Back in late June, Governor Doug Burgum and Lieutenant Governor Brent Sanford praised the sale of Coal Creek Station to Rainbow Energy Center LLC as a landmark victory for the future of energy production in North Dakota. Headlines read “40 More Years” of operation at North Dakota’s largest coal-powered station, and it was a huge sigh of relief for the residents of McLean County, Underwood, and surrounding communities in coal country. But, late last week, the Associated Press reported that two-thirds of the 28 utility power cooperatives in Minnesota that take electricity from Great River Energy would need to endorse the sale of the plant and transmission line. For this week’s KX Ag & Energy Insight, we explore the vulnerabilities of the plan to save Coal Creek.

Dakota Resource Council’s Executive Director Scott Skokos says his organization is concerned about the technical and financial feasibility of retrofitting Coal Creek Station with carbon capture.

“We’re very skeptical of this. If it works, it works, but I think the truth is they need to be a little bit more honest with those communities about the possibility of this not working,” said Skokos.

Rainbow President Stacy Tschider says carbon capture is vital for the project, and it’s a key part of Governor Doug Burgum’s vision to make North Dakota carbon neutral by 2030. But, the technology for coal plants is in its infancy and expensive. Many state officials have embraced the concept as a way to keep North Dakota’s coal industry viable as social and political pressure builds across the country to reduce carbon emissions as a way to mitigate climate change. Tschider estimates a carbon capture system at Coal Creek Station would cost about $1.5 billion, and the federal 45Q tax credit is quote “crucial” to making it happen. Carbon capture would detract from Coal Creek’s energy output, which raises concerns about the financial viability. The power station experienced a $170 million shortfall in energy sales in 2019, and similar financial losses several years before that.

Skokos says the residents didn’t get the full picture,” kinda got a false message or not a very genuine message in that sense. Like the technical feasibility of doing 40 more years of coal with an unproven technology in carbon sequestration that’s never worked at this scale of a power plant at this size on every other try that’s occurred throughout the last 15-20 years.”

Skokos points to the failed Petra Nova carbon capture project in Thompson, Texas that was forced to shut down in May of 2020 after not meeting its carbon sequestration and financial targets.

On the other hand, Laborers’ International Union of North America, or LIUNA, is on board with the plan to save Coal Creek. LIUNA of Minnesota and North Dakota Marketing Manager Kevin Pranis says union members championed the plan to the boards of the 28 utility cooperatives in Minnesota to endorse last week’s deal.

“We have 4,800 members who are members of cooperatives served by Great River Energy who are served by that power plant, and so we had members emailing the boards of those co-ops. We had members who turned out to testify publicly at those board meetings and public comment in favor of this deal,” explained Pranis.

Pranis says the deal is good for generating union jobs at the power station, transmission line, and future wind jobs. Adding it’s good for coal country and good for the climate.

“A lifeline to those communities. The plans for carbon capture could turn Coal Creek into a reliable source of low carbon baseload power for when the sun doesn’t shine and the wind doesn’t blow, and we think that it could open the possibility of further wind energy development that we’ve long supported in North Dakota,” said Pranis.

However, DRC says the fact that the majority of the profitability of the future of Coal Creek hinges on the commercialization of an unproven technology, is an awfully big gamble.

“The main thing is there’s 700+ jobs direct jobs, and that’s why our government and labor is really happy about this. And, if I was them I would be really happy too, but my thing is that they also need to be honest and say there’s also a possibility that this may not work. It seems like they have a hail mary and they need to hedge their bet so to speak. Like if it does, good, but if it doesn’t then we’re at the same place that we were, and we didn’t diversify, and we didn’t find new industries for these people to replace the lost jobs and the lost tax revenue for these counties,” said Skokos.

Skokos points out there are multiple tracks of the federal infrastructure bill, and weeks of debate left, so it is still uncertain that the subsidies needed for the financial viability of carbon capture will come through on the federal level.

What we can be sure of is that our State Senators John Hoeven and Kevin Cramer are fighting hard to ensure federal support, so that North Dakota can lead the nation in cracking the code on carbon capture.

Last week, KX reported on how the roughly $1 trillion bipartisan bill currently being debated in the Senate could be the largest investment by a single government into carbon capture and sequestration. It would also mean massive economic opportunities for fossil fuel, renewables, ethanol, and manufacturing industries in North Dakota.