In the decade from 2000 to 2010, North Dakota cracked the code in the Bakken, setting the stage for the United States to become the world’s top oil producer. We put the right legal, tax and regulatory environment in place, commissioned the North Dakota Geological Survey to collect data on the Bakken reserves and set up the North Dakota Oil and Gas Research Fund to help advance the technology. Then, the entrepreneurship of our private sector made it happen by developing and refining horizontal drilling and other innovations. The results have been incredible.
Now, with multiple extreme weather events demonstrating the need for a reliable electric grid, we need to do the same for our coal-fired electric industry and crack the code on carbon capture, utilization, and storage . Here’s the good news – we didn’t just start on this herculean effort in North Dakota, rather, we’ve been at it for more than a decade.
In 2008, as governor I set up a task force to develop the framework needed to enable companies to safely and legally sequester CO2 for geologic storage and for enhanced oil recovery. We advanced this framework through the state legislature the next year and set up the necessary legal and regulatory environment as well as trust funds for state oversight and long-term liability. Further, we established the North Dakota Transmission Authority, which is now taking the lead in preserving important baseload power sources, like the Coal Creek power plant in North Dakota, and helping to facilitate the implementation of CCUS at such facilities.
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Then as U.S. senator, I worked with the Environmental Protection Agency under the Obama and Trump administrations to allow our state to be the primary regulatory body for Class VI injection wells, which are used for geologic or long-term CO2 storage. Securing North Dakota’s regulatory primacy over Class VI wells, the first state to be granted such authority, provided needed certainty to make CCUS technology more economically feasible.
For instance, Summit Carbon Solutions recently announced a multi-billion dollar pipeline network to capture and transport CO2 from more than 20 ethanol facilities in the Midwest, bringing it to North Dakota for geologic storage. At the same time, we are advancing the development and commercialization of Project Tundra, one of the world’s largest CCUS projects, which will enable existing coal-fired power plants to be retrofitted to capture carbon emissions. This effort is led by the University of North Dakota’s Energy & Environmental Research Center and Minnkota Power. In support of their efforts, we’ve worked to bolster the partnership between the EERC and the U.S. Department of Energy and have secured more than $43 million for Project Tundra to date.
These projects demonstrate the broad-based benefits of CCUS technology. U.S. carbon emissions have already been on a downward trend since 2005. However, demand for fossil energy sources is going to continue increasing globally, with China, India, South Africa and other nations continuing to invest in new coal-fired power plants. It’s for these very reasons that Dr. Fatih Birol, head of the International Energy Agency, calls CCUS “the most important technology that exists today.” The rapid deployment of this technology is essential to accomplishing both our economic and environmental stewardship goals.
To this end, we’ve worked to pass legislation securing the 45Q Carbon Oxide Sequestration tax credit, one of the most important incentives to make CCUS projects commercially-viable, as well as legislation to enhance and extend the 45Q construction deadline. We’ve also supported funding for critical loan guarantee programs at both the DOE and the Department of Agriculture’s Rural Utility Service to help CCUS projects access low-interest financing.
Moving forward, we are pressing to improve the 45Q and 48A Advanced Coal tax credits, including modernizing the 48A tax credit to better support CO2 capture retrofit projects, and providing a direct payment option for these two CCUS tax incentives.
Through these efforts, North Dakota and our nation are positioned to crack the code on CCUS. That means we can lead the world in decarbonizing coal-fired electricity and do it on a commercially-viable basis, just as we did with horizontal drilling. Doing so is not only essential to our energy security here at home, but is the path forward for reducing carbon emissions globally.
Hoeven represents North Dakota in the U.S. Senate.
This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.