1. U.S. Coal Deposits ABUNDANT
800-year supply of coal – 25 billion tons of economically recoverable reserves
Nationally, more than 200 years of economically recoverable coal reserves
Lignite
Subbituminous
Bituminous
Anthracite

3. Low-Cost Electricity
7-10 cents here versus cents per kilowatt-hour in west / east coast. 25 cents in Hawaii.

4. Average Electricity Costs Price/Megawatt-Hour
$25.30
LOW COST:
Lignite-based plants are generally mine-mouth plants which eliminates transportation costs – we ship our “coal by wire”. Also the mines and plants have signed long-term agreements so aren’t subject to “spot pricing.”
Source: Ventyx

5. Economic Impacts Economy and Employment: Over 15,000 jobs.
4,000 Direct Jobs at Mines and Plants
11,500 Indirect Jobs
Average wages in Coal Country range from $51,119 to $76, 712.
$3.3 billion total business activity.
Tax Revenues:
Approximately $35 million in coal severance and conversion tax.
$97.9 million in total tax revenues from lignite-related business.

6. Research and Development
Over $1 billion invested over last decade to reduce emissions and improve efficiency.
Lignite Research Fund

7. Industry Challenges Federal Regulation Clean Power Plan
Stream Protection Rule
Federal Production Tax Credit for Wind
Historically-low Natural Gas Prices

8. Clean Power Plan
Requires 45 percent reduction in carbon dioxide emissions from North Dakota’s existing fleet by 2030.
Essentially requires 45 percent reduction in coal generation.

9. What’s Happening
“Push back on misinformation. Speak up for the facts.”
CPP Draft Rule
EPA’s proposed CO2 regulation for existing power plants
Estimated projected annual cost calculated by EPA and private analysts
Projected temperature reduction by 2100 if EPA regulation is enacted °F
Projected maximum annual costs to consumers (billions)
Average annual temperature (°F)
NO GAIN
ALL PAIN
Source: NOAA National Climatic Data Center. Climate at A Glance. Baseline temperature is average contiguous US annual average 53.24°F
EPA Clean Power Plan Proposed Rule – Regulatory Impact Analysis.
EPA Clean Power Plan: Costs and Impacts on U.S. Energy Markets. Energy Ventures Analysis, Inc.
NERA Economic Consulting. Potential Energy Impacts of the EPA Proposed Clean Power Plan. NERA Economic Consulting. October (projected annual cost = 10-year EVA & NERA projected l costs divided by 10)
EPA leaves out the most vital number in their fact sheet. Paul Knappenberger & Patrick Michaels. Watts Up With That?. June 12,

10. Stream Protection Rule
Pending regulation from Office of Surface Mining (OSM)
Industry estimates could strand approximately half of coal reserves at existing mines (600 million tons)
$50 million annually in compliance
No improvement in reclamation

11. Renewable Generation
Over 2,100 megawatts (MW) of wind capacity already installed
400 additional MW approved by the PSC this year

14. What’s at Stake for North Dakota?
Besides some of the lowest-cost electricity in the country, North Dakota’s coal-fired power plants provide 15,000 jobs, $3 billion in annual economic activity, and $100 million in tax revenues each year.
Severance and Conversion tax revenue sharing is a significant source of revenue for counties in coal country.
70% of severance tax is returned to the counties in which the coal was produced.
15% of conversion tax is returned to the counties in which the coal was converted.
Total Severance Tax Paid to Counties in 2014
$7,465,438
Counties General Fund
$2,986,175
Schools
$2,239,631
Cities
Total Conversion Tax Paid to Counties in 2014
$5,715,346
$2,286,138
$1,714,604

15. Path Forward: Innovation
To assure US grid reliability, affordability and environmental sustainability, we believe carbon solutions must include three things:
Next generation solutions - Commercializing transformational technologies that enable the construction of new coal facilities
Retrofit solutions – leveraging select existing coal facilities for CO2 capture retrofits
CO2 sequestration solutions – EOR and geologic storage
LEC member companies are working on all three:
Next generation solutions - Most promising technology to-date for new plant construction with near zero emissions (full carbon capture) is the Allam Cycle. ALLETE subsidiaries BNI Energy and Minnesota Power are partnering with Basin Electric Cooperative to develop and demonstrate the Allam Cycle on ND lignite.
Retrofit solutions – ALLETE subsidiary, ALLETE Clean Energy, and Minnkota Power Cooperative are spearheading project Tundra a project to capture carbon dioxide emissions from the Young Station. The project builds upon a project underway in Texas.
Sequestration solutions – Dakota Gasification Company near Beulah has a long history of EOR sequestration dating back to the 19990’s. EERC has been leading PCOR partnership for CO2 storage solutions for the last decade and recently formed and is leading the Bakken EOR workgroup researching Bakken EOR solutions.

16. ND is Uniquely Positioned
North Dakota is uniquely positioned to lead the R&D solutions that provide sustainable solid fuel options that are critical to our national security and global carbon reduction
Research Capabilities - World class research capabilities at the EERC
Geology – One of the world’s largest lignite coal resources adjacent to one of the world’s largest oil resources in the Williston Basin and huge saline aquifer geologic storage sinks
CO2 Liability - Only state to have solved the legal aspects of CO2 liability
Collaborative Partners - Collaborative industry partners with state of the art facilities and operating expertise
Supportive State Policies - North Dakota is fully committed to environmentally sustainable carbon management solutions
Growing electric loads in the state and region
Bottom-line – Securing our Lignite Industry and preserving CO2 for enhanced oil recovery and sequestration is strategic to North Dakota. Continued public-private partnership will be needed.

17. Typical Technology Development Pathway & Funding
Current Funding
None
Research Councils
Incentives & Loan Guarantees
Technology Research
Technology Development
Pilot Demonstration
Commercial Demonstration
Commercial Deployment
Proposed Funding
Basic Research
Research Councils
Advanced Technology
Tax Incentives & Loan Guarantees
Fundamental Research
(1) Continue existing incentives and add anthropogenic CO2 incentive