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Ban on eminent domain for carbon capture pipelines makes it out of SD committee • South Dakota Searchlight [1]

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Date: 2025-01-24

South Dakota lawmakers endorsed a bill 10-3 on Friday in Pierre that would prohibit the use of eminent domain for carbon dioxide pipelines.

The vote occurred in a Capitol committee room packed with people interested in the issue. House Speaker Pro Tempore Karla Lems, R-Canton, who owns land near a proposed carbon pipeline route and introduced similar legislation during past sessions, is proposing the bill. She’s one of several lawmakers who campaigned against eminent domain for carbon pipelines and has since risen into leadership. The bill now heads to the full House of Representatives.

Eminent domain refers to the power to take private property for public use, with just compensation to the owner determined by a court.

“This is a power that can be lorded over landowners to threaten or coerce them into something that they would not normally do if they had the freedom to say ‘no thank you,’” Lems said.

The bill’s passage would be a major victory for pipeline opponents who have been rallying against the use of eminent domain for a $9 billion pipeline proposed by Iowa-based Summit Carbon Solutions. That project aims to transport some of the CO2 emitted by 57 ethanol plants in five states, including eastern South Dakota, to an underground storage site in North Dakota. The project would be eligible for billions in climate-change-related federal tax credits, for preventing the release of heat-trapping carbon into the atmosphere.

Supporters of the bill said Friday that carbon sequestration pipelines should not qualify for eminent domain because the product they transport — captured carbon dioxide — does not serve a public use like pipelines that carry water, electricity or natural gas. They said a South Dakota Supreme Court ruling that Summit’s project has failed to prove its eligibility for eminent domain is proof of their argument. That case was sent back to a lower court, where Summit is still attempting to prove its project qualifies for eminent domain.

“Eminent domain is a power that should only be reserved for the government or in the rare cases where it serves all of us,” said Jeremiah Murphy, lobbyist for the South Dakota Stockgrowers Association. “Because it is a phenomenal power.”

Opponents of the bill said blocking the pipeline comes with broader implications for the ethanol industry and the two-thirds of South Dakota corn that’s made into the gasoline additive. They said carbon capture technology is needed for ethanol to meet regulatory requirements in climate-change-concerned markets around the globe.

“Eminent domain pulls people to the table and gets them to start talking so that we can engage in the kind of conversations that can result in success,” said Brett Koenecke, lobbyist for Summit.

Pipeline supporters also said the state will lose out on a proposed sustainable aviation fuel plant near Lake Preston if the eminent domain bill passes. The company proposing that project, Gevo, has said it needs the carbon capture pipeline to meet its sustainability goals.

“I don’t think a state that changes rules like this is going to be strong when it comes to inviting investment,” said David Owen, lobbyist for the South Dakota Chamber of Commerce and Industry.

Neither Gov. Kristi Noem nor Lt. Gov. Larry Rhoden — who will take over for Noem if the U.S. Senate confirms her nomination as secretary of Homeland Security — have signaled whether they would sign the bill into law.

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[1] Url: https://southdakotasearchlight.com/2025/01/24/ban-on-eminent-domain-for-carbon-capture-pipelines-makes-it-out-of-sd-committee/

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