SIOUX FALLS, S.D. (KELO) — A bill that would have denied the ability of two proposed carbon dioxide pipelines from using eminent domain was killed in a Senate committee Thursday.
The Senate Commerce and Energy Committee voted unanimously to send HB1133 to the 41st day which kills the bill, because the Legislature is in session for 38 days this year.
While two committee members arrived at their conclusion from differing viewpoints, Republican Sen. Lee Schoenbeck and Democrat Sen. Reynold Nesiba said their votes were in support of the future of the ethanol industry in the state.
HB1133 would have defined a commodity for the purpose of qualifying as a common carrier. It said that CO2 pipeline projects that transport the CO2 to be buried underground and use tax credits such as 45Q do not carry a commodity and do not qualify for use of eminent domain. The House approved HB1133 on Feb. 9.
Summit Carbon Solutions and Navigator are in the process of securing easements for their individual CO2 pipeline projects. Both projects would capture CO2 at ethanol plants for transport to underground storage. Summit would bury the CO2 at a site in North Dakota and Navigator would bury the CO2 at a site in Illinois.
“CO2 is a commodity and me trying to say different doesn’t make it so,” Nesiba said.
Republican Sen. Bryan Breitling sponsored the bill in the Senate. Because the CO2 would be buried in the ground it is not a commodity, he told the committee, and it’s not the same as a pipeline carrying CO2 to be used in carbonated beverages or in plastics.
Landowner and HB1133 supporter Joy Hohn said the bill would level the playing field between landowners and larger companies because it removes the threat of eminent domain.
Schoenbeck said a circuit court judge in South Dakota has already ruled that the CO2 transported in the planned pipelines is a commodity.
“It is a commodity,” Schoenbeck said as he pointed out that landowners initiated that lawsuit and lost.
Officials from Navigator, Summit and the state’s ethanol industry said the CO2 projects are critical to the future of ethanol as capturing and eventual burial of CO2 helps lower the carbon footprint of the industry. The ethanol industry must lower its carbon footprint to meet carbon standards in states such that consume a lot of ethanol, such as California.
Elizabeth Burns-Thompson of Navigator said her company already works with at least one ethanol plant in the state that provides CO2 to a manufacturer in the state. The planned CO2 pipeline is the “backbone” for future uses of CO2, she said.
“I started out as an opponent of the (planned CO2 project…(thinking) the whole green thing was stupid,” Schoenbeck said. “I’ve evolved.”
As he learned more from ethanol officials, he changed his mind, because the ethanol industry needs to work within the structure as it exists, Schoenbeck said, even if the rules may still seem stupid. The ethanol industry needs to lower its carbon footprint to stay economically viable, he said. Plants with access to CO2 pipelines will be able to sell ethanol in states like California and those that don’t have access will not be economically viable, he said.
Nesiba said he believes there is a need to lower carbon footprints and for green energy. The state needs to protect domestic energy. “South Dakota is poised to be a leader in green energy,” he said. A vote to send the bill was a vote in favor of corn producers and the ethanol industry, he said.
Supporters of HB1133 said passing the bill would not be changing the rules against the proposed pipelines and that it would not stop the projects.
Committee member Republican Casey Crabtree said, “Voting for this is changing the rules.”
Crabtree said constituents had contacted him to do what he could to ensure the future of the ethanol industry.