GRAND FORKS, N.D. (North Dakota Monitor) – Minnkota Power Cooperative is hoping to revive its stalled carbon capture project by adding a business partner and the possibility of using CO2 to produce more oil in North Dakota.
Grand Forks-based Minnkota has for years been seeking to capture carbon at its coal-fired power plant near Center for what it calls Project Tundra. Minnkota now plans to have Reliant Carbon Capture & Storage to operate the carbon capture and CO2 delivery system.
North Dakota’s Clean Sustainable Energy Authority on Tuesday recommended approval of $205 million in loans for the partnership — $45 million for Minnkota and $160 million for Reliant, which will build and own the carbon capture facility. The state Industrial Commission would have to provide final approval.
In a presentation to the authority Tuesday, company officials said the new Project Tundra plan reduces financial risk for Minnkota and the co-op’s members and brings in new technical expertise with Reliant that uses methods and equipment already deployed in the energy industry.
The new partnership should shorten the construction schedule from five years down to about two, which helps reduce construction costs.
Minnkota, in a news release last week announcing the partnership, said it would make a final investment decision on Project Tundra sometime in 2027.
Officials said that ideally, the CO2 captured from the Milton R. Young Station in Oliver County could be delivered to the Bakken oil fields. The oil industry, with help from government-supported research, is working on ways to inject CO2 deep underground to make oil wells more productive, a process called enhanced oil recovery.
“We continue to hear that CO2 is going to be our future solution to enhance oil recovery, and this is one of the first steps to sourcing that CO2,” said Sen. Dale Patten, R-Watford City, co-chair of the authority.
If there is not demand from the oil industry, Minnkota also has a permit to permanently store CO2 underground near the power plant.
Both methods of carbon sequestration are eligible for federal tax credits of $85 per ton of CO2 stored.
Project Tundra aims to sequester about 5 million tons of carbon per year. At $85 per ton, that is $425 million annually.
Under the partnership, Reliant would receive the tax credits. Minnkota would be compensated for supplying the CO2 and other services, such as access to the underground storage.
In the presentation, company officials said the project would cut carbon emissions at the power plant by 95%, would create about 350 jobs and would mean no increase in utility bills.
Mac McLennan, Minnkota president and CEO, said adding carbon capture would help ensure that the power plant can keep operating.
McLennan, who is a member of Clean, Sustainable Energy Authority, abstained from voting on the loans.
Reliant’s carbon capture facility is a $1.67 billion project. Minnkota’s costs, which include drilling the sequestration wells, is about $90 million.
The authority had set aside $250 million in loans for Project Tundra but has been waiting for a revised application that showed the project could be economically viable, Patten said.
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