Rural Matters

Government Shut Down, Farm Bill Expiration, Eminent Domain

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Landus continues to monitor state and federal legislation that can have direct impacts Landus members. Policy like eminent domain encroachment and rural funding in the 2023 Farm Bill are just a few examples of how Landus will continue to provide insight on what’s important to farmers and our rural communities. 

Farm Bill and Appropriations

Congress is running out of time to avoid a government shutdown. The fiscal year end is September 30, which gives legislators one week to pass 12 spending bills and avoid a total government shutdown. A shutdown could mean no October Crop Production report, which is scheduled to be published on October 12. 

Listen to the Landus Crop Tour Report in the 9/12 edition of the GROW Podcast

The current Farm Bill is also set to expire on September 30. Due to the battle of appropriation funding, it is expected Farm Bill 2023 passage will be delayed up to nine months. The next Farm Bill is shaping up to be the most expensive one to date, at an estimated cost over five years of $1.51 trillion. 

Despite the call for bipartisan unity, there has been fiery debate over the Supplemental Nutrition Assistance Program (SNAP) benefits in early Farm Bill discussions. SNAP benefits comprise approximately 80% of the total Farm Bill budget. Some Congressional members are pushing for stricter work requirements, which could add another layer of complexity to the already challenging bill.

North and South Dakota CO2 Pipeline Ruling

Two CO2 pipeline companies are still seeking the use of eminent domain for interstate pipeline projects. Summit Carbon Solutions proposal was initially declined by North Dakota regulators to build the pipeline through the state. Utility regulators denied Summit a siting permit last month, however the proposal was reopened on the grounds of “clarifying the issues to be considered.”

Iowa opponents of the pipeline have argued that Summit’s petition for a hazardous liquid pipeline in the state should be paused until it receives approval in North Dakota and surrounding states the pipeline will run through like Iowa, Minnesota, Nebraska, and South Dakota. 

Utility regulators in South Dakota denied Summit a permit to build its pipeline in that state.

The company’s proposal was set to start its final evidentiary hearing that day, but the South Dakota Public Utilities Commission agreed with its staff that the project would violate several county ordinances that restrict where the pipeline can be built.

South Dakota's Public Utilities Commission has unanimously denied an application by Navigator Heartland Greenway LLC to build a portion of its controversial carbon capture pipeline system in that state — the same pipeline that is slated to pass through Iowa. 

Navigator received the thumbs-down Wednesday in a 3-0 vote by the board. It was not immediately clear how the South Dakota denial would affect Navigator's plans for Iowa. 

The South Dakota commission also unanimously denied Navigator's motion to preempt local ordinances as a means of circumventing what the company considers overly restrictive setback requirements for the pipeline.

In Iowa at the Iowa Utility Board Hearings

Week three of the IUB hearings, Summit has said it wants to start construction on its project next year, but James Powell, the company’s chief operating officer, testified that construction in Iowa would not happen without approval from the Dakotas. 

Iowa residents who oppose the project have been unsuccessful so far in fleshing out a clear view of the people and companies that own Summit Carbon Solutions. More information was sought from the company’s executives last week during the Summit’s evidentiary hearing with the IUB, but those executives said they didn’t know much about the company’s owners.

“That’s a private investment,” said James Powell, chief operating officer of Summit Carbon Solutions. “I’m not part of that decision-making process.” 

Bruce Rastetter, an investor in Summit Carbon Solutions as well as its co-founder, might be able to provide those details. 

Hirth alleges that Summit’s parent company has the ability to depress ethanol prices, undercutting its justification for the project. 

“Mr. Rastetter’s testimony will help the board see the entire stage that Summit Ag has set and understand whether or not Summit Carbon’s proposed pipeline is part of a larger corporate undertaking that violates” Iowa law, wrote Anna Ryon, an attorney for Hirth. 

Hirth alleges that Summit Agricultural Group’s infrastructure in Brazil — which the company claims produces the “lowest cost, most sustainable gallon of ethanol in the world” — threatens the price of Iowa-made ethanol. Hirth also claims that Summit Carbon Solutions’ agreements with a dozen ethanol plants in Iowa contain “anticompetitive provisions.” 

The details of those agreements are obscured from public view because of a confidentiality agreement that has restricted their disclosure to the attorneys who represent groups who sought them. 

Also restricted from public view are the toxic release plume models that have been requested by landowner and their attorneys from Summit to understand the dangers of a hazardous CO2 pipeline rupture and the safety precautions that must be planned for in the event of a pipeline rupture. 

The first two weeks of the hearing featured landowners who were threatened with eminent domain requests by Summit because they declined to sign easement agreements with the company.

Eminent Domain and Your Farm

Many of you may ask why we are reporting on Summit Carbon Solution and Navigator’s efforts to build the CO2 pipelines across Iowa. The answer lies in the process to acquire land to build the pipeline. Eminent Domain is the real issue that everyone who owns any kind of property in Iowa (certainly farmland owners) should be concerned about. Eminent Domain is the government’s power to take private property for public benefit. (Traditionally, this was meant for publicly beneficial projects like roads and bridges)

With Summit Carbon Solutions and Navigator both being private, for-profit companies, it can be argued that these projects don’t meet the “for public benefit” guideline. The concern is: if the Iowa Utility Board grants them the power of eminent domain — where does this power stop? Will your property be the next victim of a for-profit project that is allowed to happen because it provides jobs while being built? Landus is supportive of the ethanol industry, and while they are not against the actual CO2 pipeline, many Landus members have expressed the concern of allowing eminent domain to be used for such a project.

In fact, when polled at Landus Innovation Connector events this year, farmers voted 76% higher importance to protecting their property rights against eminent domain – over the importance of the carbon capture pipelines.

It has been claimed that the ethanol industry needs the CO2 pipeline to survive. However, the new 45Z tax credits that take effect in January of 2025 would allow/encourage ethanol plants to pay producers premiums directly for low carbon crops. This seems to be a much more equitable solution; to pay the farmer directly for sustainable practices — rather than rewarding the few investors of the CO2 pipelines. The low carbon corn would allow participating ethanol plants to sell to carbon friendly markets, such as California. This solution would give ethanol plants and farmers the ability to access higher markets with low carbon fuels made from sustainable raised Iowa corn.

We welcome your input on these issues or others that you would like to see addressed here. For questions, comments, or concerns, please contact Landus external affairs lead, Sue Tronchetti.

Working together on rural matters.