NORTH DAKOTA APPROVES ROUTE FOR SUMMIT CARBON SOLUTIONS CO2 PIPELINE

BISMARCK, N.D. (Jeff Beach / South Dakota Searchlight) – North Dakota regulators approved a route permit for the Summit Carbon Solutions pipeline, a significant win for what the company says is the world’s largest carbon capture project.

The three-person Public Service Commission voted unanimously to approve the pipeline permit. The commission had denied Summit a route permit in 2023, but changes the company made to its route helped convince the commission to reverse its position.

Summit plans to put 333 miles of pipeline through North Dakota, part of a 2,500-mile network of pipelines in five states. The pipelines are planned to connect 57 ethanol plants, including Tharaldson Ethanol at Casselton, to an underground carbon storage site west of Bismarck.

“We commend and respect the North Dakota Public Service Commission for their diligence and thoughtful approach in reviewing this project,” Wade Boeshans, executive vice president of Summit Carbon Solutions, said in a news release. “This decision is a testament to North Dakota’s commitment to fostering innovation while working closely with communities and industries.”

Ethanol plants emit carbon dioxide as part of the fermentation process in turning corn into fuel. That carbon can be captured, compressed and put into a hazardous liquid pipeline.

Summit announced its plans in 2021 and had hoped to begin construction in 2023, but has faced pushback from some landowners and several legal challenges as it has tried to obtain the needed permits.

Supporters view the project as vital to helping the ethanol industry compete in low-carbon fuel markets. Ethanol is a key market for corn growers.

Opponents cite safety concerns, damage to farmland and property values and an infringement on property rights. Some landowners also have complained about Summit’s business practices.

Troy Coons, is president of the Northwest Landowners Association, a North Dakota property rights group that has challenged Summit over survey access and other issues.

“I don’t know that the PSC really answered adequately the citizens’ questions, or held the company accountable enough to move forward,” Coons said.

Brian Jorde of Nebraska-based Domina Law, which represents landowners fighting the pipeline  in North Dakota and other states, said the decision was expected based on comments and questions by the PSC during the re-hearing process.

“We will carefully review the written order for errors and address those accordingly,” Jorde said in an email. “The PSC decision is phase one in a multi-phase process.”

While Summit has said the plan to capture greenhouse gas emissions is good for the environment, several environmental groups, including the North Dakota-based Dakota Resource Council, have opposed the project as doing more harm than good.

Summit would benefit from federal tax credits of $85 for every ton of CO2 stored. It would sequester 18 million tons of carbon dioxide per year.

Commission Chair Randy Christmann emphasized that the PSC approval in North Dakota does not guarantee that Summit has the right to use eminent domain to force landowners to provide easements for the pipeline. A decision on eminent domain would have to be made in the courts.

“I certainly do encourage the company not to use eminent domain, at least not more than absolutely necessary,” Christmann said before the vote.

Christmann recounted his family’s bad experience with eminent domain when a highway was routed through the family’s ranch.

“I understand how offensive it is,” Christmann said of eminent domain. “Occasionally, it’s needed. But I damn sure understand it ought never be abused.”

Summit says it is working on obtaining voluntary property easements. A Summit filing with the PSC said as of Oct. 9, it had obtained voluntary easements on about 81.4% of the miles it needs in North Dakota.

Burleigh County, which includes Bismarck, had the lowest voluntary easement rate at more than 65%.

Christmann also said the ruling does not conclude that the Summit pipeline is a common carrier, an important designation for obtaining the right to use eminent domain.

“We need to challenge the common carrier status of CO2 pipelines and restore power over zoning for pipelines to our county commissions,” landowner David Moch, a farmer in Emmons County, said in a news release through the Dakota Resource Council. “This is an attack on our property rights. Summit Carbon has shown my community who they are, after threatening the use of eminent domain at an Emmons County Commission meeting.”

Emmons and Burleigh counties had passed ordinances that would have severely restricted Summit’s ability to site a pipeline through those counties, but the PSC ruled that state law supersedes local ordinances on carbon pipelines.

Carbon pipeline regulation is of interest to North Dakota’s oil and gas industry. Summit’s plan is for permanent underground storage, but carbon dioxide can be pumped into oil well sites to help extract more oil, a process called enhanced oil recovery.

Summit CEO Lee Blank told the North Dakota Monitor earlier this year that it had not been approached by oil companies interested in taking CO2 from the pipeline.

Carbon capture and sequestration is being used by two North Dakota ethanol plants, Red Trail at Richardton and Blue Flint at Underwood.

Christmann noted that North Dakota has had a CO2 pipeline operating for about 20 years, running from the Dakota Gasification plant near Beaulah to an oil field in Canada. It runs about 10 miles from his ranch in western North Dakota.

Commissioner Sheri Haugen-Hoffart also mentioned that pipeline.

“North Dakota has managed successfully the CO2 transportation and sequestration projects,” Haugen-Hoffart said. “Our state has a history of reasonable pipeline management, and thousands of miles of pipeline operate under strict state and federal regulations.”

Summit chose western North Dakota as a permanent storage site because the area has geology to keep the CO2 deep underground with a cap rock keeping it from reaching the surface.

Iowa-based Summit will need a separate storage permit from the North Dakota Industrial Commission.

Summit also needs a permit in South Dakota, where it already has been denied once.

Iowa has granted Summit a permit, and the company says it plans to reapply next for a permit in South Dakota. Minnesota’s Public Utilities Commission is expected to vote Dec. 12 on a 28-mile segment near the North Dakota state line.

The project also includes Nebraska, which has no state agency in charge of issuing permits for CO2 pipelines.

 

REALUNCHED SOUTH DAKOTA OPEN MEETINGS COMMISSION FINDS VIOLATIONS IN FIVE OUT OF SIX CASES

PIERRE, S.D. (Josh Haiar / South Dakota Searchlight) – The Lincoln County Commission violated South Dakota’s open-meetings laws when three commissioners attended a November 2023 open house for a carbon dioxide pipeline without notifying the public, the state’s Open Meetings Commission decided Monday in Pierre.

Commissioners Mike Poppens, Jim Jibben and Joel Arends attended the gathering, which prompted a complaint. The Open Meetings Commission decided a public notice should have been issued because a quorum of the five-member commission was present at a gathering where public policy may have been discussed — in this case, a pipeline that’s been a matter of debate in the county for several years.

“You know, I don’t think it matters if public policy was or was not talked about when they were there,” said Open Meetings Commission member Austin Hoffman, the state’s attorney of McPherson County. “I don’t see that as the issue at all. It’s whether public policy ‘may’ be talked about.”

Hoffman said public policy is almost always discussed at such gatherings and that county commissioners should know better – particularly when the topic is something as controversial as the carbon pipeline project.

The Open Meetings Commission is a five-member body appointed by the state attorney general to consider complaints about government bodies around the state. Monday was the commission’s first meeting since December 2020, due to a long and unexplained period of inactivity during the administration of former Attorney General Jason Ravnsborg. Current Attorney General Marty Jackley said he has been working to build up a full roster of commission members and allowing time for a review of lingering cases.

The commission found violations in five of the six cases it considered Monday, which will result in written public reprimands against the offenders.

Bennett County Commission

The Open Meetings Commission ruled that a complaint against the Bennett County Board of Commissioners was a violation of open-meetings laws.

Board members failed to adequately notify the public before a meeting in July 2021 where they discussed and voted on a wage increase for an employee. The board took the action following a closed-door portion of the meeting, known as an executive session. It was not listed on the meeting agenda. That violated the state’s requirement for 24 hours of advance public notice.

That was the first complaint involving the Bennett County Board of Commissioners. Another called out the board’s failure to properly move into an executive session during a February 2023 meeting. The commissioners failed to cite the specific law authorizing the closed session and failed to obtain a second for the motion to enter the executive session. That was determined by the Open Meetings Commission to be a violation of state law.

Piedmont Board of Trustees

The Piedmont Board of Trustees violated the law in 2023 when it failed to post a meeting agenda on its website, per state law, which says the agenda must be posted on the website “if a website exists.”

North Sioux City Council

The North Sioux City Council violated state law by not publishing agendas at least 24 hours before meetings. A complaint filed by a resident cited several instances when the agenda was posted late.

No violation: City of Martin

Martin resident Robert Fogg alleged the Martin City Council violated state open meetings laws by not including specific agenda items related to the “Combining of City and County Law Departments” and the “Cozad Property” on the meeting’s publicly posted agenda in February 2023. State law mandates that agendas for public meetings must be posted at least 24 hours in advance, including all topics to be discussed.

Sara Frankenstein, an attorney representing the city, acknowledged the discussions but said “Law” and “Public Comments” were listed as broad categories on the agenda, providing sufficient notice for what ensued at the meeting. She argued that finding otherwise would restrict meaningful discussions among officials, a point the Open Meetings Commission found persuasive. The commission decided no violation occurred.

Next meeting

Another meeting is scheduled for Nov. 25 to hear complaints against the Carlyle Township in Beadle County, Pennington County Board of Commissioners, Sturgis City Council, City of Lead Commission, Green Valley Sanitary District in Pennington County, Charles Mix County Commission and Tripp City Council.

 

MEN’S PRISON PRICE TAG COMES IN AT $825 MILLION, BRINGING QUESTIONS FROM BOTH LAWMAKERS AND PUBLIC

PIERRE, S.D. (John Hult / South Dakota Searchlight) – A new men’s prison in Lincoln County will cost state taxpayers $825 million, lawmakers learned last week.

That figure is $256 million more than the $569 million state lawmakers have appropriated for the project over the past few years. It also does not include the cost of paving and widening the two-lane gravel roads that surround the project site, about 15 miles south of Sioux Falls at the intersection of 477th Avenue and 277th Street.

Even without those road costs, the $825 million “guaranteed maximum price” now locked in for the multi-building complex is higher than any previous estimate publicly offered for the prison’s construction.

Department of Corrections Secretary Kellie Wasko, her finance director and the project’s construction manager faced pointed questioning from members of the Joint Appropriations Committee and the public on Thursday about the price tag, plans for flooding mitigation and about the possibility of building somewhere else.

Throughout the questioning, Wasko returned several times to a common theme: That the state studied its options for a new men’s prison, and that the $825 million project was the most fiscally responsible option to address overcrowding and security issues within the state’s correctional system.

“The decision to construct a men’s prison was not made hastily,” Wasko said.

Finance Director Brittni Skipper said that the DOC’s next prison project budget request will be less than $200 million because the money lawmakers have already allocated has been placed in an interest-bearing incarceration construction fund. The interest from the $505 million currently in the fund is anticipated to return $61 million, Skipper said. The prison is set to open in 2029. Skipper did not say how long it would take for the project to generate that much interest, and the DOC did not immediately return a request for clarification.

Some lawmakers on the committee and several members of the public, however, urged caution on the project. It would be the most expensive state-led, taxpayer-funded capital project in South Dakota history, and lawmakers are headed into a budget year with fewer dollars to spare than they’ve had in recent years.

“The Legislature is going to be challenged to find the additional funding you may need for this facility,” said Rep. John Mills, R-Volga.

The facility is intended to largely replace the existing penitentiary in Sioux Falls, parts of which date to 1881.

Price scrutinized

JE Dunn Construction and Henry Carlson Construction were selected to build the project. Vance McMillan of JE Dunn was on hand for Thursday’s meeting, and told lawmakers that there’s a “gluttony” of prison and jail projects in the works across the U.S.

Dunn talked about a handful of what he called “comparable” projects in Georgia, Alabama and Utah. Comparing price per square foot, McMillan said, South Dakota’s prison project is in line with those correctional facilities.

Mills noted that a 2022 study from a consultant company called DLR suggested a price tag of less than $350 million for a 1,200-bed facility. Mills wanted to know how the price tag for a 1,500-bed facility could be so different, given that the 2022 report adjusted for inflation.

“What are the differences between what’s anticipated to be built today that makes up your guaranteed maximum price, and what the DLR study envisioned?” Mills said.

McMillan said he doesn’t know how those consultants came up with their numbers, but said his company returned a fair price based on South Dakota’s design.

Every bed in the new facility could be used for maximum- or medium-security inmates, with each cell designed to house two inmates. The price for the new prison is tied in large part to the needs of inmates at those security levels.

“I will tell you that since we’ve been working with Kellie Wasko’s team, we’ve been very diligent about trying to roll up our sleeves and save you guys money,” McMillan said.

Rep. Chris Karr, R-Sioux Falls, said South Dakota was set to spend twice the price that Utah did per bed, and asked McMillan why that might be.

McMillan said the other projects mix maximum, medium and lower-security inmates, which can lower the price. Some of the facilities planned to house four inmates per cell, as well. That skews the per-bed comparison, McMillan said, again urging lawmakers to consider the price per square foot.

Mills and Karr asked Wasko why the state couldn’t save money by designing with four-bed cells in mind.

Wasko said four beds per unit is more like a minimum security setup, and that South Dakota has plenty of minimum security beds. What the state needs, she said, are beds for about 800 medium security inmates at the state penitentiary and about 250 inmates at Mike Durfee State Prison in Springfield.

“Can we go to a multi-bed, four-bed setup? We talked about it,” Wasko said. “When we discussed it, considering some of the management issues that we’re having right now, the population issues and our ability to separate people, it was decided that we were going to get the best use out of our beds if we went with double occupancy.”

McMillan also addressed the possibility of paring down the design. He told Mills and Karr that adjusting the design in hopes of saving money might not save much if the cost of construction continues to rise. There are only so many subcontractors with security expertise, he said, and they might be committed to other projects and more costly to hire if the state waits to start construction.

“I’m not trying to scare people,” McMillan said. “I’m just trying to be a realist for you.”

Questions about drainage, roads

Rep. Jim Bolin, R-Canton, asked Wasko if the $825 million price included road upgrades. They’ll be needed, he said, with about 400 employees coming and going from work throughout the day and the prison’s need to transfer prisoners in and out of the facility.

The price did not include the cost of roads, Wasko said. The DOC has worked with the state Department of Transportation to identify needed upgrades, and she said the details and cost of that work would be part of the governor’s proposed annual budget, which will be released next month.

The transportation department did not return a request for further information on the cost of road upgrades, how many miles would need to be built or when work might begin. The agency’s 2025-28 Statewide Transportation Improvement Plan map shows a four-mile stretch of County Highway 278 set for “corridor modifications” in 2027 at a price of $541,000. That road runs east to west adjacent to the project land. There are no projects listed on the map for the north-to-south road that runs by the new prison site, 477th Avenue, which runs through Harrisburg and into Sioux Falls.

Dan Paulson of Harrisburg testified against the project on Thursday. He lives near the area, and said he’d expect the state would need two lanes of highway in either direction on the cross streets around the prison site to make transportation feasible.

The cost of roads should be considered part of the price, he said.

“If they are not in the budget request, then it does not reflect the true cost of the facility,” Paulson said.

Another neighbor to the facility, Sam Eiesland, also talked about the road situation. Eiesland owns the land across 477th Avenue from the prison site.

“Where is the ground coming from to widen those roads?” Eiesland said. “I own that ground, and it’s not for sale.”

Michelle Jensen, another neighbor to the project, asked lawmakers on the committee why they wouldn’t push the DOC to consider alternative sites, perhaps on other land it owns, in light of the opposition and practical concerns about building a prison in an undeveloped area.

She compared the prison to a walled city plopped onto a field.

“It is fiscally irresponsible to build a new 2,000-person town in an area with no infrastructure, with volunteer emergency services, that is not zoned for such a project and is not wanted in the area,” said Jensen, who is among the landowners suing the DOC in hopes of forcing the agency to ask Lincoln County’s permission to build. A county judge dismissed the lawsuit, but the plaintiffs announced their intent to appeal on Tuesday morning.

Rep. Karr noted the catastrophic flooding that hit McCook Lake earlier this year, saying development around the area was among the factors that exacerbated the problems.

“I just want to make sure we’re thinking about the impact of this build on those other individuals around us in the community,” Karr said.

Wasko promised to get lawmakers a drainage plan to show how the agency planned to mitigate potential damage during major rain events. She also urged lawmakers to put faith in her agency and the prison it has designed.

“We are indeed building a small city within a city, and it is going to be a secure city,” Wasko said. “And I promise you that the dollars that we’re using to build this are what make it safe, because at the end of the day, I don’t think that you can put a price on public safety if one inmate gets out.”