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There has been much discussion in Iowa about CO2 pipeline companies seeking the use of Eminent Domain to seize the land of others in their quest to build pipelines. Recently, North Dakota refused to grant permits for the pipelines, for reasons mostly related to the pipeline companies’ refusal to take the concerns of landowners and local governments into account. The pipeline companies continue to be their own worst enemy, refusing to recognize the rights and concerns of landowners and local elected officials.

The Iowa Utilities Board (IUB) has been busy changing schedules and speeding up the process in ways that appear to benefit the pipeline companies seeking the power of government to assist them in their efforts. I joined a group of legislators in filing an intervention with the IUB in support of landowners and in opposition to using Eminent Domain for these projects. In this edition of Freedom Watch, I will highlight the legal argument against the use of Eminent Domain for these projects.

In my capacity as House Judiciary Chair, I have the opportunity to consult with great legal minds, and I truly appreciated their input as I formulated my thoughts for my intervention testimony to the IUB. My focus is on the Eminent Domain clause of the Iowa Constitution, and to Iowa Code that grants limited authority to the IUB for the purposes of pipeline Eminent Domain procedures. My review of the law, in consultation with legal scholars, leads me to conclude that neither state law nor the Iowa Constitution allow the IUB to grant Eminent Domain permits in this case.

The Legislature’s grant of authority to the IUB is broad, but it is not absolute. The CO2 pipeline companies seeking permission to take the land of Iowans want the IUB and Iowans to believe that the IUB’s authority is absolute. Such is not the case.

The Legislature’s grant of authority in Chapter 479B indeed gives the IUB strong powers. Chapter 479B.9 states, “The board may grant a permit in whole or in part upon terms, conditions, and restrictions as to location and route as it determines to be just and proper.”

However, the very same code section also places strict limitations on the IUB’s power to condemn private property through the use of Eminent Domain. Specifically, the very next sentence in the code section states: “A permit shall not be granted to a pipeline company unless the board determines that the proposed services will promote the public convenience and necessity.” This is a profoundly important instruction to the IUB that is being overlooked in much of this discussion.

I believe legislative intent can be clearly determined by what is found in the text of a statute. In this case, the limitations on the Legislature’s grant of authority to the IUB could not be more clear. The IUB may exercise the authority the Legislature has granted it, if doing so will “promote the public convenience and necessity.” Note this is not convenience OR necessity. So, the question becomes “will this taking promote both?” If so, the process may continue to the next question: “Is this a public use under the Iowa Constitution?” If that is so, then the IUB may continue, under the power granted to it by the Iowa Legislature. If the answer to any part of this instruction is no, the request to use Eminent Domain must stop.

At first glance, someone could look at recent Iowa Supreme Court decisions and conclude that the Legislature has in fact granted absolute authority to the the IUB to interpret the Constitutional takings clause and the relevant statutes I have discussed. However, nothing could be further from the truth. While the Iowa Supreme Court, in the 2019 Bakken case, also addressed a pipeline, it is indisputable that not all pipelines are the same. Additionally, not all CO2 pipelines are the same. While the Iowa Code considers liquid CO2 to be a hazardous liquid, the similarities end there. Therefore, the reasons for the claim for Eminent Domain must be judged on their own merits under Iowa Law. For several reasons, the claim fails that test.

The claim for Eminent Domain fails because the Legislature’s grant of power to the IUB is narrow, even more narrow than the constitutional standard. It is also more limited. The Iowa Constitution’s standard for Eminent Domain is public use, which prior to the U.S. Supreme Court Kelo decision, was also the federal standard. The Iowa Legislature narrowed the grant of authority to the IUB to only “promotion of the public convenience and necessity.”

Reasonable people can argue the boundaries of “public use,” as is obvious from the Kelo decision, but we should all be able to agree that “public convenience and necessity” is a very high bar indeed. This clear and decisive language is what tells the IUB and any Court what legislative intent is. It is a narrow grant of authority when both of those statutory conditions are met, and only then when the constitutional requirement of public use is also met.

This limited authority (public convenience and necessity) is clear to me and is also clear to the many property owners whose livelihoods and ways of life are being threatened by the misinterpretation of the grant of legislative authority.

In a number of my newsletters discussing Eminent Domain, I have discussed the issue of public use. It is important to do so again. The idea of capturing CO2 and burying it may one day significantly increase the dollar valuation of the companies seeking Eminent Domain, even as the benefit to the environment is debated. Those points may be persuasive to an Iowa landowner or investor. The market might reward those who invested in this effort, and perhaps many landowners are satisfied with their voluntary transactions with the pipeline companies. However, these factors do not somehow become ‘public use,’ and ‘convenient and necessary’ just because a business wants it to be so.

Pipeline companies are no different than any other private business asking for the heavy hand of government to help them along. When the Legislature or Executive Branch do that, it is usually through a subsidy or a tax incentive. In such a case we are talking about a policy decision, not a legal one. The help these companies are asking for is the blunt force of government to take someone else’s land. This is an unacceptable and unconstitutional use of Eminent Domain that does not meet legal requirements in Iowa.

Many times, in this discussion I have talked about the U.S. Supreme Court case, Kelo vs. the City of New London. This is the case that permitted the taking of private property for economic development purposes. This decision opened the door to a vast expansion of government power over people and was an assault on property rights in particular. In effect, it destroyed the protections in the Takings Clause of the 5th amendment. It is an infamous decision that I hope will someday be revisited. However, to my knowledge, a similar conclusion has not been reached in Iowa, when it comes to the legal meaning of public use as opposed to public benefit.

The legal issues swirling around Eminent Domain for CO2 pipelines will very likely end up with the Iowa Supreme Court. At the very least, the IUB should agree that the facts and the law have not yet been fully examined and ruled on, and should tread most carefully.

With that in mind, while I am convinced that granting Eminent Domain would be contrary to Iowa law in this case, an even worse scenario is the IUB doing so without being fully aware of the facts and law that are still evolving. Such an outcome is fully avoidable, yet difficult to undo. The IUB needs to recognize that even the threshold question of what the law means has not been fully determined or adjudicated with finality in the Iowa Courts and make decisions accordingly.

I believe it is clear that the IUB should deny this Eminent Domain request/permit based upon the letter of the law in Iowa. There are significant and distinct differences between an oil pipeline and the CO2 pipeline at issue in this case. Even if the IUB concluded that the Bakken pipeline would satisfy the very high bar of being appropriate for the “promotion of the public convenience and necessity,” the difference between shipping oil versus these companies’ plan to ship liquid CO2 in a pipeline and bury it is real and significant. Oil and natural gas not only fit the public use standard, but they also promote the public convenience and necessity. These products are essential for human survival. They heat our homes, cook our foods and fuel our transportation. Such is not the case with transporting CO2 to be buried in the ground. There is simply no comparison.

Under no possible consideration of Iowa law, the constitution, or the simple rule of logic does a CO2 pipeline satisfy the legal requirements in Iowa for the use of Eminent Domain. The CO2 pipeline business model benefits a company and its plan to provide a commercial service to industrial plants. That may be good for their bottom line, and landowners may choose to lease their land to these companies and that is their choice, but this is where the rubber meets the road: government cannot force landowners to do so for the benefit of the company when the legal requirements for the use of such power have not been met.

The IUB Pipeline Eminent Domain process is allowed only under the two conditions that were enacted into statute, both of which are governed by the constitutional requirement of public use.

If we have arrived at a point in which “public convenience and necessity” is interpreted as a blank check for companies to take people’s land – if the government becomes the ‘business agent’ for a private interest – then we not only violate state law as the Legislature wrote it, but we violate the trust of our fellow citizens. In so doing, we will have fundamentally and irreparably damaged the cause of liberty, rendering property rights nearly meaningless.

The Iowa Utilities Board must follow the Constitution and Iowa code and deny the use of Eminent Domain for the CO2 pipeline projects.

George Washington the Father of our Country, who could have been a king but instead chose to be our first President, said it best: “Freedom and Property Rights are inseparable. You can’t have one without the other.”

Author: Steven Holt


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