Summit: South Dakota regulator has conflict

The Iowa company proposing a carbon dioxide pipeline has formally requested that a South Dakota regulator recuse herself from the project’s permit application in that state because of an alleged conflict of interest — but the regulator said she does not have “a legal conflict.”

In a letter sent last week, Summit Carbon Solutions asked South Dakota Public Utilities Commissioner Kristie Fiegen to disqualify herself. That would allow the governor to appoint another state official to fill in for Fiegen during the three-member commission’s consideration of Summit’s application.

Summit wants to construct a $9 billion, five-state pipeline to capture and transport some of the carbon dioxide emitted by 57 ethanol plants to an underground storage area in North Dakota. The project would capitalize on federal tax credits incentivizing the prevention of heat-trapping carbon emissions into the atmosphere.

The project has a storage permit in North Dakota and route permits in North Dakota, Iowa and Minnesota, while Nebraska has no state permitting process for CO2 pipelines. The project also faces litigation from opponents in multiple states.

This is Summit’s second application in South Dakota, after the state’s Public Utilities Commission rejected the first application in 2023. Fiegen recused herself from those proceedings and was replaced then by State Treasurer Josh Haeder.

At the time, Fiegen wrote a recusal letter saying she had a conflict because the pipeline “would cross land owned by my sister-in-law (my husband’s sister) and her husband.” Fiegen also recused herself from an earlier, separate crude oil pipeline permit application for a similar reason.

Fiegen has not recused herself from the new application, but Summit said the same conflict exists.

“As with your previous decisions,” said the company’s new letter to Fiegen, “the facts and established South Dakota law support a decision that you should step aside.”

Fiegen responded with a letter to Summit. In its entirety, Fiegen’s letter said, “I am an elected Public Utilities Commissioner and will carry out my duties as such. I do not have a legal conflict. I am sitting on the docket.”

The Summit letter drew criticism from an attorney representing landowners opposed to the pipeline, Brian Jorde, of Domina Law Group in Omaha, who disputed the allegation that Fiegen has a conflict of interest.

“From my viewpoint she never had a conflict that rises to the level of recusal and certainly doesn’t now,” Jorde wrote. “The isolated fact that she is related by marriage to a trustee of a trust that owns land that signed an easement with Summit is not a direct conflict.”

The alleged conflict

The commission’s rejection of Summit’s first application in South Dakota was partly due to the route’s conflicts with several county ordinances. Those ordinances mandate minimum distances between pipelines and existing features. Summit’s new proposed route includes some adjustments.

The original pipeline route crossed three parcels in the state’s Minnehaha County owned by Fiegen’s sister-in-law and her husband, Jean Fiegen-Ordal and Jeffrey Ordal, and three parcels in McCook County owned by the Jeffrey A. Ordal Living Trust, which lists the couple as trustees.

Summit said it paid a total of $175,000 for easements and future crop damages on that land, including $88,000 to the Ordals. Summit declined to tell Searchlight where the remainder of the money went, but public records show the Ordals sold their Minnehaha County land after signing the easement documents in 2022.

The new pipeline route would cross the same parcels — the Minnehaha County land that the Ordals no longer own, and the McCook County land that’s still owned by the Ordals’ trust.

Summit: Litigation possible

Summit’s new letter said the logic that motivated Fiegen’s prior recusal remains unchanged. The company said her involvement risks violating South Dakota law, which the company said bars officials from participating in matters where conflicts exist.

The letter said Fiegen’s failure to recuse herself could lead to litigation, an appeal of the commission’s eventual permit decision and delays in the permitting process.

“Because your family has a direct interest in the approval or denial of the permit, and because you previously recused yourself in two dockets based on the same facts, a court almost certainly would find it inappropriate for you to participate in this docket,” the letter states.

This article first appeared in the South Dakota Searchlight.