Polarizing pipeline law on South Dakota ballot

A proposed $8.9 billion carbon dioxide-capture pipeline that has polarized the Corn Belt is facing one of its biggest obstacles yet: Election Day.

When South Dakota voters cast their presidential-year ballots Nov. 5, they’ll also decide whether to reject or keep a law passed earlier this year that’s viewed by opponents as pro-pipeline. If the measure is scrapped, it would be a major blow in a series of setbacks for Summit Carbon Solutions’ project — with critics hoping it could be the death knell they’ve been waiting for.

Landowners already told a rival company “to pack up and get out of South Dakota, and we’re going to tell Summit Carbon Solutions to do the same,” rancher Amanda Radke said at a recent referendum-related event in the South Dakota city of Watertown.

Critics say a repeal of the law would restore authority to local communities as opposed to consolidating control over pipelines in the South Dakota state capital.

Summit denies it would throw in the towel on the roughly 2,500-mile pipeline expected to run through Iowa, Nebraska, Minnesota and the Dakotas if voters toss out the law. Proponents of the measure say the long-delayed pipeline is crucial for ensuring corn remains America’s biggest and most profitable farm crop by keeping ethanol in the political conversation as other fuel sources get cleaner.

“If we can add value to our 800 million bushels of corn, the potential impact is massive,” said former South Dakota Agriculture Secretary Walt Bones, who is engaged in talks with Summit for access to his land for a segment of its route. “This is a huge opportunity for South Dakota; we need to make it happen.”

The division around the upcoming referendum mirrors wider disagreement over the pipeline itself, which seeks to capture and store carbon dioxide emitted from factories making corn-based ethanol. The project is billed as a lifeline for an industry racing to become more climate friendly so it can benefit from new markets like sustainable aviation fuel. That’s especially important as battery-powered cars may slash demand for the corn-based fuel.

But a slice of landowners has balked at the project, including a spattering of corn farmers who the pipeline pledges to benefit.

The law up for referendum, known as Referred Law 21, is so divisive that its supporters and critics don’t even call it the same name. Opponents dub it a “Pipeline Bill of Rights,” arguing the measure allows for easier approval. Backers, who want to keep what they’ve dubbed a “Landowner Bill of Rights” on the books, claim it offers valuable protection for residents who end up in negotiations for access to their property, like ensuring they won’t be on the hook if there’s damage to the land.

“It ensures carbon pipeline projects respect landowners while securing the future of ethanol and agriculture in South Dakota,” Summit spokeswoman Sabrina Zenor said in a statement. Regardless, Summit plans to reapply for a permit in South Dakota after the state rejected a previous application last year, she said.

Iowa regulators announced in August they had approved a permit for Summit, but said the company cannot start construction in the state until it gets approval from regulators in the Dakotas. North Dakota is reconsidering an amended pipeline route there. Summit also is asking Iowa regulators to expand its route in that state to connect more ethanol plants to the pipeline.

Summit says it continues to talk with landowners and is confident in its ability to work toward more voluntary agreements with property owners. It says about 75 percent of landowners along the previous route through South Dakota already had signed on, many of whom also will be part of any redrawn pipeline map.

Summit’s proposed CO2 pipeline is the last major one standing after a BlackRock Inc.-backed plan, Navigator CO2, was scrapped last year in the face of regulatory obstacles and opposition from landowners.

The smaller proposed Wolf Carbon Solutions pipeline, which would cut through Eastern Iowa including Cedar Rapids, has struggled to get off the ground.

One of the main complaints about the South Dakota law, which has been put on hold until July 2025, is that it doesn’t address the use of eminent domain to acquire easements from unwilling landowners — a top issue for the opposition. Rather, critics say it reads like the law was written for the benefit of Summit and its investors and partners.

“You think they’ve got your interest in mind?” farmer Ed Fischbach, a member of a group opposed to the use of eminent domain for private gain, said at the Watertown event. That same evening, the South Dakota Chamber of Commerce and Industry hosted an invite-only panel discussion with Jim Seurer, chief executive officer of ethanol producer Glacial Lakes Energy LLC, and others pitching the importance of keeping the law on the books, according to a local report. “All those people could have been in Watertown for a discussion and instead they’re having hors d’oeuvres and cocktails with the South Dakota Chamber of Commerce.”

Seurer, whose company has partnered with the Summit project, warns the future of the sector isn’t so clear without the pipeline. “The ethanol industry has got to evolve,” he said in an interview. “To sit out here in what’s sometimes called flyover country and just bury our heads in the sand and say we are going to do our own thing isn’t a good long-term business plan.”

The push to keep the measure on the books has led to an advertising blitz throughout the state. Glacial Lakes and other ethanol producers together contributed close to $2.2 million in the five months through Oct. 16 to help fund “Vote Yes for a Strong South Dakota.” The opposition side says it has $30,000 budgeted for its campaign, which is focused on social media. The grassroots effort pushing to repeal the law raised $10,000 this fall with an auction of homemade pies that sold for $100 to $200 each, according to Radke.

“We can’t compete with them on TV ads,” Fischbach said. “It’s just non-stop with ads running 10 to 12 times a day during key programming times.”