South Dakota lawmakers seek to slow CO2 pipelines

PIERRE, S.D. — South Dakota lawmakers advanced bills Friday at the Capitol that would put a moratorium on carbon dioxide pipelines until new federal safety rules are finalized, and would authorize landowners to sue pipeline companies for the alleged abuses of their land agents.

The bills don’t name Summit Carbon Solutions, but they’re a response to the Iowa company’s proposed $9 billion, five-state pipeline that would pass through eastern South Dakota in addition to Iowa, Minnesota and Nebraska on its way to North Dakota.

It would collect carbon dioxide emitted by more than 50 ethanol plants and transport it for underground storage in North Dakota, to capitalize on federal tax credits incentivizing the prevention of heat-trapping emissions into the atmosphere.

Land agent bill

South Dakota Rep. Kaley Nolz, R-Mitchell, is the main sponsor of a bill that would authorize lawsuits by that state’s landowners who allege they’ve suffered from deception, fraud, harassment, intimidation or misrepresentation by a land agent for a CO2 pipeline company.

Landowners who file a suit within 12 months of the behavior and prove the allegations to a court could have their agreement with a company voided. The bill allows for an award of damages up to three times the amount of the agreement or highest offer.

Several landowners testified and alleged they’d been contacted by pipeline land agents who claimed that the landowners’ neighbors had signed agreements, only to find out later that wasn’t true. Nolz filed the bill in response to those complaints.

“Clearly, the existing laws were not enough deterrence,” Nolz said.

Members of the committee who opposed the bill said the alleged abuses are already illegal.

Justin Bell, a lobbyist for Summit, said the bill could lead to excessive litigation and unfair targeting of one project’s land agreements — or easements — while not addressing similar agreements for other projects.

“I’m not sure I understand why, if this truly is happening and is a problem, why this would be limited to just one form of easement,” Bell said.

The legislation additionally includes a provision requiring land agents for CO2 pipelines to be a company employee, a resident of the state or a real estate agent licensed in the state. A similar provision was part of a broader package of pipeline law reforms passed by the Legislature last year that was tossed out by South Dakota voters in November.

The committee voted 8-4 to send the bill to the House floor.

Moratorium bill

South Dakota Rep. Richard Vasgaard, R-Centerville, is the main sponsor of the moratorium bill.

“This pipeline is going to be in the ground for a long time,” Vasgaard said. “Let’s make sure it’s done right.”

The legislation would bar that state’s Public Utilities Commission from permitting carbon dioxide pipelines until the federal Pipeline and Hazardous Materials Safety Administration adopts its new safety rules for the pipelines. The administration issued proposed rules last month and will finalize them sometime after a 60-day public comment period.

A lobbyist for Summit testified against the moratorium, saying it would take authority from the state Public Utilities Commission and hand it to the federal government. A majority of the House Commerce and Energy Committee disagreed and sent the bill to the House on a 7-6 vote.

Eminent domain bills pending

Among other pending pipeline bills is one that would ban the use of eminent domain by CO2 pipeline companies. Eminent domain is a legal process for obtaining land access from unwilling landowners for a project beneficial to the public — traditionally for electrical power lines, crude oil pipelines, water pipelines and highways. That bill has passed the House and is awaiting action by a Senate committee.

Another bill pending in the Senate would retain eminent domain as an option, but require entities using it to first attend mediation with the affected landowner and to also have a Public Utilities Commission permit before commencing eminent domain proceedings. That bill failed Friday in a close Senate vote with two members absent. The sponsor, Senate Majority Leader Jim Mehlhaff, R-Pierre, announced his intent have it reconsidered next week.

This article first appeared in the South Dakota Searchlight.