PUC Ready to Use 2019 Amendment to Deny Environmentalists Standing in Carbon Dioxide Pipeline Permit Process

In 2019, the Legislature passed Senate Bill 15, which added solar energy facilities to the Public Utilities Commission’s portfolio, changed public notice and comment requirements for PUC permit applications, and stripped conservation organizations and other lobbying groups of their standing to intervene in PUC permit applications. Covering agency scope, transparency, public participation, and due process rights, the much-hoghoused 2019 SB 15 gleefully violated the single-subject rule and could easily be overturned in court… but remember: the state only invokes that rule against the voters, not against its own interests.

I mention this two-year-old multi-subject bill this morning because the reduced-standing provision of 2019 SB 15 may be headed for its first serious test in the PUC’s consideration of the Summit Carbon Solutions carbon dioxide pipeline. The latest document in PUC docket HP22-001 is a March 17 memo from the PUC staff on intervention. “The Commission has not yet had the opportunity to opine on SDCL 49-41B-17 as it pertains to individual intervenors since the statute was amended in 2019,” writes PUC staff attorney Kristen N. Edwards. PUC staff so opines now.

Until 2019, SDCL 49-41B-17 granted standing in PUC permit processes as follows:

The parties to a proceeding under this chapter unless otherwise provided include:

1. The Public Utilities Commission and applicant;
2. Each municipality, county and governmental agency in the area where the facility is proposed to be sited, if timely application therefore is made as determined by the commission pursuant to rule; and
3. Any person residing in the area where the facility is proposed to be sited, any nonprofit organization, formed in whole or in part to promote conservation or natural beauty, to protect the environment, personal health or other biological values, to preserve historical sites, to promote consumer interests, represent commercial and industrial groups, or to promote the orderly development of the areas in which the facility is to be sited or any interested person, if timely application therefore is made as determined by the commission pursuant to rule. A statement filed by a party to a permit proceeding shall become part of the record and shall be available to the public [emphasis mine; SDCL 49-41B-17, prior to amendment by 2019 SB 15 Section 7].

Now SDCL 49-41B-17 reads as follows, with the major 2019 SB 15 changes bolded:

The parties to a proceeding under this chapter unless otherwise provided include:

1. The commission staff;
2. The applicant;
3. Each municipality, county and governmental agency in the area where the facility is proposed to be sited, if timely application therefore is made as determined by the commission pursuant to rule; and
4. Any person residing in the area where the facility is proposed to be sited, or any directly interested person, if timely application therefore is made as determined by the commission pursuant to rule. An application for party status in a proceeding under this chapter must contain a detailed statement of the interests and reasons prompting the application [emphasis mine; SDCL 49-41B-17, as amended by 2019 SB 15 Section 7].

Notice that, along with advocacy groups for conservation, consumers, and business, the law used to allow “any interested person” to intervene in a PUC permit application. In addition to striking advocacy groups’ automatic standing, 2019 SB 15 added the requirement that interested persons sticking their nose into PUC business have a “direct” interest in the applicant project.

“Person” still includes organizations and corporations [SDCL 49-41B-2(9)], so, theoretically, Dakota Rural Action, NDN Collective, the Izaak Walton League, the Chamber of Commerce, Americans for Anarcho-Capitalism Prosperity, and any other advocacy group could intervene by establishing that they are “directly interested persons.”

But citing case law from the South Dakota Supreme Court and the United States Supreme Court, the PUC staff memo works to narrow the definition of “direct interest” to make it hard for such organizations to intervene:

The South Dakota Supreme Court has held that “the interest which entitles a party to intervene must be a direct interest, by which the intervening party is to obtain immediate gain or suffer loss by the judgment which may be rendered between the original parties.” Jackson v. Board of County Commissioners for Pennington County, 76 SD 495, 500, 81 NW2d 686, 689 (1957).

…The United States Supreme Court has also taken this position. In Sierra Club v. Morton, the Supreme Court held that the Sierra Club lacked standing to challenge construction of a ski resort because the Sierra Club did not allege that any of its members would be significantly affected by the development of the ski resort. Morton, 405 US 727 (1972). The Morton Court stated that although it did not deny that the ski resort could cause ‘injury in fact’, “the ‘injury in fact’ test requires more than injury to a cognizable interest. It requires that the party seeking review be himself among the injured.” Id. at 735.

Therefore, in order to be entitled to intervention as an individual with a direct interest pursuant to SDCL 49-41B-17, a person must demonstrate that they will suffer immediate gain or loss if the Commission grants or if the Commission denies a siting permit in this docket [Edwards, 2022.03.17].

The PUC shows two party status applications, from Hartford real estate developer William G. Haugen Jr. of DEH III LLC and Eagle Butte anti-pipeline activist Joye Braun. Haugen claims that the Summit Carbon Solutions project includes an alternative route that may affect property his company owns. Pipeline running through one’s property poses a pretty clear possibility of immediate loss.

Braun submits this statement, which establishes her passionate interest in stopping this project:

The Summit Carbon Pipeline threatens the land and air of South Dakota, potential cultural resources and is a false solution, using unproven technology to climate change. It furthers the expansion and dependence on oil without offering real solutions to climate change and puts South Dakota at further risk of soil degradation, and pipeline explosions [Joye Braun, Application for Party Status, PUC Docket HP22-011, 2022.03.16].

I certainly would like Braun and anyone else, individual or organization, with concerns about climate change and the role this carbon dioxide pipeline may play in addressing that problem to have a chance to speak to the PUC on this project. But I have a bad feeling that the PUC’s lawyers will dismiss Braun’s application for failing to demonstrate that she personally faces immediate loss due to this project. Eagle Butte is 62 miles from the nearest part of carbon dioxide pipeline, the terminus of the Onida spur, so the pipeline won’t seize any property, plow any dirt, or leak any carbon dioxide that would affect Braun directly. Failing to solve climate change isn’t an immediate harm; Summit Carbon Solutions can argue that their project actually reduces the harms of climate change by reducing carbon emissions. Perpetuating dependence on oil isn’t an immediate harm; Big Oil is certainly interested in this project, but the pipeline itself doesn’t carry oil, so even if we could persuade the PUC that extending dependence on oil is a harm, we’d have to work through a complicated argument to demonstrate that the amount of carbon dioxide sequestered by this pipeline will be less than the additional amount of carbon dioxide produced by increased oil usage facilitated specifically by this project. Environmental organizations are the advocates best equipped to compose such an analysis, but even the most rigorous analysis of that possible trade-off may fail to meet the standard of immediate loss.

Watch for the PUC to accept Haugen’s application for party status but reject Braun’s application. Then we’ll see if Braun or other South Dakotans with environmental concerns about this pipeline can challenge the denial of standing wrought by 2019 Senate Bill 15.