Omdahl: North Dakota legislature denies end of coal
But the reality is that using lignite for coal generators is no longer feasible, economically or environmentally. Nonetheless, the Legislature made a major effort to float the industry over the next five years, hoping that coal can be made more economically and environmentally viable.
According to the US Energy Information Administration, coal consumption in the United States increased from 98 MMst in 2000 to 48 MMst in 2019. In 2020, the market required less coal than any year since 1905. And the market will continue to drop until the last power station is closed.
The Rocky Mountain Institute claims that “almost all publicly traded US coal companies have experienced at least one bankruptcy …”.
Yale Environment 360 alleges that insurance companies are no longer willing to cover the cost of coal-fired power plants, so none will be built. The other potential investors cannot be found.
The certainty of the decline of coal is accepted by all who know the investments and prospects of coal. In other words, everyone except the lawmakers in North Dakota.
One hope expressed is the sale of the Coal Creek station to Underwood which is slated to close in 2022. Investors with that kind of money will not buy an abandoned plant for lack of a market.
The new owners would abandon the factory. They should still compete with natural gas, a cheaper and cleaner source of energy. They should also meet the standards imposed by the national administration to clean the atmosphere.
While compliance with energy regulations is an issue for coal companies, as the Coal Creek shutdown was announced last year, an official at parent company Great River Energy cited the wind and the cheap natural gas like the bad guys.
But the legislature decided to bail out the coal industry rather than accept the economic realities. According to a report by Adam Willis of the Forum News Service, here’s what the lawmaker did:
- Processed over 20 invoices intended to boost the coal industry.
- Created a “tax holiday” for coal, eliminating $ 100 million in coal taxes over the next five years.
- Creation of a clean and sustainable energy authority with $ 25 million for grants and loans to secure low emission projects
- Creation of a $ 250 million line of credit to the Bank of North Dakota to be used by a consortium with a $ 1 billion pool for a carbon capture program.
- Passed coal-friendly legislation and hindered wind and solar power as much as possible.
This lack of foresight at the state level has created a void that some would like to fill with a White House office for the economic transition of coal communities.
This is history repeating itself. Many of the functions now assumed by the federal government were functions of the state at one time, but neglected until demands from the public pushed them to the federal government. Then the states complained about the centralization of government.
Since states are not making transition plans, it is safe to predict that the federal government will establish this White House office to transition coal communities and employees.
Omdahl is a former ND Lieutenant Governor and retired professor of political science at the University of North Dakota. Email [email protected]
This column does not necessarily reflect the opinion of the Forum Editorial Board or the ownership of the Forum.