Julio Friedmann

Julio Friedmann, principal deputy assistant secretary for the office of fossil energy at the U.S. Department of Energy spoke to members of Basin Electric Power Cooperative at the group's annual meeting in Bismarck last Wednesday.

Basin Electric Power Cooperative, PHOTOS PROVIDED

A former federal energy official told members of a North Dakota coal power cooperative they had a unique opportunity to play a role in clean energy development.

“North Dakota is definitely one of the best places to do this,” said Julio Friedmann, former principal deputy assistant secretary for the office of fossil energy at the U.S. Department of Energy, in terms carbon dioxide storage and use, particularly in enhanced oil recovery.

He said other countries would be jealous of the state’s potential.

Friedmann told attendees of the Basin Electric Power Cooperative Annual Meeting, held in Bismarck last week, that many industry leaders already see the need and opportunity carbon capture technology development provides.

Large oil and gas companies are financing the $1 billion Oil and Gas Climate Initiative to invest in carbon capture and utilization. China’s largest coal company, Shenhua Group, and U.S. coal giant Peabody Energy Corporation are both carbon capture investors.

In addition to the U.S., more than 100 parties have ratified the Paris Cliamte Agreement to combat global climate change, Friedmann said. 

“There is no market in the world where they do not care about carbon,” Friedmann said.

And he said when people tell him carbon capture costs too much money “that’s hogwash.”

Friedmann said there are natural gas combined cycle and coal with carbon capture that are “already cheaper than what else is out there today in some markets.”

He highlighted the fact that, worldwide, 15 carbon capture and utilization projects, including Basin’s involvement in enhanced oil recovery in Canada’s Weyburn oil field, Canada-based Boundary Dam carbon capture on a power plant and carbon capture on by Petra Nova on a Texas power plant, are online and seven are under construction.

The lives of those plants have been extended as a result of the investment. And the more that are built, the more innovation will find a way to improve their cost, Friedmann said. As an example, he said the price of solar power is down 80 percent from 2008 as a result of innovation and process improvement.

Friedmann said the problem companies are faced with is the question of where to make their capital investment and how to balance maintaining current facilities with building new ones at a time when many banks are refusing to finance new coal projects without carbon capture.

Friedmann suggests lobbying for more policy support, either through positive methods, like direct grants, or punitive methods, like carbon tarrifs that levy a tax on items, such as steel, and the carbon used in making them.

He also discussed tax credits.

“It’s helped (wind power) deployment,” Friedmann said, adding that Congress, with push from North Dakota’s delegation, is currently considering reform of the federal tax code to expand tax credits for carbon capture projects.

Suggested reform of Section 45Q would credit $30 to $50 per ton of carbon captured annually for the first 10 to 12 years of facility operation. 

Friedmann said some may not like a business model based on tax credits but its up to the industry to decide what works best and push for it.

As an example of what can happen with policy support, Friedmann pointed to worlwide carbon capture leader Canada, which has been consistent about decarbonization and has built projects because "industry was there from day one" saying it was important for industry survival.

Industry agreed to a surcharge as long as it was reinvested in carbon capture research and developlment and the country is implementing an economy-wide carbon tax, Friedmann said.

Australia, on the other hand, had a shifting and reversing of policy. projects were started and then canceled, causing it to slip from its position as the worldwide carbon capture leader.

What a Trump administration means for America's ability to take part in carbon capture remains to be seen, Friedmann said.

"He has proven very, very difficult to judge by what he says and what he means by what he says," Friedmann said. "But if he doesn't make a move it will disadvantage the U.S."

"Clean fossil energy has a real future (with carbon capture)," he added. 

Changes have been made to this story to correctly reflect Julio Friedmann's employment title)

Reach Jessica Holdman at 701-250-8261 or jessica.holdman@bismarcktribune.com

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