Federal infrastructure bill could be boon to North Dakota fossil fuels, electric cars

BISMARCK — If Congress passes a $1.2 trillion infrastructure package that advanced in the Senate this week, it would send close to $2 billion in federal funding to North Dakota — largely for long-term investments like repairs to roads and bridges.

But the bill also includes larger appropriations for energy and environmental projects that could prove a windfall to fossil fuels if the state can take advantage of them.

The massive spending package, a top priority for President Joe Biden, still faces a rocky path ahead in the House of Representatives, where Democrats are hoping to leverage their majority to push through other ambitious priorities alongside the infrastructure bill.

The proposal cleared the Senate thanks to support from 19 Republican lawmakers including both of its North Dakota members, Sens. John Hoeven and Kevin Cramer.

The bulk of money earmarked for North Dakota would go to general infrastructure, like roads and bridges, according to a White House fact sheet . Smaller North Dakota appropriations include $116 million for public transportation and another hundred million for rural broadband and high speed internet.

Top agenda items for Washington Democrats also included a host of programs targeting climate change and climate resiliency. North Dakota's senators have taken some criticism from the right for supporting the Democrat-backed bill, with Cramer drawing pushback in a weekend interview with Fox News , but both cited the potential gains for North Dakota fossil fuels in explanations of their support.

Though the bill includes tens of billions of dollars for projects like updating infrastructure to protect against climate change-fueled weather events and $73 billion to update the power grid to better accommodate renewable energy, it also comes with substantial carve-outs for fossil fuel producers.

In most cases, these appropriations aren’t guaranteed to land in North Dakota, but Cramer said in an interview that he believes the state is well-positioned to take advantage of competitive federal grants.

Among the pieces relevant to the North Dakota energy world is $8 billion in investment for four different “hydrogen hubs” around the country — places where hydrogen energy would be both produced, transported and used. Experts believe emerging hydrogen technology could provide a scalable source for clean energy, and, in North Dakota, a recently announced proposal to use locally sourced natural gas for hydrogen production could make a convincing play for some of that funding.

Another emerging industry, carbon capture and storage, would get a boost if the package clears the House as well, with possible ramifications for a slate of projects in North Dakota . Carbon capture is an expensive and so far sparsely used technology that North Dakota leaders hope can make the state’s legacy energy production cleaner and more financially viable in a decarbonizing economy. The infrastructure bill includes a total of $12.5 billion to help develop the technology at commercial scale.

While billions of dollars nationwide may prove thin considering the price tag of getting carbon capture projects off the ground, supporters of the technology celebrated Tuesday’s passage as a potentially landmark moment.

Brad Crabtree, vice president of carbon management at the Great Plains Institute, called the bill “a major step change in terms of commitment from the federal government” to carbon capture. And Crabtree, who is based in North Dakota, noted that the state’s advantageous geology, regulatory rules and existing slate of carbon capture projects should put the state in a good position to apply to the U.S. Department of Energy for grant funding.

There’s also $2.1 billion in low interest loans for carbon dioxide transport in places that don't currently have that infrastructure, a provision that Crabtree emphasized will be crucial to the success of carbon storage technology, since many facilities will need to move the sequestered greenhouse gas to injection sites in other places. Summit Agricultural Solutions, the multi-billion proposal to coalesce the carbon dioxide output from ethanol plants across the Midwest and store it underground in North Dakota, could be a strong candidate for federal support, Crabtree noted.

Separately, Cramer and Hoeven sponsored a $4.7 billion inclusion in the bill for plugging and reclaiming abandoned oil and gas wells, sources of harmful methane leaks and a contributor to global warming. Lisa DeVille, a co-founder of the Fort Berthold Protectors of Water and Earth Rights, said she sees these fossil fuel reclamation programs in the bill as effectively “bailouts” to the industry, but added that she supports the cleanup effort if companies aren’t going to allocate funding for it themselves.

The infrastructure bill's historic funding for climate initiatives is nonetheless pared down dramatically from the version originally put forward by Democrats. In Washington, attention quickly shifted from Tuesday's Senate vote to the Democrats’ $3.5 trillion budget proposal, which loops in many climate provisions that didn't make the final cut of the infrastructure bill.

One of the largest cuts between the original bill and the bipartisan version that eventually passed the Senate was in funding for electric vehicle adoption.

“Frankly, we were disappointed,” said Robert Moffit, a coordinator for North Dakota Clean Cities, a group that advocates for electric vehicle adoption. Many environmental groups see a mass transition toward battery-powered cars as one of the crucial steps to weaning America off of fossil fuels and transitioning to clean energy, and Moffit singled out lesser funding for the electrification of school bus fleets as a missed opportunity to replace old, diesel-powered vehicles.

Still, North Dakota ranks near last in the country in electric vehicle adoption , and Moffit noted that the bill would result in “the single largest investment in EV chargers the state has seen.”

Recently, North Dakota beefed up its EV charging station network with funding out of a federal settlement with Volkswagen. Moffit noted that money represents just a fraction of the $26 million in guaranteed funding the state would receive for charging stations out of the infrastructure bill, according to the White House fact sheet.

Cramer said he disagreed with the decision to include funding to encourage electric vehicle adoption in the bill, adding that he would have preferred that the large appropriations for power grid modernization weren't in there, either. The first-term senator acknowledged the importance of shoring up the grid in many parts of the country but argued that many of those steps do little for North Dakota, where infrastructure is already winterized.

Tuesday’s much-anticipated infrastructure vote came just a day after the United Nations’ Intergovernmental Panel on Climate Change released a landmark report concluding it is “unequivocal” that humans have warmed the planet and contributed to the growing frequency of extreme weather events.

Moffit said that the emerging prioritization of climate issues in Washington, which could expedite the rise of electric vehicles, might also foreshadow a different future for North Dakota's oil-focused economy. He noted that he has historically found it tough to make the case that air pollution is driving climate change, but said that consistent wildfires and events like North Dakota's current drought have made average members of the public more aware of the trend.

"I think there are some clear signs of where the future is going," he said, alluding to a movement away from gas-powered cars. "It will be up to our elected officials and others in the private industry to say, which way are we going to go? Are we going to fight this, are we going to dig in our heels, or are we going to become leaders in this industry?"

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