Carbon pipeline case goes back to lower courts after South Dakota Supreme Court ruling

In a major ruling Thursday, the South Dakota Supreme Court found that Summit Carbon Solutions, the company behind a proposed carbon capture pipeline, has not yet proven that it should be allowed to expropriate private land for public use through expropriation. The ruling is a major victory for landowners opposing the project, although Summit remains committed to continuing its efforts in the lower courts.

Project overview

Summit Carbon Solutions is leading an $8 billion project to capture carbon dioxide emissions from 57 ethanol plants in multiple states. The captured carbon dioxide will be transported through a massive pipeline to a storage site deep underground in North Dakota. The project is a comprehensive effort to reduce greenhouse gases and use federal tax credits to promote carbon capture and storage (CCS) technologies.

The pipeline would cross 18 counties in eastern South Dakota, but many landowners along the route are resisting and denying the company access to their land. Some have taken legal action, arguing that Summit has no right to conduct land surveys or expropriate land through expropriation without proving it qualifies as a “public transit facility.”

Court decision and its effects

Summit has stated that it is considered a public transit operator. This legal designation allows companies that transport goods or services for the benefit of the public to gain access to private property through expropriation. Public transit operators include companies such as electric companies or oil pipelines that serve the public for a fee.

The state Supreme Court, however, disagreed, ruling that Summit had not yet proven to lower courts that it met that definition. The judges explained that Summit had not sufficiently demonstrated that it was providing a public service by transporting a commodity for a fee, as required to be considered a public transportation company.

The court also questioned the utility of the captured carbon dioxide, noting that the company intends to store it underground rather than put it to any productive use. As a result, the court found it premature to characterize Summit's project as being in the public interest and remanded the case to the lower courts for further proceedings. The ruling left open the possibility for Summit to present additional evidence in the future, but did not rule on whether the company could ultimately be considered a public utility.

Summit reaction and future plans

Following the decision, Summit Carbon Solutions expressed confidence that it could meet the court's requirements. Spokeswoman Sabrina Zenor reiterated the company's belief in the positive economic impacts of carbon capture, utilization and storage, particularly for agriculture and rural communities. Summit remains committed to proving that its project serves the public good and qualifies for expropriation law.

Zenor stressed that the pipeline could benefit the rural economy by providing new opportunities for farmers and landowners along the route, suggesting that the benefits go beyond the environmental aspect of the project.

Landowner resistance and broader concerns

The Supreme Court ruling for the landowners is a major milestone in their fight against the pipeline. Brian Jorde, an attorney representing more than 1,000 landowners, said the decision affirms what he and his clients have argued for three years — that Summit does not have the legal authority to expropriate private land for the project.

Jorde also raised concerns that Summit might change its strategy by claiming the captured carbon dioxide could be used for enhanced oil recovery, a process that involves pumping CO2 into aging oil wells to extract additional crude oil. Jorde argued that this would undermine the project's environmental goals by boosting fossil fuel production.

“When they start saying they're going to use the carbon to produce more oil, that completely contradicts the climate benefits they've been touting,” Jorde said. “The whole project just doesn't make sense.”

Legal and policy implications

The court's decision has also generated a lot of interest in political circles. In the last two legislative sessions, attempts to ban the use of expropriation law for carbon pipelines have failed in the South Dakota legislature. Republican Rep. Karla Lems of Canton, who supported the effort, said the court's ruling vindicates lawmakers who had opposed the use of expropriation law in this context.

“The arguments we put forward in Parliament are now confirmed by the highest court in the state,” said Lems.

Will Mortenson, Republican House Majority Leader of Fort Pierre, pushed for passage of legislation last year that would provide additional protections for landowners but still allow pipeline companies to seek state permits. He, too, felt vindicated by the court's decision, having long argued that carbon pipelines like Summit's should not be subject to expropriation law because they do not transport traditional commodities such as oil or natural gas.

Mortenson added that the ruling is just the latest step in a larger fight over the future of carbon pipelines and their use of expropriation law. Opponents of the project have filed a petition to put the issue before voters in the Nov. 5 general election, with the goal of removing legal protections for pipeline companies.

“For the past two years, I have argued that carbon pipelines are not like other pipelines,” Mortenson said. “They do not transport goods that benefit the public, and they should not be able to take land away from involuntary landowners without proper justification. This ruling proves that.”

What's next?

Summit will again make its case in the lower courts as opponents continue to rally political and public support against using the right of expropriation for the project. The outcome could have far-reaching implications for both the future of carbon capture and the rights of private landowners across the country.