House passes bill to restrict eminent domain for pipelines

Legislation that would restrict carbon dioxide pipeline companies’ ability to use eminent domain was overwhelmingly approved by the Iowa House on Wednesday.

“I believe that the issue before us today — and the vote that we will take on this issue — is indeed historic,” said Rep. Steven Holt, the Denison Republican who led House File 565 to passage.

The bill would require pipeline companies to obtain voluntary easements for 90% of their routes before they could use eminent domain for the rest.

The bill’s future is unclear in the Senate. House lawmakers amended the bill to remove other restrictions on the pipeline projects — including one that would have empowered counties to set rules about where the pipelines can be built — and about three-quarters of the chamber voted to approve it.

The bill also would expand the ability for landowners to get compensation for crop yield damages that result from pipeline construction and would create a study committee to evaluate current eminent domain regulations.

Another amendment that failed would have stripped all of the pipeline restrictions.

“We single out liquefied carbon pipelines,” said Rep. Norlin Mommsen, R-DeWitt, who proposed that amendment. “Don’t people that have other types of pipelines running through their property deserve some protection?”

Holt said the bill targets carbon dioxide pipelines because they don’t serve the public in a manner that befits the use of eminent domain to build them.

“I believe it’s incredible mental gymnastics to conclude that these pipelines are for public use,” he said. “Yes, these pipelines are important for ethanol and for agriculture in Iowa, but that does not qualify them as ‘public use’ akin to power lines, propane gas or highways.”

State law has no requirement for pipeline companies to obtain a certain amount of voluntary easements from landowners before using eminent domain, subject to approval from the Iowa Utilities Board.

Summit Carbon Solutions, which proposes an expansive pipeline system that would connect to ethanol plants in northern and western Iowa, said Wednesday it has obtained voluntary easements for nearly 70% of its route in the state.

“This overwhelming level of support is a clear reflection that Iowa landowners view the project as critical to supporting the state’s most important industries — ethanol and agriculture,” the company said.

But Rep. Sharon Steckman, D-Mason City, rebuked that notion. She said one of her constituents with a farm in the path of a pipeline opposes the project but signed a voluntary easement because he thinks he can’t prevail.

“That’s his life, his family, everything, and he felt he had no other choice,” Steckman said. “He didn’t want to go bankrupt and lose his farm by fighting this big business so he went ahead and signed.”

Summit is paying up-front for the easements, and landowners would get to keep that money if the pipeline isn’t built, the company has said. It has already spent about $200 million and has criticized legislative efforts to change the hazardous liquid pipeline permit rules in the middle of its process, in part because of that up-front investment.

The company started the permit process in September 2021 with information meetings, applied for a permit in January 2022, and a final hearing on its request is expected to start in October.

Rep. Bobby Kaufmann, R-Wilton, said companies that use government funds and the “tools of government” for projects should anticipate that there might be changes. The three current pipeline proposals are dependent on federal tax incentives that participating ethanol plants would reap if they are able to capture and sequester their carbon dioxide emissions.

“Expect changes when you’re using government to both fund and make your project happen,” he said, and added: “I believe ‘ruining investments’ is a myth. I think it’s a complete myth that these projects need eminent domain for construction.”

But the Iowa Renewable Fuels Association — which advocates for the ethanol industry — said Wednesday that the bill would effectively ban carbon dioxide pipelines in Iowa to the detriment of ethanol plants. It commissioned a study that has dire predictions about lost farm income and a significant reduction of ethanol production if the pipelines aren’t built.

“Singling out (carbon capture and sequestration projects) is a mistake for Iowa’s future,” said Monte Shaw, the association’s executive director. “This bill will hurt Iowa ethanol production, which hurts Iowa corn prices, which hurts Iowa farmers and the economy.”

Several lawmakers have been publicly skeptical about whether the Senate will even consider the bill and whether Gov. Kim Reynolds would sign it. A spokesperson for Reynolds has not responded to a request to comment about the bill, but she has expressed support for the existing permit procedure.

“I do not agree that we know what the governor is going to do in this situation,” Holt said. “I’ve heard a lot of people suggest … that they know that. I don’t think they do. I don’t think any of us have a crystal ball.”