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Lignite leader says Clean Power Plan puts ND coal industry in ‘mortal danger’

BISMARCK - Some of North Dakota's seven coal-fired power plants will be forced to shut down unless the Obama administration's new rule to curb carbon dioxide emissions undergoes significant changes, an industry official said Tuesday just hours be...

BISMARCK – Some of North Dakota’s seven coal-fired power plants will be forced to shut down unless the Obama administration’s new rule to curb carbon dioxide emissions undergoes significant changes, an industry official said Tuesday just hours before the U.S. Supreme Court temporarily blocked the rule.

Justices voted 5-4 to grant a request made by North Dakota and 26 other states and various energy and business interests to put the Clean Power Plan on hold while a federal appeals court hears their lawsuit against it.

Lignite Energy Council President and CEO Jason Bohrer said the state’s lignite coal industry has a $4 billion annual economic impact and contributes $100 million in tax revenue per year. But the Clean Power Plan, which seeks to cut carbon dioxide emissions from the nation’s power sector by 32 percent by 2030, puts the industry in “mortal danger,” he said.

“I believe what is at stake is the continued prosperity of North Dakota,” he told the Legislature’s interim Taxation Committee.

Gov. Jack Dalrymple has said it was “a shocker” when the U.S. Environmental Protection Agency released its final rule in August ordering a 45 percent cut in the rate of carbon emissions from North Dakota’s existing power plants by 2030, after a draft rule had proposed a smaller cut.

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State officials argue the EPA is overstepping its authority and violating the state’s constitutional rights, and that the rule will cause “irreparable harm” through lost tax revenue and jobs, a less reliable power grid and higher costs for consumers.

Those challenging the rule asked the Supreme Court to step in after a three-judge federal appeals court panel denied their request for a stay on Jan. 21.

That same panel still must decide whether the rule is legal. Oral arguments are set for June 2 and a ruling is expected in last summer or early fall, but it’s likely the Supreme Court will end up settling the matter, North Dakota Assistant Attorney General Maggie Olson said.

Meanwhile, the state Department of Health continues to develop a state plan to comply with the rule, hoping it won’t be needed if the courts strike down the rule.

The plan is due Sept. 6, but the state will ask the EPA for a two-year extension before submitting its final plan, said Dave Glatt, chief of the department’s environmental health section.

“We will develop a plan that will be very broad-based. It’s not going to back us into a corner,” he said.

If the EPA adopts the final state plan in 2019, the first significant carbon cuts would be required in 2022, which Glatt said is “lightning-fast speed” for companies that typically plan at least a decade out.

“Looking at two to three years is just not doable without some major issues related to cost increases and reliability,” he said.

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Technology for clean coal combustion and carbon dioxide capture isn’t cost-effective or reliable enough yet to meet the EPA’s standards and timeline, Bohrer said. He asked lawmakers to continue supporting research and development and increase incentives for using carbon dioxide for enhanced oil recovery.

Bohrer and Glatt both noted that 55 percent of the power produced in North Dakota is exported to other states, including Minnesota, one of more than a dozen states intervening on behalf of the EPA in support of the new rules.

“By shutting down (North Dakota) power plants, that’s going to have a direct impact on them,” Glatt told reporters.

Twenty-four states, including North Dakota, also are challenging the EPA’s new rule for future power plants.

Whether the rules survive or not – President Obama has vetoed resolutions by congressional Republicans seeking to repeal them, but a new administration will take over next year – Glatt said carbon dioxide emissions will continue to be an issue and the state must have a plan to address it.

“We are going to be in a reduced carbon future,” he said.

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