PIERRE, S.D. (KELO) — The state Public Utilities Commission faces three big choices on Wednesday about the future of carbon dioxide pipelines in South Dakota.

The first is whether to grant Navigator a permit to have a branch of its proposed pipeline go through five counties — Lincoln, Turner, Minnehaha, Moody and Brookings — and collect CO2 from ethanol production facilities at Aurora, Chancellor and Hudson.

The second is whether the state commission should override pipeline ordinances in Minnehaha and Moody counties. Those counties’ commissions adopted the ordinances this year, after Navigator had proposed its route. Navigator wants the ordinances overruled.

The third is what additional conditions, if any, Navigator should face if a permit is granted.

What the state commission decides in the Navigator matter, especially regarding pre-emption of county ordinances, could indicate a direction regarding a second company’s application for a CO2 pipeline permit. The hearing on SCS Carbon Transport starts September 11.

The SCS project would be much larger, running through 18 counties — alphabetically, Beadle, Brown, Clark, Codington, Edmunds, Hamlin, Hand, Hyde, Kingsbury, Lake, Lincoln, McCook, McPherson, Miner, Minnehaha, Spink, Sully and Turner — and would collect CO2 from seven ethanol facilities in South Dakota.

Here are concluding excerpts from the arguments filed by attorneys for the various sides in the Navigator fight. To read their full arguments, click on each blue highlight.

Navigator’s James Moore on why the permit should be granted:

“Navigator’s Project poses no serious threat to the environment or the inhabitants where it will be sited. While CO2 pipelines are new to South Dakota, they are not a new type of pipeline, and with respect to their design, construction, and operation, they differ very little from other
carbon-steel pipelines transporting hazardous liquids. Because Navigator has appropriately accounted for the toxicity of CO2 in the event of a release through careful plume modeling, conservative routing, rigorous operational controls, and well-planned emergency response, the Project will be safe.”

Landowner intervenors’ Brian Jorde on why the permit should be denied:

“Perhaps there will be a time and a place for hazardous CO2 pipeline made possible by 45Q tax credits and owned by Middle Eastern interests to be located through Brookings, Turner, Moody, Lincoln, and Minnehaha counties, but that time is not now, and the place is not the route Navigator requests. There are simply too many unanswered questions and too many unsatisfactorily answered questions.”

PUC staff’s Kristen Edwards on whether the permit should be approved:

“Each issue must be weighed using the preponderance of evidence standard. Is it more likely than not that Navigator has satisfied each requirement of SDCL 49-41B-22? Ultimately, this is a case of first impression, and Staff will not insert our judgment for that of the Commission in making this determination.

“Pursuant to SDCL 49-41B-24, the Commission may deny, approve, or approve the application with conditions. Should the Commission vote to deny the Application, Applicant has the opportunity to reapply with the issues narrowed to those criteria upon which the permit was denied. SDCL 49-41B-22.1 provides in relevant part
[u]pon the first such reapplication, the applicant shall have the
burden of proof to establish only those criteria upon which the
original permit was denied, provided that nothing in the
reapplication materially changes the information presented in the
original application regarding those criteria upon which the original
permit was not denied.

“Therefore, while Staff does not opine on the ultimate issue in this brief, Staff nonetheless
offers a number of conditions such that those conditions may either be attached to a permit if
granted or, if the permit is not granted, utilized to narrow the issues for any future reapplication.”

Navigator’s James Moore on why the county ordinances should be pre-empted:

“Navigator does not ask that the Commission declare that the Ordinances are
unenforceable and must be taken off the books. The limited relief Navigator requests is that
sanctioned by SDCL § 49-41B-28—a determination that as applied to Navigator’s proposed
route, the Ordinances are unreasonably restrictive and should not defeat the Commission’s
approval of Navigator’s permit under SDCL § 49-41B-22.”

Landowner intervenors Brian Jorde on why the county ordinances should be upheld:

“Ordinances by their nature are restrictive. They establish what can and cannot be
located in certain areas. Both Minnehaha and Moody Counties produced reasonable
ordinances after thoughtful debate and each have multiple paths for Navigator to get to
yes. Navigator has failed to prove how these ordinances are unreasonably restrictive.”

PUC staff’s Kristen Edwards on whether the two counties’ ordinances are too restrictive:

Regarding Minnehaha County: “Approximately 30 miles of the proposed route are in Minnehaha County. EH 368:17-19. Of that distance, 10.98 miles fall within the buffer established by the ordinance. N79, page 4. However, the fact that the route encroaches upon the 330-foot setback does not mean that the proposed route would violate MC16-179-23. Navigator has the ability to obtain waivers from the owners of the affected parcels or to apply for a conditional use permit (CUP). Exhibit M5, page 14. If Navigator was able to obtain waivers, the Project would be considered a special use, and Navigator would not need to apply to the county for a CUP. EH 3787:17-22. Navigator’s witness, Monica Howard, testified that there are 29 landowners who would need to sign a waiver. EH 3510:19-21. Navigator has not made an effort to obtain the waivers nor has Navigator filed for a CUP. EH 3513:9-12; EH 3518:21-24.

“Because avenues still exist for Navigator to comply with the Minnehaha County’s
ordinance, the proposed route does not violate MC16-179-23 at this time. Therefore, with
respect to this ordinance, the final sentence of SDCL 49-41B-28 is inapplicable, and the
Commission may exercise its preemption discretion accordingly, meaning the Commission may
choose to preempt MC16-179-23, but is not obligated to deny the permit if the ordinance is not

Regarding Moody County: “In conclusion, it appears without contention that the proposed route would not comply with Moody County Ordinance No. 2023-01. Therefore, absent a preemption
finding by this Commission, the proposed route may not be designated per SDCL 49-41B-28.”

Minnehaha County’s Alex Hagen on why the Minnehaha ordinance shouldn’t be pre-empted:

“There is no valid basis to preempt Minnehaha County’s Transmission Pipeline
Ordinance, and Navigator’s Motion should be rejected with respect to Minnehaha County.
Minnehaha County takes no position on whether Navigator has met its burden in establishing
that its project should receive a permit from the PUC. But if a permit is granted, Minnehaha
County joins in the recommendation of PUC staff that Navigator be subject to the condition that
it ‘shall comply with all applicable laws and regulations in its construction and operation of the
Project” and “shall obtain all permits required by the applicable federal, state, or local agency
prior to engaging in the particular activity covered by the permit.’”

Moody County’s Paul Lewis on why the Moody ordinance shouldn’t be pre-empted:

Regarding whether Moody County’s ordinance has a rational basis: “In 2002, Moody County enacted a Comprehensive Plan that established Agricultural Preservation policies. EH 3854:17 – 3855:14. Foremost among those policies is the protection of agricultural lands and rural areas from uses which interfere with, or are not compatible with, general farming practices. EH 3856:6-8.”

Regarding whether Moody County’s ordinance irrationally restricts Navigator: ” In bringing this section of the brief to a close, Moody County would conclude by asserting that Navigator’s request for preemption under SDCL 49-41B-28 is, by and large, based upon utter speculation. Throughout her testimony, Ms. Howard supposes that a conditional use permit might not obtained in Moody County, when, in fact, Navigator has not even made an application for a permit with the county. EH 3942:3-6. Respectfully, Moody County finds it irrational to be accused of being unreasonably restrictive before any action has begun.”

Here are the various sides’ proposed permit conditions:

PUC staff

Rural water group

Rural electric group