SD Lawmakers Advance Carbon Pipeline Moratorium and Land Agent Regulation

By Seth Tupper

South Dakota lawmakers advanced bills Friday at the Capitol in Pierre that would put a moratorium on carbon dioxide pipelines until new federal safety rules are finalized, and would authorize landowners to sue pipeline companies for the alleged abuses of their land agents.

The bills don’t name Summit Carbon Solutions, but they’re a response to the Iowa company’s proposed $9 billion, five-state pipeline that would pass through eastern South Dakota. It would collect carbon dioxide emitted by more than 50 ethanol plants and transport it for underground storage in North Dakota, to capitalize on federal tax credits incentivizing the prevention of heat-trapping emissions into the atmosphere.

Land Agent Bill

Rep. Kaley Nolz, R-Mitchell, is the main sponsor of the bill that would authorize lawsuits by landowners who allege they’ve suffered from deception, fraud, harassment, intimidation or misrepresentation by a land agent for a carbon pipeline company.

Landowners who file a suit within 12 months of the behavior and prove the allegations to a court could have their agreement with a company voided. The bill allows for an award of damages up to three times the amount of the agreement or highest offer.

Several landowners testified and alleged that they’d been contacted by pipeline land agents who claimed that the landowners’ neighbors had signed agreements, only to find out later that wasn’t true. Nolz filed the bill in response to those complaints.

“Clearly, the existing laws were not enough deterrence,” Nolz said.

Members of the committee who opposed the bill said the alleged abuses are already illegal under existing laws.

Justin Bell, a lobbyist for Summit, said the bill could lead to excessive litigation and unfair targeting of one project’s land agreements — known as easements — while not addressing similar agreements for other types of projects.

“I’m not sure I understand why, if this truly is happening and is a problem, why this would be limited to just one form of easement,” Bell said.

The legislation additionally includes a provision requiring land agents for carbon pipelines to be a company employee, a resident of the state or a real estate agent licensed in the state. A similar provision was part of a broader package of pipeline law reforms passed by the Legislature last year that was tossed out by South Dakota voters in November.

The committee voted 8-4 to send the bill to the House floor.

Moratorium Bill

Rep. Richard Vasgaard, R-Centerville, is the main sponsor of the moratorium bill.

“This pipeline is going to be in the ground for a long time,” Vasgaard said. “Let’s make sure it’s done right.”

The legislation would bar the state Public Utilities Commission from permitting carbon dioxide pipelines until the federal Pipeline and Hazardous Materials Safety Administration adopts its new safety rules for carbon pipelines. The administration issued proposed rules last month and will finalize them sometime after a 60-day public comment period.

A lobbyist for Summit Carbon Solutions testified against the moratorium, saying it would take authority from the state Public Utilities Commission and hand it to the federal government. A majority of the House Commerce and Energy Committee disagreed and sent the bill to the House of Representatives on a 7-6 vote.

Eminent Domain Bill Pending

Among other pending pipeline bills is one that would ban the use of eminent domain by carbon pipeline companies. Eminent domain is a legal process for obtaining land access from unwilling landowners for a project beneficial to the public — traditionally for projects such as electrical power lines, crude oil pipelines and water pipelines. That bill has passed the House and is awaiting action by a Senate committee.

Another bill that has been sent to the Senate by the Senate State Affairs Committee would reform the eminent domain process and add new requirements for those seeking to use it.

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.