The Iowa media have been doing a great job at reporting on the stand off between the Iowa House and Senate on the battle over granting eminent domain power to Summit Carbon Solutions to seize swaths of Iowa farmland for Summit’s Federal tax-credit scheme. The press has been less aggressive in telling Iowans about the issues that are actually in play.
This is understandable since, while the House bill is relatively straightforward, the Senate bill is long, complex, and tedious. It’s also riddled with little booby-traps and carefully camouflaged trip wires, so any analysis risks missing a huge risk embedded in the text.
In the spirit of transparency, I thought the Standard’s readership might appreciate a list of 20 of the biggest problems in the Klimesh proposal.
Please note that by listing these, I do not mean to suggest that all these problems are insoluble. Some (such as the proposal’s continued reliance on the unlawful use of eminent domain power, or pretending that the famously corrupt Iowa Utilities Commission can be a neutral arbiter) might elude even Solomonic solutions. Others, like safety and insurance protocols, might be easier. However, the problems certainly cannot be solved until they are identified. Here, then, in no particular order, are twenty of the biggest legal and policy problems embedded in the Klimesh proposal:
- The bill’s implicit acceptance of eminent domain for private CO₂ pipelines.
The bill assumes as a predicate that eminent domain may constitutionally be exercised for carbon dioxide pipelines, thereby codifying the very premise that landowners are actively litigating in state courts. Any party that engages with the bill’s procedural framework implicitly concedes this constitutional argument.
- The concentration of all material decision-making authority in the Iowa Utilities Commission.
The IUC is assigned sole authority to approve the template easement, approve the valuation methodology, determine whether the pipeline company made a “diligent effort,” grant extensions, and ultimately decide whether eminent domain is justified — despite widespread and credible concerns about the Commission’s impartiality in the Summit Carbon Solutions proceedings.
- Self-reporting of “diligent effort” by the pipeline company.
The pipeline company is to file its own account of its negotiation efforts, characterize its own diligence, explain why negotiations failed, and describe landowners’ positions. This all is to occur without independent verification or adversarial testing of the company’s claims.
- Confidentiality shield over the “diligent effort” record.
The bill exempts the pipeline company’s self-reported negotiation record from public disclosure under Chapter 22. Landowners cannot verify the company’s claims, journalists cannot investigate them, and the public cannot scrutinize them. Only the compromised IUC reviews the evidence.
- Massive expansion of eminent domain exposure through the corridor provision.
The “voluntary easement corridor” (defined as the entire county plus five miles on either side of the proposed route) expands the number of parcels potentially subject to condemnation from a few hundred to potentially thousands. Landowners miles from the original route are drawn into the process. One calculation puts the total land area that would now be subject to possible eminent domain seizure at more than 14% of the surface area of Iowa.
- The corridor mechanism converts voluntary easement refusals into justification for condemnation.
When landowners within the corridor decline voluntary easements, their refusals become part of the evidentiary record supporting the pipeline company’s claim that it exercised “diligent effort” and that eminent domain is now necessary.
- Inadequate seven-day opt-out window.
Landowners are given only seven calendar days after receiving a written easement offer to exercise the opt-out — an insufficient period to secure legal counsel, understand the implications, and make an informed decision, particularly given the pipeline company’s years of preparation and permanent legal staff.
- The opt-out does not actually stop pipeline company contact.
Even after a landowner opts out, the pipeline company may continue to send certified mail making offers or soliciting further communication. The opt-out changes the form of contact rather than eliminating it.
- Opting out is self-defeating within the corridor framework.
When a landowner opts out, the parcel is “deemed unavailable.” But if enough landowners opt out and a voluntary route cannot be assembled, the aggregate opt-outs strengthen the company’s case for eminent domain — making the exercise of the opt-out right counterproductive for the landowner.
- Complete absence of substantive safety provisions.
The bill contains no setback requirements from homes, schools, or hospitals; no emergency response mandates; no insurance or financial assurance requirements; and no provisions addressing CO₂ pipeline rupture risks — despite PHMSA’s own acknowledgment that existing federal regulations are inadequate for supercritical CO₂ pipelines.
- No insurance or bonding requirements.
The bill does not require the pipeline company to demonstrate adequate third-party insurance coverage or bonding adequate to cover liabilities from a pipeline failure.
- Failure to address corporate ownership opacity.
The bill does not require disclosure of the pipeline company’s complete ownership structure, including parent entities, subsidiaries, and investors, leaving affected Iowans unable to assess who is ultimately responsible for the pipeline or whether the entity has adequate financial capacity to meet its obligations. Moreover, if this pipeline were to be built, Iowans need strong assurances that ownership, control, and management of this highly dangerous device are not with persons who might be tempted to create a catastrophe through sabotage.
- Retroactivity to January 2022 and January 2024.
The bill reaches back in time to affect proceedings that have already occurred, in which landowners have raised legal challenges and courts are actively considering the legitimacy of the pipeline company’s prior conduct. This is not prospective reform; it is retroactive validation of contested past actions.
- Retroactivity provisions raise special legislation concerns under the Iowa Constitution.
A statute that retroactively validates one company’s past conduct while that conduct is the subject of active litigation has the attributes of a private bill granting exclusive privileges and immunities, potentially violating the Iowa Constitution’s prohibition on special legislation.
- The “economic infeasibility” exception converts landowner resistance into grounds for condemnation.
When landowners decline below-market offers, the company may claim that paying fair value renders the project economically infeasible. The more landowners insist on adequate compensation, the stronger the company’s case for eminent domain becomes — a one-directional mechanism that penalizes the exercise of property rights.
- The valuation methodology is controlled by the pipeline company and approved by the IUC.
The pipeline company proposes the methodology for valuing easements, and the IUC — whose impartiality is in question — approves it. Landowners have no meaningful role in establishing how their property is valued.
- Procedural complexity that advantages the better-resourced party.
The bill’s elaborate procedural framework envisions multiple filing deadlines, comment periods, and administrative proceedings. Getting the system to function on even a basic level will require significant resources. The pipeline company has permanent staff for this purpose; individual landowners do not. Additional procedure does not equal additional protection when there is a fundamental asymmetry of resources.
- No provision for publicly funded legal assistance to landowners.
The bill creates a complex procedural framework but provides no mechanism to ensure that landowners have access to legal counsel capable of navigating it, leaving individual farm families to match resources with a pipeline company backed by institutional investors. With the Office of the Consumer Advocate having been neutered, there is no institutional method for the landowners’ side to be raised. While normally parties bear their own costs, this would be a state-created lawfare arena where one side has rocket-propelled grenades and the other side has spitballs. Any pipeline routing mechanism that claims it is giving landowners a fair deal must create some funded mechanism for the landowner viewpoint to be expressed.
- The bill is tailored to benefit one specific company.
The retroactivity provisions targeting pipelines “designed for the transportation of liquefied carbon dioxide,” the timing of the effective dates, and the overall structure of the bill correspond precisely to the circumstances of Summit Carbon Solutions’ pending project, indicating legislation written for the benefit of a particular entity rather than for the general public interest.
- Extensions available “upon a showing of good cause” without defined standards.
The bill permits the IUC to grant the pipeline company extensions of time “upon a showing of good cause,” but does not define what constitutes good cause, leaving the standard entirely to the discretion of the same regulatory body whose impartiality is at issue.
* * *
Twenty major problems in a bill is a significant challenge. Again, some could, at least in theory, be addressed through amendment. But several of these are structural and not cosmetic. These include the acceptance of eminent domain for a private tax-credit harvesting scheme, the reliance on a compromised regulatory body, and the retroactive validation of contested conduct. Problems like these probably cannot be patched without dismantling the bill.
What makes this list particularly necessary is that the Senate leadership has shown no interest in permitting open discussion of any of these issues.
The Senate procedural record is an embarrassment to any serious legislative body. A strike-after amendment was used to supplant the House approach with the Klimesh version; the sole rationale for this move is to cut off any deliberation on the House’s framework. The Senate’s subcommittee hearing on the bill was assigned to the smallest available meeting room at an odd-ball, early hour. And, to make absolutely sure the topic of eminent domain would not be debated on the Senate floor, the Senate proponents couldn’t resist dragging out the old “double-barrel” maneuver, where two nearly identical amendments to a bill are filed in quick succession in order to render further amendments (and debate) out of order.
These are not the actions of senators confident in the merits of their proposal. They are the actions of a group of legislators desperate to ensure that the fundamental question of eminent domain never receives an open hearing. If the Senate’s approach is so wise and so compelling, one might ask why its proponents go to such extraordinary lengths to prevent discussion of it.
By identifying these twenty problems, perhaps we can at least begin that conversation — assuming the coy but supremely august senators in charge of the show deign to descend from Mt. Olympus long enough to engage with the grubby mortals who elected them.
Love this letter. Well done.