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ND lawmakers look to funding for clean coal technology

Coal Creek Station near Underwood rises through clouds of steam billowing from the coal-fired power plant on a cold day in January. Photo by Jessica Holdman / Bismarck Tribune

BISMARCK — North Dakota's coal industry is looking to divert some of the money it contributes to a fund for county and school construction projects to develop clean coal technology.

The legislative path forward has seen little opposition, though it is undergoing some administrative hurdles, as many view development of new technologies as imperative to the survival of the industry — and without the coal companies, their would be no Coal Development Trust Fund at all.

Wade Boeshans, president and general manager of BNI Coal, said he sees the proposed change as vital to keep the fund going. If the coal industry does not develop the technology it needs to meet new regulations, it's possible the industry would have to close up shop, meaning no more contributions for the fund. Boeshans said he believes communities understand this.

Fund origination

While 30 percent of the coal industry tax revenues are allocated to the Coal Development Trust Fund, which has a balance of $68.4 million for county and school construction projects, an amendment industry plans to introduce to SB 2014, the Industrial Commission's appropriations bill, would drop that amount to 15 percent, the minimum required by state law.

The 15 percent drop had been proposed as part of SB2014's sister legislation, SB2074, which was killed by lawmakers last week. Jason Bohrer, president of the Lignite Energy Council, said the amendment process complicates things, making industry more "nervous" about its omission but he's still optimistic.

"We spent the last year educating (lawmakers) about where we are and what our challenges are," he said, adding he felt industry has done a good job letting lawmakers know the future of coal production depends upon new technologies that will meet federal carbon emissions standards.

The Lignite Energy Council is very aware it has launched its efforts for the creation of a fund to finance larger clean coal projects at the same time the state is facing a budget shortfall. So in the short term, it is hoped the diverted tax money could go to the Lignite Research Fund, which Bohrer indicated is sufficient for the next couple years.

The diversion would add about $1.5 million to the Lignite Research Fund for the biennium, and the legislation creates a mandate that the money is targeted at advanced energy technology.

While the funding is not enough for industry to build larger projects coming down the pipe, such as a zero-carbon emissions technology called the Allam Cycle and a carbon scrubber retrofit for current plants called Project Tundra, it does allow it to complete the groundwork on those projects' viability.

"By waiting, our window for (the projects') success gets a lot smaller," said Bohrer. "Let's do what we can now."

While coal's contribution to the state's economy isn't as large as oil, the industry needs the funding to keep moving forward, according to Bohrer.

"In a year like this, coal is the reason we can afford to do anything at all during this legislative session," he said.

Injection of cash

Boeshans said a minimal increase in funding is key to the next phase of research and development in preparation for a pilot.

"We feel good about where we're at," Boeshans said. "Hopefully, we come out of this session with the funding we need to continue moving projects down the path."

Dale Niezwaag, Basin Electric Power Cooperative's senior legislative representative, echoed that optimism. Because this proposed legislation involves shuffling existing funds rather than asking for new money, he said the industry has a better shot at successfully moving a pilot program forward.

The bill is being considered in the Senate Appropriations Committee.

Sen. Ron Sorvaag, R-Fargo, who sits on the committee, agrees funding clean coal projects is a "big deal for the industry going into the future" and he sees it as an investment. Sorvaag said a lot of work remains to be done on the budget, and shifting the funds from the Coal Development Fund may not be the final answer, but he expects the details to be worked out in the next few weeks.

Sen. Tim Mathern, D-Fargo, said he also expects the Legislature to find funding for the industry, likely shifting the money from one fund to another rather than awarding a new appropriation, because the industry has a lot of support from lawmakers. And he said he was glad to hear industry shift from placing sole blame for its financial troubles on regulations and accepting that competition with natural gas and wind power is a factor.

"I'm in support of research," he said. "If we can do coal without pollutants, hallelujah."