SIOUX FALLS, S.D. (AP) — Sioux Falls plans to continue allowing a biofuel company to use the methane gas released from its landfill, a deal that city officials said is saving taxpayers money and creating cleaner air.

The city recently approved a plan to extend its contract with POET for another 10 years, the Argus Leader reported. The company pipes the carbon-methane gas coming off garbage at the Sioux Falls Regional Landfill to its ethanol plant in Chancellor, roughly 10 miles (16 kilometers) away.

Garbage and waste material at the landfill naturally break down and release carbon-methane gas, which would otherwise be vented into the air or burned off on-site.

Poet CEO Jeff Broin said sending the gas to its ethanol refinery means cleaner air for Sioux Falls and a sustainable energy source that allows the biofuel company to produce a cleaner burning fuel, instead of traditional oil and petroleum.

The company has used 3.7 million Btu of the landfill gas for ethanol production over the last 10 years. It's offset almost 200,000 metric tons of carbon dioxide from natural gas, which is equivalent to one year's worth of greenhouse gas emissions from 23,000 homes, according to POET.

Sioux Falls, in return, has received about $17 million through the deal since 2009. The new contract is estimated to bring Sioux Falls $12.7 million over the next decade, a lower rate due to infrastructure already being built and a reduced unit price.

The money is used to cover the landfill's operational expenses and to pay its 20 employees, costs that otherwise would be footed by taxes or fees.

"What that means to the taxpayer in Sioux Falls? It means lower tipping fees," Mayor Paul TenHaken said at the new contract signing recently. "We haven't had to raise fees at our landfill for nearly four years (because of it) so it's better for our citizens."

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