NOTE: The hearing will continue Tuesday, August 8, at 9:30 a.m. in the state Capitol, room 413, in Pierre.
FORT PIERRE, S.D. (KELO) — The vice president of commercial operations for Valero Renewable Fuels said Saturday that the carbon-dioxide pipeline Navigator wants to build in South Dakota and four other states would help the company’s ethanol plants compete against producers from Brazil in U.S., Canadian and European markets.
Michael Harrison told the South Dakota Public Utilities Commission that the pipeline is an integral part of Valero’s plan for reducing carbon intensity. The commission is deciding whether to grant a state permit for the project.
California, Oregon and Washington already have carbon-reduction laws in place and other states are considering them. “With a lower carbon intensity we’ll be able to stop Brazilian production from coming to California and be more competitive,” Harrison said.
The pipeline would qualify for federal tax credits. “We’re not in it for the tax credits. We’re not a tax credit company. We’re a renewable fuels company,” Harrison said.
Valero pays an additional five cents more per bushel to farmers who document that they used sustainable practices such as no-till or low-till for corn delivered to five of the company’s ethanol plants, and plans are to offer the incentive at Valero’s plant at Aurora, South Dakota, in the coming months, according to Harrison.
The Navigator line would collect CO2 from the Aurora facility and from POET ethanol plants at Chancellor and Hudson. The line would also collect from other ethanol plants and agricultural facilities in Iowa, Minnesota, Nebraska and Illinois. The CO2 would be shipped to an underground disposal site in central Illinois.
Commission chair Kristie Fiegen said California is transitioning to electric vehicles and there are efforts in Europe as well. Harrison said Valero has a broader strategy. “I think (widespread EV use) is unlikely in South America or Africa. We sell a lot of product in those countries as well,” he stated. “Our analysts think EV penetration is not going to be as great as you hear from others.”
Fiegen said all three commissioners — Chris Nelson farms near White Lake, while Gary Hanson previously owned stock in two ethanol plants — support ethanol and support production agriculture in South Dakota. “Good. Much appreciated,” Harrison replied.
Several witnesses from state government agencies presented their views Saturday.
Hilary Morey, a senior biologist for the South Dakota Game, Fish and Parks Department, reviewed Navigator’s plan from an environmental perspective. Fiegen asked Morey whether that included Navigator’s plume study that estimated impacts from a rupture of the line. “I do not recall if I was provided with a plume study,” Morey said.
Fiegen said the plume report is being treated as confidential at Navigator’s request. “The public is unaware of what the plume study says,” Fiegen said. Morey said the research reports that she reviewed didn’t specifically address CO2 pipelines. Fiegen asked what effect a rupture would have on wildlife. “It would be similar impact as humans’ asphyxiation,” Morey said.
Fiegen said the project must meet criteria set in state law for a transmission project. Those are:
(1) That the proposed trans-state transmission line and route will comply with all applicable laws and rules;
(2) That the proposed trans-state transmission line and route will not pose a threat of serious injury to the environment nor to the social and economic condition of inhabitants or anticipated inhabitants in the siting area;
(3) That the proposed trans-state transmission line and route will not substantially impair the health, safety or welfare of the inhabitants;
(4) That the proposed trans-state transmission line and route will not unduly interfere with the orderly development of the region with due consideration having been given to views of the governing bodies of effective local units of government;
(5) That the proposed trans-state transmission facility will be consistent with the public convenience and necessity in any area or areas which will receive electrical service, either direct or indirect, from the facility, regardless of the state or states in which area or areas are located.
“I’m trying to figure out as a commissioner to have the confidence it won’t affect the heath, safety and welfare if there’s a rupture,” Fiegen said. Morey said she couldn’t make a judgment because she hadn’t seen the plume study.
Commissioner Nelson asked Morey whether it’s GFP’s position that wildlife are inhabitants under those criteria. “That is not our position,” Morey answered. He asked whether the project met the environment requirement. “I don’t know the answer to that,” she said.
Morey acknowledged that she had never asked Navigator for the plume analysis. Nelson asked which the criteria her review addressed. “I believe it would be impacts to the environment,” Morey said. She agreed with a possible condition that Navigator have a third-party environmental monitor in order to receive a permit.
Next to testify was Jenna Carlson Dietmeier (ditt-my-er), the review and compliance officer in the South Dakota state historic preservation office. She said Navigator’s offer to have a cultural-resources monitor would satisfy concerns she had expressed in her pre-filed testimony.
Commissioner Nelson said that one of the landowners who testified earlier in the hearing indicated he might have dinosaur bones on his property. Carlson Dietmeier said her office wouldn’t have jurisdiction. She said the federal government would have jurisdiction if the bones were found on federal property. Fiegen said setting out that process could be a condition to consider.
Nelson also asked what happens if a construction contractor finds something that might be an artifact. Carlson Dietmeier said the contractor normally stops work and contacts federal authorities, followed by a series of next steps. Carlson Dietmeier said that wasn’t in Navigator’s plan at this point but something could be written into it.
Fiegen asked about Navigator’s contacts with tribal interests. “I have not seen any lists of the tribes they contacted or the results of the contact,” Carlson Dietmeier answered.
Hanson asked Carlson Dietmeier whether she would recommend a monitor. She said there is a reference to a tribal monitor in the unanticipated-discoveries plan: “I do think that archaeological monitors, tribal monitors, would be beneficial during construction.”
Hanson said he was concerned about monitors confusing various tribes who have lived in the area throughout the centuries; “There are so many different folks who have been here,” he said.
The next witness was Jon Thurber, a PUC staff analyst. He recommended that route changes should be brought back to the commission for approval. Regarding the plume model, he said Navigator on July 18 submitted a partial response to the staff’s data requests. That was two weeks after the final discovery deadline of July 3.
Thurber said the staff was trying to analyze the mitigation measures that Navigator planned for some 20 inhabited dwellings that are directly within the proposed route’s corridor. “We didn’t have the time to pursue that analysis,” he said.
Navigator also submitted a draft of an emergency response plan on July 18 that was still in the process of being assembled, Thurber said. That plan originally was granted confidential status at the company’s request, too, but the company agreed a few days ago to release it. “That is encouraging,” Thurber said.
The problem, however, is that the PUC staff lacks the expertise to review the emergency response plan, according to Thurber. He said that “in an ideal world” the plan would be available to the public, so that the commission could hear from first responders and other emergency personnel. “Based on the July 18 submittal, it was difficult to get feedback for this hearing,” he said.
Navigator and the staff have agreed on a $10 million road-protection bond that would apply in case of damage during the construction period, according to Thurber. He said Navigator earlier proposed a $4.6 million bond, which staff thought was low.
Under cross-examination, Thurber said the staff hasn’t arrived yet at a definition of a minor route adjustment. He said deviations within the corridor needed to take into consideration the adjacent landowners too. “In a perfect world you get a waiver from the adjacent landowner that everybody’s signed off on,” he said.
Thurber said state administrative rules require submission of the emergency response plan to the commission. Comments at the public meetings showed concern about asphyxiation from the plume in case of a rupture, he said, and the commission should have the information. South Dakota has many small volunteer emergency response organizations, and the commission should have the chance to see if the ERP addresses their safety concerns, he said.