South Dakota lawmakers ban eminent domain for CO2 pipelines

A four-year controversy that has shaken South Dakota’s Republican political establishment culminated this week in the Legislature’s passage of a ban on eminent domain for carbon dioxide pipelines.

The South Dakota Senate voted 23-12 Tuesday to approve the bill, which previously passed the South Dakota House, and to send it to Republican Gov. Larry Rhoden for his signature or veto.

He declined to state his position on the bill during recent news conferences. His spokeswoman issued a statement Tuesday in response to a question from South Dakota Searchlight:

“Governor Rhoden is committed to protecting landowner rights and keeping South Dakota Open for Opportunity,” the statement 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.”

The legislation would prohibit carbon pipeline companies from acquiring land for easements by eminent domain. That’s the right to access private property for projects that benefit the public, with just compensation determined by a court. Eminent domain commonly is used for projects such as electrical power lines, water pipelines, oil pipelines and highways.

Sen. Tom Pischke, R-Dell Rapids, supported the bill. He called it a response to an outcry from landowners.

“Private companies should not be able to take South Dakotans’ land against their will,” Pischke said.

Sen. Mark Lapka, R-Leola, also supported the legislation.

“I don’t want to see us go down a path where eminent domain becomes a way of doing business,” he said.

Lapka owns land near the proposed route of Iowa-based Summit Carbon Solutions’ proposed $9 billion pipeline. So does the bill’s main House sponsor, Rep. Karla Lems, R-Canton.

The pipeline would transport carbon dioxide captured from more than 50 ethanol plants in five states, including Iowa, to an underground storage site in North Dakota. The project would qualify for billions in federal tax credits incentivizing the sequestration of heat-trapping greenhouse gas emissions.

Summit issued a statement after the bill’s passage.

“Summit Carbon Solutions has been inclusive — signing easement agreements with more than 500 landowners, working with nearly every ethanol plant, and ensuring economic benefits for farmers and ethanol producers in the upper Midwest,” the statement said, in part.

The company labeled its project as important to “American energy dominance” and said “South Dakota should be part of that future.”

Summit was denied a permit by South Dakota’s Public Utilities Commission in 2023, largely due to the route’s conflicts with local ordinances that mandate minimum distances between pipelines and existing features. The company has since made some adjustments to its route and reapplied, and that application is pending.

The project has received permits in Iowa, Minnesota and North Dakota, while Nebraska does not have a permitting process, and some of the permits have been challenged in court.

Lapka and Lems are among the legislators who were motivated to run for office by their opposition to Summit’s potential use of eminent domain. The company has voluntary agreements for easements with some landowners but likely will need eminent domain to complete its project. Summit’s eligibility to use eminent domain in South Dakota also is being challenged in court.

South Dakota Searchlight’s Seth Tupper and Makenzie Huber contributed to this report. This article first appeared, in an unabridged version, in the South Dakota Searchlight.