06.30.21

Hoeven: Carbon Capture is Coal Creek's Next Chapter

Senator’s Work to Crack the Code on Carbon Capture Key Component of Rainbow Energy’s Purchase of Coal Creek

BISMARCK, N.D. – Senator John Hoeven, a member of the Senate Energy and Natural Resources Committee, today outlined the important role of carbon capture, utilization and storage (CCUS) technologies to the future of Coal Creek Station, which was approved for purchase by Rainbow Energy today ensuring its operation beyond 2022. Hoeven has been working with Great River Energy, Rainbow Energy and North American Coal to find a solution to keep the plant and adjacent Falkirk Mine in operation. A vital component to the purchase is Hoeven’s work to crack the code on CCUS technologies that will enable Rainbow Energy to deploy a CCUS project at Coal Creek Station, including providing:

  • A direct revenue stream from the 45Q tax credit.
  • Loan guarantees from the Department of Energy and U.S. Department of Agriculture.

“We worked hard with the companies and our state’s leadership to find a solution to keep Coal Creek Station in operation,and key to this effort is leveraging the opportunity to crack the code on carbon capture technology,” said Hoeven. “Rainbow Energy’s commitment to purchase Coal Creek and deploy a carbon capture project presents yet another opportunity for North Dakota to lead the way with the latest, greatest technology, allowing us to continue utilizing our abundant coal resources while reducing emissions. That’s why we’ve worked on a bipartisan basis to put in place the 45Q tax credit for carbon capture, which provides a new revenue stream to accelerate the deployment of CCUS for our coal-fired generation facilities.”

“Coal Creek Station is one of the most efficient and critical baseload power plants in our region, and the employees at both the plant and the Falkirk Mine do a tremendous job providing affordable, reliable energy. Now, under Rainbow Energy, they will also be on the forefront in advancing CCUS efforts for our state and nation.” 

Cracking the Code on CCUS

Hoeven has been working for more than a decade to crack the code on CCUS technologies to help continue to produce cost-effective energy from coal-fired electric with improved environmental stewardship. That includes:  

  • Getting the 45Q tax credit implemented in a way that makes CCUS projects more commercially-viable. The 45Q tax credit provides an important new revenue stream for CCUS projects of up to $50 per ton for CO2 permanently stored, or up to $35 per ton for CO2 stored and used for enhanced oil recovery. To this end, Hoeven:
    • Helped secure the final 45Q regulations. The senator worked closely with the Trump administration to move the final regulations forward.
    • Passed legislation providing a two-year extension on the construction deadline for the 45Q tax credit.
  • Securing funding in the Fiscal Year 2021 appropriations legislation for critical loan guarantee programs at both the Department of Energy and the Department of Agriculture’s Rural Utility Service to help CCUS project developers secure up-front financing and leverage revenue from the 45Q tax credit.
    • This aligns with bipartisan, bicameral legislation Hoeven recently helped introduce to provide flexible, low-interest loans and grants to support construction of the infrastructure needed to implement CCUS technologies, like pipelines to transport CO2.
  • Prioritizing enhancements for the 45Q and 48A Advanced Coal tax credits in order to further support coal producers and CCUS development.
    • This includes the senator’s Carbon Capture Modernization Act, bipartisan legislation to modernize the 48A tax credit for clean coal facilities to better support CO2 capture retrofit projects.
    • Hoeven also helped introduce bipartisan legislation provide a direct payment option for the 45Q and 48A CCUS tax incentives, ensuring all CCUS projects, including projects developed by not-for-profit electric cooperatives, are able to utilize the full value of the credit.
  • Bolstering the Department of Energy’s partnership with the University of North Dakota’s Energy & Environmental Research Center (EERC) in support of their efforts to develop and commercialize new energy technologies, including CCUS at Project Tundra.
    • Hoeven has helped secure $43 million in federal funding for Project Tundra to date.

 Securing State Primacy over Class VI Wells

Hoeven has worked since his time as governor to secure the state’s role as the primary regulator of Class VI wells, which provides greater certainty to CCUS project developers. His efforts include: 

  • Establishing the North Dakota CO2 Storage Workgroup in 2008, during his time as governor.
  • Helping advance a bill through the state legislature to create a regulatory framework for carbon storage under the North Dakota Industrial Commission.
  • As U.S. Senator, moving the state’s application for regulatory primacy forward at the EPA and successfully pressing for its approval.

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