Writer: Natalie Bouzas
Editor: Mira Khan
Spring 2024
Eminent domain, or the right to take private property for public use with just compensation, has been a long-debated issue in the legal realm. Many question the ethics of taking land away from unwilling participants and whether this aligns with the United States’ value of “freedom for all.” One of the rising concerns with Eminent Domain lies with the government now allowing private property to be taken and given to another private institution as long as there are public benefits. This means that instead of seizing private homeowners’ property for government public projects, your property can be given to a private business, like a pipeline company, under the notion of using the land for the greater good of all. This issue, with its profound legal and ethical implications, lies at the heart of the Midwest Carbon Dioxide pipelines.
The proposed pipelines would extend from North Dakota to Illinois, covering six states. They are owned by private companies that offer a service called carbon sequestration to businesses that emit carbon dioxide. The pipeline companies would capture carbon dioxide from local ethanol plants, liquify it, transport it, and then store it deep beneath the ground at North Dakota and Illinois sites.
The Midwest Carbon Pipeline project aims to offset the carbon emissions from ethanol production. The pipeline project is vital to keeping the US on track to reach net-zero emissions by 2050. It also benefits the large Midwest ethanol industry because it lowers recorded emissions. Although the CO2 still exists, the CO2 emissions are being taken out of the atmosphere and stored underground, and the government only counts atmospheric CO2 as emissions produced by companies. The Biden Administration has incentivized this goal with their 45Q federal tax credit, offering federal funding to Carbon Capture and Storage programs or programs that use carbon sequestration. This federal tax incentive is funding the proposed pipelines across the Midwest.
The three leading companies proposing these pipelines are Summit Carbon Solutions (SCS), Navigator CO2, and Wolf Carbon Solutions. SCS announced its plan to build 2,000 miles of new CO2 pipeline; Navigator Co2 ventures to build 1,300 miles; and Wolf to build 300 miles. The only challenge in their way is the 3,600 miles of private property on which their proposed pipeline route would lie. Residents in the proposed areas have largely resisted the company's efforts to use their land. Some residents have safety concerns about the proposed pipelines, while others have concerns about their impact on property values and rights. One safety concern revolves around the storage of the liquified CO2. The liquified CO2 could migrate through cracks in the soil and become trapped in buildings, killing unsuspecting victims. CO2 could also leak out of the soil and back into the atmosphere, potentially undermining the purpose of the pipeline altogether (Parenti, 2020).
Moreover, carbon dioxide removed from the atmosphere does not just disappear. What happens when we run out of room? Unless we find a way to utilize this CO2, it will remain sitting underground, waiting to escape. The problem of emissions is not being fixed; it is being avoided and passed on to the next generation. This practice will not be sustainable unless fossil fuel industries simultaneously lower their emissions while sequestering carbon.
Adding to tensions, private pipeline companies, especially SCS, have claimed their authority to use eminent domain to take the landowner's private property if they do not willingly allow the companies to use it. Under eminent domain, SCS is even vested with the authority to survey the private land without landowners' permission despite any objections from the landowners. Surveying activity upsets the residents because these private companies are entering their private land to determine whether or not they want to legally take it for their own company. The companies qualify for these surveying powers because of their eminent domain authority. These actions are supported through provisions under South Dakota law that state, “Each person vested with authority to take private property for public use may cause an examination and survey to be made as necessary for its proposed facilities'' (South Dakota Legislature, 2024). Despite this law, some landowners refused to allow SCS access to their property for surveying purposes. Legal action has been taken between the landowners and SCS, and cases in both the Third and Fifth Judicial Circuit courts found SCS actions constitutional. Landowners have now appealed the case to the South Dakota Supreme Court under Helfenstein v. SCS Carbon Transport.
The legal action taken by some landowners has lodged a solid impediment to the companies’ plans. Resistance to the Navigator CO2 pipeline even caused the company to shut down development and give up on the project. However, SCS has not given up, and while Helfenstein v. SCS Carbon Transport is pending a decision, the legal history of similar cases seems to support SCS’s use of eminent domain. In the 2005 Kelo v. City of New London, the Supreme Court upheld that private property could be taken for private development as long as it benefited the public. The majority opinion claimed that the constitution did not require a literal meaning of “public use” and that because the city was not taking the land to benefit a particular group of private individuals but was following an economic development plan, the city’s actions were constitutional (Oyez, 2024). Considering the ruling of Kelo v. City of New London, SCS’s carbon sequestering could qualify for “public use,” justifying their use of eminent domain. SCS’s “public use” could be their removal of carbon dioxide from the atmosphere because it is aiding the greater good of the US in its move towards carbon neutrality by 2050 while also aiding the local ethanol economy, which is vital to many midwestern states.
In predicting the results of Helfenstein v. SCS Carbon Transport, further legal questions can be found in South Dakota legislation, which states that “Any company that owns a pipeline and is a common carrier…may exercise the right of eminent domain in acquiring right-of-way, as prescribed by statute…”(Delworth, 2023). This House Bill 1188 gives pipeline companies that classify as “common carriers” the authority to use eminent domain. The South Dakota legislature further classifies a common carrier as “a carrier which holds itself out to the general public as engaged in the business of transporting goods for a fee” (South Dakota Legislature, 2024). Therefore, the central question of this case study lies in whether liquified carbon dioxide is a commodity, and if it is, does this classify the SCS pipeline company as a common carrier? If so, this would allow SCS’s actions to be constitutional.
To determine the answer, some preliminary questions must be answered. Is SCS transporting carbon dioxide for private business or public hire? The problem arises that SCS is sequestering carbon dioxide, transporting the liquified carbon dioxide, and storing it in the ground, all within its company. These facts suggest that SCS is not for public hire at all. Then can SCS qualify as a “common carrier” as required under the law?
Moreover, Texas law explicitly states, “Pipelines transporting only their own product are not considered common carriers” (Lashmet, 2020). Under this provision, SCS would not seem eligible for eminent domain use and, therefore, would not be vested with the authority to survey private lands. If South Dakota determines a similar notion, the question must then be deferred to the ownership of the carbon dioxide. Because the emissions are produced from the ethanol plants, does the ownership lie with the ethanol companies? If the ethanol companies own the emitted carbon and sell it to SCS, then SCS could qualify for “public hire.” Under Helfenstein v. SCS Carbon Transport, Brian Jorde, a lawyer for the landowners, claims that “SCS takes [the] title as soon as the CO2 emits from the ethanol plant. They are transporting what they own. They are a private, for profit, carrier and they do not have the protections [of the law]” (Walton, 2024). On the other hand, SCS claims it is being paid to transport carbon, proving its commodity status, and qualifying the company as a common carrier.
The South Dakota Supreme Court ultimately has to decide whether carbon is a commodity and whether SCS is a common carrier, which would determine whether SCS has eminent domain authority under South Dakota law. The ruling of this case will decide the fates of local landowners and whether SCS can survey and take their property. After the first review of the case, the court said more evidence was needed before ruling. In response to the wait, other states’ congressmen, anticipating legal issues with the pipelines, are proposing bills to offer landowners more protection from surveying and eminent domain. An example of this is seen in Iowa’s Senate File 101/House File 308, which would repeal the Iowa Utilities Board’s power to grant eminent domain to pipeline companies (Delworth, 2023). If these bills were to pass, pipeline companies would face a much harder time implementing their projects and gaining the authority to seize private property through eminent domain.
However the outcome of the ruling of Helfenstein v. SCS Carbon Transport or the legislative efforts to block pipeline companies, consideration must be given to the social implications of pipelines. From an environmentalist perspective, is the pipeline really remedying climate change? SCS states that 18 million metric tons of CO2 will be stored underground in North Dakota annually. The company further states that North Dakota has the capacity to store all CO2 emissions for the US for the next 50 years (Summit Carbon Solutions, 2024). However, what happens after that? Although storing emissions underground pushes the US towards our goal of 2050 net emissions, what happens to the CO2 after that? CO2 sequestration and storage is a short-term solution that pushes its implications off for future generations to deal with. We must then consider whether carbon dioxide pipelines are really for public benefit.
Furthermore, the morality of eminent domain must also be assessed. The justification of eminent domain as a “public use” or “public benefit” seems to stem from a utilitarian perspective. It provides benefits to the most people over benefits to all people. The pipeline companies are sequestering carbon under the notion that most people will benefit because taking carbon out of the atmosphere would help lessen the impacts of climate change. Still, in this process, the costs of the local landowners are being overlooked. Why should local farms have to unwillingly give up their lands for private institutions to “fight climate change” while stuffing their pockets full? Although taking carbon out of the atmosphere will be needed to lower the global temperature, many companies are using this form of geoengineering to maintain their current carbon footprint instead of becoming more sustainable. To actually combat climate change, there needs to be both a reduction in carbon emissions and carbon sequestered from the atmosphere. It seems unfair that local communities should have to suffer just so that ethanol companies can continue emitting the same amount they have always been while pretending to become more green. There seems to be a distributive injustice of the benefits and costs of this project, and it appears that the landowners must suffer for the “public good” of a private institution.
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