Iowa Lawmakers Weigh Eminent Domain for Carbon Dioxide Pipeline

The Iowa legislature is preparing to take another shot at legislation on carbon dioxide pipelines after last year’s treacherous go-around ended in a veto from the governor.

But lawmakers are finding themselves already at odds on one issue: eminent domain.

The Iowa House of Representatives’ judiciary committee has already introduced and approved a bill that would make it illegal to use eminent domain for carbon dioxide pipelines. The lawmakers’ aim is to protect landowners who oppose Summit Carbon Solutions’ proposed project to transport carbon dioxide captured at ethanol plants across multiple states to where it could be stored underground.

Iowa Senate Majority Leader Mike Klimesh (R), however, wants to take a different approach.

Klimesh this week introduced a bill that would establish a voluntary easement corridor which would allow developers to have more flexibility in their projects’ routes. His hope is pipeline developers will then have more landowners willing to give voluntary permission to use their land for construction, making the touchy issue of eminent domain—where the government takes private property for a public use—irrelevant.

Efforts to advance statewide policies on carbon dioxide pipelines come amid multiple legal fights over Summit’s project.

The Supreme Court this month declined two Iowa counties’ petition to weigh in on whether their ordinances imposing setback requirements for these projects were preempted by federal law. And a lawsuit landowners lobbed against the Iowa Utilities Commission, which approved Summit’s permit for the project a few years ago, is ongoing.

Klimesh, like others, is waiting for the court ruling. He said his bill would fix “multiple problems with one approach” because it focuses on all hazardous liquid pipelines and not solely carbon dioxide pipelines.

“It’s really the best blend for property rights,” Klimesh said.

Steven Holt, who chairs the House’s judiciary committee and is among more than 40 lawmakers intervening in the lawsuit against the IUC, said he’s fine with expanding the corridor—which is what the Senate bill would do—but insists on also including language protecting landowners from eminent domain.

“Eminent domain is still going to be used,” Holt said. “And if you believe, as I do, that it doesn’t meet the constitutional requirement of public use, then one landowner or two landowners or 10 landowners is too much because their constitutional rights are being violated.”

Beyond the Statehouse

The battle in Iowa pitting landowner rights against carbon capture infrastructure is one that’s been playing out all over the country. It reached a pivotal point in South Dakota last year, stemming from opposition over Summit’s proposed project, when the state enacted a law prohibiting using eminent domain for carbon dioxide pipelines.

Some Iowa landowners have been pushing the state to follow South Dakota.

The issue has also stirred up animosity in places like Louisiana, where locals have pushed back against carbon capture and storage projects, parishes have passed ordinances disavowing the projects, and the governor paused new applications for carbon storage wells.

Should Iowa pass the House’s bill and Gov. Kim Reynolds (R) sign it into law, Summit’s already-delayed project as currently planned would be facing down another massive hurdle.

“This bill would effectively block CO2 pipeline projects and cut off access to new and emerging low carbon markets for ethanol and agriculture,” a Summit spokesperson said in a written statement regarding the proposed House bill. “At a time when corn prices are already under pressure, rural communities need policies that expand opportunity and investment—not ones that shut the door on future markets.”

A key unknown in Iowa is how Reynolds would act on any eminent domain bill, should it pass both chambers of the statehouse. Reynolds vetoed a bill last year that included a ban akin to South Dakota’s along with a number of other provisions.

In her veto message, Reynolds said the bill wasn’t “just about eminent domain” and that it set “a troubling precedent that threatens Iowa’s energy reliability, economy, and reputation as a place where businesses can invest with confidence.”

In her Condition of the State address this month, Reynolds didn’t mention eminent domain or carbon dioxide pipelines. Her office didn’t respond to a request for comment on whether Reynolds would support either the House judiciary committee’s bill or Klimesh’s legislation, or whether the eminent domain legislation addresses the concerns she raised in her veto message last year.

Avoiding a Replay

Klimesh’s bill doesn’t prohibit eminent domain, but would require a pipeline company to “make a diligent effort” to comprise its route solely with voluntary conveyances within the project’s corridor. The law would go into effect once enacted, but would apply retroactively for carbon dioxide pipelines going back to 2024, or in some instances, as early as 2022.

How the House responds to Klimesh’s proposal remains to be seen. Iowa Speaker of the House Pat Grassley (R) flicked at Reynolds’ old veto in remarks to kick off this year’s legislative session, saying, “if last year’s bill had too many components to it, then let’s return to the crux of the issue and focus on the topic of eminent domain.”

Last year’s bill made it to Reynolds’ desk after a dozen senators held up budget legislation when they signed a letter stating they wouldn’t vote on it until the chamber considered the eminent domain bill.

Klimesh said he really wants “to avoid a replay,” cautioning that if the legislature zeroes in on a single issue, “it kind of takes away the ability for us to have more of the wide scope of view that I’d like to see us have.”

The House’s Holt said he can’t speak about what will take place in the Senate, but that state lawmakers will keep working on issues they agree on and topicslike property tax reform. Carbon dioxide pipeline legislation is where it might be a bit tougher, he pointed out.

“There’s certainly going to be a little vigorous back and forth,” he said. “That’s for sure.”