Is Project Tundra a risky business proposition?
Of course it is. This isn’t news.
But if it is completed, the project will see an existing coal-burning plant in central North Dakota fitted to capture carbon and store it safely underground. Pushing the project are Minnkota Power Cooperative, the Energy and Environmental Research Center at UND, the Lignite Energy Council and the North Dakota Industrial Commission. Its cost is expected to be somewhere around $1 billion.
It could capture up to 90% of the plant’s carbon dioxide emissions, effectively saving the plant and prolonging North Dakota’s fossil fuel industry while cleaner technologies are developed. As reported recently by Forum News Service, it would be the world’s largest carbon capture facility and it could be a model decarbonization plan for coal plants elsewhere.
And, it is coming with controversy. The latest: North Dakotans could end up paying for a $250 million loan program established this year by the Legislature. Forum News Service reported that when lawmakers approached the state-owned Bank of North Dakota, the bank’s leaders were wary of the loan’s size, subsidized interest rates and risk. Among the risks are the questions that naturally arise with this new technology and Project Tundra’s sheer scale.
Instead, they wrote language that made up to $250 million available to the state for lending, with the condition the Legislature or the state's top regulatory board provide a reimbursement so the bank wouldn’t assume liability.
That reimbursement could, in reality, be paid by the state’s taxpayers. Importantly, several lawmakers – including Republican leaders like Sen. Ray Holmberg, R-Grand Forks, and Rep. Jeff Delzer, R-Underwood, who lead the Senate and House appropriations committees – said they don’t expect the loans to hurt the state or its residents.
Also, Senate Majority Leader Rich Wardner, R-Dickinson, told Forum News Service there are numerous state funds the Legislature could pull from if needed, and also that lawmakers hope federal carbon capture tax credits would cover the costs over a longer period.
Last year, the Ohio-based Institute for Energy Economics and Financial Analysis released a report that criticized Project Tundra, saying it “faces significant risks and uncertainties that could undermine its economic viability and lead to higher electric rates for the ratepayers of the cooperatives that buy power from Minnkota. ...”
In an interview with the Grand Forks Herald after that report’s release, Minnkota CEO Mac McLennan clarified: “I want to be careful when I say it’s not going to impact our members. What we’re saying is that we’re not taking a billion dollars and putting it on the backs of our members.”
North Dakota is a state rich in oil and coal, and rest assured, those resources are going to be gathered and burned for years to come. As we have written before, it’s unrealistic to imagine the state – or the world – will simply stop its consumption of these energy sources, even as our planet’s climate warms as a result.
In the meantime, reliable green power alternatives – wind, solar, hydro and the like – must be developed to slow global warming. Part of that equation must be carbon-capture technology to help bridge the gap between today’s realism and tomorrow’s hope. North Dakota has a chance to be a leader.
Of course Project Tundra is risky. But it’s important to the state and, possibly, the world.
Developing it is worth the risk.