South Dakota state Rep. Karla Lems, R-Canton, speaks to hundreds of rally attendees at the South Dakota Capitol in Pierre on Jan. 13, 2025, during an event highlighting opposition to a carbon dioxide pipeline. (Photo by Joshua Haiar/South Dakota Searchlight)
Lawmakers and advocates on the right and left are raising questions about a provision in legislation a powerful U.S. House committee approved Wednesday, with critics arguing it would allow federal regulators to approve natural gas and carbon dioxide pipelines over prohibitions in state law.
Two sections in the House Energy and Commerce Committee’s reconciliation instructions, which the Republican-led panel passed along party lines, would allow pipeline operators to pay $10 million to participate in an expedited federal permitting process that critics say would override state laws.
The potentially intensely controversial provision would give the Federal Energy Regulatory Commission exclusive authority to issue licenses for pipelines carrying natural gas, carbon dioxide, hydrogen, oil, or other energy products and byproducts.
“Notwithstanding any other provision of law, if the Commission issues a license under subsection (c)(1) of this section and the licensee is in compliance with such license, no requirement of State or local law that requires approval of the location of the covered pipeline with respect to which the license is issued may be enforced against the licensee,” the text of the bill reads.
A summary document provided by the committee says the bill would apply to states only in cases when state agencies are responsible for conducting federal reviews.
“For States, this includes their authorities to impose conditions for any certifying authorities delegated to States by federal law,” the document says.
But a variety of groups and lawmakers — environmental groups opposed to loosening reviews, landholder advocates concerned about property rights and small-government conservatives who favor local control — say the measure would open the door for the federal government to nullify state and local protections.
That includes a recent South Dakota law to prevent pipeline operators from using eminent domain to force landowners to sell or allow use of their property.
“This is federal overreach,” South Dakota state Rep. Karla Lems said in a Thursday interview. “It would override any state or local law regarding … the routing of a pipeline.”
Trump’s ‘big, beautiful bill’
The Energy and Commerce Committee was one of 11 House panels that have approved reconciliation instructions and sent them to the House Budget Committee to consolidate into one package. House Republicans plan to consider the 1,100-page package on the floor next week.
The complex process, known as budget reconciliation, allows the majority party to pass legislation with simple majorities in both chambers, avoiding the U.S. Senate’s usual 60-vote requirement.
President Donald Trump has described the package as “one big, beautiful bill” and it contains a host of his domestic policy priorities including extending tax cuts and increasing funding for immigration enforcement.
A provision in Democrats’ 2022 reconciliation bill encouraged an existing trend of pipeline installation in the Midwest. The measure provided tax breaks for carbon sequestration, which can involve piping the carbon dioxide byproducts that result from processes like ethanol production into underground storage chambers.
Actually building those pipelines across hundreds of miles between ethanol producers, particularly in farm states like Iowa and South Dakota, and underground storage facilities in North Dakota, where the geology supports it, requires the use of private land, which has been strongly opposed for several reasons and led to state restrictions.
Environmental and safety groups worry some pipeline at some point will rupture and therefore pose a danger to nearby residents and water sources.
Private property owners and conservative political allies say they should have stronger rights to resist pipeline operators from using their property.
Plea to Congress
That unusual coalition was apparent again this week as environmentalists and conservatives united to oppose the measure in the Energy and Commerce bill.
A collection of 70 environmental and conservation groups signed a letter to the committee Wednesday urging the language be removed.
“These measures would radically expand federal jurisdiction over all types of interstate pipelines, drastically limit public input, shorten environmental review timelines, and shield projects from legal challenges, all while clearing the way for expanded use of federal eminent domain against landowners,” the letter said.
The letter was signed by groups ranging from the local agriculture and conservation organization Dakota Rural Action to national environmental group Food & Water Watch.
South Dakota House Speaker Jon Hansen, a self-described MAGA Republican, tweeted screenshots of the provision with the message “property rights are under attack again.”
Florida Gov. Ron DeSantis, a Republican former U.S. House member and rival to Trump in the 2024 presidential nomination race, reposted the tweet.
“This represents overriding both the rights of states and private property owners to serve Biden’s Green New Deal,” DeSantis wrote above Hansen’s message. “What the heck is going on up there?”
Uncertainty over impact
Chase Jensen, a senior organizer with Dakota Rural Action, said in a press release accompanying the coalition letter that the group was calling on members of Congress “to stand with the State of South Dakota and oppose this clear attempt to buy permits and bypass the people.”
“When South Dakota was first faced with carbon dioxide pipelines, our congressmen said it was up to the state to deal with it,” Jensen said. “Now that we have barred eminent domain for these private projects – their billionaire owners are trying to cut the state out of the process altogether.”
South Dakota’s U.S. House member, Republican Dusty Johnson, said in a statement to South Dakota Searchlight he’d been unaware of the bill’s language but predicted it would be removed before final passage.
He indicated he was unsure what the effect of the bill would be, but started “from a place of deep skepticism.”
“I wasn’t aware of this language until committee text was released,” Johnson, who does not sit on Energy and Commerce, wrote. “As a former public utilities commissioner, I have strong concerns with bypassing state permitting and I begin from a place of deep skepticism for this language. I doubt it will be included in President Trump’s ‘one, big, beautiful bill.’”
But U.S. Rep. Julie Fedorchak, a North Dakota Republican who is a former state utility regulator, told reporters on a press call Thursday morning that she thought the bill would not block the state from being involved in environmental reviews, even if a company seeks a pipeline permit from federal regulators.
Fedorchak said she doesn’t think the proposal would limit local input on projects, adding that FERC has a “pretty robust permitting process” for interstate natural gas pipelines.
A spokesman for the Energy and Commerce Committee did not return a message seeking clarification Thursday.
North Dakota Monitor Editor Amy Dalrymple and South Dakota Searchlight Editor Seth Tupper contributed to this report.
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