By John Siciliano
May 1, 2018 - North Dakota's energy industry can thank the state legislature's foresight and tax code for its nation-leading push on clean coal technology.
The state, which has the most shale oil in the upper Midwest, wants to be able to use carbon capture technology to help it produce more oil through fracking. And state lawmakers have created tax incentives so companies can write off nearly every component of the technology process.
The tax credit changes were the brainchild of Republican state Sen. Dwight Cook, who looked at what states like Texas were doing to harvest carbon dioxide to help recover oil from long-abandoned wells--a process called "carbon capture."
Cook's idea was hashed out four years ago when he sat down with a power plant owner hoping to employ carbon capture and develop a plan to push the development of the technology, which is almost commercially ready but needs the right tax policy to help push it into use. The bill was passed into law and signed by the governor in April 2015.
“I understood how the state could benefit,” Cook said. “We wanted to capture CO2 and get it in the ground for enhanced oil recovery.”
Carbon capture isn’t as complex as it sounds. It’s a catalytic process that acts a bit like the pollution control devices found in cars.
The technology captures part of the carbon dioxide emitted when coal is burned at a power plant, before the gases leave the smoke stack. The carbon dioxide is then chilled and sent via a pipeline to be injected in wells for the "enhanced oil recovery process," or EOR.
Unfortunately for Cook, when he suggested the tax bill, the Obama administration had just proposed its Clean Power Plan climate change standards for existing coal plants, and the Environmental Protection Agency targeted the state with one of the strictest carbon reduction goals in the nation.
Meanwhile, the EPA wasn’t friendly to coal plants, even ones with carbon capture. It was a dilemma that infuriated North Dakota's Democrats and Republicans.
Under the Trump administration, however, North Dakota is looking to become a leader not only in oil production, but also the clean coal technology that looks to turn carbon dioxide into an industrial working fluid and make fracking more efficient. Fracking, or hydraulic fracturing, uses fluid to inject and break shale rock deep underground to release its oil and natural gas.
With help from its state tax subsidies, North Dakota, this month, became the first state to be granted an EPA permit to begin injecting deep underground CO2 from a fossil fuel plant.
The state isn't stopping there. Cook says the legislature is searching for ways to perfect its carbon capture policies for fracking. That could prompt other fracking states to follow its lead.
How carbon dioxide could benefit the fracking process is still being studied, Cook said, because fracking wells are functionally different from conventional oil wells.
Most of the wells in North Dakota use fracking--unlike Texas, which has a mix of conventional and shale wells.
The state legislature’s tax and energy committees are studying how CO2 would benefit the shale oil production process is the problem, but there's still work to be done. “Haven’t cracked the nut yet,” Cook said. “There is ongoing study in the [2017-2018] session that's still going on,” he said.
He said the legislature and the state’s academic institutions, including the University of North Dakota, are also trying to figure out how to make CO2 a beneficial working fluid in fracking.
To put the state's efforts in perspective, Washington has only just begun kicking around the idea of giving incentives for carbon capture projects, after years of letting previous incentives stall, linger and expire. Washington hasn’t begun looking closely at the fracking process in terms of benefiting the clean coal technology.
North Dakota's lead on carbon capture for fracking is a common theme emerging among states on clean coal policy.
Illinois is also hoping to pick up the pieces after two presidential terms of inaction.
The Prairie State is looking the salvage the remnants of the Obama administration’s Futuregen program, which it canceled after the utility side of the project couldn’t meet a funding deadline.
The program was long hailed as the federal government’s premier zero-emission coal plant project. No one in Washington talks about the initiative anymore, but Illinois hasn’t forgotten it.
The Illinois House of Representative's Agriculture and Conservation Committee approved a bill this month to allow a small-scale clean coal power plant to be built at the abandoned Futuregen site in Eastern Illinois.
“This is great news for Eastern Illinois. Any time we have an opportunity to bring more jobs to our region, it’s a win-win,” said State Rep. Reggie Phillips, a Republican who sponsored of the bill. The full House will vote on the measure later this year.
The power plant would would be small, about 77 megawatts, Phillips said. But it will be built solely with private funds.
“If we are successful, this new clean coal power plant would be the first one to operate in Illinois, a historic opportunity not only for our region, but for our state as well,” he added.
The plant would help Illinois meet a state requirement to generate 25 percent of its energy from power plants that use clean coal technology.
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