A U.S. project to capture carbon dioxide emissions from a large North Dakota coal-fired power plant and bury the CO2 on site has suffered a major blow with the withdrawal of Canadian pipeline and energy company TC Energy (née TransCanada Corp.).
Project Tundra at Minnkota Power Cooperative’s elderly, two-unit Milton R. Young lignite plant near Center, N.D., is projected to cost about $2 billion. The plant’s first, 250-MW unit went into service in 1970 and the 455-MW second unit fired up in 1977.
The rural cooperative wants to avoid closing the plant, hoping that capturing some 4 million tonnes of CO2 annually would keep it alive. The project would capture all of the flue gas from Unit 2 and a portion of Unit 1 emissions. The project has been under development for nearly a decade.
Zacks Equity Research last week (Dec. 3) reported that TC Energy (Toronto Stock Exchange: TRP) has pulled out of the development consortium that also includes Mitsubishi Heavy Industries, and Kiewit Corp. The stock research analysts said, “The carbon capture project was seen as an essential step toward enhancing the environmental sustainability of coal power in the region, providing a potential model for similar initiatives in other parts of the country. However, the withdrawal of TRP has now cast a shadow over the project’s future.”
Project Tundra has received significant backing from the U.S. Department of Energy. Last December, DOE selected the project for access to up to $350 million in cost-shared funds under the Biden administration’s Bipartisan Infrastructure Law. In September DOE gave Minnkota a $4.3 million downpayment on the award. The project got $40 million from DOE in 2020.
The project would be the largest and most ambitious carbon capture attempt in the U.S. Zacks commented, “While TRP did not disclose the specific reasons behind its exit or the financial commitment the company had made to the project, this move highlights the increasing complexity of financing large-scale carbon capture projects in a rapidly changing regulatory environment.”
Hanging over the project is the Environmental Protection Agency’s Power Plant Rule, which supports carbon capture and storage but threatens plants with closure if they don’t meet stringent 90% removal targets and strict deadlines. The rules drew lawsuits from industry opponents, including the National Rural Electric Cooperative Association, of which Minnkota is an important member.
Power Engineering noted that the rural cooperatives in court filings this year wrote that “Project Tundra sits atop ideal geology for storage, has been in planning for nearly a decade, and has used government funding for two-thirds of the costs so far, yet still would not meet the 90% capture rate.”
President-elect Trump has repeatedly expressed fundamental doubt about climate change and threatened to repeal all of the Biden efforts to rid the world of fossil fuel emissions. Whether he follows through, and whether Project Tundra would be collateral damage is unknown.
But the project is likely to have a friend in Trump’s Washington. Trump’s nominee for Interior Secretary, who would also chair an interagency energy task force, is North Dakota Republican Gov. Doug Bergum. He’s been a strong supporter of Project Tundra, which got DOE funding in the first Trump go-round. A 2019 news release from Burgum’s office applauded a $9.8 million award for the early stages of the project, the front-end engineering and design (FEED) phase. The release noted, “Last November, the North Dakota Industrial Commission awarded $15 million from the state’s Lignite Research Fund to help pay for the FEED study.”
Burgum said in the release, “Project Tundra gives North Dakota the opportunity to reduce emissions and boost energy production for the benefit of consumers, the environment and the coal and oil industries that provide thousands of good-paying jobs and economic development resulting in billions in tax revenue to our state and local governments. We appreciate the Department of Energy, Secretary Perry and our state’s congressional delegation for supporting this promising technology and look forward to further collaboration as the project advances with backing from the Industrial Commission and industry.”
–Kennedy Maize
The Quad Report
To comment:
kenmaize@gmail.com
