Joshua Haiar/South Dakota Searchlight
When the majority leaders of South Dakota’s two legislative chambers introduced legislation last January that they described as a compromise on carbon dioxide pipelines, they predicted “a consequential year for lawmakers in Pierre.”
They didn’t think they’d be the ones suffering the consequences.
Their legislation passed in March and promptly sparked a backlash. Voters ousted 14 Republican legislators in the June primary election, including 11 who voted for the most controversial bill in the pipeline package. Pipeline opponents gathered enough petition signatures to refer that bill to voters, who rejected it in the Nov. 5 general election.
A few days after that, Republican legislators went behind closed doors and voted to replace their leadership team, mostly with members who voted against the spurned pipeline bill.
Last year’s Republican majority leaders, Rep. Will Mortenson of Fort Pierre and Sen. Casey Crabtree of Madison, are back in the Legislature after winning reelection in their districts, but have been cast out of leadership. The annual lawmaking session began earlier this month at the Capitol in Pierre and continues through March 13.
Michael Card is an associate professor emeritus of political science at the University of South Dakota. He said Mortenson and Crabtree probably did not realize they were sowing the seeds of an intra-party rebellion when they introduced their pipeline bills last January.
“I do think they were blindsided,” Card said. “They thought they’d done a really good job for landowners.”
Scott Odenbach, the new Republican House majority leader from Spearfish, put it more bluntly in a recent interview with South Dakota Public Broadcasting. He said the supporters of last year’s legislation “awakened a sleeping giant” and “fundamentally miscalculated the depth of passion amongst landowners in South Dakota” for property rights.
The spark
The $9 billion pipeline proposal at the center of the drama is from Iowa-based Summit Carbon Solutions.
The pipeline would transport carbon dioxide captured from 57 ethanol plants in five states to an underground sequestration site in North Dakota, along a route that includes 700 miles in eastern South Dakota. Federal tax credits intended to incentivize the removal of heat-trapping carbon from the atmosphere are motivating the project.
The South Dakota Public Utilities Commission rejected Summit’s first permit application in 2023, in part because of the route’s conflicts with local ordinances mandating minimum distances between pipelines and existing features. Summit reapplied late last year with what it described as “major reroutes.”
The company says it has about 80% of the land access agreements it needs in South Dakota. Landowners who’ve refused to sign easements say they’re protecting their property rights and are concerned about potential leaks that could release deadly carbon dioxide plumes. They’ve attracted supporters from across the political spectrum, including some Republican climate change deniers who view carbon capture projects as boondoggles and some Democrats concerned about the fate of family farms.
To gain access to the rest of the land, Summit may have to pursue eminent domain, a legal process in which a court determines fair compensation for landowners. The state Supreme Court ruled last year that Summit had not proven its project is eligible for eminent domain. The high court sent the matter back to a lower court, where the company is trying to prove its case.
One of the members of the new Republican legislative leadership team is Rep. Karla Lems, R-Canton, who was chosen to assist the House speaker as speaker pro tempore. The Summit pipeline would cross her land, and her opposition to eminent domain motivated her to run for the Legislature and win in 2022.
Lems introduced a bill in 2023 to ban carbon pipelines from using eminent domain in the state. The legislation passed the House but died in a Senate committee.
Some senators who opposed the bill said South Dakota’s corn and ethanol industries could collapse without the pipeline. The project would lower ethanol production’s carbon footprint and keep the gasoline additive eligible for sale in markets such as California, where stricter laws on carbon emissions are in place.
Lems said testimony on the bill reflected a divide in the Republican Party. She described it as “constitutional conservatives versus the corporatists.”
Crabtree disagrees with that. He said President Donald Trump’s nominee to lead the U.S. Interior Department, former North Dakota Gov. Doug Burgum, is a supporter of Summit’s project.
“The Trump administration supports this project, too,” Crabtree said. “So, are they corporatists or constitutional conservatives?”
No legislation addressing pipeline opponents’ concerns passed by the end of the 2023 legislative session. The following summer, hundreds of people descended on the state Capitol for a rally, demanding lawmakers reconvene in Pierre to pass a bill prohibiting eminent domain for carbon pipelines.
Mortenson had voted for the eminent domain ban in the House, but he did not attend the summer rally. He said in a statement at the time that unless “we get agreement with the Senate on some proposals, we shouldn’t call a special session and neither should the governor. It would be a waste of taxpayer dollars and legislator time.”
“For my part, I’ll be spending the next couple months working with senators to gather consensus on protecting landowners. I hope we get the job done,” he added.
A ‘path forward’ creates division
Mortenson’s determination to find consensus with senators resulted in the three-bill package that he and Crabtree unveiled for the 2024 legislative session. Their jointly written statement promoting the legislation did not mention eminent domain. Legislation banning eminent domain had failed, so Mortenson and Crabtree were pursuing a different path.
They described it as “a path forward that benefits landowners and sets clear expectations of regulatory and procedural requirements for those who want to do business in South Dakota.”
In other words, the legislation would not ban eminent domain or stop any company from pursuing a pipeline, but would implement new protections for landowners and local governments affected by pipelines.
All three bills passed. Of the two that remain in effect today, one requires pipeline companies to provide more information to landowners when giving them notice of a land survey, forces pipeline companies to pay each landowner $500 for a survey, and empowers landowners to file court challenges against a company’s right to conduct a survey. The other law defines carbon pipeline easements, limits them to 99 years, voids them if a project isn’t commenced within five years of the easement’s signing or the issuance of a permit, and says they cannot be transferred without the consent of the property owner.
The third bill, which has since been tossed out by voters, had new protections for landowners and local governments.
Those included the right of counties to impose a surcharge on carbon pipelines, with half of the revenue going to property tax relief for affected landowners; a requirement that pipelines be buried at least 4 feet deep; an imposition of liability on pipeline companies for leaks and for damages caused to underground drain tile that farmers use to remove excess moisture from fields; a requirement for pipeline companies to file agricultural impact mitigation plans and carbon dioxide dispersal models; and a mandate that land agents acting on behalf of pipeline companies be either a resident of South Dakota or a real estate agent licensed in the state.
But all of those aspects of the third bill were ultimately tossed out by voters, largely because of another provision in the bill that pipeline opponents found most offensive. That was a requirement for local governments to demonstrate that their restrictions on pipeline locations are reasonable, rather than a pipeline company having to prove those regulations unreasonable. Pipeline opponents said that provision would make it easier for state regulators to override local ordinances and approve pipeline permits, thereby paving the way for pipeline companies to use eminent domain.
Mortenson said the bill had nothing to do with eminent domain, but it became a rallying cry for the activists who referred the bill to a public vote.
“There was a lot of enthusiasm stemming from the eminent domain question,” Mortenson said. “I think that enthusiasm mapped itself onto the referral effort.”
Pipeline opponents have seen how important it is to protect local siting ordinances. The conflicts between those ordinances and Summit’s original route played a major role in the Public Utilities Commission’s decision to reject Summit’s first permit application in 2023.
So pipeline opponents drew a line in the sand with Senate Bill 201, which became Referred Law 21 on the Nov. 5 ballot.
“Lawmakers either stood with property rights, or they put corporate greed first,” said Ed Fischbach, a farmer from Mellette. “Leadership sided with ethanol and the pipeline — Republican and Democrat both. Guys like me, a former Democrat, were reregistering to vote for conservatives who were willing to take a stand, because property rights is the biggest issue in this state right now.”
Mortenson said the burden-of-proof flip was not as significant as it was made out to be, because supporters and opponents would still have had to present their best evidence to the Public Utilities Commission, regardless of which side had the burden of proof regarding local ordinances.
Grassroots mobilization
After last year’s legislative session, pipeline opponents organized rallies at barns, rural community centers and county fairs.
Joy Hohn, R-Sioux Falls, took part in the effort as she ran successfully for a seat in the state Senate.
“We showed up everywhere people cared about property rights,” Hohn said.
In a few months, they submitted an estimated 28,000 petition signatures to put Senate Bill 201 on the ballot as Referred Law 21.
They also spread the word about lawmakers who voted for the bill and encouraged voters to toss them out, resulting in 11 of those lawmakers losing in the June primary.
Mortenson said a large and motivated group can have an outsized influence on a primary. Turnout in June was 17%.
“We’ve had common sense conservative governance for decades,” Mortenson said. “When people are happy with how things are going, they’re more likely to stay home. When people are really fired up, they go and vote. I don’t doubt there was an enthusiasm gap in that election.”
The movement’s momentum carried into the November general election, where Referred Law 21 was thrown out by South Dakota voters. That happened despite supporters of the bill, including ethanol companies, spending 10 times more on their campaign.
Mark Lapka is a Republican farmer from Leola and pipeline opponent who won a seat in the state Senate in November.
“When property rights were being put at risk for climate change, people just had enough,” he said. “People just wanted to be left alone.”
Eminent domain ban proposed
As the Legislature convened earlier this month for its annual lawmaking session, one bill that would ban eminent domain for carbon pipelines was already prefiled in the Senate, and a similar bill soon followed in the House.
Lems said she’s confident the legislation will pass, and Crabtree also said it could pass. Gov. Kristi Noem would then have to decide whether to sign it into law. Or the decision could fall to Lt. Gov. Larry Rhoden, who will be elevated to governor if the U.S. Senate confirms Noem as President Donald Trump’s Homeland Security secretary.
The Governor’s Office did not immediately respond to a question about whether Noem or Rhoden would be willing to sign a ban on eminent domain for carbon pipelines.