Nov. 14–The state’s coal research and development arm will consider a project that, if approved, would be the largest spend in its fund’s history.
Minnkota Power Cooperative and partners will make the pitch for $15 million in funding from the North Dakota Industrial Commission to help pay for engineering and design work on a carbon dioxide capture system at the Milton R. Young Station near Center.
Project Tundra, as it’s called, is modeled after another, smaller carbon capture project in Texas called Petra Nova, completed by NRG Energy. The system is expected to capture up to 95 percent of carbon emissions from the Young Station’s Unit 2. The carbon would then be transported via pipeline to western North Dakota for use in enhanced oil recovery projects.
The total project cost is $31,164,414. Another $15 million will be requested from the U.S. Department of Energy in 2019. At the federal level, Minnkota would be in competition for half of a $30 million appropriation set aside for advanced carbon capture projects.
Stacey Dahl, Minnkota’s senior manager of external affairs, said receipt of the state dollars would be contingent upon the cooperative winning the federal funding. She said Minnkota also would invest more than $1 million through cash and in-kind contributions.
Funding this phase of Project Tundra would nearly empty the Lignite Research Fund’s bank.
Karlene Fine, the Industrial Commission’s executive director, said the fund has about $16 million in uncommitted dollars. This project would leave $1 million untouched, though Fine anticipates another $4 million to be added to the fund by the end of the biennium.
Lignite Research Fund dollars come from a portion of coal-related taxes collected by the state and earmarked for industry research and marketing projects. About $15 million comes to the fund each biennium, Fine said. This past biennium, the fund started receiving a larger portion of those taxes, as well as a one-time $3 million appropriation from the state’s mineral revenues collected in the Strategic Investments and Improvements Fund.
The last time the state got anywhere near spending these kind of Lignite Research Fund dollars on a single project was in the early 2000s with what it called Lignite Vision 21.
Vision 21 allowed the fund to bond up to $10 million, to be paid back by future coal tax dollars, Fine said. It was the program that helped construct Spiritwood Station near Jamestown. Fine said the Industrial Commission also had approved a $19 million request in 1992 but that project never came to fruition and the money was never spent.
The Project Tundra study is expected to take up to 32 months to complete and will include not only equipment for the Young Station but also a design for an underground pipeline to transport the carbon 120 miles to conventional oil wells near Watford City, outside the Bakken formation.
Minnkota’s Dahl called the project important and worth the investment because of the value it would return to the state and its lignite coal stores. She said it also would unlock additional oil resources from wells owned by its partner, Eagle Energy Partners.
Minnkota expects to finish its current pre-front end engineering and design work, for which it also received Lignite Research Fund dollars, in the second quarter. Dahl said they’re seeking this next stage of funding now in order to keep the project moving.
“We have a lot of momentum behind the project,” she said.
Eagle Energy Partners also received state funding for its portion of the project, cataloging the oil resources still stranded in its wells and where it would need to inject the carbon.
The coal industry is calculating about $46 million of additional revenue annually to the state from tax dollars and increased oil production if the project is to succeed.
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