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Carbon capture dominates North Dakota energy developments in 2021

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090921 CO2 Pipeline.jpg (copy)

More carbon dioxide pipelines are slated for North Dakota. The one shown here begins at Basin Electric's Great Plains Synfuels Plant and extends to Canada.

2021 ought to be dubbed The Year of Carbon Capture in North Dakota.

The technology hit a milestone this year when state regulators permitted the first project intended to capture carbon dioxide from an industrial facility and store the emissions underground within the state. Numerous other projects are in the works.

The effort at Richardton ethanol plant Red Trail Energy is the first expected to come to fruition in North Dakota. CEO Gerald Bachmeier anticipates the facility will start capturing and injecting its carbon emissions thousands of feet deep by mid-March 2022.

The project will enable Red Trail to better market its ethanol to states such as California that have policies favoring fuels with a low carbon intensity. A federal tax credit is pushing carbon capture efforts forward. Supporters of the technology see it as a way to combat climate change, as less carbon dioxide is emitted into the atmosphere.

Other carbon capture projects may not be far behind Red Trail. Regulators held a hearing this fall for Minnkota Power Cooperative’s Project Tundra at the coal-fired Milton R. Young Station power plant near Center. The incoming owners of Coal Creek Station plan a carbon capture system at the coal plant near Washburn as well. Other projects are underway led by companies such as Midwest AgEnergy, Basin Electric Power Cooperative, Denbury Resources and Summit Carbon Solutions.

Another carbon capture system is planned by Bakken Energy, which announced this year that it seeks to purchase the Great Plains Synfuels Plant near Beulah from Basin Electric Power Cooperative and repurpose it to produce hydrogen from natural gas.

The carbon capture projects dovetail with the goal Gov. Doug Burgum unveiled at the Williston Basin Petroleum Conference in May to make North Dakota carbon neutral by the end of the decade. He told the audience that the state has “hit the geologic jackpot” with rock formations that contain the right characteristics for permanent carbon dioxide storage.

Carbon neutrality involves striking a balance between the carbon dioxide released from within the state and the amount of emissions contained or offset in some way.

“We won’t achieve this goal with federal mandates or state regulations,” Burgum said. “The only way we will achieve this goal is through innovation.”

A number of questions linger posed by environmentalists, landowners and others surrounding North Dakota’s embrace of carbon capture: Will the technology work as expected? Will property owners be adequately compensated for the use of their land for carbon dioxide storage? How will large-scale projects at coal plants be financed? Would the state be better off focusing on renewable energy such as wind and solar than trying to save coal? 

Focus on coal

Other big developments surrounding coal occurred in 2021. Affiliates of Bismarck-based Rainbow Energy Marketing Corp. announced in June that they would purchase North Dakota’s largest coal-fired power plant, Coal Creek, and the transmission line that runs from the facility to Minnesota. The news prompted a sigh of relief in North Dakota’s coal country, as outgoing owner Great River Energy had planned to close the facility next year amid financial challenges.

Rainbow is waiting on Minnesota officials to approve a permit transfer for the power line. The company has said in regulatory filings that it plans to connect 120 megawatts of renewable energy to the line by 2023. It also intends to install a data center near Coal Creek, as well as a carbon capture system at the plant, both of which would use a significant amount of electricity and free up more space on the line for power from other sources.

Coal plants face challenges amid competition from natural gas and renewable power. The two coal-fired units at Heskett Station are slated to close in March 2022, and the company will start construction on a new gas-fired unit there around the same time, MDU spokesman Mark Hanson said. Otter Tail Power Co. announced this year that it intends to sell its share of Coyote Station near Beulah by 2028.

Tension over wind power in coal country came to a head when the Legislature met at the start of the year. In the end, lawmakers passed several bills aimed at helping the coal industry, including by providing power plants with tax relief. They also established the Clean Sustainable Energy Authority, which recommends projects for state grants and loans.

Other energy news

The extreme cold that hit the central United States in February prompted power outages up and down the country, including in North Dakota. That influenced the debate over energy at the Legislature and has continued to be a topic of discussion at meetings of the North Dakota Public Service Commission, which regulates the state's investor-owned utilities.

Lawmakers met again in a special session this fall and designated $150 million in federal stimulus money to help pay for natural gas infrastructure, including a cross-state pipeline that would bring gas from the Bakken oil fields into eastern North Dakota. Potential developers are preparing applications for the project.

North Dakota's oil production hovered around 1.1 million barrels per day all year in 2021. It has recovered somewhat since the coronavirus pandemic prompted a downturn in the industry during 2020, but it has not yet reached pre-pandemic levels of as much as 1.5 million barrels per day in the state.

State Mineral Resources Director Lynn Helms said uncertainty surrounding the Biden administration's plans for federal leasing, emissions and the Dakota Access Pipeline is "tamping down" the oil industry's recovery.

"We've seen a pretty decent recovery from the extremely low rig count and frack crew numbers that we saw this time one year ago," he said at his monthly press briefing earlier in December. "I think we anticipated a quicker recovery than what we saw, so it's a little concerning."

The North Dakota Oil and Gas Division continued its abandoned well plugging and cleanup program, which it began in 2020 using federal pandemic stimulus money. The effort will likely extend for a number of years now that the state can tap into more federal funding recently authorized by the infrastructure bill that passed Congress this fall.

2021 marked the sixth year that the fight over the Dakota Access Pipeline made front-page headlines in North Dakota. The U.S. Army Corps of Engineers is working on a new environmental review of the pipeline while the legal battle continues. The U.S. Supreme Court is expected to make a decision in early 2022 on whether to hear the case filed years ago by the Standing Rock Sioux Tribe, which fears pollution from the pipeline. Developer Energy Transfer maintains the line is safe.

Another pipeline issue hit the courts in 2021 when federal and state authorities announced the result of a multiyear investigation into the largest oil field spill in North Dakota history. Government officials reached agreements on a settlement with Summit Midstream Solutions, which will pay $35 million after its pipeline leaked nearly 30 million gallons of saltwater in 2014 and 2015.

Reach Amy R. Sisk at 701-250-8252 or amy.sisk@bismarcktribune.com.

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