Hoeven: Great Plains Synfuels Plant Will Be Largest Coal-Based CCUS Project to Use Geologic Storage

DGC Facility Also First in the U.S. to Use Both EOR & Geologic Storage - Senator Worked Since 2008 to Provide Legal, Tax & Regulatory Environment Needed to Crack the Code on CCUS

BEULAH, N.D. – Senator John Hoeven, a member of the Senate Energy and Natural Resources Committee, today joined company leaders from Basin Electric Power Cooperative and the Dakota Gasification Company (DGC) in announcing a proposed carbon capture, utilization and storage (CCUS) project in development at the Great Plains Synfuels Plant near Beulah. The facility currently captures approximately 2 million tons of the plant’s CO2emissions, which are piped to Saskatchewan for use in enhanced oil recovery (EOR). The proposed project will enable the facility to capture up to 3.5 million tons of CO2 per year and will serve as part of the largest coal-based CCUS project utilizing geologic storage, while also being the first CCUS project in the U.S. utilizing both EOR and geologic storage

The proposed project is made possible due to the legal, tax and regulatory framework that Hoeven has worked to implement, both as governor and now as U.S. Senator, to help crack the code on CCUS. His efforts began in 2008, when he established the North Dakota COStorage Workgroup. Following this, Hoeven:

  • Advanced a bill through the state legislature to create a regulatory framework for carbon storage under the North Dakota Industrial Commission.
    • The state also enacted legislation that granted ownership of the pore space to the owner of the overlying surface estate.
  • As U.S. Senator, moved the state’s application for regulatory primacy over Class VI wells forward at the EPA and successfully pressed for its approval in 2017.
    • This authority provides certainty to project developers and enables projects like this to use Class VI wells for geologic storage of CO2.
    • North Dakota is one of only two states to have this regulatory authority.
  • Worked to get the 45Q carbon capture tax credit implemented in a way that makes CCUS projects more commercially-viable.
    • The senator also secured a Revenue Ruling from the Internal Revenue Service (IRS) and the Department of Treasury ensuring that coal gasification projects, such as the project at DGC, are eligible for the 45Q tax credit.
  • Funded critical loan guarantees at the U.S. Department of Energy (DOE) and Rural Utilities Service (RUS).

“The Dakota Gasification Company was already an early leader in CCUS, and this proposed expansion is another milestone in our state’s efforts to crack the code on this critical energy technology – the largest coal-based carbon capture project to use geologic storage,” said Hoeven. “We’re able to make progress like this because we’ve been laying the groundwork for geologic storage of CO2 in North Dakota since 2008. That means not only providing regulatory certainty, but also advancing key incentives at the federal level, including the 45Q tax credit and loan guarantees for project developers.”

Securing the 45Q Tax Credit

The 45Q tax credit provides an important new revenue stream for CCUS projects of up to $50 per ton for CO2 permanently stored, or up to $35 per ton for CO2 stored and used for enhanced oil recovery. After helping pass legislation to reform and expand the 45Q tax credit, Hoeven worked to advance its implementation. His efforts included:

  • Working closely with the Trump administration to move the final 45Q regulations forward.
  • Passing legislation providing a two-year extension on the construction deadline for the 45Q tax credit. 

Further Efforts to Crack the Code on CCUS

Moving forward, Hoeven is advancing the following priorities to crack the code on CCUS, which will enable the nation to continue making use of its abundant energy resources, while reducing emissions:

  • Front end investment in technology development, including bolstering the partnership between the Department of Energy (DOE) and the University of North Dakota’s Energy & Environmental Research Center (EERC).
  • Loan guarantees to help project developers secure financing to build the equipment and infrastructure needed to capture and store CO2.
  • Enhancements for the 45Q and 48A Advanced Coal tax credits to provide important revenue streams to project developers and encourage adoption of CCUS. Hoeven is sponsoring legislation to:
    • Modernize the 48A tax credit for CO2 capture retrofit projects.
    • Helped introduce a bipartisan bill to provide a direct payment option for the 45Q and 48A CCUS tax incentives.
    • Joined legislation to increase the value of the 45Q tax credit and make it more accessible to CCUS projects of all sizes.