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North Dakota board aimed at curbing emissions recommends funding for hydrogen hub, natural gas plant

The newly formed Clean Sustainable Energy Authority recommended $28 million in grants and $135 million in loans on Tuesday for a slate of applicants that ranged from a massive natural gas plant to a proposed hub for hydrogen fuel production to carbon capture ventures at coal and ethanol facilities.

Power lines cross in front of smoke stacks
The Great Plains Synfuels Plant near Beulah.
FNS file photo
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BISMARCK – Members of a new North Dakota board aimed at fostering cleaner energy production in the state’s fossil fuel sectors recommended more than $160 million in grants and loans on Tuesday, Dec. 14, to a slate of applicants that ranged from a massive natural gas plant to a proposed hub for hydrogen fuel to carbon capture ventures at coal and ethanol facilities.

The Clean Sustainable Energy Authority recommended a total of $28 million in grants and $135 million in loans for its potential inaugural beneficiaries. Those awards still need final approval from the North Dakota Industrial Commission, the three-member business regulatory panel chaired by Gov. Doug Burgum, which will hold its final meeting of the year next week.

Among Tuesday’s recommended recipients were a few heavy-hitters, including the Bismarck-based Bakken Energy and Mitsubishi Power Americas’ $1.8 billion plans to develop a so-called clean hydrogen hub at a coal gasification plant near Beulah, as well as a proposal by Canadian company Cerilon to develop a $2.8 billion gas-to-liquids plant in Williams County to capture an estimated 8% of the state’s total natural gas output.

North Dakota lawmakers established the Clean Sustainable Energy Authority during their legislative session earlier this year with the aim of kickstarting emissions-reducing projects in the state’s carbon-intensive fossil fuel and agriculture sectors. Those businesses are facing mounting investor pressures to mitigate their contributions to climate change, and lawmakers instructed members of the Clean Sustainable Energy Authority last week to target funding towards “game-changing” ideas with the potential to make industry-wide waves.

Tuesday's marathon meeting brought top executives from both the North Dakota energy world and out-of-state companies to present their pitches for a cut of the new fund's total $45 million in grants and $250 million in low-interest loans.

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Winning projects

The Clean Sustainable Energy Authority, whose members include energy industry nominees and Lt. Gov. Brent Sanford, recommended funding for all but one of their first round applicants. They opted to leave $17 million in grants and $115 million in loans on the table for submissions next year.

Board's members voted 7-1 to approve $10 million in grants and $80 million in loans to Bakken Energy’s hydrogen proposal, which would retrofit the financially troubled Great Plains Synfuels plant near Beulah to produce hydrogen fuel. That money came out of a $20 million pot earmarked explicitly for hydrogen development, which was added to the Clean Sustainable Energy fund at Burgum’s suggestion during the recent legislative session.

Approval for the hydrogen hub comes as the idea has drawn criticism in the last week from advocates for the North Dakota coal industry. A group representing the state’s three coal producing counties cited concerns about the proposal’s heavy reliance on federal funds and a possible depletion of coal sector jobs tied to Great Plains Synfuels in a letter to Burgum asking the state to hold off support for the project.

Paul Sukut, the recently retired CEO of Basin Electric Cooperative, Great Plains Synfuels' current owner, told the board that the plant has lost hundreds of millions of dollars in the last three years, and said the co-op was looking into shuttering it when Bakken Energy approached them with the hydrogen proposal.

Coal advocates have also questioned what would happen to jobs at the nearby Freedom Mine, which currently feeds Great Plains Synfuels. Sukut acknowledged to the board that the plan would likely result in “some reduction in employees" at the mine but added that the alternative is the best option for the gasification plant and its 525 employees, whose jobs would be retained in the transfer.

Hydrogen has drawn hype in recent years as a potentially clean fuel source for power generation and transportation, and Bakken Energy CEO Mike Hopkins pitched his company’s project as a leading contender for billions of dollars in federal funding recently established for hydrogen hubs around the country. The company is pursuing $1.5 billion in loans through the U.S. Department of Energy for the bulk of its funding.

“We need the whole of the state to come together and embrace what we’re doing,” said Hopkins. “We implore you to send a message that North Dakota is united in its support for low-cost clean hydrogen" manufactured with natural gas.

Al Christianson, a Clean Sustainable Energy Authority member and government affairs director at Great River Energy, said that while he has some concerns about the unestablished market for hydrogen and potential political response to funding Bakken Energy’s proposal, he was convinced of its benefits to North Dakota communities after Sukut's statement that Great Plains Synfuels might otherwise shut down.

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Cerilon’s proposed gas-to-liquids facility in Williams County drew unanimous support for a $7 million grant and $40 million loan following a presentation in which company executives outlined the possibilities for the project to open up access to petrochemical production in North Dakota, an industry that state leaders have eyed as a new economic driver.

Board member Joel Brown, who is also a McKenzie County commissioner, praised the project as “another game-changer" that could break “the glass ceiling” for the development of a coveted industry in North Dakota that would provide new uses for the Bakken's abundant natural gas byproduct.

Other funding awards were recommended for two of North Dakota's ethanol and coal industry carbon capture ventures.

A funding request by the University of North Dakota's Energy & Environmental Research Center for a preliminary engineering study into the $1.5 billion plans to retrofit Coal Creek Station, the state’s largest coal-fired power plant, for carbon capture and storage was recommended for $7 million in grant funding. The nearby carbon capture proposal at Blue Flint Ethanol, which is being pursued by Midwest AgEnergy, would receive $3 million in grants if the board's recommendation stands.

The board also recommended $15 million to support a project by the Canadian company Valence Natural Gas Solutions to deploy mobile gas capture units in the oil fields, which would help cut back on the industry's wasteful and environmentally harmful practice of gas flaring.

A proposal submitted by Wellspring Hydro to recycle produced water waste in the North Dakota oil fields would receive $1 million in grant funding, nearly half of the project’s total costs. Wellspring Hydro is looking to use the highly concentrated salt water to extract products like lithium, which can be used to make the batteries that power electric vehicles.

The board opted not to recommend fulfilling several million in grant funding requested by Marathon Oil to support technology for capturing methane, a super potent greenhouse gas, noting that companies seem to be moving towards those deployments anyway.

Though formation of the Clean Sustainable Energy Authority drew some pushback from environmental groups and renewable energy advocates during the legislative session earlier this year, Scott Skokos, director for the conservationist Dakota Resource Council, said his organization is broadly supportive of several of the ideas brought before the board.

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Skokos said he is skeptical of expensive efforts to clean up the coal industry using untested carbon capture technology, but he singled out several proposals aimed at cutting oil field waste and emissions as potentially fruitful ideas for helping the state's fossil fuel industries transition into a cleaner economy.

Notably absent from this round of applicants was Project Tundra, the billion dollar plan being pursued by Minnkota Power Cooperative to retrofit a central North Dakota coal plant for carbon capture. Top Republican lawmakers said during the legislative session that the $250 million loan program was designed specifically for Project Tundra , but the venture has faced engineering set-backs that have pushed the timeline for its final investment decision back to the end of 2022.

Readers can reach Forum reporter Adam Willis, a Report for America corps member at awillis@forumcomm.com.

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