Lignite Research Council: History of Innovation

The Lignite Energy Council has a longstanding R&D program in partnership with the North Dakota Industrial Commission (NDIC).  The NDIC reinvests a tax levied on coal production in the state to R&D projects that are vetted by the Lignite Research Council (LRC).  The LRC consists of 30 members appointed by the Governor of North Dakota.  Appointees represent lignite mining, lignite processing, lignite research, state agencies, federal agencies, the labor community, North Dakota legislature, owners of lignite reserves, counties, and the public and includes goals such as:

  • Support continued options to enhance performance of the existing fleet
  • Invest in transformational research (Next generation of Lignite conversion systems that integrate CO2 capture)
  • Focus on Carbon Capture Utilization & Storage (CCUS)

 The Lignite Research program is focused on solving both regulatory and economic challenges faced by the coal industry.  These challenges result from regulations to reduce regional haze or CO2, but also from market dynamics exacerbated by an uneven field in power markets. For every state dollar invested in R&D, more than nine dollars are invested by other sources.  To date, total investment for its 200 projects is more than $700 million.

 The biggest priorities surrounding CO2 are to find technology to allow new coal plants to be built at near-zero emissions, find retrofit technology to allow current plants to operate more effectively in today’s markets by monetizing CO2, and to find long term solutions for the captured CO2.  The Lignite Research Program has active projects in each of these areas.

  • One of the most promising technologies for new plant construction with near zero emissions (full carbon capture) are “supercritical CO2” systems, such as the Allam Cycle.
  • A natural gas prototype Allam-cycle plant is nearing completion in Texas.
  • North Dakota utilities are involved in an effort to build an Allam Cycle plant running on gasified lignite
    • Started in 2013 as BNI/Minnesota Power technology development, in partnership with Basin Electric.
    • $475,000 spent through 2016
    • Project paused in April 2017 awaiting completion of Texas pilot plant and value proposition to ALLETE from technology owner
  • We also need to look at economically-viable options to retrofit existing plants.
  • North Dakota utilities have initiated “Project Tundra,” a retrofit option for the Milton R. Young station based off of NRG’s successful Petra Nova carbon capture project.
    • Started in 2015 as ACE- ALLETE Energy Corridor project in partnership with NRG.
    • $500,000 spent in early development up to 2016.
    • Project restarted in mid-2016 – ACE in partnership with BNI & Minnkota.
    • 2017 ~$8M committed & $6M pending to technology assessment & preliminary design
    • 2018- North Dakota Industrial Commission approved $15M to help pay for engineering and design work on the project.
  • CarbonSAFE is a project to find long term solutions for captured CO2 storage and sequestration
    • $8M DOE study of CO2 placement at DGC/AVS and Young Station. Partnership with Basin, Minnkota, ACE/BNI. MPC/ALE

Track Record of Success

 The R&D program has enjoyed a great deal of success in reducing emissions and increasing the efficiency of coal-fired power plants, as well as development of value-added products and additional market opportunities for the industry.  One of our most high profile success stories was a partnership with the Department of Energy, Great River Energy and the Lignite Research Council to the develop Great River Energy’s patented DryFining.   DryFining is an advanced coal drying process that reduces the moisture content of lignite from 38 to 29 percent moisture, and increases the heating value by nearly 1,000 Btu/ton.  The process has reduced carbon dioxide emissions by four percent, and has achieved reductions of 40 percent for mercury and sulfur dioxide, as well as 20 percent reduction in nitrogen oxide.  The development of DryFining technology also allowed Great River Energy to construct the nation’s newest coal-fired power plant - Spiritwood Station, a 99-megawatt combined heat and power plant, 100 miles east of Coal Creek Station.

 Other examples of projects funded under the lignite research program include:

  • Rare Earth Element Extraction from North Dakota Coal-Related Feedstocks (Joint DOE Project)
  • Advanced Reclamation Strategies for North Dakota Coal Mine Lands
  • Evaluation of the “linear no-threat” model of risk analysis
  • Combined heat and power systems

Breakthrough Solutions Require Federal Support

 As the LEC and its research partners continue to explore options for carbon capture and other technologies to allow coal to remain a strategic energy resource for the United States, the industry needs the Department of Energy and Congress to expand its efforts to support the use of coal and provide parity with support for other energy resources.  The LEC appreciates Congress’ funding of DOE’s clean coal technology programs, and urges its continued support of this valuable use of taxpayer dollars. We ask that federal support continue and:

  • Recognize that New Source Review sometimes conflicts with R&D advances and acts as a disincentive to improve plant efficiency through new and innovative research
  • Maintain positive tax environment
  • Develop a workable tax credit to provide meaningful incentive for carbon capture business models
  • Expand R&D funding to develop advanced energy solutions that work for North Dakota’s energy industries, but have world-wide applicability
    • Encourage the Department of Energy funding solicitation to advance post-combustion carbon capture at commercial scale (i.e. greater than 350 Megawatt-Equivalent.)
    • Encourage the Department of Energy funding to develop largescale advanced supercritical carbon dioxide cycles – 200 Megawatt-Equivalent or greater.

Affordable Clean Energy Rule

We support the Environmental Protection Agency’s proposed Affordable Clean Energy Rule and the repeal of the Clean Power Plan. We reiterate our support for the cooperative federalism that has led to successful reductions in criteria pollutants while fossil fuel use has increased. 

North Dakota’s energy profile positions it to be a leader in reducing CO2 use while using its 800-year supply of lignite coal to drive the region’s prosperity for decades to come.  The future of the industry relies on preserving existing assets and developing mutually-beneficial relationships between the coal, oil and gas, and other value-added industries utilizing carbon dioxide.  Achieving cost-effective carbon capture will require a strong public-private partnership between industry partners and state and federal governments.

Permitting Reform

The federal coal leasing program has improved under President Trump, but there are still opportunities for the program to better reflect the needs of states, the federal government and coal mining companies while protecting the environment at the highest level. These same permitting obstacles have also arisen in the oil and gas industry, where they are being addressed.

The SECURE American Energy Act includes a provision that improves the permitting process for oil and gas drilling where less than 50% of the minerals of a project are owned by the federal government. In that case a federal permit is not required, but only for oil and gas. The same type of problem exists in North Dakota for small holdings of federal coal. In fact, for the coal industry the problem is even more

pronounced, since federal coal extraction involves dealing with the federal land managers at the Bureau of Land Management and then gaining federal mine plan approval from the Office of Surface Mining.

The Lignite Energy Council believes that the federal coal leasing process can be similarly improved and the risk of stranded coal minimized by adopting the following principles:

  • Allowing a single NEPA process to be used as the basis of approval for both the BLM permit and then the OSM mine plan approval
  • Requiring strict enforcement of regulatory timelines—6 months for Environmental Assessments and 1 year for Environmental Impact Statements
  • Requiring final decisions within 2 years of the filing of an application
  • Creating a waiver process if the coal owned or held in trust by the Federal government represents less than 50% of the coal within a permitted mine area and there is no surface land owned or held in trust by the Federal Government

Regional Haze: A North Dakota Solution

Regional Haze regulations require states, in coordination with the Environmental Protection Agency (EPA) and other federal agencies to implement plans to reduce the pollution that is linked to visibility impairment. The rule has the ultimate goal of recreating the same visibility conditions near certain National Parks and Wilderness Areas that existed more than 100 years ago.  Although the EPA first approved North Dakota's Regional Haze plan in April 2012, it withdrew its approval under pressure from environmental industry groups.  

 After a series of lawsuits surrounding Best Available Retrofit Technology (BART), the courts eventually sided with the State of North Dakota that North Dakota Department of Health's BART determinations for Minnkota Power Cooperative’s Milton R. Young Station and Basin Electric’s Leland Olds Station were sufficient. 

 The Lignite Energy Council continues to believe that the principles of cooperative federalism should underpin future regional haze updates and will seek permanent solutions from Congress that will address the following concerns:

  • The Regional Haze program seeks to continually improve visibility, beyond what is perceptible to the naked eye
  • Future required updates on “reasonable progress,” goals and strategies, as well as revised plans will be left to the discretion of future EPA Administrators
  • BART for other forms of coal is not necessarily appropriate for lignite coal plants, but the EPA disputed that reality during the Obama Administration
  • States are required to update their goals and progress every 5 years, and to submit revised plans every 10 years
  • The Year 2064 Natural Background Visibility Goal must be reconsidered. As ND has explained in their SIP, achieving natural conditions in ND will require the elimination of all anthropogenic sources of emissions, and the elimination of all SO2 and NOx emissions still won’t achieve the uniform rate of progress. 
  • EPA must address the following before additional emissions reductions are considered from power plants:
    • States need clearer authority and discretion over the process.
    • A source that was already subject to substantial emissions reduction during the first RHR implementation period or for other regulations (e.g., SO2 NAAQS implementation) should be excluded from the list of sources targeted for further controls for, at minimum, the next RHR implementation period.
    • A source that does not cause perceptible haze impacts should not require emission controls.
    • Sources ceasing operation or shutting down should be disqualified from emission controls requirements.

Sue and Settle Reform

The practice of “Sue and Settle” has been used to enact burdensome regulations without significant public input or Congressional oversight.  It was a primary weapon used by environmental industry groups to implement anti-fossil fuel regulations, including the Clean Power Plan.

  •  "Sue and Settle" refers to when a federal agency agrees to a settlement agreement behind closed doors in a lawsuit from special interest groups, to create priorities and rules outside of the normal rulemaking process.
  • The agency relinquishes statutory discretion by committing to timelines and priorities that often realign agency duties.
  • No public input or outside participation is required
  • Between 2009 and 2012, EPA chose not to defend itself in over 60 lawsuits from special interest advocacy groups

 On October 16, 2017, EPA Administrator Scott Pruitt issued a directive to end “sue and settle” practices within the EPA.  Major changes include providing advance notice to the public of any notice of intent to sue or proposed settlement agreement, allowing the public to weigh in on proposed or modified consent decrees and settlements, and to exclude attorney fees and litigation costs when settling with suing parties.  However, without Congressional action, future administrations can undo these changes and revert to abusive practices.

 We ask that Congress implement permanent fixes to regulatory programs that allow the “sue and settle” process to short-circuit the administrative process. 

Lignite Coal and Resilience

The Lignite Energy Council supports the efforts of the Department of Energy (DOE) and the

Federal Energy Regulatory Commission (FERC) to better understand the value of resilient resources to the electric grid. We believe there are fundamental inequities across the electricity markets. Baseload generators, including those fueled by affordable lignite coal, are not fully compensated for the reliability and resilience that their power plants provide. 

 As of August 2018, more than 115,000 MW of coal generating capacity has been retired, converted to another fuel or been slated for retirement by 2030. This represents nearly 40% of the U.S. coal fleet that was operating in 2010. While North Dakota has seen only one recent retirement of a coal-fueled power plant, which relied on Powder River Basin coal as opposed to lignite coal, this problem may only get worse: over the next 5 years, 79 percent of anticipated capacity to be retired nationally is expected to be coal generation.  Although there are many reasons for these retirements, coal generation is not appropriately and comparatively valued for the reliable and resilient generation that it provides, compounding every other problem faced by coal generators.

 As Congress, DOE and FERC consider solutions, the Lignite Energy Council urges consideration of the following principles:

  • Equivalent market rules and penalties for all types of generating assets
  • New “baseload standby” product compensation for assets that cannot come online and offline quickly, but are required to stay online to handle the day-to-day volatility of variable energy resources like wind and solar, and, as a result, incur financial losses.
  • New “ramp” product compensation for assets that can provide the needed energy-ramp capability to handle the abrupt changes in variable energy resources
  • Any rule to fully value reliable and resilient power for the services and benefits it provides should be available to all regions and markets and to plants subject to state or local cost of service regulation
  • Mine-mouth power plants should be deemed in compliance with fuel supply requirements, since their available fuel supply is not subject to transportation disruptions
  • Fuel supply stability should also be evaluated on price stability, since some fuel types experience wide swings in price which disrupts plant operation