Movements in the North Dakota Coalfields

Last week while many of us were working off the effects of too many cookies, the State of North Dakota and its ever-vigilant lignite coal industry were advancing new lignite mine and liquid coal projects. For the fourth time, Great Northern Power Development submitted its application to mine 7000 acres at South Heart, in southwestern ND, to the Public Service Commission. The cover letter, filed on December 29, is available from the PSC site. Hat tip to the diligent Mary Hodell of rural South Heart for spotting the resubmittal almost instantly.

Another project still drawing breath in spite of repeated delays is American Lignite Energy’s $4 billion proposed coal gasification plant for McLean County, ND. If constructed, the plant would produce 460 million gallons of gasoline a year from lignite coal, according to a story posted by the Bismarck Tribune. The ND Industrial Commission – made up of the governor, the ag commissioner, and the attorney general – approved an extension of a $1.3 million grant given in 2006 along with a commitment of up to $10 million to study the project. At the time of the original grant, the Commission set a deadline of Dec. 31, 2008 to determine feasibility. The extension was justified by the prospects of more favorable political conditions for the project with a Republican-controlled U.S. House.

At the same Commission meeting, Sandi Tabor, director of the North Dakota Transmission Authority, reported on new cost allocation rules for building transmission lines. North Dakota has long been eager to build out the transmission infrastructure necessary to export more lignite-fired electricity. The new rules allow developers of new transmission lines to spread costs to customers across the Midwest Independent System Operator’s service area of nine states for projects that meet certain qualifications. Tabor also happens to be Vice President of Government Affairs for the Lignite Energy Council (LEC).

LEC’s mission is to “protect, maintain and enhance development of our region’s abundant lignite resource.” Their website clarifies:

The primary objective of the Lignite Energy Council is to maintain a viable lignite coal industry and enhance development of the region’s lignite coal resources for use in generating electricity, synthetic natural gas and valuable byproducts.

Members of the Lignite Energy Council include mining companies, major users that use lignite to generate electricity, synthetic natural gas and other valuable byproducts, and businesses that provide goods and services to the lignite industry.

If the LEC has any trouble getting that job done on its own, it has only to turn to Article X, Section 21 of the North Dakota Constitution, which provides financing for lignite research, development, and marketing:

Not less than fifteen percent of the tax imposed for severing coal shall be placed into a permanent trust fund in the state treasury …. Up to fifty percent of the taxes collected and deposited in the permanent trust fund during a biennium may be appropriated by the legislative assembly for lignite research, development, and marketing as provided by law. An additional twenty percent of the taxes collected and deposited in the permanent trust fund during a biennium may be appropriated by the legislative assembly for clean coal demonstration projects approved by the industrial commission.

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