South Dakota Gov. Larry Rhoden chats with legislative staff during the 2025 legislative session on Jan. 21, 2025. (Makenzie Huber/South Dakota Searchlight)
By: Joshua Haiar
PIERRE, S.D. (South Dakota Searchlight) – Some ethanol leaders think it’s ironic that Republican Gov. Larry Rhoden brought his “Open for Opportunity” tour to an ethanol plant this week, after he signed a bill that negatively impacted a proposed multi-billion-dollar project for the industry.
“The whole industry is very disappointed with how things went in South Dakota,” Walt Wendland, president of the Ringneck Energy ethanol plant in Onida, told South Dakota Searchlight.
Rhoden visited the plant Tuesday, after launching his tour highlighting economic development on Monday in Sioux Falls.
Wendland wants to connect the Onida plant to Summit Carbon Solutions’ proposed $9 billion, five-state pipeline that would capture carbon dioxide from more than 50 ethanol plants and transport it to an underground storage site in North Dakota. The project would be eligible for federal tax credits incentivizing the prevention of heat-trapping greenhouse gas emissions into the atmosphere.
Rhoden signed legislation March 6 barring carbon pipeline companies from using eminent domain. That’s the right to access private property for projects that benefit the public, with just compensation for landowners determined by a court.
Summit has voluntary access agreements, called easements, with some landowners on the route. Other landowners have refused to sign the agreements, citing concerns about private property rights and potential leaks of toxic carbon dioxide plumes. They’ve also alleged unethical behavior by some land agents for Summit.
Without eminent domain, gaining access to the remaining land needed for the project in South Dakota could be difficult or impossible. Wendland said Summit spent millions on easements, “and suddenly, the state pulls the rug out from you, and tells you to go home.”
“That’s not the way we should be doing business,” he said.
Last week, Summit asked South Dakota regulators to pause proceedings in the company’s permit application. The company has permits in North Dakota, Minnesota and Iowa, although some permits are under litigation, while Nebraska lacks a permitting process.
South Dakota ethanol advocates say the project would be a $1.86 billion investment in the state. They also say it would increase demand from markets seeking fuel with lower greenhouse gas emissions.
Rhoden, a longtime advocate for property rights, said the bill does not end the proposed project.
“I encourage Summit and others to view it as an opportunity for a needed reset,” Rhoden said in a statement on March 6. “Voluntary easements for this proposed project will still be able to move forward. In fact, without the threat of eminent domain, the opportunity might finally be available for trust to be rebuilt and for more productive conversations to occur between Summit and South Dakota landowners.”
Wendland said his Tuesday conversation with Rhoden was productive, and he believes the governor tried to find a compromise before signing the eminent domain ban. That proved impossible after several years of political strife caused by the project, including a voter-rejected compromise bill last year and the primary election losses of more than a dozen incumbent Republican legislators after the passage of that bill.
“He said the issue was taking up too much time for everybody, and by signing the bill, that all went away,” Wendland said. “But at our expense, at agriculture’s expense.”
Rhoden and Lt. Gov. Tony Venhuizen discussed their support of the eminent domain ban when they kicked off their “Open for Opportunity” tour Monday in Sioux Falls. Venhuizen referenced the divisiveness of the issue.
“I hope that these legislators in our state politics can kind of move beyond it,” he said. “Because it was having a very corrosive effect on our state politics.”
Rhoden said the debate “made me just sick to my stomach because there wasn’t a good answer.” He said the narrative about supporters of the project became too negative.
“If you believed in the carbon pipeline, then you were just a tree-hugging, green energy, Green New Deal, Biden Democrat,” Rhoden said.
Eric Baukol is the CEO of Redfield Energy, another ethanol plant hoping to connect to the Summit pipeline. He said he understands the politics of it all, but that doesn’t make it any less disappointing.
“If I were them and I wanted to be elected, it makes total sense,” he said. “But it’s short-sighted. The shift toward carbon sequestration in agriculture is coming, and this will likely be a burden.”
Redfield Energy Board Chairman Jim Klebsch said that while some politicians at the Capitol in Pierre told him they got elected to oppose eminent domain for the project, “they knew in their heart and in their mind that the project was good for South Dakota.”
“It was easier just to shut it down and walk away than it was to fight the real fight,” Klebsch said. “We can’t sustain current corn prices. Land prices will suffer, and local tax revenues along with them. Something will have to happen, and the pipeline project was one solution.”
Lawmakers who supported the eminent domain ban hailed it as a victory for property rights.
Sen. Tom Pischke, R-Dell Rapids, voted for the bill when it passed the Senate on March 4.
“Private companies should not be able to take South Dakotans’ land against their will,” he said at the time.
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