South Dakota regulators deny Summit Carbon Solutions a carbon dioxide pipeline permit

Regulators in South Dakota on Tuesday denied Summit Carbon Solutions' permit application to run about 700 miles (1126 km) of its carbon dioxide pipeline through the state, the second time the state has spurned the company hoping to build the world's largest carbon pipeline aiming to combat climate change.

The denial is another of several setbacks to the project, including South Dakota's March ban on the use of eminent domain for carbon dioxide pipelines. The state denied the company's first permit application in 2023.

Summit hopes to run 2,500 miles (4023 km) of pipeline across Iowa, Minnesota, Nebraska, South Dakota and North Dakota to capture carbon dioxide from 57 ethanol plants and store it underground.

The company has faced resistance from landowners along the route who refuse to sign easements out of concern about potential pipeline leaks and impact to land values.

In a Tuesday afternoon meeting, members of the state Public Utilities Commission said Summit had not adequately demonstrated a viable route for the pipeline without the use of eminent domain - compulsory land purchases for projects in the public's interest.

"We will take the necessary steps to refile an application that reflects a reduced scope and continued engagement with landowners and plant partners," said Summit spokesperson Sabrina Zenor.

Groups resisting the pipeline celebrated the decision.

"Summit’s application depended on the use of eminent domain to force unwilling landowners into the project. Now that South Dakotans have the right to say ‘no, thank you’, the route was unworkable," said Chase Jensen, an organizer with Dakota Rural Action, in a statement.

The ethanol industry supports carbon capture and storage projects because they would help the industry secure lucrative tax credits for lower emission fuels. Carbon storage projects have drawn huge investment but also are expensive and unproven at scale.

Summit's permit applications have been approved in Iowa, North Dakota and Minnesota. Nebraska does not have a state approval process for carbon dioxide pipelines.