Carbon Pipeline Company Files for Pause or Dismissal of Legal Fights in South Dakota

By Joshua Haiar

A carbon dioxide pipeline company has asked courts to pause or dismiss its pending legal fights against landowners and a state regulator in South Dakota after the state’s adoption of a law that prevents the company from using eminent domain.

Eminent domain is a legal process for acquiring access to land for projects that have a public benefit, with compensation for landowners determined by a court. It’s commonly used for projects such as electrical power lines, water pipelines, oil pipelines and highways.

Some South Dakota landowners who oppose the Summit Carbon Solutions project sued to stop the company from surveying their property. They argued that doing so without just compensation was unconstitutional because soil sampling and other invasive practices would occur.

Summit said it had a right to survey the land because it had eminent domain authority. The company sued some landowners as well.

The disputes ultimately reached the South Dakota Supreme Court, which determined Summit had not yet proven it meets the legal qualification for using eminent domain, and sent the cases back to lower courts. Lawsuits in which Summit no longer needed to survey the land in question — because an agreement was reached or the route was changed — were then dismissed, leaving four cases remaining.

Summit filed a motion to dismiss those cases on March 20, two weeks after Republican Gov. Larry Rhoden signed the bill barring carbon pipeline projects from using eminent domain.

Regulator Case Paused

Meanwhile, a judge has paused Summit’s legal effort to remove an elected state regulator from its pipeline permitting case. Summit alleged the regulator has a conflict of interest. The company cited the eminent domain ban as part of its rationale for seeking a stay in the case.

South Dakota Public Utilities Commissioner Kristie Fiegen’s sister-in-law is part of a trust that owns land on the proposed pipeline route. Fiegen declined to recuse herself from Summit’s permit application, and Summit sued to disqualify her from considering the permit.

Both Summit and the state agreed to indefinitely stay the case, and a judge entered the stay on March 14.

Permit Pause Sought

Summit has also requested a pause for “review and adjustment” of its permit proceedings with the South Dakota Public Utilities Commission. The commission rejected Summit’s first application in 2023, largely due to the route’s conflicts with local ordinances that mandate minimum distances between pipelines and existing features. Summit later adjusted its route and reapplied.

The eminent domain ban has been hailed as a victory by some landowners who have resisted Iowa-based Summit’s proposed $9 billion project. The pipeline would transport carbon dioxide emissions from dozens of ethanol plants in five states to an underground storage site in North Dakota. It would qualify for billions in federal tax credits incentivizing the sequestration of heat-trapping greenhouse gas emissions.

The project has permits in North Dakota, Minnesota, and Iowa, although some permits are being challenged in court. Nebraska does not have a permitting process.

Summit has said it is not giving up on the project.

“In South Dakota, recent legislative changes have temporarily slowed our timeline, but they have not altered our vision or our determination,” said Summit CEO Lee Blank in a press release. “We remain confident that our project is moving forward in a way that benefits farmers, ethanol producers, and rural communities.”

This story was originally published by South Dakota Searchlight, which is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. South Dakota Searchlight maintains editorial independence. Contact Editor Seth Tupper for questions: [email protected].

Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: [email protected]. Follow Iowa Capital Dispatch on Facebook and Twitter.