Landowner protection bills advance as carbon pipeline controversy continues
February 6, 2024
Joshua Haiar (South Dakota Searchlight)
PIERRE — A committee of state lawmakers endorsed three bills Monday that would protect some landowner rights but would not prevent a proposed carbon dioxide pipeline.
The committee considered five bills that would impact the pipeline project. Three passed the House Commerce and Energy Committee and two failed.
The three bills now headed to the full House of Representatives would add protections for private property owners when pipeline companies conduct surveying, ensure better terms for landowners in agreements with pipeline companies, and add financial protections for landowners subjected to eminent domain.
One of the defeated bills would have prevented carbon pipelines from using eminent domain, and the other would have required carbon pipelines to have a regulatory permit before pursuing eminent domain.
The bills come after the state’s elected utility regulators denied Iowa-based Summit Carbon Solutions’ pipeline permit application last year, citing the route’s conflicts with some county ordinances that require minimum distances between pipelines and existing features. Summit has said it plans to reapply.
The multi-billion-dollar pipeline would capture carbon dioxide emissions produced by 51 ethanol plants in five states and transport it for underground storage in North Dakota. Carbon dioxide traps heat in the atmosphere, contributing to climate change, and federal tax credits are available for sequestering carbon.
One bill that passed the committee 10-1 amends the state’s laws regarding land surveys on private property for public utility projects.
“This bill grants substantial benefits to landowners,” Rep. Will Mortenson, R-Fort Pierre, told the committee. But he added, “This bill isn’t going to stop any project from getting done.”
The bill stipulates that any person or entity looking to conduct an examination or survey on private property must have a pending or approved siting permit application with the state.
Secondly, the bill mandates a 30-day written notice to the property owner. The notice must include a detailed description of the property areas to be examined, the anticipated date and time of entry, the duration of presence on the property, the types of surveys and examinations to be conducted, and the contact information of the person or agent responsible for the entry.
“I think these are common courtesy,” Mortenson said. “When are you coming? How long are you going to be there?”
Furthermore, the bill introduces financial compensation for landowners. Entities seeking to enter private property for surveys would have to make a one-time payment of $500 to the property owner as compensation for entry, in addition to covering any damage caused during the examination.
Property owners would also be given the right to challenge the survey or examination by filing an action in circuit court within 30 days of receiving the written notice. Additionally, upon request, the results of the survey or examination would have to be shared with the property owner.
The legislation excludes the state or its political subdivisions from the requirements, focusing instead on private entities.
Various agriculture groups supported the bill, but Summit Carbon Solutions raised concerns.
Summit lobbyist Justin Bell acknowledged the bill would not end the pipeline project, “but we still believe it’s a bad law.”
“As far as I know, there’s not another state in the nation that requires compensation,” Bell said.
Mortenson said he’s willing to take on that distinction.
“If we’re an outlier in being the fairest to landowners, that’s the kind of outlier I want to be,” he said.
Steve Willard, lobbying on behalf of electric utilities, reminded lawmakers the bill “affects all of us,” referring to the various kinds of utilities.
Another bill that passed 8-3 – also introduced to the committee by Mortenson – specifies how carbon pipeline easements are to be granted, recorded and terminated. An easement is an agreement to access private land.
Among the legislation’s key provisions: Carbon pipeline agreements would not be allowed to exceed 50 years and would automatically terminate if not used for the transportation of carbon dioxide within five years from their effective date. Landowners would be entitled to annual compensation for granting the easement, set at a minimum of $1 per foot of pipeline each year the pipeline is active.
“More voluntary easements, that should be our goal in this building,” Mortenson said.
When pipeline companies can’t reach voluntary agreements with landowners, the other option is eminent domain, a process that involves going to court to access the land and determine a fair price.
Various agriculture groups also supported the bill, which they said compares favorably to existing laws governing wind turbines.
Summit Carbon Solutions lobbyist Brett Koenecke said the company has concerns, primarily because “wind is creating something,” while “a pipeline is transportation.”
“They are fundamentally different things,” he said, adding that “ongoing payments under this law are a significant concern for my client.”
Bill Van Camp, a lobbyist for ethanol producer Ringneck Energy, which is a Summit Carbon Solutions partner, said the bill would force plants to pass the additional costs on to corn farmers.
Another bill that passed 8-3 would require entities using eminent domain to cover some legal costs for landowners under certain conditions.
Rep. Karla Lems, R-Canton, owns some land the carbon pipeline would cross. She said while introducing the bill to lawmakers that the bill would help “level the playing field” between landowners and companies using eminent domain.
The bill says that if the final amount awarded to the property owner to access their land is at least 20% higher than the offer made when the entity sued the landowner, the entity must reimburse the landowner for attorney fees.
Summit Carbon Solution lobbyist Brett Koenecke opposed the bill, “because it’s not likely at all to result in the positive changes proponents are seeking.”
“You can’t come with your best offer before you’ve had those communications,” he said, referring to the back and forth that takes place in negotiations.
Several other pipeline-related bills are pending during the current legislative session, which is in its fifth of nine weeks.
