South Dakota Governor Larry Rhoden, a Republican, signed a bill on Thursday prohibiting the use of eminent domain for carbon dioxide pipelines, marking a significant win for property rights advocates who had lobbied for the measure for years.
The legislation, which passed the state Senate on Tuesday after clearing the House in late January, blocks developers of carbon pipelines from using eminent domain to acquire land.
This issue has been a point of controversy due to Iowa-based Summit Carbon Solutions’ proposed $9 billion carbon capture pipeline.
Summit’s project aims to transport CO2 from over 50 ethanol plants in five states, including South Dakota, to an underground storage site in North Dakota.
The project could qualify for billions of dollars in federal tax credits designed to incentivize the storage of carbon emissions.
In a letter explaining his decision, Rhoden, who is a rancher from western South Dakota and a former legislator, emphasized his long-standing commitment to property rights and portrayed the bill as a way to rebuild trust between landowners and developers.
Relevant: South Dakota House Blocks Eminent Domain For CO2 Pipelines
“l’ve fought for private property rights in this Capitol for over 20 years,” Rhoden wrote. “When I was a legislator, I was the prime sponsor of legislation that reformed eminent domain to protect property rights. I don’t just care about landowners — I am a landowner.”
Supporters of the new law argue that private companies like Summit should not have the power to seize land against the wishes of property owners.
However, opponents contend that the measure could negatively impact the ethanol industry, which is trying to reduce its carbon footprint as more states and nations impose restrictions on carbon-heavy fuels.
Relevant: Summit Carbon Solutions Reapplies For Pipeline Permit In South Dakota
American Carbon CEO Tom Buis said the “legislation comes at a time when South Dakota farmers and ethanol producers desperately need new markets to restore profitability. Instead of supporting economic growth, this decision creates unnecessary roadblocks and sends the wrong message to agriculture and rural communities.”
In a statement, Summit criticized the ban, claiming that it “changed the rules in the middle of the game.”
Rhoden expressed his belief that voluntary land-access agreements, known as easements, should be the preferred approach. He emphasized that his signing of the bill “does not kill the proposed project” and encourages Summit and others to pursue voluntary easements.
