infrastructure Investment and Jobs Act.