North Dakota coal country sees some optimism under Trump


UNDERWOOD, N.D.—As Jeremy Eckroth drove across a moon-like landscape in central North Dakota, a massive dragline excavator came into view.

The structure towered over the North American Coal Corp.'s Falkirk Mine, where roughly 7.5 million tons of lignite coal is mined every year. Most of it is used at the adjacent Coal Creek Station, the largest power plant in the state, said Eckroth, the mine's environmental manager.

The company's Government and Public Affairs Director David Straley, sitting in the back of the pickup, expressed frustration over years of delays on their federal coal lease application on a 320-acre site nearby. But he said federal officials have become more responsive in recent months.

"Although the timeframes are still slow, the decisions will be at least made," Straley said. "It's the indecision that's worse than not knowing."

Officials associated with North Dakota's coal industry are expressing some optimism under President Donald Trump, who campaigned on bringing back jobs to an industry that has seen employment drop to historic lows. Since taking office, he has touted efforts to roll back regulations like the Clean Power Plan, an Obama-era policy that would require North Dakota power plants to cut carbon dioxide emissions nearly in half, and declared that his administration has "ended the war on beautiful, clean coal."

The moves have drawn the ire of environmental groups, but it's welcome news for people in North Dakota's coal country. Average employment at North Dakota mines hit 1,261 in 2015, according to the Energy Information Administration.

"It's a big player out here," said Hazen Community Development Executive Director Buster Langowski. "There was a lot of noted relief in our area ... when our president became elected and then of course did away with some of the (Environmental Protection Agency) regulations."

But some are skeptical Trump's actions will have lasting benefits for the industry.

"I don't think any reasonable observer of the coal industry would take the position that these steps would create a long-term viable future for the coal industry or for electrical power generation that relies on coal," said Brad Crabtree, vice president for fossil energy for the Great Plains Institute. "I don't think you can make a case that the regulations are the significant cause of uncertainty."

Crabtree said the main driver of coal's economic challenges is abundant and cheap natural gas, which surpassed coal as the top source of electricity generation for the first time last year, according to a recent U.S. Department of Energy report. That document agreed that the "biggest contributor to coal and nuclear plant retirements has been the advantaged economics of natural gas-fired generation."

James Van Nostrand, director of the Center for Energy and Sustainable Development at West Virginia University's College of Law, said market forces are "really what's killing coal," including competition from renewable sources.

"You can roll back the regulations ... but those are just like nickels in terms of cost-savings," he said.

Historic lows

U.S. coal production has dropped to a nearly 30-year low, and the 65,971 mine employees across the country is the lowest since the EIA started collecting data in 1978, according to the agency's latest annual coal report. About 12 percent of coal-fired power plant capacity was retired between 2002 and 2016, according to the Energy Department report.

Republican Rep. Kevin Cramer, a former state utility regulator, said North Dakota's coal industry is in a better position than others in part because the power plants here are generally located near a mine, reducing transportation costs. While coal mine employment dropped by 21 percent nationwide between 2010 and 2015, it increased by more than 13 percent in North Dakota, according to the EIA.

The recent closure of a coal-fired power plant in Mercer County drew some fears that problems were on the horizon. But Rick Lancaster, vice president and chief generation officer for Great River Energy, was confident that coal would remain a viable energy source in North Dakota. He said Stanton Station was an older, smaller plant that used coal from out of state, making it less competitive.

"Energy sources like low-cost natural gas power plants and wind power are driving down prices in the wholesale market," Lancaster said. "When we compared Stanton's cost to the cost of power in the wholesale market, Stanton was losing money."

The Stanton Station retirement caught the eye of North Dakota legislators, who earlier this year considered but defeated proposals that critics labeled a moratorium on new wind power projects. Republican Sen. Dwight Cook, who introduced one such proposal, worried about power grid reliability and argued there's a connection between the decline in coal-fired generation and increase in wind energy production, which has been boosted by federal tax incentives that are now being phased out.

The DOE report said "while concerns exist about the impact of widespread deployment of renewable energy on the retirement of coal and nuclear power plants, the data do not suggest a correlation." But state renewable standards and federal tax credits do reduce revenues for traditional baseload power plants, the report said.

A North Dakota legislative committee plans to study whether the state should tax wind energy like it does oil production, said Republican Senate Majority Leader Rich Wardner, chairman of the interim Energy Development and Transmission Committee. But to blame all of coal's challenges on wind "is not quite right," he said, adding that coal plants will need to work to contain carbon emissions.

"Coal does provide a cheap, affordable electrical supply to our people. It has for years and will continue," Wardner said. "But the big bug is CO2 and climate change."

Steve Van Dyke, spokesman for the North Dakota Lignite Energy Council, said while the coal industry is more optimistic with a new administration in Washington, challenges still remain. He said having Trump in the White House probably gives the industry "four more years to find a CO2 solution."

Some, like Crabtree, see a future for coal with the development of technologies to capture carbon dioxide to help reduce emissions. He pointed to pending legislation in Congress, sponsored by Sen. Heidi Heitkamp, D-N.D., to extend and expand a tax credit for such carbon capture projects.

"We can do the same thing for managing carbon emissions from coal that we've done for wind energy and solar energy, which is provide clear, financially certain incentives," Crabtree said. "The (Trump) administration itself, as far as I know, has not taken any initiative to support this effort."

For now, though, Trump's actions have been largely welcomed in North Dakota. Cramer, a staunch Trump supporter, said "the coal industry in North Dakota has the brightest future it's had in a very long time."