Environmental
Part 2 in our series on Carbon Capture and Storage
If you’re a landowner, you may hold a valuable property interest that is gaining attention across the country: pore space. Pore space is the empty space between the particles of soil, sand, rock, and sediment beneath the surface of your land. It’s a geological formation that, if large enough, can store gas, brine water, and similar substances. Why the recent interest in pore space? It’s a necessity for Carbon Capture and Storage (CCS)—a technology that removes carbon dioxide (CO2) from emission sources and stores it in pore space far beneath the land’s surface.
We began this series on CCS with an overview of the technology and why it’s gaining traction in Ohio. See our first post on the Ohio Ag Law Blog. This second post focuses on legal issues related to pore space. The capacity to store CO2 in the pore space beneath the surface is a property interest that may have value to landowners—one that could be sold or leased to another party for CCS or other storage purposes. But before pore space transactions occur in Ohio, the General Assembly must address a few legal issues: clarification of pore space ownership, whether and how pore space interests can be severed and conveyed, and the relationship between a severed pore space interest and surface and mineral interests. Here’s why these are important legal needs.
- Ownership of pore space. A golden rule of property law partly answers the issue of pore space ownership in Ohio: the “ad coleum” doctrine. The doctrine states that the owner of land owns the rights above and below the land, from the sky to the earth’s core. The assumption under this common law rule, then, is that a landowner owns all subsurface pore space. But what if the pore space is created as a result of a particular activity, like mining? While a few court cases in Ohio have followed the ad coleum doctrine and recognized pore space ownership as an attribute of surface ownership, there have been inconsistent court rulings on the question of ownership of pore space resulting from mining activities. The rulings drive a need for the Ohio legislature to clarify pore space ownership issues, first by codifying the ad coleum doctrine and stating that a surface owner also owns the pore space beneath the surface. Second, statutory law could state whether the surface or mineral owner holds the right to pore space resulting from mineral extraction. If Ohio follows the general rule on mineral extraction adopted among other states, Ohio law would state that the surface owner retains the right to pore space after minerals are fully extracted.
- Severance, conveyance, and recording of pore space interests. Can a surface owner sever the rights to pore space and convey the interest to another party, as Ohio law allows with mineral interests? That’s another legal question in need of clarification in Ohio. The legislature could establish the right to sever pore space and adopt the same conveyancing and recording standards we utilize for tracking other property interests in Ohio.
- Conflicts with other property interests. Can pore space owners interfere with mineral and surface ownership interests by taking actions such as establishing a CCS well on the surface to store CO2 in the pore space? Which property interest has priority over the others if there is a conflict? Our courts can address legal questions as they arise but the Ohio legislature has the power to clear up the relationship between these property interests through statutory law. In particular, Ohio law should establish the priority of rights between the surface, pore space, and mineral interests and answer which is dominant over another when there is a conflict.
Will the legislature tackle these pore space issues that arise with the potential of CCS in Ohio? Possibly, but probably not until the next legislative session begins in January. There are currently proposals in both chambers of the legislature that simply declare an “intent to regulate carbon capture and storage technologies and the geologic sequestration of carbon dioxide for long-term storage,” House Bill 358 and Senate Bill 200, but those bills do not yet contain any detailed language and they will die if not passed by year’s end. With few days remaining in the legislative session this year, the bills are not likely to see any action. There will likely be new versions of the bills introduced next year, however, if the interest in CCS in Ohio continues. Hopefully, the proposals will answer our legal questions about pore space as a property interest of Ohio landowners.
Read the next blog post in this series, which reviews the CCS legislation under consideration in Ohio, at this link.
Tags: pore space, CCS, carbon, carbon capture, carbon injection, carbon lease, carbon sequestration
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One thing we're not short on in agriculture today is the opportunity to engage in carbon sequestration programs. Many programs are available that offer to pay farmers and landowners for adopting practices that sequester carbon dioxide to keep the pollutant out of the atmosphere. The practice aims to reduce greenhouse gas (GHG) emissions, as carbon dioxide is a significant contributor to GHG. Farming practices that sequester carbon include using cover crops, adopting no-till, and planting trees.
If you're considering a carbon sequestration or carbon credit program, what do you need to know about carbon sequestration? An upcoming program offered by OSU Extension's Energy Outreach Program will offer insight into carbon sequestration. Join us on October 29, 2024 at 8 a.m. for a webinar on "Carbon Sequestration for the Farmer and Landowner" and hear from these three panelists:
- Michael Estadt, Assistant Professor & Extension Educator, Pickaway County
- Peggy Kirk Hall, Attorney & Director, Agricultural & Resource Law Program
- John Porter, Outreach & Partnership Liaison,Truterra, LLC
The panel will highlight important issues and considerations for farmers and landowners interested in carbon sequestration. Pre-registration is not necessary; simply join the webinar through this link: go.osu.edu/carbon2024.
Contact Dan Lima at lima.19@osu.edu or call the OSU Extension office in Belmont Co. (740) 695-1455 for more information.
Tags: carbon, carbon sequestration, carbon dioxide, greenhouse gas, climate change, climate smart
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Co-authored by Tyler Zimpfer, Law Fellow, National Agricultural Law Center
This is the first in a four-part series on Carbon Capture and Storage in Ohio. See Part 2 in this blog post, Part 3 in this blog post, and Part 4 in this blog post.
Many in Ohio agriculture are familiar with the terms “carbon sequestration” and “carbon credits.” The terms relate to efforts to reduce carbon in the atmosphere by capturing or “sequestering” the carbon. Ohio farmers have taken advantage of their ability to sequester carbon through practices like conservation tillage and cover crops, thus exchanging carbon sequestration practices or the generation of carbon credits for cash payments.
Now an additional form of carbon sequestration is emerging: Carbon Capture and Storage (“CCS”). CCS is a carbon sequestration technology that industries with large carbon dioxide (CO2) emissions are using to reduce their carbon “footprint.” CCS technology captures CO2 from airborne emissions and injects it into geologic formations beneath the land surface. Because CCS requires land and can reduce the “carbon index” of products like ethanol, the technology has implications for Ohio agriculture.
In this first post on CCS, we’ll lay out the background of CCS and what’s driving interest in it. Future posts will explain legal hurdles for bringing CCS to Ohio, how CCS relates to ethanol and the potential growth of the sustainable aviation fuels market, and how Ohio landowners could be affected by CCS.
What is Carbon Capture and Storage?
CCS is a process that captures carbon dioxide from an emitting source and permanently stores it underground in geologic formations referred to as “pore space.” Though some are hearing of CCS for the first time, CCS technology has existed for decades, as have many studies on its safety, sustainability, and the amount of carbon that can be stored in different formations and regions. The Environmental Protection Agency (“EPA”) finalized a rule regulating geologic sequestration in 2010 pursuant to the agency’s authority under the Safe Drinking Water Act.
CCS involves three separate steps – capture, transport, and storage. CO2 is captured and separated from other gases at industrial facilities or directly from the atmosphere. After captured, the CO2 is then compressed for transportation. The compression forces the CO2 to act like a liquid. CO2 is most commonly transported via pipelines but can also be moved by ship to offshore wells. Once the CO2 arrives at the intended destination, it is injected into rock formations, often a mile or more underground, where it spreads throughout the pore space of the formation in a plume. The CO2 is then permanently stored in the geological formation. CCS technology is also used for “enhanced oil recovery,” because CO2 injection can recover untapped oil reserves in a partially-depleted oil field. When used for enhanced oil recovery and storage, the technology is referred to as “carbon capture utilization and storage” or CCUS. The image below illustrates different types of CCS.
Source: Congressional Budget Office
Regulation of CCS wells
CO2 injection wells are regulated under the federal Safe Drinking Water Act by the EPA through the Underground Injection Control (UIC) Program. The category of wells relevant to CO2 for geological storage is “Class VI” wells. The primary purpose of the Class VI regulations is to protect underground sources of drinking water and prevent leakage, explosions, and contamination. Much attention is currently focused on CCS technology due to a recent Archer Daniels Midland (ADM) suspended the injection of CO2 at a site in Illinois after discovering a potential leak due to corrosion in a monitoring well. While there is no report of water contamination, the EPA found ADM violated federal safe drinking water rules by failing to follow an emergency response plan after detecting the leak.
Why so much interest in CCS?
CCS is expected to be an important strategy of industries that struggle with decarbonization or net-zero greenhouse gas emission goals. CCS can reduce CO2 emissions for hard-to-abate sectors that don’t have other methods for reducing their emissions, such as refineries and cement, steel, and chemical manufacturing
A more recent (and arguably more prominent) factor driving CCS is the current federal tax incentive. The 2022 Inflation Reduction Act (IRA) expanded the tax credit known as “Section 45Q,” first enacted in 2008 and extended in 2018. A company that captures and stores a certain threshold of CO2 every year is eligible for the tax credit. The IRA made several changes to the Section 45Q tax credit to further promote CCS and make it more lucrative and accessible, such as increasing the value of the credit by 70% to $85 per metric ton; lowering the annual capture amount required for eligibility by at least 50% for most facilities; and allowing transferability of the tax credit. With the significant changes in the IRA, researchers expect an increase in CCS projects across the United States.
Can we do CCS in Ohio?
No, not without legislation. Two legal changes are necessary to enable CCS technology in Ohio. (1) Ohio law must define and clarify property rights to the pore space in geological formations beneath land surfaces, and (2) the state must allow the establishment of CCS injection wells in Ohio. We explain these two requirements in our second post in this series on CCS, available at https://farmoffice.osu.edu/blog/carbon-capture-and-storage-legal-issues-pore-space.
For more background information on CCS and Section 45Q, see:
- Congressional Research Service, Carbon Capture and Sequestration (CCS) in the United States, https://crsreports.congress.gov/product/pdf/R/R44902
- Congressional Budget Office, Carbon Capture and Storage in the United States, https://www.cbo.gov/publication/59832#_idTextAnchor007
- Ohio Department of Natural Resources, Carbon Capture, Utilization, & Storage, https://ohiodnr.gov/discover-and-learn/safety-conservation/about-odnr/geologic-survey/energy-resources/carbon-capture-utilization-storage
- Congressional Research Service, The Section 45Q Tax Credit for Carbon Sequestration, https://crsreports.congress.gov/product/pdf/IF/IF11455
Tags: carbon capture, CCS, sequestration, 45Q, pore space, carbon injection, carbon storage
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We are back with another edition of the Ag Law Harvest, where we bring you rulings, laws, and regulations that affect the agricultural industry. This month's Ag Law Harvest is bringing the heat with H-2A wage rule injunctions, cultivated meat ban challenges, sales and use tax issues, and an emergency order from the EPA.
Federal Judge in Georgia Blocks H-2A Wage Rule for Named Plaintiffs. A Georgia federal judge has limited the U.S. Department of Labor's enforcement of a rule titled "Improving Protections for Workers in Temporary Agricultural Employment in the United States" (the “Final Rule”). This rule, challenged by 17 states led by Kansas and Georgia, as well as by Miles Berry Farm and the Georgia Fruit and Vegetable Growers Association (the “Plaintiffs”), is claimed to be unconstitutional. The Plaintiffs argued that the Final Rule violates the 1935 National Labor Relations Act (the “Act”) by granting H-2A farmworkers greater organizing and collective bargaining rights than those afforded to U.S. citizen agricultural workers, effectively bypassing the Act. The U.S. District Court in Georgia sided with the plaintiffs, ruling that the Department of Labor's Final Rule improperly creates a right that Congress did not intend and did not create by statute. The court emphasized that administrative agencies, including the DOL, cannot create laws or rights that Congress has not established. The court criticized the DOL for overstepping its authority, stating that while the DOL can assist Congress, it cannot assume the role of Congress. The court granted a preliminary injunction prohibiting the DOL from enforcing the Final Rule, but only for the Plaintiffs. Thus, the preliminary injunction will only apply in Georgia, Kansas, South Carolina, Arkansas, Florida, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, Nebraska, North Dakota, Oklahoma, Tennessee, Texas, and Virginia. The injunction will also apply to Miles Berry Farm and the Georgia Fruit and Vegetable Growers Association. We will keep you updated as the case goes up on appeal and how this ruling affects other H-2A lawsuits across the country.
Florida Cultivated Meat Ban Challenged. A California business has filed a federal lawsuit against the state of Florida, challenging a law that bans the sale of cultivated meat. The company argues that Florida's prohibition is unconstitutional, claiming it violates their right to engage in interstate commerce by restricting their ability to sell their products across state lines. Upside Foods, Inc., the California based company, alleges that Florida Senate Bill 1084 (“SB 1084”), which bans the manufacture, distribution, and sale of cultivated meat, violates the U.S. Constitution’s Supremacy Clause because SB 1084 “is expressly preempted by federal laws regulating meat and poultry products.” Furthermore, Upside Foods alleges that SB 1084 violates the U.S. Constitution’s Dormant Commerce Clause because SB 1084 “was enacted with the express purpose of insulating Florida agricultural businesses from innovative, out-of-state competition like UPSIDE.” Upside Foods has asked the district court in Florida to declare SB 1084 unconstitutional and to issue an injunction preventing SB 1084’s enforcement. Proponents of SB 1084 argue that the law protects Floridians, however, Upside Foods alleges that the Florida ban isn’t meant to protect the public, rather it was passed to “protect in-state agricultural interests from out-of-state competition.”
Board of Tax Appeals Finds Utility Vehicle Not Exempt Under Agricultural Sales Tax Exemption. Claugus Family Farm LP (CFF), an Ohio timber farm, purchased a 2015 Mercedes-Benz utility vehicle and claimed it was exempt from sales tax under Ohio’s Agricultural Sales Tax Exemption. After an audit, the Ohio Department of Taxation assessed the sales tax on the vehicle. CFF petitioned for reassessment, but the Ohio Tax Commissioner determined that CFF did not provide enough evidence to prove the vehicle was primarily used for farming as required by law. CFF then appealed to the Ohio Board of Tax Appeals, arguing that the vehicle was mainly used for farming operations, such as transporting people around the farm, monitoring tree health, applying pesticides, maintaining equipment, and carrying supplies. CFF claimed the vehicle was used 95% of the time on farming activities. Upon review, the Board of Tax Appeals noted that “the use of vehicles for transportation around a farm, as well as general uses such as delivering parts and cutting and hauling of wood and brush, do not constitute direct farming activities.” The Board held that the vehicle was used primarily for these purposes and not directly in farming and thus found the vehicle to be subject to Ohio’s sales and use tax.
EPA Emergency Order Suspends Use of Pesticide DCPA/Dacthal. On August 7, 2024, the U.S. Environmental Protection Agency (“EPA”) issued an Emergency Order immediately suspending the registration and use of all pesticides containing dimethyl tetrachloroterephthalate (“DCPA” or “Dacthal”). The EPA cited the danger the substance poses to pregnant women and unborn babies. The agency determined that the continued sale, distribution, or use of DCPA products during the cancellation process would present an imminent hazard, justifying the emergency suspension without a prior hearing. Despite efforts by AMVAC Chemical Corporation, the sole registrant of DCPA products, to address these concerns, the EPA concluded that no practicable mitigations could make the use of DCPA safe.
Tags: ag law harvest, H-2A, pesticides, EPA, Cultivated Meat, U.S. Constitution, Ohio Sales Tax, Agricultural Sales Tax Exemption, Ag Law, Farm Law
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Featured Discussion on the Downward Trend in Global Profitability of Crop Farming and a Bearish Outlook for 2024
During its annual conference from June 10th to 14th, the agri benchmark Cash Crop Network discussed recent developments in global crop production. I was fortunate to recently attend the agri benchmark conference in Valladolid, Spain. The conference was hosted by the Spanish Ministry of Agriculture who together with its operating company Tragsa, established and manages a network of 37 typical crop farms. Approximately 55 international experts from all over the world discussed recent results and topical issues of global crop production.
The Ohio State University College of Food, Agricultural and Environmental Sciences is a member of the agri benchmark network and I serve as the network representative for the College. The following are a few selected highlights from the conference.
Last year (2023) was difficult for most typical agri benchmark farms when compared with previous, more profitable, years. Increasing machinery cost and lower output prices many farms experienced a massive downturn in return to land.
The projections for 2024 for the agri benchmark network, which is coordinated by the German Thünen Institute, are even more bearish. The likely relief provided by lower fertilizer prices will not fully compensate for the increase in machinery costs. In addition, based on global price projections, farm-gate production prices are likely to be lower in 2024 than in 2023. Many typical farms are likely to struggle with returns in 2024.
US renewable diesel boom – how US soybean production may increase
A number of U.S. states have implemented blending targets for renewable fuels. As a result, renewable diesel production has increased substantially. By 2029 this will lead to an annual demand of 8 million tons of soybean oil renewable diesel production (FAPRI-MU, 2024), a 3-million-ton increase in demand relative to 2020. The respective supply can be generated through more domestic crushing or an increase of soybean acreage; most likely, a combination of both options will be used. To satisfy this increased demand for soybean oil via expansion of soybean acreage, about 5.1 million ha (+15% of current soybean acreage) of additional farmland would be required. An increase in soybean acreage may come from either (a) shifting away from continuous corn rotations to corn-soy and (b) shifting corn-soy rotations toward corn-soy-soy. Based on agri benchmark data, Margaret Lippsmeyer from Purdue University showed that option (a) would require an increase in soybean prices of 6% and option (b) of 8% to make these rotations preferable over existing ones.
Ukraine grain exports: No specific effects on Central & Eastern European farm-gate prices
At the national level, agri benchmark farm-gate data did not yield an indication that growers in Central and Eastern Europe have been suffering from the inflow of Ukrainian grain. As the graph attached indicates, respective wheat margins between Western Europe and Central and Eastern Europe actually narrowed. However, agri benchmark partners mentioned that in regions close to the Ukrainian border lower than usual prices have been observed.
EU sugar production: Expanding and rather profitable in 2023
Due to high EU sugar prices in 2022, EU production increased by 7% in 2023. Therefore, the EU became a net exporter again. Since global sugar prices were still rather high, the negative impact on domestic prices was low. Thomas de Witte from Thünen Institute stated that profitability of sugar beet production was extraordinarily high – an advantage of 1.000 to even 2.000 €/ha over other crops could be observed. A possible future cut of 15 to 30 €/t in beet prices (or 20% to 40%) would still make beets competitive at wheat prices of 230 €/t.
Regenerative agriculture – a promising option to reduce environmental footprint?
The members of the agri benchmark Network discussed the concept and the environmental claims of regenerative agriculture. Many industry leaders and politicians are promoting this idea to address public concerns regarding agriculture; influential global consulting companies try to educate growers regarding the profitability of suggested measures such as cover crops and no-till. One discussion focused on the notion that proponents of regenerative agriculture oversell the potentials, in particular regarding greenhouse gas savings and economics. Furthermore, the two major sources for GHG emissions – nitrogen use and land use change – are not addressed. Considering these shortcomings, the network will be publishing a thesis paper on this topic and will suggest more meaningful indicators to define goals that effectively reduce GHG emissions and reduce pressure on biodiversity.
agri benchmark, a nonprofit, politically independent organization, provides comprehensive information and advice on crop production systems. With its proven and unique farm level data and a global network of on-the-ground experts, agri benchmark enables economic and environmentally sustainable decision-making by agricultural stakeholders worldwide.
Let’s grow together – Your strategic partner for tomorrow’s agriculture
For more information visit: agribenchmark.org
Evolution of average return to land* across all crops (USD/ha)
* Total revenue (incl. decoupled payments) minus total cost (excluding land cost);
weighted average per farm, simple average across all farms per region
Evolution of farm-gate wheat prices – regional agri benchmark averages (USD/t)
Source: agri benchmark Cash Crop (2024)
Group picture from the conference
Source: agri benchmark Cash Crop (2024)
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Ohio’s Wild, Scenic, and Recreational Rivers Program will soon see some changes under Senate Bill 156, recently passed by the Ohio General Assembly. The legislature forwarded those changes to the governor on July 16. Governor DeWine is expected to sign the bill, which had unusually high non-partisan support with only one legislator voting against the measure.
The legislature’s focus on the Wild, Scenic, and Recreational Rivers Program began with concerns from owners of private land that abuts watercourses designated under the program as wild, scenic, or recreational. Ohio currently has 15 designated watercourses comprising 27 stream segments and just over 830 river miles. Many of the designated watercourses are along agricultural lands.
Those landowner concerns initiated a program review and led to the revisions enacted by the legislature in S.B. 156, which makes the following changes.
- Transfers the authority to administer the program from the Division of Parks and Watercraft to the Division of Natural Areas and Preserves (DNAP) in the Ohio Department of Natural Resources (ODNR).
- Narrows DNAP’s scope of authority to the watercourses that are designated as wild, scenic, and recreational rivers, rather than to wild, scenic, and recreational river “areas” as under the current law.
- States that a watercourse designation does not affect private property rights or authorize the Director of Natural Resources, DNAP Chief, or any governmental agency or political subdivision to restrict the use of private land adjacent to a designated river.
- States that the law does not give any right to the above parties to enter upon private land.
- Expands the types of watercourses subject to designation as a wild, scenic, or recreational river to include the headwaters of those rivers.
- Requires DNAP to perform certain duties regarding publicly owned land along a designated river, including both of the following:
- To adopt rules governing the use, visitation, and protection of scenic river lands and other specified publicly owned lands administered by DNAP within the watersheds of wild, scenic, and recreational rivers; and
- To establish facilities and improvements within the system of wild, scenic, and recreational rivers, scenic river lands, and other specified publicly owned lands that are necessary for their visitation, use, restoration, and protection and that do not impair their natural character.
- Requires the DNAP Chief to adopt rules establishing fees and charges for the use of facilities in nature preserves, scenic river lands, and on publicly owned lands.
- Clarifies that certain public entities must obtain approval from the ODNR Director if specified construction activities are performed within 1,000 feet of a wild, scenic, or recreational river.
- Requires the ODNR Director to post the intention to declare a watercourse as a wild, scenic, or recreational river on DNAP’s website.
- Allows the DNAP Chief to accept, receive, and expend gifts, devises, or bequests of money, land, or other properties for purposes of the wild, scenic, and recreational river program.
Learn more about S.B. 156 on the Ohio legislature’s website. Information on Ohio’s Scenic Rivers Program is on ODNR’s website.
Tags: water law, scenic rivers, ODNR, Property Rights
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Applying Ohio’s “agricultural exemption” from zoning is a constant challenge for county and township zoning officials. A township in Logan County faced that challenge when a landowner claimed its composting facility to be an agricultural land use that is exempt from township zoning authority. After obtaining a composting permit from the Ohio EPA, the landowner established the compost facility, despite the township’s disagreement that the facility qualified for the “agricultural exemption.”
When there is uncertainty about the meaning or application of a law such as the Logan County zoning situation, Ohio law allows a county prosecutor to request a legal opinion from the Ohio Attorney General (Ohio AG). That’s exactly what the Logan County Prosecuting Attorney did, directing four questions to the Ohio AG that relate to how township zoning regulations, the agricultural exemption, and state permitting laws apply to the compost facility. The Ohio AG’s resulting opinion offers helpful guidance for rural zoning officials who face the challenge of understanding whether a land use is an agricultural land use that is exempt from zoning. It also provides an explanation of the relationship between state issued permits and local zoning authority.
Here’s a summary of the Ohio AG’s response to the questions the Logan County prosecutor raised.
1. Is a compost facility considered “agriculture” that is exempt from township zoning under the agricultural exemption, and if not, is it subject to township zoning?
Logan County didn’t receive a definitive answer to this question. Instead, the Ohio AG explained that it does not have the authority to answer a question of fact. It is the township zoning officials who must determine whether land is “agriculture” for purposes of the agricultural exemption, based upon the facts of the specific situation. In doing so, the township may exercise its discretion and examine any factors necessary and relevant to making its decision, including the nature and character of all activities conducted on the land as well as activities to prepare an agricultural product that are not conducted on the land at issue, and the township’s decision is subject to judicial review.
The Ohio AG did, however, provide a useful summary of the agricultural exemption provisions in Ohio Revised Code sections 519.01 and 519.21, which apply to townships, as follows:
- ORC 519.01 provides a definition of “agriculture” as “farming; ranching; algaculture meaning the farming of algae; aquaculture; apiculture; horticulture; viticulture; animal husbandry, including, but not limited to, the care and raising of livestock, equine, and fur-bearing animals; poultry husbandry and the production of poultry and poultry products; dairy production; the production of field crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs, ornamental trees, flowers, sod, or mushrooms; timber; pasturage; any combination of the foregoing; and the processing, drying, storage, and marketing of agricultural products when those activities are conducted in conjunction with, but are secondary to, such husbandry or production.”
- The opinion explained that the terms “in conjunction with” and “secondary to” in the emphasized language above carry common meanings: “in conjunction with” means “occurring together” and “secondary to” means “of second rank, importance or value.” Because “composting” is not specifically listed in the agriculture definition, it must be done “in conjunction with” and “secondary to” the production of the agricultural products used for the composting. The Ohio AG stated that, “If the composting facility is located on land that does not engage in agri-cultural activity, composts agricultural products that are not produced on its premises, or does not use the compost on its premises, then the composting facility is likely not “agriculture” pursuant to R.C. 519.01.”
- ORC 519.21(A) contains the limitation on power that is the agricultural exemption: “the Revised Code confers no power on any township zoning commission, board of township trustees, or board of zoning appeals to prohibit the use of any land for agricultural purposes or the construction or use of buildings or structures incident to the use for agricultural purposes of the land on which such buildings or structures are located . . . and no zoning certificate shall be required for any such building or structure.”
- The Ohio AG explained that taken together, ORC 519.01 and ORC 519.21(A) require that land on which the secondary agricultural activities of processing, drying, storage, and marketing of agricultural products occurs or land on which a building or structure is located must “be primarily used for an agricultural purpose to qualify for an exemption from the township zoning resolutions.” Conversely, agricultural activities that are merely an accommodation to a business are not “agriculture” under ORC 519.01 and could be regulated as a commercial use under township zoning regulations.
2. Can township zoning resolutions regulate composting facilities by considering such as a “conditional use” if the zoning resolution does not explicitly address composting as a permitted or conditional use?
A simple explanation by the Ohio AG answered this question. According to Ohio law, A township may only regulate a non-agriculture composting facility as a conditional use if the township zoning resolution includes composting or solid waste facilities as permitted conditional uses in the applicable zoning district.
3. What recourse does a township have if a composting facility claims to be exempt from zoning due to the agricultural exemption, even though composting is not included in the agricultural exemption statute?
For a violation of a zoning resolution or a question regarding the interpretation of a township zoning resolution, the Ohio AG explained that a township may choose to utilize the remedies outlined in ORC 519.23 and ORC 519.24. Those remedies include a criminal cause of action and fines or an action to enjoin or abate a violation.
4. Does a township have any recourse if the Ohio Environmental Protection Agency (Ohio EPA) issues a permit for a composting facility when a property owner failed to secure a local zoning permit?
In response to this question, the Ohio AG explained that while some laws do preempt local authority over a land use, the state solid waste laws do not “supersede the authority of a township to enact zoning regulations.” This means that a township is not required to permit a facility simply because the Ohio EPA issues a permit for it. The Ohio AG concluded that if a township determines that a composting facility is not “agriculture” and not exempt from zoning under the agricultural exemption, that facility then would be subject to the township zoning regulations and Ohio EPA composting facility regulations.
Read Ohio Attorney General Opinion No. 2024-004 in the Opinions Database on the Ohio Attorney General’s website.
Tags: Zoning, agricultural zoning, agricultural exemption, compost
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The U.S. Department of Agriculture Agricultural Marketing Service (USDA) is asking the agricultural community to weigh in on a new program aimed at the voluntary carbon market in the U.S. The agency has published a Request for Information seeking input on what the agency should consider in developing rules for the new “Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.” The purpose of the new program, created by the passage of the Growing Climate Solutions Act last year, is to facilitate farmer, rancher, and private forest landowner participation in voluntary carbon markets by: (1) publishing a list of widely accepted protocols designed to ensure consistency, reliability, effectiveness, efficiency, and transparency of voluntary credit markets; (2) publishing descriptions of widely accepted qualifications possessed by covered entities that provide technical assistance to farmers, ranchers, and private forest landowners; (3) publishing a list of qualified technical assistance providers and third-party verifiers; and (4) providing information to assist farmers, ranchers, and private forest landowners in accessing voluntary credit markets.
Farmers haven’t engaged in the voluntary carbon market to the extent some predicted several years ago, when “carbon agreements” began circulating through the agricultural community. A carbon agreement is a private contract that compensates a farmer for adopting practices that sequester carbon, with one ton of sequestered carbon creating a “carbon credit.” Those who pay farmers for the carbon credits can retain the credits or trade the credits through a carbon market. The owner of the carbon credits can use the credits to offset their greenhouse gas emissions, with the goal of reducing their “carbon footprint.”
According to USDA Secretary Vilsack, “high-integrity voluntary carbon markets offer a promising tool to create new revenue streams for producers and achieve greenhouse gas reductions from the agriculture and forest sectors. However, a variety of barriers have hindered agriculture’s participation in voluntary carbon markets and we are seeking to change that by establishing a new Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.” In its Request for Information, the agency seeks responses to eight questions:
Question 1: How should USDA define the terms “consistency,” “reliability,” “effectiveness,” “efficiency,” and “transparency” (see 7 U.S.C. 6712(c)(1)(A)) for use in protocol evaluation?
Question 2: What metrics or standards should USDA use to evaluate a protocol's alignment with each of the five criteria to be defined in Question 1? What should USDA consider as minimum criteria for a protocol to qualify for listing under the Program?
Question 3: In general, after a new protocol is published, how long does it take for a project to use the protocol and be issued credits ( i.e., what is the lag time between protocol publication and first credit generation)?
Question 4: Which protocol(s) for generating voluntary carbon credits from agriculture and forestry projects should USDA evaluate for listing through the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program?
Question 5: Additional information for any protocol(s) identified under Question 4.
Question 6: How should USDA evaluate technical assistance providers (TAP)? What should be the minimum qualifications, certifications, and/or expertise for a TAP to qualify for listing under the Program?
Question 7: Should the qualifications and/or registration process be different for entities and individuals that seek to register as a TAP?
Question 8: What should be the minimum qualifications and expertise for a third-party verifier to qualify for registration under the Program?
The agency will accept comments on the questions until June 28, 2024.
Part of a broader policy initiative
USDA announced the Request for Information on the same day that Secretary Vilsack, Energy Secretary Granholm, and Treasury Secretary Yellen, published a Joint Statement of Policy and Principles for Voluntary Carbon Markets, which outlines seven principles for the government’s approach to advancing “high-integrity voluntary credit markets,” summarized in a White House Fact Sheet:
- Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization.
- Credit-generating activities should avoid environmental and social harm and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.
- Corporate buyers that use credits should prioritize measurable emissions reductions within their own value chains.
- Credit users should publicly disclose the nature of purchased and retired credits.
- Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards.
- Market participants should contribute to efforts that improve market integrity.
- Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs.
The recent USDA announcements once again suggest that there are many issues for farmers considering engaging in the carbon market. Caution is usually warranted when dealing with a new, developing market. For farmers who do want to enter into the carbon market, be sure to refer to our posts on Carbon as a commodity for agriculture? and Considering carbon farming? Take time to understand carbon agreements. The Farmers Legal Action Group also has an excellent publication on Farmers Guide to Carbon Market Contracts in Minnesota, also useful for Ohio farmers.
Tags: carbon market, carbon agreement, VCM, Growing Climate Solutions Act, greenhouse gas
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A new chapter is developing in the legal battle over resolving water quality problems in the Western Lake Erie Basin. Earlier this month, the Lucas County Board of Commissioners, City of Toledo, and Environmental Law & Policy Center filed a federal lawsuit against the U.S. Environmental Protection Agency (EPA). The lawsuit targets the EPA’s approval of Ohio’s Total Maximum Daily Load (TMDL) plan for the Maumee River Watershed. If it feels like déjà vu, that’s because it is. In the ten years since Toledo experienced a drinking water crisis caused by harmful algal blooms in the Western Basin, there have been four federal lawsuits demanding a plan for improving water quality in the lake and a legal battle to protect the lake with a “Lake Erie Bill of Rights.”
The current litigation arises from a 2023 settlement agreement that led the Ohio EPA to create the TMDL for the Maumee River Watershed. A TMDL establishes a framework for future decisions that affect water quality by identifying the links between sources of impairment and pollutant load reductions necessary to reduce impairment and attain water quality standards. The EPA reviewed and approved Ohio EPA’s Maumee River WatershedTMDL last year, against opposition from environmental groups and the parties in the current lawsuit. That approval of the TMDL is the source of the new lawsuit.
According to the plaintiffs, the EPA should not have approved the Maumee River Watershed TMDL because it “will not remediate Lake Erie.” The parties claim that the plan “fails to limit pollution caused by dissolved reactive phosphorus and does not meaningfully address the concentrated feeding operations, or CAFOs, that are responsible for polluting the watershed.” In support of their argument, the parties cite the following five “legal defects” in the plan, each an alleged violation of the Clean Water Act:
- Failure to set Dissolved Reactive Phosphorous (DRP) limits.
- Failure to set an adequate “margin of safety” that accounts for lack of knowledge about the relationship between effluent limitations and water quality.
- Failure to assign waste load allocations to discharging CAFOs.
- Failure to apportion load allocations to all nonpoint sources.
- Inadequate implementation plan and failure to provide reasonable assurances.
The lawsuit asks the federal court to vacate the current Maumee River Watershed TMDL and order the EPA to prepare a new TMDL that “will actually clean up Lake Erie.”
What does this mean for Ohio agriculture?
If the plaintiffs are successful, the lawsuit could result in the preparation of a new TMDL for the Western Basin. The current Maumee River Watershed TMDL plan prepared by the Ohio EPA encourages an “adaptive management” approach for agricultural activities, based on voluntary adoption of management practices coupled with monitoring and progress evaluation. A new TMDL could more directly affect agricultural activities, particularly if the EPA agrees with the plaintiffs’ arguments that the TMDL should assign waste load allocations to discharging CAFOs and apportion load allocations to all nonpoint sources. But remember that the EPA approved the current TMDL plan, suggesting that the agency will not be inclined to make significant alterations if the court orders it to prepare a new plan.
Other than the possibility of a new TMDL, the lawsuit does not directly affect agricultural operations right now. It does not name any specific farms or bring them into the litigation. The lawsuit does not affect current voluntary efforts to reduce water quality impacts, such as H2Ohio.
Nor is the litigation likely to generate additional lawsuits against agricultural operations that currently comply with all applicable laws, a question we've heard from some producers in the Maumee River watershed. Several Ohio laws provide defenses to such lawsuits and those laws will continue to be in effect throughout the federal litigation, unless the Ohio legislature makes any changes to the laws. Those legal defenses, explained in our law bulletin on “Laws that Provide Defenses for Agricultural Production Activities,” apply to operations that meet the specific requirements of the laws and include:
- The Fertilizer Applicator Certification Training (FACT) defense for claims involving the application of nitrogen, phosphorous, potassium and plant nutrients.
- The Right to Farm Law defense and exemption from Statutory Nuisance for allegations that agricultural activities are creating a nuisance that unreasonably interferes with health, comfort, or property rights.
- The Ohio Agricultural Pollution Abatement Law for nuisance claims involving “agricultural pollution,” defined as the failure to use practices to abate erosion, or degradation of waters of the State by residual farm products, manure, or soil sediment.
- The Confined Animal Feeding Facilities (CAFF) defense for nuisance claims against farms operating under a CAFF permit.
What happens next?
The EPA is likely to respond to the complaint with a request that the federal court dismiss the claim, and we probably won’t see a decision on that request before the end of the year. If the court declines to dismiss the case, the plaintiffs must then convince the court that the current TMDL plan does not comply with the Clean Water Act. Arguments will focus on the five legal defects presented by the plaintiffs. As has been true for the previous litigation, a decision would take a year or more. Yet again, we await the outcome of a Lake Erie lawsuit.
As April comes to a close, we bring you another edition of the Ag Law Harvest. This month’s harvest brings you laws and regulations from across the country regarding a national drinking water standard, the Endangered Species Act, Ag-Gag laws, noncompete agreements, and pollution.
EPA Finalizes First-Ever PFAS Drinking Water Standards
Earlier this month, the U.S. Environmental Protection Agency (“EPA”) announced a final rule, issuing the “first-ever national, legally enforceable drinking water standard to protect communities from exposure to harmful per-and polyfluoroalkyl substances (PFAS), also known as ‘forever chemicals’”. The final rule sets legally enforceable maximum contaminant levels for six PFAS chemicals in public water systems. The EPA also announced nearly $1 billion in new funding to “help states and territories implement PFAS testing and treatment at public water systems and to help owners of private wells address PFAS contamination.” The EPA suggests that this final rule “will reduce PFAS exposure for approximately 100 million people, prevent thousands of deaths, and reduce tens of thousands of serious illnesses.”
Interior Deptartment Finalizes Rule to Strengthen Endangered Species Act
The Department of the Interior has announced that the U.S. Fish and Wildlife Service finalized revisions to the Endangered Species Act (ESA). These revisions aim to enhance participation in voluntary conservation programs by promoting native species conservation. They achieve this by clarifying and simplifying permitting processes under Section 10(a) of the ESA, encouraging greater involvement from resource managers and landowners in these voluntary initiatives. For more information about Section 10 of the ESA visit the U.S. Fish and Wildlife Service’s website.
Kentucky Passes Ag-Gag Statute
On April 12, 2024, the Kentucky legislature overrode the governor’s veto to pass Senate Bill 16 into law. The new law, titled “An Act Relating to Agricultural Key Infrastructure Assets,” expands the definition of “key infrastructure assets” to include commercial food manufacturing or processing facilities, animal feeding operations, and concentrated animal feeding operations. It criminalizes trespassing on such properties with unmanned aircraft systems, recording devices, or photography equipment without the owner's consent. The first offense is a Class B misdemeanor with up to 90 days imprisonment and a $250 fine, while subsequent offenses are Class A misdemeanors with up to 12 months imprisonment and a $500 fine.
Federal Trade Commission Bans Non-Compete Agreements
The Federal Trade Commission (“FTC”) announced a final rule banning noncompete agreements and clauses nationwide. This move aims to promote competition by safeguarding workers’ freedom to change jobs, increasing innovation and the formation of new businesses. Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. However, existing noncompetes for senior executives – those earning more than $151,164 annually and in policy making positions – remain enforceable under the new rule. Employers will have to notify workers bound to an existing noncompete that the noncompete agreement will not be enforced against the worker in the future. The final rule will become effective 120 days after publication in the Federal Register.
EPA Announces New Rules to Reduce Pollution from Fossil Fuel-Fired Power Plants
The U.S. Environmental Protection Agency (“EPA”) unveiled a set of final rules designed to decrease pollution from fossil fuel-fired power plants. These rules, developed under various laws such as the Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act, aim to protect communities from pollution and improve public health while maintaining reliable electricity supply. They are expected to substantially reduce climate, air, water, and land pollution from the power industry, aligning with the Biden-Harris Administration's goals of promoting public health, advancing environmental justice, and addressing climate change.
Tags: EPA, ag law harvest, ag-gag, FTC, Noncompete Agreements, endangered species act, Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act
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