South Dakota Bans Use of Eminent Domain for Carbon Dioxide Pipelines

March 6 (Reuters) - South Dakota Governor Larry Rhoden signed a bill on Thursday banning the use of eminent domain, which allows private land to be taken for public use, for the construction of carbon dioxide pipelines, potentially endangering a $9 billion project proposed by Summit Carbon Solutions.

Summit's pipeline would carry captured carbon dioxide from ethanol plants in five Midwest states to an underground storage location in North Dakota. It would span 495 miles (796 km) across South Dakota.

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Some landowners in the states have challenged the project, arguing that it is unsafe and that using the right of eminent domain to build it violates their property rights. Summit has sought approval from states to use eminent domain to build the project in cases where landowners refuse to voluntarily sign agreements.

"It's very unfortunate that, despite our approvals in Iowa, North Dakota, and Minnesota, South Dakota changed the rules in the middle of the game," Summit spokesperson Sabrina Zenor said in a statement.

"As for legal action, all options are on the table," Zenor said.

Summit's construction permits were approved in Iowa in June, in North Dakota in November, and in Minnesota in December. The company was denied a permit in South Dakota in September 2023 and reapplied last fall.

Groups that have opposed the Summit pipeline cheered the new law.

"We are proud of all the hard work that we’ve done over the last four years. It shows that when people unite around a common cause, we are unstoppable," Jess Mazour, a leader of the Iowa chapter of the Sierra Club, which opposes the pipeline, said in a statement.

'Eminent Domain Concerns'

Rhoden said in a letter to the state's House of Representatives that he has had hundreds of conversations about the Summit project and that landowners see the threat of eminent domain as an infringement on their freedoms.

"I have said many times that Summit needs to earn back trust from South Dakota landowners. Unfortunately, once trust is lost, it is a difficult thing to regain," the letter said.

In September 2023, Summit secured voluntary easements for 73% of its right-of-way in South Dakota. The company did not provide an updated figure.