South Dakota voters have rejected a ballot measure that would have eased the permitting process for a highly contentious carbon dioxide pipeline. The planned $8 billion project, developed by Summit Carbon Solutions, would carry CO2 captured from ethanol plants to sequestration wells in neighboring North Dakota. But if the company had been banking on legislative relief for its siting challenges, it will have to figure out a new plan to move forward.
Referred Law 21, as the measure was called, was a citizen-led veto referendum on a bill that passed the South Dakota legislature and was signed by the governor in March. The bill would have preempted all local land use regulations and ordinances related to the siting of carbon dioxide pipelines and other transmission infrastructure, including power lines. Full authority to permit these projects would have been handed to the state’s utility commission, an elected three-member body that regulates utilities.
Summit Carbon Solutions is trying to build what would be the largest pipeline designed to carry carbon dioxide in the United States. From a climate perspective, putting debates on land use and local control aside, the calculus of the project is complicated.
Ethanol refineries are ripe for carbon capture — they emit a very pure stream of CO2 that is technologically easy to capture, and it’s better that it be buried underground than dumped in the atmosphere. But the long term prospects for ethanol in a low-carbon future are murky at best, and investing $8 billion in carbon capture and pipeline infrastructure could help justify its continued use over other, potentially better solutions. Though it’s clear electric cars will eventually crowd out ethanol from the passenger vehicle fuel market, some advocate for the industry to pivot to aviation fuel.
The pipeline faces opposition throughout the Midwest from a diverse coalition of stakeholders, including landowners in the pipeline’s path, environmental groups like the Sierra Club that oppose carbon capture in general, and Republican legislators who question the project’s merits on the grounds that climate change is merely a “hypothesis.” Though CO2 pipelines generally have a good track record for safety, a high-profile rupture in Mississippi in 2020, which sent 45 people to the hospital, has also amplified concerns.
At least five municipalities in South Dakota have passed rules governing the siting of the pipeline, Chase Jensen, a senior organizer for the environmental nonprofit Dakota Rural Action told me on a call last week. For example, Minnehaha County, the home of Sioux Falls, adopted setback rules last year that require pipelines to be laid 330 feet away from residential areas, businesses, and churches. An ordinance in Lincoln County requires 1,855 feet, and prohibits construction on sites of historical or archeological significance.
“Everybody who's going to make a buck from the future energy transition is licking their chops at this,” Jensen said of Referred Law 21, which would have preempted these ordinances. “It's a lot easier to just make campaign donations to three public utility commissioners than the 300-plus county commissioners across the state.”
The bill signed into law in March was painted as a compromise. Though it weakened local control, it gave counties the ability to charge pipeline companies a tax of $1 per linear foot of pipe installed. It also included a so-called “Landowner Bill of Rights” that enshrined certain protections like ensuring the pipeline’s developer is liable for damages caused by the project, and designating a minimum depth at which the pipeline must be buried.
But Jensen and others who opposed argued it didn’t offer landowners anything new — some of its provisions are already afforded by South Dakota law, and others had already been negotiated with Summit Carbon Solutions. Jensen pointed out that the utility commission already has the ability to override local ordinances if it finds them to be overly restrictive.
Now, with control over pipeline siting back squarely in the hands of local authorities, the future of the Summit project in South Dakota is unclear. The utility commission already rejected the company’s initial application for construction permits last year; Summit has since altered its route and reapplied.
Martin Lockman, a climate law fellow at Columbia Law School, told me it was difficult to take away a clear message from the fight, in part because CO2 pipelines have strange politics. Coalitions for and against them don’t break down over party lines or traditional groups like environmentalists versus fossil fuel companies. Some climate advocates, as well as experts in the U.S. Department of Energy, say we’ll need to build many thousands of miles of new carbon pipelines in order to help us sequester carbon captured from industrial facilities and from the atmosphere.
The specific arguments over the Summit project may not apply to projects proposed elsewhere, Lockman told me, but its fate could still have ripple effects. “Any kind of high profile failure might make investors a little bit more leery to participate in this kind of project,” he said.
