Lawmakers pass legislative package of pipeline bills, easing Summit Carbon's CO2 project into SD

Summit Carbon Solutions passed a legislative hurdle in 2023, when a House bill attempted to disqualify them from eminent domain rights because their pipeline was focused on sequestration.

One year later, the Iowa-based company has a new path forward — with caveats abound — to build their sequestration line in South Dakota, after a series of heavily lobbied and extensively debated pipeline-related bills.

On Wednesday, the South Dakota House and Senate heard and voted to pass three amended pipeline bills — Senate Bill 201, House Bill 1185, and House Bill 1186 — one more time, officially sending the legislative package drafted by the chamber's leadership to Gov. Kristi Noem's desk.

All three bills received amendments from legislators opposite of their originating chamber prior to the Wednesday vote. This triggered the creation of a conference committee to discuss compromises on each piece of legislation earlier in the day, and all three were passed.

In a release sent minutes before the House vote, Noem released a statement indicating her support for Senate Bill 201, one of the bills discussed in the chambers, which includes an extensive provision termed the "Landowner Bill of Rights," which proponents tout as a series of landowner protections.

“I stand with South Dakota landowners and always will,” said Governor Kristi Noem. “I am looking forward to signing a Landowner Bill of Rights that will provide new protections for landowners and allow for economic growth to move forward through a transparent process.”

More: After heavy debate, SD House passes bill to lay the groundwork for Summit Carbon's pipeline

The bills in the legislative package were drafted by Rep. Will Mortenson, R-Fort Pierre, and Sen. Casey Crabtree, R-Madison, majority leaders of their respective chambers.

SB 201 is a bill which allows counties to impose a $1 per linear foot annual surcharge on pipelines — 50% of which would go towards tax relief for property in the county, with the rest being spent within the county's discretion — while also allowing a permitted pipeline to supersede or preempt local county or municipal zoning, building and safety ordinances, unless following an specific ordinances is a condition of the permit.

It would also require pipeline companies to release their dispersion models — a simulated depiction of the release of hazardous carbon dioxide following a pipeline rupture event — to the South Dakota Public Utilities Commission, a state regulatory body. The commission, within the scope of SB 201, would then have to share relevant modeling data with counties, local emergency managers, and law enforcement agencies.

SB 201's "Landowner Bill of Rights" provisions include 15 protections for property owners whose land runs along with a carbon dioxide pipeline.

This lengthy section of the likely-to-be-passed legislation requires pipeline developers, who have entered into an easement with a landowner, to bury their pipeline "below the level of cultivation"; repair damage to drain tile; accept liability for leaks or repairs; compensate landowners for harm or loss in the event of leaks, repairs, ruptures and other failures; file an agricultural mitigation impact plan; and follow the various provisions enabled in the bill.

Senate lawmakers voted 24-10 in favor of SB 201; House passed the bill 39-31.

HB 1185, another pipeline bill, requires pipeline and transmission developers to provide more detailed notice ahead of planned land surveys and examinations. It would also require developers to pay landowners $500 before sending surveyors to intrude on a landowner's property.

The bill also codifies a landowner’s right to challenge surveys and examinations and provides an in-statute definition of a survey and examination.

The bill was spurred by a series of controversial surveys conducted by Summit Carbon, which plans to build a multi-billion-dollar pipeline system through eastern South Dakota, Iowa, Minnesota, Nebraska and North Dakota.

Multiple landowners sued Summit Carbon last year after the company provided notice of intent to survey their rural lands. The lawsuit was an attempt to stop the surveys from occurring, but Fifth Judicial Circuit Judge Richard Sommers sided with the company in the cases and issued an order on April 21 to prohibit the landowners from interfering.

House lawmakers voted 42-28 in favor of HB 1185; Senate passed the bill 29-5.

Lawmakers also considered HB 1186, a bill which defines the requirements for granting a carbon pipeline easement. The legislation limits the maximum duration of an easement to 50 years. This would prevent pipeline companies from signing a perpetual easement with landowners, which then could allow them to use their property for carbon transportation indefinitely.

A previous version of the bill would have provided landowners with a payment of $1 per linear foot of carbon pipeline on their property, with payments beginning on an annual basis once the pipeline comes in full operation. This provision was later stripped and remodeled to apply toward counties in SB 201.

Past coverage: Two pipeline bills passed a House committee. Landowners say their core concerns remain

House lawmakers voted 41-29 in favor of HB 1186; Senate passed the bill 24-10.

In a statement, Summit Carbon said the "Landowner Bill of Rights" would provide "significant landowner protections while ensuring regulatory certainty and promoting the future of the ethanol industry."

"Thank you, South Dakota legislators, particularly Leaders Crabtree and Mortenson, for their work on this landmark legislation, which is a win-win scenario for all involved," Lee Blank, CEO of Summit Carbon Solutions, said. “We appreciate the attention and engagement from so many South Dakotans, especially our partners and agricultural leaders. We look forward to doing our part to create and maintain successful relationships going forward."

Walt Wendland, SD Ethanol Producers Association Board President and CEO of Onida-based Ringneck Energy, applauded the legislature in a release for passing the three bills, which he called "pro-landowner, pro-business, pro-farmer, and pro-ethanol."

"Thank you to Leader Crabtree and Leader Mortenson for their steadfast determination to make sure this was a good deal for landowners and for businesses looking to create long-lasting economic development in this state," Wendland said. "We applaud the South Dakota legislators who supported farmers, landowners, and ethanol with this compromise"

Chase Jensen, a lobbyist for Dakota Rural Action, said in a statement to Argus Leader the passage of the bills was a "step backwards for South Dakota." He also ascribed the motivation of the bills to Summit Carbon, saying the company was "successful in their clear attempt to change the rules of our permitting process to provide a more certain outcome for their next permit application."

"Dakota Rural Action is disappointed by the three 'package' pipeline bills, which failed to address the root issues brought about by recent carbon dioxide pipeline projects," Jensen said. "The so-called "landowner bill of rights," touted as the strongest landowner protections in the country, does nothing to stop private for-profit companies from exercising the right of eminent domain to force private landowners into easements against their will.

This article originally appeared on Sioux Falls Argus Leader: Compromise pipeline bills pass SD House and Senate, await Noem's signature