Why Are North and South Dakota Fighting Over Carbon Pipelines?

A $9 billion carbon pipelines project has triggered a legal standoff between North and South Dakota. South Dakota’s eminent domain ban threatens to derail Summit Carbon Solutions’ ambitious plan to transport CO₂ from ethanol plants across state lines. North Dakota officials explored legal action but recently backed down, leaving the project’s future uncertain.

What’s Behind the Carbon Pipeline Controversy

Ethanol plants face a competitive problem. While ethanol is renewable, its production generates CO₂ emissions. This puts these facilities at a disadvantage when competing in low-carbon fuel markets.

Summit Carbon Solutions proposed a solution: build carbon pipelines to capture CO₂ from ethanol plants and store it underground in North Dakota. The project would help ethanol producers maintain their market position in renewable energy sectors.

The catch? The pipeline route requires crossing private property in multiple states. Summit Carbon needs land easements from property owners—and that’s where everything fell apart.

Why These States Can’t Agree

Both North and South Dakota earned an A grade from the Institute for Justice for protecting private property rights. Yet they’ve taken opposite stances on carbon pipelines and eminent domain.

North Dakota supports the project because it benefits the ethanol industry and corn farmers. The state sees economic value in storing CO₂ underground.

South Dakota views it differently. Representative Jon Hansen argued the project takes property rights from residents to benefit a private company. When property owners across South Dakota opposed giving up easements, state lawmakers listened.

South Dakota Blocks the Pipeline

In March 2025, South Dakota passed House Bill 1052. The law prohibits using eminent domain “to acquire right-of-way for, construct, or operate a pipeline for the preponderant purpose of transporting carbon oxide.”

This legislation effectively blocks Summit Carbon from forcing property owners to grant easements. Without those easements, the multi-state carbon pipelines project cannot proceed as planned.

Summit Carbon complained the law specifically targeted their project. North Dakota Attorney General Drew Wrigley called it a “hostile act” against his state’s interests.

Governor Larry Rhoden defended South Dakota’s position. Drawing from his experience protecting property rights, he insisted companies should negotiate voluntary land-access agreements rather than force property transfers through eminent domain.

The Constitutional Question

Attorney General Wrigley initially considered challenging South Dakota’s law under the Dormant Commerce Clause. This constitutional principle prevents states from passing laws that unduly burden interstate commerce.

Courts use a balancing test when evaluating these challenges. They weigh the burden on interstate commerce against local benefits and consider whether less restrictive alternatives exist.

After reviewing the legal landscape, Wrigley acknowledged the challenge wasn’t viable. In September 2025, he stated he doesn’t see a legal path forward to overturn South Dakota’s carbon pipelines ban.

What This Means for Property Owners

This dispute highlights the tension between economic development and property rights. Similar conflicts affect property owners nationwide, from pipeline projects to tax assessments.

If you’re facing property rights issues, whether related to eminent domain or other concerns, experienced legal guidance makes a difference. An eminent domain attorney can help you understand your rights when government or private entities seek to acquire your property. For property owners in New Jersey dealing with assessment disputes, a property tax lawyer or NJ property tax appeal lawyer can challenge unfair valuations. Those facing New Jersey eminent domain cases need legal representation that understands both state law and constitutional protections.

What Happens Next

The carbon pipelines project remains stalled. Summit Carbon must either negotiate voluntary easements with every South Dakota property owner along the route or redesign the pipeline to avoid the state entirely—both expensive and time-consuming options.

North Dakota’s decision not to pursue legal action suggests this dispute may not reach the courts. The resolution likely depends on whether Summit Carbon can convince South Dakota property owners to voluntarily grant easements or whether the company abandons its current pipeline route.

This case demonstrates how property rights protections can override major infrastructure projects, even those valued at billions of dollars. It also shows that neighboring states with similar political philosophies can reach vastly different conclusions when private property rights conflict with economic interests.

Protect Your Property Rights

Facing eminent domain or property disputes? Get legal guidance.

Property rights issues require experienced legal representation. Whether you’re dealing with pipeline easements, eminent domain actions, or unfair property tax assessments, MROD’s attorneys understand the complexities of property law. We protect property owners’ rights against government overreach and corporate interests. Schedule a consultation now.