North Dakota leaders: State has CO2 solutions, but banks are key
Business leaders tout North Dakota's innovations in agriculture and energy solutions, but say the state needs capital investments to build projects that will help achieve net-zero carbon emissions.
FARGO — Leaders in North Dakota’s energy and agriculture sectors touted their innovations that will help create a carbon neutral future — but the state’s lieutenant governor pleaded with a leading Wall Street banker to provide necessary capital.
Sen. Kevin Cramer, R-N.D., hosted Bank of America CEO Brian Moynihan for a conversation before a business audience at North Dakota State University on Tuesday, Nov. 23.
Cramer called North Dakota “ground zero" for carbon solutions in introducing Moynihan, who asked Cramer to invite him to the state, which is striving to achieve net-zero carbon emissions by 2030 without government mandates under a challenge laid down by Gov. Doug Burgum .
The Bank of America, the nation’s second largest, has $250 million in commercial lending in North Dakota, with clients including Basin Electric Power Cooperative, based in Bismarck.
Moynihan said private companies can lead the way to a sustainable, clean energy future if the government helps guide a “just transition,” including setting a clear price for carbon that will allow businesses to plan and invest.
“The private sector has to drive this and is driving this,” Moynihan said. Bank of America, he said, will keep doing business with oil companies, which some activists want to shun because they produce greenhouse gas emissions.
“We need to help them make that transition” to a carbon neutral future, he said. Of the need for a carbon price, Moynihan said, “Just give us something to shoot at so we can start to work.”
That carbon neutral future is happening now in North Dakota, speakers told Moynihan.
North Dakota has the ability to store underground all of the nation’s energy-related carbon emissions for 50 years, according to researchers at the University of North Dakota’s Energy and Environmental Research Center.
Minnkota Power Cooperative generates 42% of its electricity from hydropower and wind, but still needs coal-fired electricity to provide baseload power, said Stacey Dahl, the power co-op’s senior manager of external affairs.
Minnkota is trying to build Project Tundra, which would capture 4 million tons of carbon dioxide per year, making it one of the world’s largest carbon capture and storage projects. To make that happen, federal tax credits are essential, she said.
Stacy Tschider, president of Rainbow Energy of Bismarck, which is taking over Coal Creek Station, a 1,200-megawatt coal-fired plant near Underwood, said the company plans to add wind and solar generation to a power line linking the power plant to Minnesota.
But those renewable power sources are intermittent, and the reliable baseload power from coal that captures its carbon emissions will be crucial, Tschider said.
“We’re going to have to run toward baseload generation,” he said, not away from coal generation that captures carbon.
Tschider also spoke of the importance of federal tax credits as well as capital from banks, such as Bank of America.
“We’re going to need banking,” he said.
Coal Creek Station, which Great River Energy planned to close before Rainbow Energy stepped in, provides 700 jobs and has an economic impact of $1.5 billion to North Dakota’s economy, Tschider said.
The bipartisan federal infrastructure bill contains money for power transmission as well as $15 billion for carbon capture and sequestration research and demonstration, Cramer said.
Wade Boeshans, executive vice president of Summit Carbon Solutions, a $4.5 billion initiative to pipe carbon dioxide from 31 ethanol plants in the Upper Midwest to North Dakota for underground storage, said the U.S. has 2,500 years of carbon emissions storage capacity.
That means the nation will run out of fossil fuels before it runs out of storage, Boeshans said. But capturing carbon is capital intensive, he added. “The key to these projects is the ability to finance.”
Chris Kendall, president of Denbury — an oil company Kendall describes as a carbon company — said carbon capture and storage is already happening in the oil and gas industry. “I think of carbon capture as being completely shovel ready now,” he said.
The carbon industry has the potential to be twice as large as the oil industry, Kendall said. “That kind of puts it in perspective,” he said. Denbury has more than 1,000 miles of pipes to carry carbon, including to its Cedar Hills project in Bowman County.
Lt. Gov. Brent Sanford said North Dakota will show how carbon capture, utilization and storage can be commercially feasible.
“It’s going to be perfected right here,” he said. “We can truly transform baseload energy production with coal,” and also store carbon from ethanol plants, as Summit Carbon Solutions plans to start doing in 2024.
“There’s so much opportunity for ag and energy in North Dakota,” Sanford said. But he pleaded with Moynihan to help make capital available for promising projects.
“We are a venture capital desert, we are a private equity desert,” he said. “We truly are a desert for capital.”
North Dakota is investing hundreds of millions of public dollars, but desperately needs private capital, Sanford said. “Bring that to Wall Street for us,” he asked Moynihan.