Eminent domain bill for pipelines gets early Iowa Senate support

by Jared Strong, Iowa Capital Dispatch
April 9, 2024

Legislation that would give landowners a better opportunity to challenge eminent domain requests by carbon dioxide pipeline companies in court was advanced Tuesday by an Iowa Senate subcommittee.

House File 2664 would enable those landowners — or the pipeline companies — to seek judicial review of the requests earlier in the state’s pipeline permit process. It would also enable them to challenge state regulators’ decisions about the pipeline permits in court and potentially halt pipeline construction without having to post a bond to cover the companies’ financial losses that are tied to those delays.

The House-approved bill applies to all hazardous liquid pipelines, including those that carry anhydrous ammonia and oil. State law allows pipeline companies to use eminent domain to gain easements from unwilling landowners to construct and operate their pipelines on land the companies don’t own.

Proponents of the bill say it strengthens landowners’ rights and might reduce their uncertainty about the future of their properties. Opponents say the current permit process is sufficient to protect landowners and that the bill has the potential to kill unpopular projects.

Those who oppose such projects “could use the tools of this bill to stop virtually any pipeline project in the state because they could create endless timelines, and time kills projects,” said Jeff Boeyink, a lobbyist for Summit Carbon Solutions. “And this creates enormous risk for anybody who wants to invest in a pipeline in the future … and investors simply are going to shy away from that kind of risk.”

The legislation is a response to landowners’ concerns about Summit’s proposed pipeline system, which would span five states and transport captured carbon dioxide from ethanol plants in Iowa to North Dakota for underground sequestration.

Summit seeks eminent domain for about a quarter of its initial 690-mile route in Iowa. It recently announced a 340-mile expansion of the project.

An Iowa Utilities Board decision about Summit’s initial permit request for the project is imminent, which would partially nullify the effects of the bill on the company’s project. The first part of the legislation would allow landowners who are subject to eminent domain to seek a court review before the IUB decides whether to grant a permit and eminent domain.

Under current rules, landowners must wait for the IUB decision and then challenge it in court. Summit’s permit process has been ongoing for more than two years with the board and might conclude before the law would take effect.

But the second part of the bill — which stipulates that landowners and others “shall not be required to post a bond to stay action on the permit” — could come into play.

“If the pipeline is approved, and we appeal the decision, we don’t want them to build the pipeline while we’re waiting for a judge’s decision,” said Jess Mazour, of the Sierra Club of Iowa, which opposes Summit’s project. “In Iowa right now you have to put up a bond that could be hundreds of millions of dollars. We can’t afford it.”

Three senators recommended the bill for further consideration, although Sen. Jason Schultz, R-Schleswig, who led the subcommittee, said it will likely be amended.

“I do believe this is the correct thing … to give people an opportunity to know the fate of their land without waiting three years,” he said. “That just seems cruel and unusual.”

He said parts of the bill might be tweaked to ensure it won’t result in an endless loop of litigation that could doom pipeline projects, and that its scope could be narrowed solely to carbon dioxide pipelines in an attempt to get broader support in the Senate.

The bill passed the House 86-7 last month. The House approved a different bill last year that would have required pipeline companies to gain voluntary easements for 90% of their routes before being eligible for eminent domain, but that bill stalled in the Senate.

Sens. Dan Dawson, R-Council Bluffs, and Herman Quirmbach, D-Ames, joined Schultz in recommending the new bill.

Iowa Capital Dispatch is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com. Follow Iowa Capital Dispatch on Facebook and Twitter.