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Numerous coal, oil bills clear Legislature

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Dozens of bills passed the Legislature this spring that will prompt changes for North Dakota’s coal and oil industries.

A number sought to stave off mounting challenges facing the state’s lignite coal plants and mines, which face competition from natural gas and renewable power.

“The coal industry is under fire,” said House Majority Leader Chet Pollert, R-Carrington. “We need to get that straightened out so that our coal industry is on safe and fair competing grounds with other sources of energy.”

He spoke about coal earlier this week when the governor signed House Bill 1452, which establishes the Clean Sustainable Energy Authority. The authority, an arm of the state Industrial Commission, will administer loans and grants to advance low-emissions technologies.

The funds could go toward any number of projects involving various sources of energy, though much of the discussion during the Legislature focused on technology to capture carbon emissions from coal-fired power plants for storage underground. Several projects are in the works in North Dakota to capture the greenhouse gas and inject it into deep rock formations, rather than let the emissions escape into the atmosphere where they contribute to global warming.

Project Tundra at Minnkota Power Cooperative's Milton R. Young Station is the effort furthest along in the state, and lawmakers eyed it as a likely funding recipient. House Bill 1452 makes $25 million available, and another measure, House Bill 1015, extends a line of credit up to $250 million. A third measure, House Bill 1380, sends up to $30 million from the Legacy Fund, the state's oil tax savings account, to the energy authority every two years.

Critics of the energy authority argued that its board makeup will not guarantee representation to the state's renewable power industry or Native Americans, and some opposed state money going to fossil fuels.

Other coal bills signed into law included House Bill 1412, which grants coal-fired power plants five years of relief from the conversion tax they pay to the state. That will save the facilities a combined $43 million over the next two years, according to an estimate from state tax officials. The bill also gives counties the ability to grant the coal industry relief on the taxes they collect.

A separate tax measure, Senate Bill 2152, clarifies that the coal and ethanol industries will not have to pay sales tax on carbon dioxide they store underground.

Senate Bill 2287 directs the state to study rising insurance costs for the coal industry.

Rolling blackouts hit thousands of electric cooperative members in February, the result of bitterly cold weather that plagued the southern United States and put tremendous stress on power grids, which span numerous states. One grid operator ordered outages all the way up to North Dakota to avoid worse problems.

Those blackouts influenced the debate over energy at the state Capitol, with many Republicans doubling down on efforts to protect coal plants, which provide a steady power output.

The blackouts hit as lawmakers considered Senate Bill 2313, which concerns the reliability of the power grid. The final version signed into law directs the North Dakota Transmission Authority to participate in reliability-related studies, and it allows the North Dakota Public Service Commission to assign a greater value to coal as commissioners evaluate utilities’ long-range plans.

Another measure concerning the PSC, House Bill 1095, gives regulators more flexibility in applying a state law requiring that wind farm operators install technology to prevent the red lights atop wind turbines from blinking brightly all night long. It also requires that older wind farms obtain state approval before “repowering” their turbines with new blades when the old ones wear out.

Oil

Lawmakers approved a number of oil-related bills, including one seeking to resolve a longstanding dispute over oil and gas royalties owed to the Board of University and School Lands. House Bill 1080 caps interest and penalties on unpaid royalties at 15% and establishes a limit of seven years for the state to collect unpaid money.

The Land Board estimates the bill will cause the state to forgo $69.4 million amid the dispute, which has to do with deductions oil and gas companies took from royalties to account for costs associated with transportation and processing. Revenue overseen by the board for the development of state-owned minerals benefits public education in North Dakota.

A group of mineral owners sought to address deductions from royalties they receive through Senate Bill 2217. The measure faced opposition from the oil industry and was amended into a study to take place ahead of the 2023 legislative session.

Legislators also sought to add the agriculture commissioner to the Land Board through Senate Bill 2282 and several related measures, which would have placed the issue before voters because such a change would require an amendment to the state constitution. Board members opposed the bill in part because it would place all three regulators who make up the Industrial Commission on the board. The bill was amended into a study of the board’s makeup.

The state soon will begin sharing more oil tax revenue with the Mandan, Hidatsa and Arikara Nation after lawmakers passed Senate Bill 2319. The legislation allows the tribe to share in taxes collected on wells that begin off the Fort Berthold Indian Reservation and extend horizontally underground across the boundary. Previously, the tribe could collect taxes only on wells entirely within the reservation boundary and on those that begin within the border and extend outside.

Lawmakers approved Senate Bill 2065, which sets up the regulatory framework for establishing an underground storage facility for oil, natural gas or natural gas liquids. A landowners group opposed the bill over concerns about compensation, and the possibility of a legal challenge looms.

The Legislature also endorsed Senate Bill 2328, which offers oil producers temporary relief on the state extraction tax when a well uses a system to mitigate the wasteful flaring of excess natural gas, such as a generator that converts the gas into electricity.

Other

Two bills dealing with environmental cleanup introduced by state regulators cleared the Legislature, Senate Bill 2070 and House Bill 1079. The former establishes a fund to clean up abandoned contaminated sites. The latter gives the Department of Environmental Quality more tools to reach agreements with landowners that address risks associated with contaminated property.

Another pair of bills deal with federal environmental regulations. Senate Bill 2237 clarifies that the state cannot adopt air quality regulations for coal plants that are more stringent than federal rules. Senate Bill 2238 spells out how the state should develop a federally mandated plan for addressing haze.

Lawmakers also weighed several measures aimed at putting longer truck configurations on the roads, an effort in part to save on fuel costs for shipping. Senate Bill 2026 directs the North Dakota Department of Transportation to conduct a pilot project allowing new configurations.

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

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