SIOUX FALLS, S.D. — Uncertainty looms over a major carbon capture pipeline in the Midwest following a decision by South Dakota’s Public Utility Commission. On Tuesday, the commission rejected the route permit application for the pipeline proposed by Summit Carbon Solutions, an Iowa-based company. The decision came with a 2-1 vote, with Commissioner Kristie Fiegen leading the motion for denial. She stated that the application was “not ready to go forward” and did not meet the necessary criteria and structure.
Fiegen remarked, “The PUC’s duty is to make a decision based on a route — one route,” expressing her view that the proposed path was not feasible. One of the contributing factors to the difficulty in securing approval was legislation passed in March by South Dakota lawmakers. The legislation worked to ban eminent domain for carbon capture pipelines, creating challenges for Summit’s planned path. As a response to the ruling, Summit announced its intention to resubmit an application featuring a modified route designed to align better with the interests of local landowners and ethanol plant partners.
“While we are disappointed in today’s decision, we remain committed to South Dakota as without it the ethanol industry, farmers, and land values in the state will all suffer,” Summit communicated in a statement. South Dakota represents a critical segment of the 2,500-mile pipeline, which is a substantial project valued at an estimated $8.9 billion. The pipeline is intended to transport carbon emissions from various ethanol plants in Iowa, Minnesota, Nebraska, North Dakota, and South Dakota to a permanent underground storage facility in North Dakota.
The project has already received approvals in Iowa, Minnesota, and North Dakota, and has seen over $150 million invested by Summit for the segment in South Dakota. Celebrations ensued among landowners following the commission’s decision. Ed Fischbach, a board member of Dakota Rural Action, commented, “Today is a victory for South Dakota landowners and local control. We are grateful the PUC has made this common sense decision and freed landowners to get on with their lives and businesses.”
Faced with challenges in securing approval for its route, Summit had earlier requested an extension on its permit application share to redesign its pathway in a manner that would be more accommodating to landowners. Complications arose after state lawmakers sanctioned a ban on eminent domain for carbon capture initiatives, a mechanism allowing the government to expropriate private land with compensation. Without the ability to invoke eminent domain, Summit is required to negotiate voluntary agreements with property owners along the South Dakota section of the intended pipeline.
In pursuit of an extension, Summit stated its willingness to collaborate with landowners and state authorities in “good faith” rather than oppose the eminent domain restriction. This intention led commissioners to conclude that the current route presented considerable obstacles due to the volume of landowner resistance. Instead of embarking on a legal battle against the state, Summit indicated in its request for more time that it would introduce new propositions to landowners and pinpoint segments to ethanol plants that could be omitted in light of significant landowner opposition.
The Midwest’s ethanol industry sees nearly 40% of the country’s corn usage to produce ethanol. Through the underground sequestration of carbon in North Dakota, Summit’s pipeline aims to diminish the carbon intensity of ethanol, thereby enhancing its competitiveness as a sustainable product in the global market.