South Dakota’s energy boom too much too soon?

SOUTH DAKOTA - As South Dakota continues an energy boom that began a decade ago, Don Carr watches from afar and says this state's residents may be getting in too deep too fast.

Since the ethanol boom began a decade ago, South Dakota has become home to 16 ethanol plants.

The state was once home to only a handful of individual wind turbines, but since the construction of the state's first large wind farm in 2003, four large wind farms have been constructed with at least another three under way or scheduled for construction. In the past 18 months, the amount of wind power in South Dakota has increased by 700 percent, producing approximately 285 megawatts of wind production capacity.

TransCanada, a Canadian oil company, is at present constructing its Keystone pipeline through the eastern portion of the state on its way to refineries in Oklahoma and Illinois.

Another TransCanada line, the Keystone XL, is proposed to be buried in central and western South Dakota.

The proposed Hyperion project may eventually see a huge oil refinery constructed in the extreme southeast corner of South Dakota, near Elk Point.

Energy proponents proudly note the quick development the state has seen, landowners are collecting payments from use of their property, and public entities such as school districts will get some of the collected tax revenue.

But some people have concerns about the state's rapid progress of energy development.

"Industry wants things to happen fast (and) a lot of times, environmental concerns and safeguards are an afterthought," said Carr, press secretary for agriculture and public lands for an organization called the Environmental Working Group. Carr also is a former communications director for the South Dakota Democratic National Committee. "We are constantly fighting the idea that environmental safeguards come second."

The debate about South Dakota's energy boom has caused something of a split. Both sides of the issue, and the political spectrum, wonder about the speed with which the state should embrace new energy industries.

Paul Blackburn, staff attorney for Plains Justice in Vermillion, a public interest law center that focuses on environmental issues, said he believes South Dakota's renewable energy advancements still lag behind neighboring states like Iowa and Minnesota.

"Relative to other states in the region, South Dakota has very little installed wind capacity," Blackburn said. "South Dakota is lagging way behind some other states in terms of its development."

Part of that relates to the national economy, he said, but the oft-discussed lack of transmission capacity also plays a role.

"I think that South Dakota should look into allowing more South Dakotans to sell their product via the wires that currently exist to customers in other states rather than having those wires be continually maintained for an exclusive use of fossil fuel interests," he said.

Sen. John Thune, R-S.D., also would like to see South Dakota progress faster.

"I would argue that we haven't moved fast enough," said Thune, who has long been a key figure behind energy development in the state. "There is so much pent-up opportunity in South Dakota for wind."

While alternative energy sources like wind may be embraced by many as the future of energy production, opinions on the pace and methods of such advancement differ throughout the state.

South Dakota Public Utilities Commissioner Dusty Johnson said the general consensus is that South Dakota should move faster to bring certain industries ¬ó wind farms, for instance ¬ó to the state.

The amount of channeled wind power in the state has increased 700 percent in the last 18 months, Johnson said, and work is continuing to lay groundwork for new wind farm projects.

As the process of constructing new wind farms in the state continues, Johnson said he hasn't fielded many complaints from residents concerned about the rate of progress.

"We haven't heard a lot from people who think we're moving too quickly," Johnson said. "By and large, we're hearing from people who would like to see the state move faster."

Johnson said the state was farsighted in preparing for companies interested in erecting wind farms in the area. Legally, wind rights can't be severed from property rights, nor do property owners legally sign an easement for more than 50 years.

Easement options also expire after five years, which prevents landowners from "signing up with the wrong developer and getting locked up for (numerous) years," Johnson said.

Members of the Legislature may soon hear from those who feel that such options actually give the landowner too much power over energy companies.

Johnson said developers have recently started to voice concerns about the five-year option expiration, and he expects to see the issue come up during the next legislative session.

"Some developers think that five-year window is too short because it takes so long to build this many massive, multimillion dollar facilities," Johnson said. "(There) will absolutely be legislation addressing that."

While Blackburn believes that South Dakota has a good amount of untapped renewable energy potential, he is concerned that residents aren't getting their due.

"There's been a long history in South Dakota of the wealth of the state being pulled outside the state by people or organizations that live outside South Dakota," Blackburn said. "It is quite possible for the wealth that's generated by wind and renewable energy development to end up outside the state."

Thune would like to see wind energy start to emulate the ethanol industry by having more local ownership.

The passage of a renewable energy standard by Congress and an improved economy could seriously boost the chances of such an increase.

"I'm very optimistic. Economics continue to improve as technology gets better," Thune said. "Those things are only creating forward momentum for wind energy in South Dakota."

Thune acknowledged that transmission issues continue to be the biggest hindrance to the growth of wind energy in South Dakota, but he's hopeful the future will hold the solution to the transmission capacity problem and make South Dakota "the Saudi Arabia of wind."

Blackburn believes that some transmission concerns could be solved using existing wires. He'd like to see independent studies conducted on the state's current transmission structure. It's also important to Blackburn that South Dakotans learn more about wind and other renewable energies and contact state regulators to ask for more efficient means of delivery.

"They need to... encourage the regulators to promote these solutions," Blackburn said. "I think that sometimes the state regulators focus so much on rate that they don't think about the actual cost of power to the customers."

Since the boom of ethanol production began in South Dakota, 16 plants have been constructed, including Poet Biorefining near Loomis, which, according to Johnson, "is doing some of the best research in the world on cellulosic ethanol."

But Jim Margadant, regional conservation organizer for the South Dakota Chapter of the Sierra Club in Rapid City, is hoping South Dakota will place a stronger focus on cleaner energy sources, such as wind, instead of fuels that leave a larger carbon footprint.

Margadant expects water to become "more and more precious" as time goes on. Since biofuel manufacturers are large consumers of water, ethanol production may prove to be an increasingly inefficient source of energy, he said.

"Our state is kind of clinging to assisting and developing an energy policy that is pretty carbon dependent and it leaves a pretty dirty footprint," Margadant said. "That is not the way of the future."

Carr acknowledges that ethanol has been good for South Dakota's economy, but he's still waiting for proof that the federally subsidized industry is environmentally friendly. That, Thune said, is "bogus science."

"There is no question that ethanol is better environmentally than traditional fuels," Thune said. "You cannot tell me that something that comes from a product like corn isn't better than something that comes from petroleum for the environment."

As for the question of subsidies, Thune said the amount saved by not having to pay as many countercyclical and loan deficiency payments to farmers because of increased corn prices is much more than the tax incentives offered.

More wind farms can mean less reliance on other, more carbon-heavy, methods of energy production, Carr said.

Carr is concerned that increasing acres of fuel crops such as corn reduces the number of conservation acres, like those in the Conservation Reserve Program.

That, he said, also could have detrimental effects on the environment.

"The worry is... that when land is taken out of CRP or these other conservation programs and plowed under and used to plant fuel crops, those lands are not replaced," Carr said. "When you plow them under, you release carbon in the atmosphere and you also take away land that cannot sequester carbon."

Thune, a longtime advocate of increasing CRP acres in South Dakota, said he's concerned about the decreased number of CRP acres but doesn't believe ethanol is a major factor. The increased price of corn simply makes it more logical for farmers to plant corn instead of enroll in the program, he said.

"I don't think you can say that because of ethanol, everybody's pulling their land out of CRP," Thune said.


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