Gov. Larry Rhoden is signing a bill prohibiting the use of eminent domain for carbon pipeline projects in South Dakota.
The bill, HB 1052, is in response to a pipeline proposed by Summit Carbon Solutions which would move CO2 across the state.
Supporters of the bill say it protects landowner rights. Critics say it sets a troubling anti-business precedent in the state.
Rhoden said in a press conference Thursday the measure doesn’t necessarily kill the pipeline project, it just removes the threat of eminent domain.
“South Dakota landowners don’t want eminent domain for a proposed carbon pipeline. They believe this infringes on their freedoms and their property rights. And to tell you the truth, I agree," Rhoden said. "I wish this conversation had never been about eminent domain."
Summit released a statement saying the bill “changed the rules in the middle of the game.”
"This kind of regulatory uncertainty creates real challenges — not just for our project, but for the ethanol plants in South Dakota that now face a competitive disadvantage compared to their counterparts in neighboring states," the statement said. "While this presents obstacles, our project moves forward in states that support investment and innovation, and we will have more news on that soon.
HB 1052 represents another major setback in Summit's bid to run the pipeline through South Dakota. The pipeline would take CO2 from dozens of ethanol plants across the Midwest, including many in South Dakota, and transport it to be stored underground in North Dakota. Other states along the pipeline's path, including North Dakota, Minnesota and Iowa, granted Summit permits. The project's backers say it’s a way of reducing emissions that lead to climate change and boosting the state's ethanol industry. It would also likely profit from federal tax credits.
The project ran into roadblocks when the possibility of using eminent domain was raised with landowners, causing some local governments to establish setback ordinances that would make building the pipeline challenging. Opponents also raised concerns over possible safety risks.
The South Dakota Public Utilities Commission rejected Summit's initial application to build the pipeline over questions on the company's ability to complete the project and follow all local laws in the state. Summit has since reapplied.
In 2024, state lawmakers approved a bill adjusting state pipeline regulations to make the project more feasible, but voters overturned that law in the November election.
It was continued concerns over property rights that fueled Rhoden's decision to sign the bill, according to a letter he wrote explaining his decision.
"Freedom ends when it infringes on the freedom of another. And when those situations arise, 'governments are instituted among men' to protect the rights of the people," the letter said.
Critics of the bill also raised legal concerns over it targeting a single entity — carbon pipelines. When asked whether he's concerned the bill could lead to potential litigation against the state, Rhoden said he believes Summit should focus on completing the project in a way that doesn't include eminent domain.
Senate Majority Leader Jim Mehlhaff is one of a handful of legislators who has spoken against HB 1052, saying it signals that South Dakota isn't open for business.
But the bill's backers ultimately won out on the weight of the landowner rights argument. Bill sponsor Rep. Karla Lems called it "the people’s bill."
“They had to devote their time, their energy. It was physical and mental stress. All of these things that we brought on the people that they shouldn’t have had to walk through," Lems said.
