BISMARCK — A North Dakota proposal establishing a $25 million state fund for financing technology to reduce the state's carbon emissions was signed into law by Gov. Doug Burgum on Monday, April 26.

The creation of a new Clean Sustainable Energy Authority is part of broader efforts by North Dakota officials to respond to shifting political and financial winds that have put the state's oil and coal industries on the defensive in recent years. Top Republican leaders celebrated the signing Monday as a landmark move to keep the state's fossil-fuel-focused energy sector competitive under realigning markets that have increasingly favored low emissions resources.

Before signing House Bill 1452 into law, Burgum heralded the proposal as a measure to "level the playing field" for North Dakota's fossil fuel energy resources while putting the state at the forefront of national decarbonization efforts. "We have an opportunity going forward to rethink how people think about North Dakota and how they think about carbon and its role," the Republican governor said.

The authority, which will function as an advisory arm to the state's three-member Industrial Commission, an energy regulation board overseen by Burgum, will recommend grants and loans for energy projects out of a $25 million fund over the next two years. That bucket will be replenished in some form in future bienniums, though the particulars are still being worked out through other bills.

On top of this appropriation, the authority is likely to oversee a credit line of up to $250 million, funding that Republican leaders have said is intended for Project Tundra, the proposed $1.1 billion carbon capture facility attached to a central North Dakota coal plant.

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The bill's lead sponsor, Bismarck Republican Rep. Glenn Bosch, called the formation of the fund and authority a "game-changing" move for the state's energy sector.

Critics question board makeup

The Clean Sustainable Energy Authority proposal has also drawn some criticism this session from North Dakota environmentalists and small-government conservatives. Both groups have pointed to the authority's controlling majority from the oil and coal industries and argued that its grants and loans are likely to favor fossil fuels over renewable energy sources like wind and solar.

The bill outlines a 16-member Clean Sustainable Energy Authority with eight members that will have voting power. Those members include the authority's Legislature-appointed chairman, two members appointed by the Lignite Research Council, two appointed by the Oil and Gas Research Council, one member appointed by the Western Dakota Energy Association — which represents coal and oil-producing counties — and two members appointed by the Renewable Energy Council.

In addition to the authority's makeup, some observers have raised questions about its transparency and methods for selecting research partners. Veteran GOP adviser Robert Harms, a longtime consultant to the state's oil industry who now represents wind clients, said that he has some concerns about a provision of the bill that would exempt the authority from typical procurement laws. The bill applies similar procurement exemptions to those allowed for other arms of the Industrial Commission, but Harms said he thinks the Clean Sustainable Energy Authority needs a different standard, "simply because of the amount of public dollars involved."

Future of carbon capture project

The authority's likely oversight of up to $250 million in credit has also drawn pushback this session. Though Republican leadership has said the funding was intended for Project Tundra from the start of session, it was not explicitly attached to the Clean Sustainable Energy fund until last month — a vetting process that Harms called "troubling." The exact mechanism for extending this money has been bounced between numerous bills in recent weeks but is currently written into separate legislation that would establish the funding as a line of credit through the Bank of North Dakota.

Though that money isn't explicitly designated for Project Tundra, Grand Forks Republican Sen. Ray Holmberg, who chairs the Senate Appropriations Committee, said the loans are intended to get the ambitious carbon capture project over its fundraising hump.

Stacey Dahl, a spokesperson for Minnkota Power, the utility company pursuing Project Tundra, said it's too soon to say whether they will pursue the $250 million loan program and noted that the company will announce whether it plans to go forward with the project later this year or early next year.

Still, Dahl noted that "the loan program is of significant value to us" and endorsed the Clean Sustainable Energy Authority as an important step for supporting clean energy innovation going forward.

"This is going to be a really key program in getting any project across the finish line," she said.

Readers can reach reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com.