North Dakota Lawmakers Look to Buoy Coal With Relief Bills
By Adam Willis
February 4, 2021 - With North Dakota coal staring down an uncertain future, lawmakers are making financial relief for the troubled fossil fuel industry a top priority this legislative session.
North Dakota's declining coal industry employs around 13,000 people in the state's central coal-producing counties, and its struggles to compete with more affordable natural gas and federally subsidized renewables like wind and solar have made it a flashpoint of political debates over the state's energy future.
The ticking clock on the lifespan of Coal Creek Station, the Underwood, N.D., power plant slated for closure next year, and the arrival of the new, climate-focused Biden administration have made coal policy an even more urgent priority for lawmakers.
"The bottom line is, 'Houston we got problems,'" said Senate Majority Leader Rich Wardner, putting the stakes bluntly in a committee meeting on coal industry innovation on Wednesday, Feb. 3.
Several of the coal bills on the table would create aid programs for the industry and have drawn opposition from renewables advocates. One bill discussed Wednesday, House Bill 1412, would provide tens of millions of dollars in tax relief to the coal industry in the next few years. Another presented earlier in the week, House Bill 1458, would tax green energy providers and reallocate the funds as grants to the coal industry.
Sen. Jessica Unruh Bell, R-Beulah, an environmental manager for the North Dakota Coal Corporation, said she is tracking over 20 bills this session aimed at benefiting the coal industry in some form, a much larger volume than have come up in previous years.
"I think that everything needs to be on the table," she said.
But some environmental groups have argued that North Dakota lawmakers are mounting a last-ditch effort to save an industry that is under threat from forces beyond the state's control.
"Instead of hedging their bets, they're going all-in on something that might not work," said Scott Skokos, the director of the environmentalist Dakota Resource Council. "And that's scary."
For Skokos, the focus of North Dakota lawmakers on national environmentalist priorities misses the real threats to the coal industry in cheaper natural gas and shifting market forces, as an increasing number of investors look to put their money behind clean energy projects instead of fossil fuels.
But with President Joe Biden coming of the gates with a slew of aggressive climate initiatives, Skokos said lawmakers see coal in the crosshairs of the new administration. "The coal industry feels existentially threatened by the Biden administration," he said.
Republican leadership has backed a substantial tax break for the coal industry. House Bill 1412, introduced by House Appropriations Committee chairman Rep. Jeff Delzer, R-Underwood, would grant a $75 million "tax holiday" to the coal industry over the next five years.
"We cannot afford to ignore the challenges the industry faces," Delzer told lawmakers. "This will give the industry some relief to better compete with other forms of generation, and the end goal will be to keep the thousands of our friends and neighbors who have and will continue to make their living as the work force related to coal."
Delzer's bill cutting the state's coal conversion tax by 60% until the summer of 2026 would sunset unless renewed by the Legislature in the 2025 session. Coal companies would still have to pay the remaining 40% of the coal conversation tax to cities and counties, as well as payments towards the Lignite Research Council, a state-industry partnership looking for ways to make coal more sustainable through methods like carbon capture.
The bulk of that tax would be cut from the state's general fund. And though Delzer, a tight fiscal manager, noted that this would be a noticeable dent to state coffers, he said that the cut will be worth it to protect jobs.
"Anytime you start taking 30 million away from the general fund, it's an effect on it," he said. "But when you're talking about the kind of jobs that we got, hanging out there in the coal industry, and the fact that we need to support the coal industry, it's probably a valid reduction in revenue."