A U.S. Supreme Court decision, a South Dakota Supreme Court ruling, and South Dakota voters will impact the biofuels industry in various ways.
Supreme Review
Refineries vs. biofuels producers. Those are the players involved as the U.S. Supreme Court reviews petitions concerning the Renewable Fuel Standard. Biofuels producers see the RFS as vital to their ability to survive in the energy sector with its mandate that a minimum amount of biofuel (called Renewable Volume Obligations) is part of the nation’s fuel supply.
The purpose behind the RFS is to reduce the nation’s reliance on fossil fuels.
Refineries know that the more they are required to include biofuels, the less demand there will be for petroleum gasoline. Small refineries can get exemptions through the U.S. Environmental Protection Agency.
RELATED: Farmdoc daily explains the history of the Renewable Fuel Standard and the provisions that allow small refineries to apply for a waiver. Read that here.
Biofuels producers hope that the review by the U.S. Supreme Court is a positive development.
In July, a federal appeals court sided with small oil refineries and rejected the E.P.A.’s 2022 decision that denied temporary waivers to small oil refineries. Read the Reuters article on that decision here.
Pipeline Problem
An Iowa company hoping to build a carbon sequestration pipeline across five states has hit another legal setback. The South Dakota Supreme Court rejected Summit Carbon Solutions’ petition. The company wants the court to consider it a common carrier.
Common carrier status could allow Summit to use eminent domain to force access for its pipeline project on landowners’ property.
Summit wants to build the 2,500-mile pipeline through Iowa, Nebraska, Minnesota, North Dakota, and South Dakota. The pipeline would carry liquid carbon dioxide from ethanol plants and store it in an underground storage tank in North Dakota.
Ethanol producers think the project could reduce carbon emissions, making their product more environmentally friendly. Lowering carbon emissions could also allow the pipeline company to qualify for significant federal tax credits.
Some landowners have fought the project with some expressing concerns about risk to their property from the pipeline or a potential hazardous leak. Summit has been working with legislators and regulators in five states to get the necessary legal authority for the project.
People’s Choice
Summit Carbon Solutions doesn’t just need the courts and regulators to approve all the aspects of South Dakota’s portion of its $8 billion carbon pipeline; it also needs the voters’ permission. Referred Law 21 goes before South Dakota voters on November 5.
Here are the main aspects of Referred Law 21:
Authorizes counties to impose a $1.00 per foot surcharge on carbon dioxide pipelines for each year that a pipeline company receives a federal tax credit. The county gets half of the revenue, and the landowner receives half.
The company must install pipelines at a minimum depth of four feet and assume responsibility for damage to drain tile.
Carbon pipeline operators must begin business operations within five years of establishing an easement. Otherwise, the company loses the easement.
Requires the pipeline company to indemnify lawmakers for liability.
Requires the pipeline company to notify landowners of what happens if there is a leak.
The pipeline company must pay for any damage caused by leaks.
RELATED: South Dakota Searchlight explains the requirements of Referred Law 21 and has statements from a supporter and an opponent. Read that here.
