Federal appeals court rules against county pipeline ordinances

County ordinances in Iowa that restrict the placement of carbon dioxide pipelines are overruled by the authority of state and federal regulators and cannot be enforced, a federal appeals court decided Thursday.

The decision concerns ordinances adopted by Shelby and Story counties that, among other provisions, set minimum distances the pipelines must be laid from houses, schools, medical facilities and other sites with people and livestock.

Summit Carbon Solutions, which sued the two counties in 2022, wants to build a pipeline system that would span more than 2,500 miles and transport captured carbon dioxide from ethanol plants in five states — including Iowa — to North Dakota for underground storage.

The company has received permission from state regulators for the first phase of its pipeline project in Iowa and is in the process of getting approval to expand it.

But it also must gain approval in South Dakota before it proceeds with construction, and that state has twice rejected its permit requests. Further, lawmakers there enacted a law this year that prevents the use of eminent domain to forcibly obtain land rights for the project, which imperils its future.

Iowa Gov. Kim Reynolds is contemplating whether to sign a similar bill into law.

Summit has sued six counties over their pipeline ordinances. The company's lawsuits against Bremer, Emmet, Kossuth and Palo Alto counties were paused pending the outcome of the appeals of the Shelby and Story lawsuits.

A federal judge sided with Summit in 2023 and issued injunctions to block Shelby and Story from enforcing the ordinances.

The county’s appeals of those decisions were consolidated and considered by a three-judge panel of the Eight Circuit U.S. Court of Appeals.

Importantly, the court’s Thursday ruling found that county ordinances that set rules for pipeline placement are trumped by federal authority over pipeline safety and state authority over pipeline routes.

The Shelby and Story ordinances would require pipeline companies to obtain county permits that, if denied, "would prohibit a pipeline company from building in a certain location, even if the (Iowa Utilities Commission) permits construction there," the appeals court decision said. "That possibility makes the pipeline company permitting requirements inconsistent with state law and thus preempted."

An attorney who represents the two counties did not immediately respond to a request to comment for this article. The decision can be appealed to the U.S. Supreme Court.

Summit, in a prepared statement, said the ruling "supports a consistent, lawful permitting process for critical infrastructure projects like ours."

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