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Port: Little sign of a slowdown in North Dakota's coal industry

Coal production in North Dakota is proving far more resilient than the rest of the nation.

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Minnkota Power Cooperative's Milton R. Young Station, near Center, N.D., burns lignite coal to generate electricity for customers in eastern North Dakota and northwestern Minnesota. In 2017, North Dakota coal-fired power plants produced 2.7 million tons of coal ash, which must be properly disposed of and monitored. Special to The Forum
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MINOT, N.D. — According to the federal government's Energy Information Administration, total U.S. coal production declined more than 23% from 2013 through 2018.

As I write this, the EIA isn't reporting numbers for the fourth quarter of 2019 yet, but the first three quarters of last year all showed a decline in coal production over the same quarter in the previous year.

Yet, in North Dakota, that sharp decline isn't happening.

The Lignite Energy Council has just released its annual report on the state's coal production, and while there was a roughly 8% decline in 2019, production remains about at typical levels.

And the decline in 2019, it seems, had less to do with market conditions than outages at the state's coal-fired power plants (some planned, some not).

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Of course, competition from other energy sources such as natural gas and wind power contributed too, as LEC President Jason Bohrer acknowledges in a press release sent out by the group.

"North Dakota's five lignite mines continue to be a supplier of low-cost fuel for power plants," Bohrer said. "The lower tonnage in 2019 also resulted partially from electricity produced from other sources including natural gas, wind generation and the Garrison Dam, which put pressure on lignite-based power plants in the state."

Still, coal production in North Dakota is proving far more resilient than the rest of the nation, as this chart from the LEC accompanying their press release illustrates.

From 2016 to 2018 coal production in North Dakota increased, even as it fell nationwide:

EMBED: Lignite Energy Council Coal Production Chart
Graph created by the Lignite Energy Council

Why is North Dakota bucking the national trend? A lot of it has to do with the unique way the state's coal mines and coal-fired power plants are situated relative to one another.

"The lignite industry is unique in that our plants are generally adjacent to the mines, which reduces, if not eliminates, transportation costs," Bohrer points out. "It also means that our state benefits from the jobs associated from both the mines and the power plants along with low cost, reliable electricity generated from lignite."

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Lower transportation costs are a significant advantage for North Dakota coal producers.

I'm glad to hear of the competition coal is facing from other energy sources. Our energy market, to the greatest degree it can be, should be competitive.

Nothing will better push coal companies (and gas companies and wind companies, etc., etc.) to be more reliable and more efficient than competition.

If only the competitive playing field were level. Unfortunately, wind power (and solar power, though that's not really a factor in our region) continues to enjoy no small degree of political favoritism. The year-end budget deal pushed through by Congress in 2019 included a renewal of a massive subsidy for wind energy that representatives of the wind industry had been insisting wasn't going to happen .

If coal fades away because it can't compete with other sources of electricity, so be it.

But I'm not sure we're well served if coal power fades because the politicians put their finger on the scales for the competition.

To comment on this article, visit www.sayanythingblog.com

Rob Port, founder of SayAnythingBlog.com, a North Dakota political blog, is a Forum Communications commentator. Listen to his Plain Talk Podcast and follow him on Twitter at @RobPort.

Opinion by Rob Port
Rob Port is a news reporter, columnist, and podcast host for the Forum News Service. He has an extensive background in investigations and public records. He has covered political events in North Dakota and the upper Midwest for two decades. Reach him at rport@forumcomm.com. Click here to subscribe to his Plain Talk podcast.
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