Eminent domain laws split Midwest landowner attitudes toward CO2 pipelines
August 20, 2023

FORT PIERRE, S.D. — A carbon dioxide sequestration pipeline that may ferry climate-heating gas from the stacks of ethanol plants to burial points deep in Illinois rock bed may soon need Minnesota’s approval. But first, the project must clear South Dakota regulators.

And the farmers attending last month’s hearing in a rodeo museum were firmly opposed.

“We’re all pro-ethanol,” said Kay Burkhart, who farms outside Valley Springs, S.D., which hugs the Minnesota state line. “But they’re going to force us to sign an easement that we don’t want to sign.”

A billion-dollar-plus bet is afoot to dramatically lower corn ethanol’s carbon footprint by spider-webbing pipelines across the Upper Midwest. Omaha-based Navigator C02 and Iowa’s Summit Carbon Solutions aim to sell more biofuel in greenhouse-conscious California and Canada, as well as qualify for lucrative federal tax credits.

Signs opposing the proposed route of the Wolf Carbon Solutions captured carbon dioxide pipeline are seen along Ivanhoe Rd. near Ely, Iowa, on Wednesday, October 12, 2022. Signs opposing eminent domain, a method used to acquire land for projects like this, are also along Ivanhoe Rd. (Jim Slosiarek/The Gazette)

Signs opposing the proposed route of the Wolf Carbon Solutions captured carbon dioxide pipeline are seen along Ivanhoe Rd. near Ely, Iowa, on Wednesday, October 12, 2022. Signs opposing eminent domain, a method used to acquire land for projects like this, are also along Ivanhoe Rd. (Jim Slosiarek/The Gazette)That could translate into a premium price for many Midwest farmers’ corn.

But to do so, they need to run pipe beneath private land, rivers and marshes.

For Burkhart and others, their opposition is largely over eminent domain. Under that legal authority, her land can be forcibly traversed for a court-approved sum of money — including by CO2 pipeline companies in South Dakota.

That’s not the case in Minnesota, where farmer sentiment is more mixed on the subject.

Under Minnesota statute, only natural gas and oil pipelines possess that authority. So far, that’s meant a world of difference in the attitudes toward the CO2 pipeline here compared to in Iowa and South Dakota. In those neighboring states, the proposal has stirred anger, with flurries of lawsuits, tense stand-offs between surveyors and landowners, and calls for legislative special sessions.

“You don’t have eminent domain, but you have running water and electricity in Minnesota?” asked Burkhart, who wishes South Dakota’s eminent domain law was more narrowly tailored. “How do you have civilization?”

The same farmers who could benefit financially often stand opposed to the idea of forced access to their land. Eminent domain is typically reserved for public projects or utilities and these CO2 pipelines are a private endeavor.

At least in Minnesota, the companies are obligated to pay farmers up-front for entirely voluntary easements.

“Every one of the other states we intend to operate in does provide a pathway to condemnation,” said Elizabeth Burns-Thompson, the vice president of government and public affairs with Navigator CO2. “Minnesota does not.”

From the exterior, the absence of this lever for the pipelines has seemingly made it easier, not harder for business because in principle, the approach feels less hostile.

Navigator says they’ve gathered “a bulk” of the easements in Minnesota, though they’ve yet to formally apply for a route permit from the state’s Public Utilities Commission.

Similarly, Summit Carbon, which has applied for a permit along one of the three branches it intends to build in Minnesota, says it’s netted nearly two-thirds of the private crossings in Minnesota — including more than 90 percent in Jackson and Otter Tail counties.

The companies declined to discuss whether they’ve paid Minnesotans more for easements. But Brian Jorde, an Omaha attorney representing landowners in South Dakota and Iowa, says Minnesota’s high legal barrier, at least in theory, means landowners are better protected.

“Where they have eminent domain and where they have survey laws that say we can do what we want, they’re just more like the Wild West,” Jorde said. “When the law protects people, corporations have to treat people better.”

By comparison, Navigator revealed before South Dakota’s public utilities commission that they’d secured only 30 percent of the necessary easements in that state.

But some Minnesotans are also passionately opposed to the CO2 pipelines.

At the first round of public listening sessions in western Minnesota earlier this year, and in public filings, opponents accused Summit of minimizing the safety risks of a pipeline rupture. One woman suggested the company bamboozled her infirm mother into signing a contract — a charge Summit’s CEO Jimmy Powell denies.

Peg Furshong, director of programs at Montevideo-based nonprofit Clean Up the River Environment (CURE), fears the company may use Minnesota as a prop for showing investors “some movement in the project.”

Earlier this month at FarmFest, Minnesota’s annual ag-industry gathering, workers at Summit Carbon booth mostly answered farmers’ polite questions.

“We’re working directly with the landowners,” said Scott O’Konek, a project manager. While Summit has sued dozens and dozens of landowners in South Dakota, they’ve needed to work “100 percent for voluntary easements” in Minnesota.

“Each landowner is met with and negotiated with,” O’Konek said. “A majority of the easements are [already] acquired.”

Standing not far away, Thom Petersen, Minnesota Department of Agriculture commissioner, acknowledged “farmers are really split.”

While Minnesota has “a really strong eminent domain law” for projects like the Enbridge Line 3 oil pipeline, which crossed northern Minnesota, Petersen said CO2 sequestration pipelines don’t qualify for the same legal authority. “[For] a private utility, it’s going to make it very difficult to take the land. So they need to negotiate fairly.”

Both CO2 pipelines are still a long way from breaking ground. Minnesota’s PUC will vote on a scope of survey on Aug. 31. Similarly, in Nebraska, the companies so far are seeking voluntary easements.

Summit’s hearings in Iowa and South Dakota begin within the month.

Kim Junker, who farms near Stout, Iowa, in Grundy County, speaks at an anti-carbon capture pipeline rally at the Iowa Capitol in Des Moines on Wednesday, March 22, 2023. Photo by Erin Murphy.
Kim Junker, who farms near Stout, Iowa, in Grundy County, speaks at an anti-carbon capture pipeline rally at the Iowa Capitol in Des Moines on Wednesday, March 22, 2023. Photo by Erin Murphy.

On the witness stand in Fort Pierre last month, a Navigator C02 executive told regulators his company will always first seek voluntary landowner easements.

“We strive not to go down that path,” said Chief Financial Officer Jeff Allen. “That is literally the last option available.”

But when pressed by Jorde on whether he would vow not to seek eminent domain should the pipeline be approved, Allen demurred.

In the audience, Valley Springs landowner Dan Nelson said he worries about carbon dioxide bursting out of a pipe would overtake campers at nearby Palisades State Park.

“You get a 10-mile-an-hour wind,” Nelson said, “it’ll follow the creek and be there in three and a half minutes.”

Nelson said he spoke with the local fire department about who’d answer such a call and was told the volunteers would phone Sioux Falls, which is a 30-minute drive away.

Nelson agreed he wasn’t concerned about ethanol’s future. It was safety consequences that scared him. Eminent domain, too.

“This is a private enterprise, and they want to go through our land with eminent domain,” Nelson said, taking off a baseball cap emblazoned with a Minnesota company’s logo.