Carbon dioxide storage, utilization projects get Industrial Commission funding

BISMARCK — The state Industrial Commission has granted $100,000 for the early stages of another carbon capture project slated for southwest North Dakota.

The three-member regulatory body made up of the governor, attorney general and agriculture commissioner awarded the funding Tuesday to the Prairie Horizon Carbon Management Hub, a joint undertaking of the University of North Dakota Energy and Environmental Research Center and Prairie Horizon, a consortium involving Marathon Petroleum and TC Energy.

This tranche of funding will mostly go toward a two-year evaluation of the area’s infrastructure and geology, which may require different considerations than other carbon storage projects given the area’s historic and active oil and gas development.

If the Hub is built out, it would capture climate-warming carbon dioxide emissions from Marathon’s biofuels refinery in Dickinson and the Prairie Horizon Hydrogen facility, another collaboration between Marathon and TC Energy expected to be built in southwest North Dakota in the coming years.

Prairie Horizon Hydrogen is one part of the Heartland Hydrogen Hub which has been allocated $925 million by the federal Energy Department for clean hydrogen projects. Prairie Horizon plans to produce hydrogen with methane natural gas, a practice which will need to employ the use of carbon capture for it to be considered clean under federal standards.

The Renewable Energy Council, an advisory group to the Industrial Commission, recommended the carbon capture project for funding earlier this month. The program derives its funding from the Resources Trust Fund, which is financed through the oil extraction tax and has a $3 million spending cap this biennium. This part of Prairie Horizon’s project has already received $2.5 million from the Energy Department. Prairie Horizon will contribute up to $625,000.

Carbon storage is a key element of Gov. Doug Burgum’s goal for North Dakota to reach carbon neutrality by 2030. But storage is not the state’s only plan for CO2. Two projects for utilization of captured emissions also received funding Tuesday.

The commission awarded $100,000 to Semplastics, a Florida-based company that is studying the potential for mixing captured CO2 with wastewater from oil production to create building materials. Semplastics is working with the EERC on the project. The funding was recommended by the Lignite Research Council, another advisory body for the commission. Funding comes from the Lignite Research Fund, which gets its cash from a combination of taxes on oil, gas and coal. It was granted an $18.5 million spending cap this biennium.

The commission also approved $135,000 to the State Energy Research Center for a project that will forecast the near-term impact of using CO2 for enhanced oil recovery in the Bakken oil fields. The Center is part of the EERC and is funded through taxes on oil and gas; the Industrial Commission can grant up to $7.5 million to the Center per biennium.

Enhanced oil recovery is a process of injecting gases, water or other chemicals underground to pump out hard-to-recover oil, which is around 30-60% of what is in a reservoir, according to the federal Energy Department.

The Department of Mineral Resources, an arm of the Industrial Commission, is finalizing new regulations that would allow operators to secure a bond which would place a well that would otherwise be considered abandoned on enhanced oil recovery status for potential use when the technology is more widely available, a result of recent legislation. A bond is an assurance of money to pay for plugging and reclamation should the company abandon a well site and ignore its responsibility to clean it up. A landowner can challenge the well’s status after 12 years.

Proponents of enhanced oil recovery say it could lower the life-cycle emissions of oil while boosting production. Without utilizing the practice, North Dakota’s oil output will begin to decline in the coming decades, officials have said.

Some environmental groups question the practice’s benefits. When the rule was first introduced in September, the

Northwest Landowners Association told the Tribune

it worries the rules would allow operators to indefinitely delay the expensive process of plugging and reclaiming oil wells that are no longer economic under readily available technology.

Mineral Resources has defended the rules as thorough. Assistant Director Mark Bohrer said that Mineral Resources turned down a request by the North Dakota Petroleum Council, an oil and gas trade group, to loosen requirements for wells placed on enhanced oil recovery status.

“We felt (12 years is) a significant time and we thought that the wells should be adequately constructed to sit there idle that long and not having to worry about endangering the surface waters,” he said.

For the time being, much of the captured CO2 in North Dakota will be stored.

Separately on Tuesday, Andrew Sorbo, vice president of strategic initiatives at Minnkota Power Cooperative, presented the commission with updates for Project Tundra, which will capture emissions from the Milton R. Young coal-fired power plant in Oliver County and be the country’s largest carbon storage project if built. A final decision on whether Minnkota will go ahead with Project Tundra is expected next year.

Sorbo said the cooperative sees enhanced oil recovery as a possibility in the future, but the heftier federal tax credits for storage makes pumping CO2 underground more attractive.

“Economics obviously drive almost every decision that gets made,” he said.