This story has been updated.
FORT PIERRE, S.D. (KELO) — A state legislator was the first of more than a half-dozen landowners Tuesday who told the South Dakota Public Utilities Commission why they don’t want Navigator’s proposed carbon-dioxide line to be permitted anywhere in the state.
Republican Rep. Karla Lems from rural Canton spent several hours on the witness stand. She was the prime sponsor of HB1133, which sought to ban carbon-dioxide from being defined as a common carrier under certain circumstances and, in turn, make a project no longer eligible to use eminent domain to force access through a property. The House of Representatives approved her bill, but a Senate committee killed it.
Lems’ testimony followed hours of explanation from a Navigator-affiliated official about safety steps that the company plans to take for the line. Lems said she hadn’t heard anything that reduced her concern. “It literally could wipe somebody out,” she said.
Lems said she tried to sell at auction some agricultural-zoned property in Lincoln County that carry what’s known as ‘housing eligibility.’ In Lincoln County, that eligibility would allow a house to be built on each 40-acre tract. The property was withdrawn from the market after attracting bids that were lower-priced than she expected.
Meanwhile, other properties without the prospect of what she described as a hazardous pipeline sold for higher amounts. Lens said she concluded that a potential CO2 pipeline hurt the market value of her properties.
Navigator wants to run about 13,000 feet of CO2 pipeline through other pieces of property that her family owns. She said the family leases its agricultural land to various tenants who pay according to productivity. “Therefore we’re taking land out of productivity. It’s less money for us. It’s less money for him,” Lems said.
Under cross-examination, Lems told Melanie Carpenter, one of Navigator’s attorneys from Sioux Falls, that she hadn’t tried to negotiate any easement terms or crop-damage payments with Navigator. Lems denied she was waiting for the PUC to decide whether to grant the permit.
Lems acknowledged that the Northern natural-gas pipeline runs through some of the family’s farm ground. She said the property was insured and farming took place over the line. One of her estimated 10-plus tenants had told he wouldn’t farm over a Navigator easement, she said.
She didn’t know how much of the corn that tenants grow on her family’s ground was sold to ethanol plants. Navigator plans to collect CO2 from the Valero ethanol plant at Aurora and POET ethanol plants at Chancellor and Hudson. The CO2 would be shipped to Illinois for disposal.
“I can tell you some of them said they’re not going to take it to the ethanol plant anymore,” Lems said. She acknowledged that her mother is an investor in an ethanol plant.
William Taylor, a Sioux Falls attorney representing several labor unions that would build the Navigator line, pointed out through his questions to Lems that numerous pipelines cross through Lems’ legislative district. He also noted through his questions that several of Sioux Falls’ higher-priced housing areas have pipelines running beneath them. Lems emphasized that those lines are for products that the public uses.
Taylor asked what Lems meant by “in the public use.” She answered, “I meant something that is used frequently by a majority of the public.” Under further questions, Lems acknowledged that several of the pipelines didn’t carry products that South Dakotans use.
Lems agreed with Taylor’s question that the PUC has no greater authority than the Legislature has given. He asked her to show the state law that allows the PUC to tell a company where to put its route. State law only lets the commission decide where a project shouldn’t go.
Said Lems, “I believe that if they (PUC) rule in favor of granting a permit for a project as a common carrier, it then allows that company to move forward and have a project.” Then the company can use eminent domain to force access through a property owner’s land, she said: “It’s a chain link.”
Commission chair Kristie Fiegen asked for more information about the history of Lems’ late father purchasing properties. Lems said some of the land has been held for 15 years waiting for “the right moment, the right person” to come along.
Regarding what sets CO2 apart from other commodities, Lems said, “I believe that we can see organically that it obviously is different.” She said there were no outcries against water or natural gas or electricity lines. “This is different. It is different because people don’t see it as a public use,” she said. She added, “You can clean up an oil spill. Yes, there are some dangers with natural gas, but not the possibility that you could see with a CO2 pipeline.”
In answer to a question from commissioner Gary Hanson, Lems agreed that she was aware that Navigator hasn’t pursued eminent domain against any property in South Dakota at this time. Commissioner Chris Nelson asked whether some things are more valuable than dollars and cents.
“Absolutely,” Lems said. She disagreed with the company being able to force its way onto private property and said the safety questions were “very, very huge.”
“We can have the best safety mechanisms in place, and we can still have an accident,” Lems said. Nor does she want her family or neighbors or anyone who buys property from the family her property to face that threat.
Lems also dislikes that BlackRock has provided financing for the project, in part because the investment group has recently established a financial relationship with the United Arab Emirates. “The foreign ownership itself is enough for me to say I don’t want to do business with this company,” she said. “I don’t feel my morals and values line up with that company and I don’t feel they are friendly to most of South Dakota’s patriotic values.”
People should have the right to say, No thank you, Lems said. Commissioner Nelson noted that one of the criteria the Legislature set for PUC permits is whether a trans-state facility would “substantially impair the health, safety or welfare of the inhabitants.”
“Well I definitely feel it could impair if we had a rupture,” Lems said. She said Navigator’s pipeline would require people to be on a higher awareness of a potential leak or rupture. “I don’t want to have to live that way, and I don’t want to put it on anyone else to have to live that way.” She said maybe “moral duty” needs to be added to the siting criteria.
“If you allow this to go through the commission could change the lives of hundreds of rural families forever,” Myrlie said.
“I just hope things work out for everybody,” commissioner Hanson replied.
The hearing continues at 8 a.m. CT Wednesday.