ND legislative hearings on CO2 pipeline bills draw big crowds; eminent domain the main issue

BISMARCK — Supporters of eminent domain bills in the North Dakota Legislature testified this week that they would protect property owners from pipeline companies, while opponents believe the legislation could harm infrastructure projects in the state and hamper future energy and agricultural development.

The Senate Energy and Natural Resources Committee heard testimony Thursday, Jan. 26, and Friday, Jan. 27, on eight bills dealing with carbon dioxide pipelines and eminent domain — the seizure of private property rights against a landowner's wishes.

All eight are sponsored by Sen. Jeff Magrum, R-Hazelton, and come in response to Summit Carbon Solutions’ proposed CO2 pipeline that is being reviewed by the North Dakota Public Service Commission. Some opponents believe the legislation, if passed, could hamper the coal and oil industries in the state.

“I know I have a series of bills we’re going to be looking at and our committee will be challenged with making good decisions on,” Magrum said. “This is nothing against any type of industrial oil or coal development ... But first and foremost, I believe that if we don’t protect our property rights, we won’t be free anymore.”

Adam Dunlop, executive vice president of Midwest Ag Energy, which operates ethanol plants, said that capturing climate-warming carbon dioxide is a "game-changing opportunity" for the state's agriculture and energy industries. Oliver County landowner Keith Kessler, who favors Summit's pipeline, said fear among other landowners of eminent domain has become like a "runaway team of horses."

Summit's Midwest Carbon Express pipeline would cross 2,000 miles through Nebraska, Iowa, South Dakota, Minnesota and North Dakota, transporting CO2 emissions from Midwestern ethanol plants to Oliver and Mercer counties northwest of Bismarck, where they would be injected and stored underground.

Summit is working with landowners along the route to obtain needed easements, but some reluctant property owners worry that the company might use eminent domain to acquire land use rights if they don't agree to the company's easement terms.

Eminent domain involves taking private property for use even if a landowner opposes such an action, but the landowner is still compensated. Senate Bill 2313 would increase awarded compensation by 33%.

“Whether for a residential property or a pipeline, when a landowner is being forced into a sale against their will, it is unfair that the remedy is merely to receive market value … If you get market value, you’re going backwards,” said Northwest Landowners Association Chairman Troy Coons.

Tom Stromme / The Bismarck Tribune

Jeffrey Skaare, director of land, legal and regulatory affairs for Summit, said the company is offering “well above fair market value.”

North Dakota Petroleum Council Vice President Brady Pelton testified that the bill has consequences that “could not be more detrimental to the infrastructure development necessary to take our state forward.”

“This bill is likely to result in a dramatic increase in the number of eminent domain proceedings by incentivizing the property owners to forgo negotiations altogether with developers,” he said.

Summit Executive Vice President Wade Boeshans said the company referenced eminent domain when approaching landowners on the project route "in full transparency and honesty."

"It was never used or intended to be received as a threat," he said, adding that Summit is focusing on obtaining voluntary easements.

Senate Bill 2251 would require survey crews to get written permission from landowners or a court order before entering their property. Summit has filed lawsuits against some landowners to get survey access.

“Having (landowners) come home from town and finding trucks on their land with really no concept of what’s happening is bad practice,” North Dakota Petroleum Council President Ron Ness testified. “And we have certainly learned that the hard way in many instances, but I think our pipeline companies have made this standard practice across the oil and gas industry. We think this bill essentially codifies that and makes it really clear.”

Skaare said Summit treats landowners fairly.

“And some people still don’t want to do this, and this is placing your finger on the scale of justice and adding to it, and it’s bad policy for the state of North Dakota, it’s bad policy to start creating these types of laws,” he said.

Senate Bill 2209 allows for companies to use eminent domain in a county only if they acquire 85% approval from landowners in the path of the pipeline. Senate Bill 2212 would remove CO2 pipelines from state law that allows pipelines to use eminent domain — which Boeshans said "would effectively stop all CO2 pipelines and significantly impair if not eliminate the ability for industrial facilities to install carbon capture and compete in low carbon markets."

Other bills take different tactics, such as requiring a higher percentage of landowners to consent to underground storage space for CO2; Boeshans said Summit has already acquired 85%.

Landowners who spoke in favor of the legislation argued that they worry about the safety of CO2 pipelines on their properties and how it might hinder future development on their land. Several landowners testified that Summit's pipeline does not serve a public purpose and that the company should not be allowed to use eminent domain for its private gain.

Kevin Bernhardt, of Linton, said that the pipeline runs through the middle of his property and his son's property — which are about a half mile apart. He added that it's "approximately 1,300 feet from my doorstep."

"It pretty much is going to stop any future development that we're going to have on that property because it affects three sections of my place," Bernhardt said. "... This is our chance right here to protect the people of North Dakota and the future people that want to come in again, to allow our private property rights not to be abused."

Kessler, a farmer and rancher in Oliver County who signed an easement with Summit, said he believes carbon capture is the only way to move the state's main industries forward.

"Carbon capture is important for the ag and energy industry because they go hand in hand. And the thing is everybody likes to eat, everybody likes to turn on the lights. We use several different kinds of power, not just electricity," Kessler said. "We have to sustain the agriculture and energy (industries) in North Dakota and in the United States in general. Both of these industries are under attack, and we have a way to defend them with carbon capture."

The committee did not take any action on the bills on Friday.