This story has been updated.
PIERRE, S.D. (KELO) — The South Dakota Public Utilities Commission is weighing in on the future of carbon dioxide pipelines in the state.
At a meeting on Wednesday, the members unanimously decided to deny the Navigator CO2 project’s permit application.
Chair Kristie Fiegen made the motion that commissioners Gary Hanson and Chris Nelson supported.
Fiegen noted that the company could still take other steps such as an appeal or reapplying.
Navigator’s lead attorney James Moore of Sioux Falls and the company’s vice president of environmental and regulatory matters Monica Howard immediately left the Capitol meeting room after the decision.
Moore told KELOLAND News outside the Capitol afterward that he wasn’t authorized by the company to comment on the decision or what the company’s next move might be. He referred the inquiries to a company spokeswoman.
Navigator’s statement said, “While we are disappointed with the recent decision to deny our permit application in South Dakota, our company remains committed to responsible infrastructure development. We will evaluate the written decision of the Public Utilities Commission once issued and determine our course of action in South Dakota thereafter. Our commitment to environmental stewardship and safety remains unwavering, and we will continue to pursue our permitting processes in the other regions we operate in.”
The commissioners said they didn’t discuss the decision beforehand. Prior to the vote, each of them read a lengthy explanation of the reasons for voting to deny.
The main vote came after the commissioners unanimously rejected a request from Navigator that they pre-empt pipeline ordinances that had been passed in Minnehaha and Moody counties. Commissioner Nelson described the pre-emption step, which the Legislature allows but had never been used, as “an extreme remedy.”
Explaining her reasons for denial of the permit, Fiegen said she wasn’t confident Navigator will comply with all state and local requirements. She cited Navigator’s failure to originally notify all landowners along the proposed route and the company’s refusal to share the results of the plume study until late in the hearing.
Fiegen also said Navigator could unduly affect the region’s development.
Commissioner Hanson said Navigator hadn’t met the burden of proof laid out in South Dakota law, hadn’t shown the willingness to comply with all applicable laws and rules and hadn’t always been cooperative with the PUC staff’s requests for information.
Hanson said all pipelines aren’t the same. “Unlike the natural gas and propane pipeline companies, Navigator is not a utility and is not distributing a product to consumers. The pipeline therefore does not need to be in the proximity of humans or livestock or economic growth areas of communities or farmsteads. The location of the natural gas lines in municipal areas were shown by Navigator to argue that hazardous pipelines can be in thriving communities. However, natural gas and propane and water provide fuel for homes, businesses and industry and to create electricity. CO2 pipelines do not,” Hanson said.
Commissioner Nelson said he would support the motion to deny but, for him, the question was closer than it was for Fiegen or Hanson. Nelson said Navigator hadn’t addressed the welfare of the inhabitants along the proposed route, which is one of the requirements in state permitting law. He cited the high percentages of landowners who refused Navigator’s offers to allow the line.
“While that’s certainly not one hundred percent of the landowners, to me it is a stunningly large percentage of landowners, many of them inhabitants who simply said, No. And so my conclusion is that this project would substantially impair the welfare of the inhabitants,” Nelson said.
About 30 landowners along Navigator’s proposed route and along the proposed route of the SCS Carbon Transport pipeline attended the Navigator decision Wednesday. So did Brett Koenecke and Cody Honeywell, two Pierre attorneys who have been representing SCS.
The state commission opens a hearing on the SCS application on September 11. There currently isn’t a CO2 pipeline in South Dakota.
Each lawyer in the Navigator docket received about 10 minutes to make closing arguments. Moore referred to the 12 years that he spent working on the Keystone XL oil-pipeline project that he said “ping-ponged” back and forth, based on which political party held the White House. The company finally gave up on the KXL project after Democrat Joe Biden pulled the permit needed to cross the border from Canada. “I don’t think that’s how pipeline dockets should be decided,” Moore said. “It should be decided on the evidence.”
Representing the landowners was attorney Brian Jorde from Omaha, who participated by phone Wednesday. He admitted he was wrong in pre-judging the commission’s and staff’s conduct. “The parties had a fair process, and that’s what we asked for,” he said.
Jorde reminded the commission that Navigator had the burden of proof. “And their best case just wasn’t good enough,” he said.