Fate of Summit pipeline uncertain as South Dakota again rejects route permit

SIOUX FALLS, S.D. — The massive Summit Carbon Solutions CO2 pipeline connecting about 60 ethanol plants across the Midwest was thrown into uncertainty Tuesday after South Dakota’s Public Utility Commission denied its application for the second time.

The commission voted 2-1 to reject the application by the Iowa-based company, with Commissioner Kristie Fiegen saying it was “not ready to go forward” and lacked “the form and content required.”

“The PUC’s duty is to make a decision based on a route — one route,” said Fiegen, who initiated the motion to deny. “The current route, in my view, is not viable.”

South Dakota is a crucial part of the 2,500-mile pipeline across five states, estimated to cost $8.9 billion. The pipeline would transport CO2 emissions from ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to be stored underground permanently in North Dakota. The project would make Summit and the ethanol producers eligible for federal tax incentives that reward the sequestration of the greenhouse gas and the production of low-carbon fuels.

The project already has approvals in Iowa, Minnesota and North Dakota, and Summit has invested more than $150 million into its route in South Dakota.

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Iowa regulators, however, said Summit could not start construction in the state until it had received permission from the Dakotas. South Dakota regulators rejected the company’s first application in 2023, and while the company worked on a revised route, South Dakota lawmakers stepped in.

They passed, and the state’s Republican governor signed, an eminent domain ban for carbon dioxide capture pipelines in March that made Summit’s planned route difficult, regulators agreed Tuesday. After Tuesday's decision, Summit said it would refile its application with a reduced route in South Dakota it hopes would satisfy landowners and ethanol plant partners.

“While we are disappointed in today’s decision, we remain committed to South Dakota as without it the ethanol industry, farmers, and land values in the state will all suffer,” the company said in a statement.

Landowners, meanwhile, rejoiced over the South Dakota decision.

“Today is a victory for South Dakota landowners and local control," Dakota Rural Action board member Ed Fischbach said in a statement. "We are grateful the PUC has made this common sense decision and freed landowners to get on with their lives and businesses.”

Summit previously had requested an extension on its permit application to rework its route in a way that would satisfy landowners, but South Dakota regulators refused to grant it more time.

Questions about the pipeline arose after South Dakota lawmakers approved a ban on eminent domain for CO2 pipelines, in which the government can seize private property with compensation. Without that power, Summit would need to secure voluntary agreements with landowners along the South Dakota route.

Summit was granted eminent domain authority along its Iowa route. Iowa lawmakers have proposed limits on eminent domain and currently are floating a ban, but the restrictions have not gained much traction in the Iowa Senate and none have become state law.

In its filing for an extension in South Dakota, Summit said it would work with landowners and the state in “good faith” rather than challenge the eminent domain ban in court. That statement persuaded commissioners Tuesday that there was no path forward for Summit, given the amount of landowner opposition along the current route in that state.

Instead of pursuing legal action, Summit said in a filing that additional time would allow it to “roll out new offers to landowners” and identify which branches to ethanol plants it could eliminate in the face of significant landowner opposition.

The ethanol industry is concentrated in the Midwest, with nearly 40 percent of the nation’s corn used to brew ethanol. By sequestering the greenhouse gas in North Dakota, Summit’s pipeline promises to lower the carbon intensity of ethanol and make it more competitive as a sustainable product.