Ethanol Blog

OMAHA (DTN) -- Voters in South Dakota overwhelmingly rejected a state law that would have dictated how counties regulate carbon pipelines in the state.

The vote, which is not finalized was nearly 60% opposed to the law and defeated in all but one county in the state. The referendum, known as Referred Law 21, challenged a law passed by legislators' earlier this year, Senate Bill 201.

That will set back efforts for Summit Carbon Solutions and its plans to build a 2,000-mile carbon pipeline that would capture and ship carbon dioxide emissions from 57 ethanol plants. The plan is to sink the carbon in North Dakota so the pipeline needs to navigate regulations in South Dakota to operate.

Summit issued a statement early Wednesday making it clear the company will re-submit its permit application. The South Dakota Public Utilities Commission had rejected Summit's first permit application in September 2023.

"Summit Carbon Solutions will apply for a permit in South Dakota on Nov. 19, 2024," the company stated. "Our focus continues to be on working with landowners and ensuring the long-term viability of ethanol and agriculture in the state. Projects like ours have successfully navigated South Dakota's existing regulatory landscape in the past. We will continue to operate within the current framework, knowing that the future of ethanol and agriculture is vital to our shared success."

Landowner groups in South Dakota had organized aggressively against Referred Law 21. The law allowed counties to impose a tax on carbon pipelines of $1 per foot. The law also imposes requirements for pipeline setbacks, minimum depth, rules for handling drain tiles, potential leaks and indemnities to landowners. The law also requires the South Dakota Public Utilities Commission to limit counties' authority to set tighter restrictions on pipelines. The law was dubbed by lawmakers as a "landowner bill of rights" but critics disputed that take.

Sinking the carbon in the ground could generate as much as $85 a ton for Summit under the 45Q tax credit. For ethanol producers, piping away the carbon rather than emitting it would dramatically lower their carbon-intensity scores for producing sustainable aviation fuel or selling biofuels into states that have low-carbon fuel standards.

"South Dakota voters have spoken: South Dakota is not for sale. Summit and its big-moneyed partners thought they could buy the voters as easily as they bought the legislature. They outspent us by over tenfold, but voters saw through their lies. As South Dakotans, we value local control and our communities. By defeating Referred Law 21, the voters have proven that we value people over profits. Hopefully this time the legislature will listen," said Ed Fischbach, South Dakota landowner impacted by the proposed Summit CO2 pipeline.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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