PIERRE, S.D. — It’s the end of the line for a bill to clarify the definition of “commodity” within eminent domain law.
The rejection of the attempt to carve out specific uses of carbon is a boost to the prospect of building carbon sequestration pipelines in South Dakota.
Facing opposition from the companies behind the two proposed carbon pipelines and the ethanol industry set to benefit from this carbon capture technology, the Senate Commerce and Energy committee on Feb. 16 voted 9-0 to kill House Bill 1133.
“The people I represent and the people that I care about are the corn growers that live in my district,” said Senate Majority Leader Casey Crabtree, one of several members of leadership serving on the commerce committee. “And you know what they're telling me? They're saying, ‘Do what you can up there, make sure that, for our corn, we get a fair market value for it.’”
With months of discussion over the planned pipelines figuring to play heavily into the 2023 session, House Bill 1133 and nearly one-dozen other proposals filled testimony rooms and legislative halls, with two edging out of a House of Representatives less swayed by economic growth arguments.
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Both of the House-passed bills are now dead: House Bill 1230, which proponents sold as a change to the timeline of eminent domain cases to keep legal back-and-forths to a minimum, also died at Thursday’s committee hearing, this time on a 6-3 vote.
“We had a feeling that this was going to be an uphill lift in this committee,” Sen. Bryan Breitling, of Miller, the commodity definition bill’s prime sponsor, said after the hearing. “And so we’ll see what other opportunities present themselves and see what our next steps are.”
The two companies, Summit Carbon Solutions and Navigator CO2 Ventures, plan to capture some of the carbon emitted in the ethanol process, pipe that carbon underground and store it in a permanent geological site.
According to proponents of the project, which they say is the fastest way to cut carbon scores in half, lowering the carbon output of ethanol will allow it to be sold in a growing number of low-carbon fuel markets like California and Canada.
Jim Seurer, the CEO of Glacial Lakes Energy, noted that ethanol companies purchase more than half of the corn in the state, and most of that ethanol is exported.
“If we think California has got a stupid government … they still control access to their market, whether we like it or not,” Sen. Lee Schoenbeck, of Watertown, said in explaining his opposition to the bill. “You’ve got to take the cards that are dealt to you.”
Following a line of reasoning that had succeeded in previous debates, Breitling in his opening comments argued that any common understanding of a commodity includes the context of fungibility within a market.
“The garbage that I place in my dumpster is not a commodity,” he said.
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Elizabeth Burns-Thompson, a government affairs specialist with Navigator, countered the bill’s assumptions about the carbon project by pointing out that, were larger-scale uses of carbon to become available, infrastructure like carbon pipelines would be critical economic drivers.
“If we're going to look at how do we take CO2 and further process that into the value-added products of the future, be it bio-based plastics or polymers or potentially new waves of biofuels, we necessarily need that supply chain backbone, that viable transportation system,” she said.
Yet outside of Breitling’s introduction of the bill and Burns-Thompson’s response looking at potential, down-the-road uses that fit the common understanding of a commodity, very little time by either proponents or opponents was spent on the few lines of text germane to the bill.
Instead, the focus was damage to long-tenured family farm heirlooms, shady business practices around easements or the future health of the South Dakota economy.
“That was frustrating because we weren't talking about the topic. We let [the discussion] go to a lot more latitude than we thought it should have been,” Breitling said. “If the focus was more on the bill's topic, I think we would have had a little bit more opportunity for success.”
For Summit Carbon, which sports a much larger footprint in the state than Navigator and has at this point signed easements on around 60% of land on the route, the path forward is continued negotiations; they want “to be left alone to complete our project and do what we have to do according to the laws that are in place,” said Brett Koenecke, a lawyer and registered lobbyist for Summit Carbon.
For the group of opposed landowners, who took issue with the framing of their movement as anti-ethanol since the pipeline could still be built through voluntary easements, the road forward is less clear.
“Moving forward, we don't like what happened today,” Joy Hohn, who has been deeply involved with attempting to defend landowner rights, said after the decision. “I think we're just going to regroup and figure out our next strategy, I guess. So I don’t think this is the end.”
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Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or jharward@forumcomm.com.
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