Congressmen show pipeline support

By Erin Voegele | September 08, 2008
Several congressmen from the Midwest are pushing for legislation that could improve the feasibility of ethanol pipelines. In particular, two pieces of legislation were introduced on both sides of Congress in July and have been referred to the applicable committees.

U.S. Sens. Tom Harkin, D-Iowa, and Richard Lugar, R-Ind., introduced the Biofuels Pipeline Act of 2008, which would give pipeline owners that move ethanol the same tax benefits they receive for moving petroleum products. Currently, a provision in the tax code prevents publicly traded partnerships (PTPs), which build and operate most liquid pipelines, from moving forward with biofuels projects. Under current laws, PTPs must earn 90 percent of their income from exploration, transportation, storage or marketing of depletable natural resources, including oil, gas and coal. Renewable fuels aren't currently included in the law. The act would change the tax code, allowing PTPs to earn qualified income from transporting, storing or marketing any renewable liquid fuel approved by the U.S. EPA. The measure was referred to the Senate Finance Committee.

U.S. Reps. Leonard Boswell, D-Iowa, and Lee Terry, R-Neb., introduced the Renewable Fuel Pipeline Act, which would amend the Energy Policy Act of 2005 to provide loan guarantees for projects to construct renewable fuel pipelines. It would also increase the loan guarantee rate to 90 percent. The act was referred to various House committees, including the Committee on Energy and Commerce, and the Committee on Transportation and Infrastructure. On Aug. 20, Boswell held a press conference in Iowa to highlight the need to improve the infrastructure for transporting ethanol from the Midwest to the rest of the country. Representatives from Magellan Pipeline Co., the Iowa Corn Growers Association and the Iowa Renewable Fuels Association also participated.

Also in July, South Dakota Gov. Mike Rounds appointed seven people to the South Dakota Underground Pipeline Task Force, which was created to review the status of existing and proposed water, natural gas, ethanol and refined petroleum pipelines in South Dakota. It will also assess the adequacy of state laws and regulations regarding those pipelines. The task force held its first meeting Aug. 14. It must present findings to Rounds by Dec. 1.