Ethanol carbon capture pipeline news digest: stories from South Dakota--and The Atlantic

Rep. Kaley Nolz, R-Mitchell, speaks on the South Dakota House floor during the 2025 legislative session. (Makenzie Huber/South Dakota Searchlight)

Reading around today, I came across several articles about carbon capture.

One is another installment from the South Dakota Searchlight in the Upper Midwest ethanol carbon pipeline saga.

The other is a look at how Trump Could Start A New Pipeline Fight, published in the national publication The Atlantic.

First, Friday's South Dakota Searchlight piece.

Lawmakers advance carbon pipeline moratorium and bill regulating land agents
by Seth Tupper

South Dakota lawmakers advanced bills Friday at the Capitol in Pierre that would put a moratorium on carbon dioxide pipelines until new federal safety rules are finalized, and would authorize landowners to sue pipeline companies for the alleged abuses of their land agents.

The bills don’t name Summit Carbon Solutions, but they’re a response to the Iowa company’s proposed $9 billion, five-state pipeline that would pass through eastern South Dakota. It would collect carbon dioxide emitted by more than 50 ethanol plants and transport it for underground storage in North Dakota, to capitalize on federal tax credits incentivizing the prevention of heat-trapping emissions into the atmosphere.

Land agent bill

Rep. Kaley Nolz, R-Mitchell, is the main sponsor of the bill that would authorize lawsuits by landowners who allege they’ve suffered from deception, fraud, harassment, intimidation or misrepresentation by a land agent for a carbon pipeline company.

Landowners who file a suit within 12 months of the behavior and prove the allegations to a court could have their agreement with a company voided. The bill allows for an award of damages up to three times the amount of the agreement or highest offer.

Several landowners testified and alleged that they’d been contacted by pipeline land agents who claimed that the landowners’ neighbors had signed agreements, only to find out later that wasn’t true. Nolz filed the bill in response to those complaints.

“Clearly, the existing laws were not enough deterrence,” Nolz said.

Members of the committee who opposed the bill said the alleged abuses are already illegal under existing laws.

Justin Bell, a lobbyist for Summit, said the bill could lead to excessive litigation and unfair targeting of one project’s land agreements — known as easements — while not addressing similar agreements for other types of projects.

“I’m not sure I understand why, if this truly is happening and is a problem, why this would be limited to just one form of easement,” Bell said.

The legislation additionally includes a provision requiring land agents for carbon pipelines to be a company employee, a resident of the state or a real estate agent licensed in the state. A similar provision was part of a broader package of pipeline law reforms passed by the Legislature last year that was tossed out by South Dakota voters in November.

The committee voted 8-4 to send the bill to the House floor.

Moratorium bill

Rep. Richard Vasgaard, R-Centerville, is the main sponsor of the moratorium bill.

“This pipeline is going to be in the ground for a long time,” Vasgaard said. “Let’s make sure it’s done right.”

The legislation would bar the state Public Utilities Commission from permitting carbon dioxide pipelines until the federal Pipeline and Hazardous Materials Safety Administration adopts its new safety rules for carbon pipelines. The administration issued proposed rules last month and will finalize them sometime after a 60-day public comment period.

A lobbyist for Summit Carbon Solutions testified against the moratorium, saying it would take authority from the state Public Utilities Commission and hand it to the federal government. A majority of the House Commerce and Energy Committee disagreed and sent the bill to the House of Representatives on a 7-6 vote.

Eminent domain bill pending

Among other pending pipeline bills is one that would ban the use of eminent domain by carbon pipeline companies. Eminent domain is a legal process for obtaining land access from unwilling landowners for a project beneficial to the public — traditionally for projects such as electrical power lines, crude oil pipelines and water pipelines. That bill has passed the House and is awaiting action by a Senate committee.

Another bill that has been sent to the Senate by the Senate State Affairs Committee would reform the eminent domain process and add new requirements for those seeking to use it.

The issues takes the national stage in Zoë Schlanger's Trump Could Start a New Pipeline Fight; A tax credit for carbon capture has fans in the oil industry in The Atlantic.

Some passages citing the fight in South Dakota. I've been using the hashtag #FederalTaxCreditProfiteers in my X posts about this issue, and that's where Schlanger begins:

The Trump administration is fully engaged in a drive to eliminate virtually any government activity or mention related to climate change—with a few notable exceptions. Take, for example, a single tax credit in Joe Biden’s signature climate law that may have the best chance of survival out of any climate-coded policy.

A provision in the Inflation Reduction Act, known as 45Q, enlarged a tax credit for any company willing to capture carbon dioxide. A version of this credit has been in place since George W. Bush’s presidency, and in its current iteration, it represents billions of dollars in federal incentives. If the Trump administration moves to keep 45Q intact, that choice would be an unusual vote of confidence from the president for a large government expenditure billed as a way to fight climate change. (The White House did not respond to a request for comment.)

The politics of this tax credit are unusual in the climate world too. Both the oil industry and some climate-minded Democrats in Congress want to keep it. Among its opponents are environmental groups, as well as avid Donald Trump supporters in South Dakota and other states where carbon-capture infrastructure would be built.

And that opposition?

Karla Lems, a Republican representative from South Dakota, voted for Trump and considers herself a conservative. She is among the most vocal opponents of a pipeline that the company Summit Carbon Solutions plans to build across her state and four others, to bring carbon dioxide from ethanol plants to a storage site in North Dakota. The company is attempting to use eminent domain to clear its way, which incensed Lems. “George Washington said freedom and property rights are inseparable,” she told me. She sponsored a bill now making its way through the state legislature to bar eminent domain for carbon projects. (For a while, Summit planned to put it directly through her family’s farmland, but the company eventually decided to site it on her neighbor’s land instead, she told me. Summit declined to comment for this story.)

To Lems, the 45Q tax credit is exactly the type of handout and government bloat that Trump promised to eliminate. “In my mind, this is a company that stands to make a lot of money from this project, which I believe is just a grift on the taxpayers," she told me. “It’s all a big boondoggle and a scam. We’ll see if the Trump administration can see it for what it is.” Chase Jensen, an organizer at Dakota Rural Action, which is also working to block the Summit pipeline, says many of his group’s dues-paying members voted for Trump and would see it as a betrayal if he decided to keep the tax credit. Many assumed Trump would be against it, given its presentation as a Biden-branded climate solution, he told me. But more than that, he said, “these folks hold property rights as one of the most core rights.” That those rights would be traded so that, as they see it, a corporation could make money would violate their deepest conservative values.

Already, the Summit-pipeline fight has “completely restructured” leadership in South Dakota, Jensen said; 11 Republican representatives who had voted for pro-pipeline legislation lost primary elections for state House and Senate seats. Jensen expects that the Trump administration’s stance on 45Q will be disillusioning for supporters who might have expected the president to side with people over corporations. “People are going to have to reconcile what’s happening,” he said. (Summit has said that the project would need “reassessment” if the tax credit were repealed.) ...

Read the entire article at The Atlantic.

Photo: Rep. Kaley Nolz, R-Mitchell, speaks on the South Dakota House floor during the 2025 legislative session. (Makenzie Huber/South Dakota Searchlight).

The South Dakota Searchlight article is republished online under Creative Commons license CC BY-NC-ND 4.0. I'm stretching fair use conventions with the Atlantic copy.

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Feb 21, 2025

Ethanol carbon capture pipeline news digest: stories from South Dakota--and The Atlantic

Land agent bill

Moratorium bill

Eminent domain bill pending

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