A key component of Rainbow Energy purchasing the Coal Creek Station is carbon capture and storage that will be done there, said Sen. John Hoeven, R-ND.

Hoeven spoke to Minot media members on Wednesday following the announcement that the Bismarck-based company is buying the Coal Creek Station from Great River Energy, a purchase that will keep the plant and the Falkirk Mine operating. He was in Minot later that day for a drought meeting with farmers and ranchers.

The Coal Creek Station is located between Underwood and Washburn and the Falkirk Mine is adjacent.

Carbon capture and sequestration technologies enable energy producers to capture CO2 at the source to prevent it from being released into the atmosphere. Once the CO2 is captured, it can be stored deep underground, or used for enhanced oil recovery or other beneficial uses, according to information from Hoeven’s office.

In regard to carbon capture and storage, he said Rainbow Energy will be able to do that “because we’ve passed 45Q tax credit which provides $50 a ton for every ton of CO2 they sequester.”

“This is also about reaching out into the future and building our energy here as an energy powerhouse in North Dakota because it continues that low-cost, dependable coal-fired electricity for our region but it also provides the very best environmental stewardship so we’re crafting the code on carbon capture. What I mean by crafting the code is making it economically viable – commercially viable – and that’s what that $50 a ton credit does,” Hoeven said.

The 45Q tax credit provides a revenue stream for carbon capture, utilization and storage (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, according to information from Hoeven’s office.

“It’s really something where we’re leading the country. This is what the country is trying to do – figure out how to make carbon capture work. This is the kind of project that does that and that’s why it’s so important,” Hoeven added.

In addition to jobs and affordable energy, he said it’s for security. “Energy security is national security and it’s just exciting that North Dakota is leading the way,” Hoeven said.

Hoeven’s work to crack the code on CCUS technologies that will enable Rainbow Energy to deploy a CCUS project at Coal Creek Station besides the direct revenue stream from the 45Q tax credit will also provide loan guarantees from the U.S. Department of Energy and U.S. Department of Agriculture, according to information from his office.

“We’ve been working on this for about two years,” said Hoeven of finding a solution to keep Coal Creek Station and the Falkirk Mine operating. That work includes with Great River Energy, Rainbow Energy and North American Coal.

He said he’s worked with Rainbow Energy for many years and watched them build “this great North Dakota company.” Rainbow Energy is an energy marketer that sells wholesale power.

“It’s a huge undertaking and it’s very innovative,” he said of the Rainbow Energy purchase of the coal-fired power plant, mine and deploy a carbon capture project.

“They’ll keep the employees at the plant so North American Coal can also keep their employees at the mine. This keeps both the plant and the mine operating,” Hoeven said.

He said they hope to have the transition closed later this year. He said the plant and mine will operate all the way through the handoff from Great River Energy to Rainbow Energy.