SIOUX FALLS, S.D. (KELO) — Proposed carbon dioxide pipelines are not common carriers of a commodity and should not be allowed under South Dakota law to use eminent domain, according to supporters of a bill headed to the state House of Representatives.
The House State Affairs Committee approved a do-pass of amended House Bill 1133 that says a common carrier of a commodity is not a pipeline that transports material that is being disposed of underground. HB1133 now goes to the House for debate as early as Wednesday afternoon.
The legislation from Republican Rep. Karla Lems originally said, “Notwithstanding the provisions of this section, a company transporting carbon dioxide, by pipeline, is not a common carrier.”
Lems brought an amendment Monday removing that wording and adding two different sentences that now say, “(T)he term, commodity, means a product that is intended for commerce and is being transported to a point of distribution, consumption, or processing, within or outside of this state. The term does not include a product that is disposed of in geological storage or used in a manner that allows its owner, shipper, or the shipper’s customer to qualify for a tax credit or a direct payment, pursuant to 26 U.S.C. § 45Q.”
If CO2 is not a commodity as defined by HB 1133, it would mean Summit Carbon Solutions and Navigator would not be able to use eminent domain to secure easements for their proposed CO2 pipelines in South Dakota. Both companies have permit applications pending before the state Public Utilities Commission.
Committee member Republican Rep. Roger Chase said approval of HB1133 would likely kill the CO2 projects.
HB1133 would not keep CO2 pipeline projects from happening, “they can still do these projects,” said lawyer Brian Jorde, a supporter of HB1133. Jorde said he is working with several hundred South Dakota landowners who have concerns about the proposed CO2 projects including eminent domain.
“This is a start to level the playing field,” Jorde said of HB1133. Without the bill, companies such as Summit can use eminent domain as a threat, which means they may not be negotiating in good faith with landowners, Jorde said.
Chase, who voted against HB1133, said “CO2 is a commodity that is produced in South Dakota.” CO2 is being transported in trucks in the state, he said.
Cement plants, dry ice manufacturers and hand sanitizers do and can use CO2, Chase said. There is a company in his district that buys 850 to 900 ton of CO2 on an annual basis, he said. That CO2 comes from a South Dakota ethanol plant.
Representatives of Summit and Navigator said the goal is to secure voluntary easements. Navigator vice president for government and public affairs Elizabeth Burns-Thompson said the team that works with easements has ethics training. Using the threat of eminent domain is not acceptable, she said.
But several landowners who testified on Monday said their experiences have not been positive and because eminent domain is possible, it’s a threat.
Wendy Schultz, a landowner from near Watertown, cried as she said how the possibility of a CO2 pipeline on her property has stalled a dream to build a new home in the property.
“Our lives have been put on hold because of the uncertainty of (the CO2) project,” Schultz said. Her family is against eminent domain use by a private company on private land for private gain, she said.
The proposed projects have been controversial with a few hundred comments in opposition shared with the PUC, for example.
Landowner Ed Fischbach said he has served on a rural water board. Although it had the power to use eminent domain for a project, it did not need to, according to Fischbach. CO2 does not fit the common carrier standard for eminent domain, he said.
Burns-Thompson said CO2 is a commodity and pipelines would be common carriers. Navigator works with an ethanol plant in Hudson that captures CO2 on site. That CO2 is used in manufacturing and agriculture, she said.
While the CO2 that would be collected by the Navigator pipeline may be transported to an underground site in Illinois, the system is also built for other and future uses of CO2, Burns-Thompson said.
Discussion in the House Affairs Committee could be a preview of what’s in store for the full House. The committee passed HB1133 by a vote of 8 to 5.
Committee member Republican Rep. Hugh Bartels said HB1133 changes the rules during the game.
“If this had an effective date out in the future, I might be more inclined to do this,” Bartels said.
Bartels said eminent domain can be a tool used to get people to negotiate with electric transmission and similar projects. Some of the landowners who testified on Monday have not even negotiated with the CO2 pipeline, Bartels said.
Protecting an American dream like Schultz’s is one reason committee member Republican Rep. Jon Hansen said he’d vote in favor of HB1133. Hansen described it as a “big corporation” who would “crush her American dream.”