Large pipeline project returns to S.D. Public Utilities Commission, with multiple voices seeking input
A new CO2 pipeline project application was recently filed with the South Dakota Public Utilities Commission. In late November, SCS Carbon Transport LLC (“Summit”) applied to the PUC for approval of a pipeline and associated facilities that would transport carbon dioxide generated by ethanol plants (like the one above in a public domain photo posted on wikimedia commons) approximately 698 miles through South Dakota. A previous application by the company was dismissed by the PUC.
The new Summit application describes Summit as a common carrier pipeline that will ship CO2 on behalf of its ethanol producer partners. The project will cross 326 water bodies, including the Big Sioux River.
The application also states, “The Project will cross roads, rivers, and other resources as they are encountered along the route … Construction will cross rural water systems pipelines with potential to impact those lines.”
The judge and jury on this pipeline application, at least at the first stage, are the three elected officials of the PUC. The commissioners. The PUC is what I call a “partial adjudicatory body.” The PUC cannot hear and decide all issues which may come before the commission on any given case, and indeed the PUC often prefers not to hear and decide all the issues which may be presented.
I will discuss this point a bit later in this piece. The PUC is, nevertheless, the go-to government body with the general power to approve or reject an application such as the one under discussion.
A public service commission is one of the more singular agencies in any state government. South Dakota has only three PUC commissioners, Gary Hansen, Chris Nelson, and Kristie Fiegen. The individual commissioners stand for election under a six-year term to administer and adjudge the issues according to their individual judgment pursuant to the laws and administrative rules of the state, the United States, and to their oath of office.
A six-year job is a nice job. I am not aware of any commissioner in my lifetime who was “fired.” If I was smart, well spoken, and good looking, and if I were indeed looking, I might consider running for the job.
In a large case which affects a good number of property owners, and many other interests, the PUC will entertain applications by interested parties to intervene and participate in the case. Interested parties are usually property owners, affected government bodies and affected businesses.
Before an interested party may participate in a case the party must “Briefly explain your interest in this permit proceeding.” As a general matter the PUC is liberal in granting participation. If the application for party status is granted by the commission, the party becomes a formal party, or intervenor, to a contested case.
In the Summit case, the PUC staff recommend a possible stricture on parties who may participate in the case. The PUC staff recommended a specific geographical limitation regarding who may be an interested party. In the relevant part of its memorandum on this matter the PUC staff writes, “Staff recommends that a presumptive two-mile distance be considered as the standard for considering direct interest, absent consideration on a case-by-case basis if additional detail is provided …”
I am not aware of a similar distance limitation in other cases. This unresolved issue will be of importance to pending party status applicants.
The case is new and none of the issues with the Summit application have yet to be heard. Still let us have a look at some interested parties, or parties who wish to participate in the case. Several parties have requested formal party status and some parties only file for PUC consideration of their comments.
The following illustrate but a few of the filings:
As an outside party, the South Dakota Ethanol Producers (SDEPA) seek party status. SDEPA is a nonprofit corporation organized under the laws of the state of South Dakota and is comprised of nine member companies. In its application paperwork it alleges the proposed pipeline will capture and transport CO2 from facilities owned and operated by each of SDEPA’s members.
The application states SDEPA’s members will be directly impacted by all aspects of the project, including identification of and interconnection with CO2 delivery points, construction, operation, maintenance and safety.
Another outside party maintains a different existing pipeline system. The operating common-carrier crude oil pipeline carrier, Dakota Access, LLC (“Dakota Access”), filed for party status. The request was granted early in the case. Dakota Access alleges problems with pipeline crossing agreements and also states it is not aware of information on the technical feasibility of pipeline crossings.
Another outside party filed a comment but did not request formal party status. The party filing as a township provided comments only. The township, in its filing, stated, “When the proposed CO2 pipeline was brought to our attention, we attended meetings and performed research on the proposed project. We advertised, voted and implemented an Ordinance for the Regulation of Carbon Dioxide Pipelines that would be installed within the township. The ordinance was established to protect the electors of the township and their properties. We trust that you will support our ordinance if the pipeline project is approved.”
How does the PUC deal with multiple filings and requests? In the Summit docket, there are a considerable number of comments by the public and by affected parties, and the comment filing period has not ended.
The PUC staff provides a standard notification to potential filers: “SCS Carbon Transport LLC filed a siting permit request with the commission on Nov. 19, 2024, resulting in the opening of docket HP24-001. This Pipeline Siting Information Guide, posted in the docket, explains the commission’s processing of this type of docket. Informal public comments such as yours are reviewed and considered by the PUC commissioners and staff and are posted under Comments and Responses in the publicly available docket. You are encouraged to follow along as more information is received and posted in the docket by the parties involved.”
What are some of the possible issues the observer could see as the Summit application proceeds? The following are several issues the PUC might consider in a pending case. The reader should note that I do not necessarily agree with the issues discussed.
And, it is not here suggested that the PUC will or should apply these issues in deciding the Summit application. Rather, I provide the below to illustrate how the process works.
An applicant must “prove the case.” The responsibility for success in the application process lies with the applicant. The applicant’s standard of proof is by the preponderance of evidence. The applicant has this burden to show the appropriateness and legality of the complete project.
If the commissioners approve an application based on a successful showing of the elements of proof under state law, the commissioners must determine and state for the record that the PUC possesses the legal authority to impose conditions on the construction, operation and maintenance of the project.
Concerning any condemnation issues, the commissioners will usually determine that the PUC has no authority over condemnation or eminent domain and that state law requires that these issues be brought before a state circuit court.
The commissioners ruled in an unrelated prior case that state law does not delegate authority to the PUC to route a transmission facility. In a prior case, the commissioners also found that they lack authority to compel an applicant to select an alternative route. And in the other case, the commissioners ruled that they could not issue a decision on whether to grant or deny a permit for a proposed facility based on whether a selected route is the route the PUC itself might select.
David Ganje is an attorney who practices commercial, natural resources and environmental law. The website is lexenergy.net.
