On the cusp of the Environmental Protection Agency’s announcement of proposed greenhouse gas regulations for existing coal-based power plants — expected to come on Monday — Americans in every state should understand how the EPA’s actions could affect their lives and pocketbooks.
Here in North Dakota, our economy has surged, due to the oil and gas extraction from the Bakken formation. It’s one reason our state was polled recently by Gallup as the happiest in the nation. Demand for electrical power statewide is expected to increase by 208 percent over the next 20 years. With an abundant 800-year supply of recoverable lignite coal reserves, North Dakota’s coal industry should be well-positioned to meet that demand and continue driving economic growth with low-cost, reliable power. But the proposed rules by EPA may threaten our region’s energy infrastructure.
Through numerous proposed regulations, the EPA is already trying to prevent regional utilities from building new conventional generation plants to meet increased demand. Depending upon the final EPA rules for existing power plants, utilities might be forced to close down the state’s eight coal-based power plants, which have employed thousands of North Dakotans and paid hundreds of millions of dollars to the state over the past 40 years. But this pales in comparison to the financial losses to consumers and businesses all across America that would result from losing affordable, reliable power.
According to the U.S. Chamber of Commerce’s report on the impact of potential new federal carbon regulations, the region of the country that includes North Dakota could suffer a loss of 27,000 jobs every year between now and 2030, as well as lose $3.2 billion in economic growth during those years.
The chamber’s findings mirror a similar study completed last year regarding the impacts of a carbon tax in North Dakota and Minnesota. The hardest-hit economic sectors in North Dakota would be the coal industry, followed by manufacturing and oil refining. In Minnesota, the hardest hit sectors would be manufacturing and refining.
Abundant lignite coal reserves already provide approximately 80 percent of the power within North Dakota as well power as to two million people throughout the Upper Midwest. Any regulations that would require unfeasible retrofits to continue operation of existing plants would greatly impact power reliability and our economy. As studies by the chamber and other organizations have concluded, unreasonable regulations could lead to layoffs, increased costs to consumers, and depressed economic activity.
We care deeply about the impact of emissions on the environment, and representatives of the regional coal industry have attempted to communicate this message to the EPA on numerous occasions. We want to ensure the EPA doesn’t punish North Dakota utilities and ratepayers for the $2 billion investment they made to reduce emissions and improve the efficiency of their coal-based power plants. As a result of those efforts, we are one of only seven states that meet all federal clean air criteria.
During this year’s “polar vortex,” 89 percent of the coal capacity slated for retirement by a major power provider in the Upper Midwest was tapped to meet electricity demand. The U.S. Department of Energy predicts 20 percent of the country’s coal-fired generation capacity could be on the chopping block from recent EPA rules. The U.S. Chamber estimates that an additional 40 percent could be prematurely retired due to greenhouse gas rules. This begs the question: How will we keep the power on during the next cold snap or heat wave?
The EPA’s proposal presents yet another threat to the ability of utilities to supply power during peak demands. To ensure our region can continue to rely on affordable and reliable electricity from lignite coal, any new regulations must offer a balanced approach that takes into account both economic consequences and significant investments already made to ensure a cleaner environment.
