Iowa State House, Senate Propose Competing Carbon-Pipeline Bills

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land Texas)

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Summary

Iowa's House has passed a law that completely bans the use of eminent domain for carbon pipelines. While that bill goes to a Senate subcommittee for review, a state senator has proposed a competing bill that leaves eminent domain as a potential last resort, but allows more flexibility in a pipeline's route in order to obtain voluntary easements.

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Two Congressional Chambers, Three Bills

Last week, Iowa's state House of Representatives passed a bill banning the use of eminent domain in the construction of carbon pipelines. The proposed bill, passed 64 to 28 by the House, now moves to a state Senate subcommittee for review.

In a related move, Iowa's Senate Majority Leader Mike Klimesh (R) introduced legislation regarding all hazardous liquids pipelines, which includes carbon pipelines. One bill would leave eminent domain as a last resort in pipeline construction but would allow developers to pursue alternative routes within a county or five miles of the pipeline route approved by the Iowa Utilities Commission. This flexibility in the route would, in theory, provide greater opportunities for developers to source out voluntary easements. Pipeline companies must present the commission with evidence that they have "diligently sought to devise a route of voluntary easements" and have been unable to do so before requesting eminent domain power.

The other bill introduced last week by Klimesh calls for a severance tax on carbon dioxide, meaning it would be taxed as a removed natural resource when transported through the pipeline. The tax would be a flat fee per ton of carbon dioxide. Severance taxes on resources are predominately seen in petroleum-rich states such as Texas, North Dakota and New Mexico, where such taxes on extracted oil and gas contribute to state coffers. This proposal by the Iowa senator appears much less controversial than his proposal addressing land acquisition and eminent domain.

Differing Voices

At the heart of the debate in Iowa are two competing factions: landowners who want nothing to do with the pipelines and resent them being forced onto their property, and the corn-growers and ethanol producers who see the move providing benefits that start with lower carbon emissions and lead to increased sales and higher and more competitiveness on the global market with a lower-carbon product, in this case ethanol.

The Project at the Heart of the Matter (And Then There Was One)

For a number of years, there were two major U.S. carbon pipeline developments, creating contracts with dozens of ethanol plants to capture, move and transport the plants' carbon dioxide. The companies developing these pipelines, establishing routes and signing on plants, were Summit Carbon Solutions (Ames, Iowa) and Navigator CO2 (Omaha, Nebraska).

Navigator, citing too many regulatory hurdles and opposition, specifically referencing challenging climates and pushback in Iowa and South Dakota, canceled its entire project in late 2023. Refiner and ethanol producer Valero (San Antonio, Texas) had signed several plants up for Navigator's services, making the company the anchor shipper for the project.

That left Summit Carbon Solutions, and the company is having severe difficulties in the two states most responsible for driving Navigator out of action--Iowa and South Dakota. Showing the scale of Summit's project, the company has signed up around 57 ethanol plants across five states to ship carbon on the approximately 2,500-miles pipeline network.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can learn more by viewing IIR's related reports on Summit's Midwest Carbon Express Pipeline, as well as the canceled Navigator project.

South Dakota Challenges

Summit had a serious obstacle hurled at it in March 2025, when South Dakota banned the use of eminent domain for carbon pipelines. Following the ban, Summit applied to cancel its pending pipeline application with the state's Public Utilities Commission (PUC), which it was not allowed to do. The PUC then rejected the application the following month.

Summit has suggested that it would make new plans in the state that reduce the project's scope there. However, no new plans have been submitted since the PUC's April rejection, and an October 2025 report from Carbon Herald suggested that Summit was considering completely eliminating South Dakota from its plans, potentially scrapping plans for North Dakota as well, where the company's carbon-storage site would be located.

North Dakota approved Summit's plans in that state, which include 333 miles of pipeline as well as the carbon sink, in late November 2024, although opposing voices remain. These dissenting opinions on the project's approval don't seem to be gaining as much traction as they have in South Dakota and Iowa, however.

And those two states are immensely important to Summit's plans, with contracts to serve about 40 of the 57 ethanol plants signed on for the project.

Iowa Opinions

While the Senate's bill that expands possible routes but leaves room for eminent domain may be workable for the company, the Iowa Capital Dispatch reports lobbyists for Summit saying that the House legislation, which would remove all possibilities of eminent domain, would effectively kill the entire project.

A CBS affiliate based in Des Moines reported that although the state's House advanced the eminent domain ban, the majority of the debate leading up to the vote on the bill was filled with critics of the legislation, who repeatedly tout the economic and environmental benefits the pipeline would provide.

Tellingly, however, while the entire project revolves around the green idea of capturing carbon-dioxide emissions, and the local chapter of the Sierra Club actually opposes the project on the grounds of property rights. The Capital Dispatch quoted Jess Mazour, the conservation program associate with Sierra Club Iowa Chapter, who said of Senator Majority Leader Klimesh's proposed bill, "A lot of the stuff that he's saying is simply just a misdirection and a distraction away from the issue at hand, which is property rights, and the ability for someone to say no, and that's not addressed in his bill whatsoever."

A Tenuous Future

With plans severely hampered, if not outright destroyed, in South Dakota, Iowa's pending legislation on carbon pipelines will have a significant on Summit. While the Senate's bill leaves room for the project's development, the legislation introduced in the state's House would effectively mean the project could not move forward in any way approaching its proposed scale.

Key Takeaways

• Iowa's state House has passed a bill banning the use of eminent domain in the construction of carbon pipelines. The bill now goes to a Senate subcommittee.
• Meanwhile, an Iowa state senator has proposed legislation that would widen available pipeline routes in order to help find voluntary easements, but still leaves eminent domain on the table.
• The bills primarily affect Summit Carbon Solutions' planned 2,500-mile carbon pipeline project, covering 57 ethanol plants in five midwestern states.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).