Summit Carbon pauses pipeline permit application after SD eminent domain bill passes

PIERRE — Summit Carbon Solutions’ multibillion-dollar carbon sequestration pipeline is in stasis.

Summit Carbon, an Ames, Iowa-based carbon pipeline developer, filed a Wednesday motion with the South Dakota Public Utilities Commission to suspend its permit application and extend the regulator’s deadline to issue said permit “indefinitely.”

The decision comes of the heels of the South Dakota Legislature passing House Bill 1052, a piece of legislation prohibiting developers from using eminent domain — a process in which utility companies and governments can take private property for public projects — to acquire land, construct or operate a carbon dioxide pipeline.

South Dakota Gov. Larry Rhoden signed the bill March 6, and the legislation will go into effect July 1.

In the Wednesday filing, Summit Carbon wrote the legislation affects the company’s ability to perform land surveys.

Pipeline developers conduct civil, biological and cultural surveys in order to determine the suitability of the land and the feasibility of constructing subsurface pipelines, as required by the state regulator’s permitting process.

“With the passage of HB 1052, the Applicant’s ability to obtain survey permission has changed,” the company stated. “However, the project must survey the route completely in order to inform the Commission of the constructability prior to obtaining a permit. The surveys which are necessarily required to inform the route decisions as to right of way will be significantly delayed.”

The company continued that the new law would delay future surveys, and that “the timelines involved in Commission action on this application are unrealistic.”

“The Applicant asks that the proceedings be paused for review and adjustment of the schedule until such time as the Applicant is prepared to proceed,” the company stated in its letter.

The Wednesday motion pauses Summit Carbon’s permit application but the company indicated it could resume the process at a later date.

Summit Carbon path through South Dakota unclear

In a Wednesday statement to the Argus Leader, the company said its request to change the permit schedule would allow staff more time to buy easements.

“Given these challenges, we have requested a review and adjustment of the schedule accordingly,” read the company’s statement. “Summit Carbon Solutions remains committed to working through this process and advancing the project in states that support energy and innovation.”

It is unclear how Summit Carbon will move forward with its plans in South Dakota, a state that would serve as a bridge between the developer’s North Dakota sequestration site and the 31 Iowa ethanol plants that may connect to the pipeline — 13 of which are facilities operated by POET, a Sioux Falls company that’s one of the largest biofuels producer in the world. Five POET-owned ethanol plants also are planned to connect to Summit Carbon’s South Dakota route.

Joshua Shields, POET’s Senior Vice President of Corporate Affairs, told the Argus Leader in a request for comment that the state’s impending changes to its eminent domain law represents a “setback” for the industry.

“Tens of thousands of South Dakota family farms and jobs depend on diverse and growing markets for biofuels and the only affordable and technologically-feasible way for South Dakota producers to continue to compete in those markets is with carbon capture,” Shields wrote. “While South Dakota’s new law is a setback, we will continue to explore all ways to capture the value of carbon for POET and our partners in agriculture.”

The Iowa Utilities Commission granted the carbon developer a permit to build its pipeline but conditioned its ability to begin construction on also obtaining permits from North Dakota and South Dakota regulators, according to the Des Moines Register. It has since received a permit from North Dakota though a group of landowners is appealing the state’s approval.

The South Dakota regulator denied the company’s first permit application in September 2023 after 19 months of hearings.

The developer’s initial plans were to build a carbon dioxide pipeline across five states, including South Dakota.

If built, the $8.9 billion transmission line would run about 2,500 miles across Iowa, Minnesota, Nebraska, North Dakota and South Dakota and connect to 57 ethanol plants along the way. More than 600 miles of pipeline would run through the Mount Rushmore State.

Summit Carbon, which has worked to obtain a construction permit since 2022, has faced stiff opposition in South Dakota, largely from rural, conservative landowners whose properties would be affected.

The company attempted to claim its right to the use of eminent domain when it filed more than 80 eminent domain lawsuits against South Dakota landowners in April 2023. About 160 South Dakotans were sued in the company’s pursuit of acquiring land easements, with most of those landowners declining to work with the company.

Opponents also often criticize the purported safety risks of carbon pipelines by pointing to a February 2020 emergency near Satartia, Mississippi, where a pipeline owned by Denbury Gulf Coast Pipelines burst after weeks of rain shifted soil around a pipeline weld and broke it. The resulting plume of carbon dioxide drifted to the nearby town, forcing the evacuation of about 200 residents and sending 45 people to local hospitals.

According to a 2022 Congressional Research Service report, prior to the Satartia accident, CO2 pipeline operators reported only one injury and no fatalities caused by regulated pipelines between 2002 and 2022.

In a separate ruling, South Dakota’s Public Utilities Commission in September 2023 unanimously denied an application by Navigator Heartland Greenway LLC to build a portion of its controversial carbon capture pipeline system in the state.

This article has been updated with additional information.