New South Dakota Law Throws Wrench in Carbon Pipeline Project
Introduction to the Pipeline Project and the New Law
In a significant move, South Dakota has enacted a law that prohibits the use of eminent domain to acquire land for carbon capture pipelines. This development has cast a shadow over a proposed 2,500-mile pipeline project spearheaded by Summit Carbon Solutions, which aims to transport greenhouse gas emissions from over 50 ethanol plants across five Midwest states—including Iowa, Minnesota, Nebraska, North Dakota, and South Dakota—to a storage site in North Dakota. The estimated $8.9 billion project has been met with resistance, particularly in South Dakota, where Governor Larry Rhoden recently signed the bill into law, effectively banning Summit from forcing landowners to allow the pipeline on their property. Despite this hurdle, Summit has vowed to press on, stating that “all options are on the table” and that the project is still moving forward in other states.
Legal and Regulatory Challenges Ahead
The new South Dakota law has thrown the pipeline’s viability into question, as large-scale infrastructure projects like this one typically rely on eminent domain to secure land rights. While Summit has already secured over 2,700 easements across the region, the lack of eminent domain authority in South Dakota could pose a significant obstacle. The company has not ruled out legal action, leaving many wondering if it will challenge the law in court. Summit has hinted at potential negotiations with South Dakota landowners, suggesting that it may either reroute the pipeline through neighboring Minnesota or find alternative paths to circumvent resistant landowners. However, the company has yet to provide specifics on how it plans to overcome this roadblock.
Meanwhile, the project’s importance to the ethanol industry cannot be overstated. As the U.S. transitions toward electric vehicles, the demand for ethanol—a common additive in gasoline—may decline. This has left Midwest farmers and ethanol producers scrambling to identify new markets, with passenger jet fuel emerging as a promising alternative. However, transforming ethanol into aviation fuel requires a significant reduction in carbon emissions to qualify for federal tax incentives. Summit’s pipeline is seen as a critical component in achieving these goals, capturing and storing emissions underground to comply with stricter environmental standards.
Navigating Rerouting Possibilities
One potential solution to the South Dakota impasse is rerouting the pipeline through Minnesota. The current proposed route would traverse nearly 700 miles of South Dakota before entering North Dakota, but shifting the pipeline eastward through Minnesota could bypass resistant landowners. However, this is no simple fix. Summit would need to secure new easements and navigate Minnesota’s regulatory landscape, which includes a recently approved 28-mile segment near Fergus Falls and two additional legs in southern Minnesota. A Summit spokesperson declined to comment on whether the company is actively exploring this option, leaving many to speculate about the feasibility of such a move.
Rep. Karla Lems, the Republican sponsor of South Dakota’s new law, has suggested that the legislation is not intended to kill the project outright but rather to encourage Summit to “reset” its approach. For now, the company appears committed to pushing forward, even as it faces growing opposition and logistical challenges.
The Broader Implications for the Ethanol Industry
The stakes are high for the ethanol industry, which relies heavily on pipelines like Summit’s to remain competitive. Ethanol producers in South Dakota are particularly concerned that the new law will put them at a disadvantage compared to neighboring states. Walt Wendland, who operates an ethanol plant in Onida, South Dakota, expressed frustration over the law, stating, “Ever since I built a plant, I never wanted an advantage, just don’t put me at a disadvantage.” Without the pipeline, these producers may struggle to meet the stricter emissions standards required to tap into new markets, such as aviation fuel.
Iowa Renewable Fuels Association Executive Director Monte Shaw has emphasized the pipeline’s role in reducing carbon emissions and securing the future of the ethanol industry. However, the ongoing challenges faced by Summit Carbon Solutions raise questions about whether this vision can become a reality.
Will the Pipeline Ever Be Built?
Four years after Summit first proposed the pipeline, the project remains mired in uncertainty. In addition to the South Dakota eminent domain ban, the company has faced lawsuits in Nebraska and opposition from regulators in Iowa. Despite these setbacks, Summit remains optimistic, pointing to growing federal support for carbon capture initiatives under the Biden administration. The Inflation Reduction Act and the Bipartisan Infrastructure Law have introduced tax incentives aimed at promoting projects like this one, which align with broader climate goals.
However, the political landscape remains unpredictable. A potential shift in federal policy under a future Republican administration, particularly one led by Donald Trump, could significantly impact the pipeline’s prospects. Trump has historically prioritized fossil fuel production over alternative energy sources, leaving many to wonder how his policies might affect carbon capture projects.
As the situation unfolds, one thing is clear: the fate of Summit’s pipeline will depend on a delicate balance of legal, regulatory, and political factors. While the project has the potential to play a pivotal role in reducing carbon emissions and securing the future of the ethanol industry, the road ahead is fraught with challenges. Whether Summit can navigate these obstacles and bring its ambitious vision to life remains to be seen.
