State denies Summit permit; both carbon pipelines proposed in SD now rejected

FORT PIERRE, S.D. — Some landowners who’ve been fighting against a proposed carbon dioxide pipeline shed tears of joy Monday as South Dakota utility regulators denied a permit application from Summit Carbon Solutions.

The decision means both carbon pipelines currently proposed in eastern South Dakota have been rejected in their first attempts to gain permits in the state.

“I’ve felt like there was a tractor on my chest, and that weight has finally been removed,” said Jared Bossly, of rural Warner, whose land is along the Summit route.

The Public Utilities Commission made its latest decision following  a motion by its own staff to reject Summit’s application. The staff motion said Summit’s proposed route is in direct violation of “setback” ordinances adopted in Brown, McPherson, Minnehaha and Spink counties. Those ordinances establish minimum distances between pipelines, homes and other places.

If commissioners approved the permit, the motion said, they would be sanctioning a project that violates county laws.

“There is simply not a path forward,” Staff Attorney Kristen Edwards told the commissioners Monday morning.

The decision occurred at the Casey Tibbs Rodeo Center on the first day of what was intended to be a three-week hearing on the permit application.

Brett Koenecke, a lawyer for Summit, told the commission, “We sit here ready to prove the technical aspects of this application.” He argued unsuccessfully that because of the time and effort Summit put into preparing for the hearing, the hearing should move forward.

Commissioner Chris Nelson made a motion to postpone the hearing rather than deny the permit. That motion failed 2-1 with Commissioner Gary Hanson and State Treasurer Josh Haeder — filling in for Commissioner Kristie Fiegen, who recused herself because of a conflict of interest — voting against it. After that, Haeder’s motion to deny the permit application passed unanimously. Fiegen recused herself because a relative of hers owns land that would be affected by the Summit project.

The decision came after Summit withdrew its request to have the commission overrule the county setback ordinances. Another company trying to build a carbon pipeline — Navigator CO2 — failed last week to convince the commission to use its power to preempt such ordinances. The commission also denied Navigator’s permit application, following a hearing that ran from July 25 to Aug. 8.

In the motion to deny Summit’s permit filed by Edwards, she pointed out that despite Summit’s assurance of complying with local regulations, there hasn’t been any tangible evidence to show that the company has obtained the necessary waivers or county permits.

The door isn’t entirely closed for Summit or Navigator. The companies can reapply in the future and obtain permits, provided they can adequately address the commission’s concerns about the projects.

“I suspect that this project is ultimately going to be built,” Koenecke said. “Carbon capture is the future of agriculture.”

Summit also suffered a rejection by regulators recently in North Dakota. A weeks-long hearing on its route in Iowa is underway.

Summit and Navigator seek to capture carbon dioxide emitted from ethanol plants in multiple states and transport it in liquid form to underground sequestration sites – North Dakota for Summit, and Illinois for Navigator. The multi-billion-dollar projects are eligible for billions in tax credits from the federal government, as incentives for removing heat-trapping carbon dioxide from the atmosphere.

Summit has initiated dozens of eminent domain court cases in an attempt to gain access to land from South Dakota landowners unwilling to grant it. Navigator has not yet pursued eminent domain in South Dakota. Both companies have some voluntary access agreements — called easements — with a portion of affected landowners.