FORT PIERRE, S.D. (KELO) — The landowners against the project got to claim a victory Monday, as the South Dakota Public Utilities Commission denied the permit application from Summit Carbon Solutions for a proposed carbon-dioxide pipeline that was to serve four ethanol-producing companies.

But the rejection, which came on technical grounds, might be fleeting. Don’t be surprised when Summit applies again — and don’t be surprised if the next version of the pipeline is more ambitious, with a new leg to serve the Gevo aircraft-fuels plant that is planned at Lake Preston.

Governor Kristi Noem has touted the Gevo facility as the “largest economic investment in South Dakota history” and her lieutenant governor, Larry Rhoden, attended the September 15, 2022, groundbreaking. Likewise, Summit has noted the Gevo project on its website.

Nor would it be a surprise if the commission eventually approves Summit’s next application. Because, in the words spoken Monday by one of Summit’s attorneys, Brett Koenecke, carbon capture is “the future of agriculture.”

The commission’s denial Monday was based on Summit’s admission that the current project couldn’t get through four counties — Brown, McPherson, Spink and Minnehaha — because of local pipeline ordinances.

The commission last week had refused to grant Navigator’s request that the commission pre-empt pipeline ordinances in Minnehaha and Moody counties. Summit had likewise filed for pre-emption but withdrew its motion on Thursday. That decision in turn triggered the PUC staff’s motion Friday to deny Summit’s application.

The PUC staff’s lead attorney, Kristen Edwards, told the commissioners Monday that their refusal to grant Navigator’s pre-emption request presented Summit with “an impossible challenge.” But she also noted that state law allows an applicant to re-apply and said she expects Summit will.

As Koenecke argued to the commission Monday, Summit’s route would run through not only the four counties with pipeline ordinances, but through 14 other counties where pipeline ordinances weren’t enacted. He said 72% of landowners along the route had voluntarily granted easements.

“There is a broad base of support out there,” Koenecke said. He wanted the commission to go forward with the permit hearing. “We are here ready to prove the technical aspects of this application,” he said.  

Summit is also taking a step that Navigator didn’t — fighting in court for access across property of landowners who so far have refused to say yes. South Dakota law allows the power of eminent domain to be used for projects. Koenecke estimated Monday that Summit is engaged in 150 to 160 lawsuits seeking access.

Koenecke didn’t get what he wanted Monday. As it became clear the commission would consider denial, he shifted to asking for a 90-day continuation so that the company could pursue waivers from landowners. But commissioner Gary Hanson, a former Sioux Falls mayor and council member, expressed doubts about whether three months would be long enough.

Landowners opposed to the pipeline aren’t getting what they want, either. State senators last winter rejected legislation that the House had passed to remove common-carrier status for CO2 pipelines. A House-driven call for a special session hasn’t convinced the governor to call lawmakers back to the Capitol.

Monday marked the first day of a three-week hearing on Summit’s permit application. Acting Commissioner Josh Haeder called for denial.

“It is my estimation after listening to testimony today that Summit cannot demonstrate at this time or in the near future that they have the ability to route the pipeline as proposed. So I would just, I would say I appreciate the argument of the applicant today, but without pre-emption you make crystal clear in your pre-filed testimony that various counties make this impossible at this time,” Haeder said.

Before the vote on Haeder’s motion could be taken, commissioner Chris Nelson proposed instead an indefinite extension. “Everybody’s put a tremendous amount of work into this, and it doesn’t seem to me to be fair to throw all of that out with a motion to deny. Summit is saying with time they can cure these deficiencies. I don’t know if that’s true or not, but I’m willing to give them the opportunity,” Nelson said.

“We need a clean process here,” Hanson countered. “The applicant had a responsibility to be ready when they first came. Obviously, they were not.”

Nelson’s substitute motion failed 2-1. He then announced he would back denial. “As I look at the two sections of statute that we’ve been working on this morning, we could go through three weeks and we would have, we would have a lot of this issue resolved,” Nelson said.

But at the end of those three weeks, Nelson continued, he still didn’t see a way to get past section 1 of 49-41B-22 — the law requiring the proposed facility comply with all applicable laws and rules — or the last sentence of 49-41B-28, the law that says without a pre-emption finding by the commission, no route shall be designated which violates local land-use zoning, or building rules, or regulations, or ordinances.

“And so I’m going to support the motion, and we’ll start clean,” Nelson said.

Summit issued a news release, saying the company respects the decision and plans to refile. “SCS intends to do just that, to refine its proposal and reapply for a permit in a timely manner. SCS remains committed to the South Dakota ethanol industry and the growth of South Dakota’s energy industry,” the company’s statement said.