This week, the CEO of the Lignite Energy Council penned a letter to North Dakota Legislators in order to speak on behalf of our industry on Senate Bill 2344. The bill addresses pore space issues and it has received some controversy over the past few weeks, which have largely focused on issues that do not affect the lignite industry. However, public comments made this week from a landowners group that argued that older, traditional oil wells should be shut down because they have little value to remain operational. Bohrer wrote the following letter to share why the traditional wells should remain open due to the promise they have for the future for our industry and all of North Dakota:
Dear Senator or Representative,
I am writing to offer the Lignite Energy Council’s perspective regarding Senate Bill 2344, which is also known as the “pore space” bill. The pore space issue can be very confusing to understand as it involves complex legal issues. Although the issues that generated the most controversy associated with this bill—salt water disposal and gas storage—do not impact the coal industry in the short term, we did want to weigh in regarding the potential of enhanced oil recovery and its place within the debate, and assure you that North Dakota’s older, traditional oil wells have significant potential value that SB2344 protects and preserves.
Enhanced oil recovery has the potential to double the economic impact of the coal industry, and vastly increase the number of coal industry employees. The technology to recover incremental oil using CO2 is real, it exists, and is ready to be deployed in North Dakota. As we move closer to capturing CO2 from power plants, the next phase will be to develop oil field partners—and the first wave of those projects will most likely be existing traditional wells outside the Bakken. Those wells are “marginally productive” and many are threatened with closure due to tightening economics. The argument that those wells, because they are no longer producing like they once did, have little value to the state is seriously flawed. With additional investment, those wells can be reinvigorated and produce significant amounts of oil for years to come. As you resolve this debate, do not discount the value of marginal wells—both the state of North Dakota and to the coal industry.
A recent study released by the Energy and Environment Research Center in Grand Forks projected that using carbon dioxide for enhanced oil recovery could create 15,000 new jobs and double the economic impact in North Dakota to around $6 billion.
The lignite industry has invested tens of millions of dollars into R&D in order to maintain a strong future for the both the state’s economy and oil tax revenues. This future is only possible by using CO2 for enhanced oil recovery, which will begin in the older, traditional oil wells. Any policy that will reduce the economics of those wells reduces the likelihood that we can jump start the opportunity to do so.
Please consider this information before voting on this important legislation.
Jason Bohrer
President and CEO
Lignite Energy Council