SIOUX FALLS, S.D. (KELO) — A bill that could prohibit two carbon dioxide (CO2) pipelines from using eminent domain in South Dakota passed the full House today.
House Bill 1133 will now move on to the Senate.
HB1133 defines a commodity as it relates to a common carrier. The definition has a role in the use of eminent domain. The House-approved bill says CO2 transported in a pipeline for underground burial and using federal tax credits such as Q45 is not a commodity transported in a common carrier and therefore, would not qualify for eminent domain use under state law.
Navigator and Summit Carbon Solutions are working with ethanol plants to capture CO2 for transport in a pipeline in parts of the state. Summit’s pipeline will travel across about 478 miles of the state in its 2,000 mile long route to North Dakota for underground burial. Navigator will travel fewer miles in its 1,300 mile long pipeline with burial in Illinois. Both projects involve several states including Iowa and Minnesota.
State law allows pipelines carrying commodities to use eminent domain to sure easements for projects. HB1133 is focused on commodity and common carrier but supporters drifted into eminent domain references during the discussion.
Legislators were reminded several times by House Speaker Pro Tempore Republican Rep. Mike Stevens to stick to the point of HB1133 which would define a commodity.
Republican Rep. Scott Moore said that CO2 pumped into the ground “never to be used again” is not a commodity. While some opponents to HB1133 said CO2 is being used in the state for dry ice and other uses, Moore said, that isn’t the case with underground storage.
“I disagree, I feel it is a commodity,” Republican Rep. Drew Peterson said. To him, whether or not the CO2 is used to carbonate a soft drink or put underground is not the issue, because it remains commodity, Peterson said.
Republican Rep. Hugh Bartels said HB1133 is directed to stop a pipeline project. “Changing the rules after a company has already invested in a proposed project will threaten the state’s business climate, in particular agriculture,” he said.
Supporters of HB1133 are “grasping at straws” by calling CO2 a waste product, citing the use of tax credit for a property, Bartels sad.
Democrat Rep. Oren Leismeister said HB1133 protects the agriculture industry. CO2 is a commodity when it is used for dry ice, in soft drinks and other products but “at this time the product is going straight into the ground. That’ s not a commodity, it’s a by-product,” Lesmeister said.