Feeding and Powering the World

Carbon Capture, Utilization, and Storage: Securing North Dakota’s Energy Future
By Energy and Environmental Research Center | May 03, 2023

Two core economic pillars of North Dakota are the energy and agriculture industries. However, both industries are historically carbon-intensive, meaning that a lot of carbon is generated during specific processes associated with these industries. Managing global carbon emissions is one of the most pressing environmental concerns of our time. Many scientists are concerned that anthropogenic (human-made) greenhouse gases (GHGs) are affecting Earth’s climate. This concern is driving policies in the United States and around the globe, which are resulting in economic incentives and preferential financing for companies taking action to lower the carbon intensity of the commodities they produce. The challenge is to address anthropogenic GHG emissions while providing access to reliable, affordable, resilient energy and products. Carbon capture, utilization and storage (CCUS) is one of the best technologies to address the challenge to decarbonize these industries while we continue to feed and power the world and grow the economic contributions of these cornerstone industries to our state.

For more than 20 years, the University of North Dakota Energy & Environmental Research Center (EERC) has partnered with industries, state and federal agencies and universities to conduct focused research on the capture and geologic storage of carbon dioxide (CO2). Geologic storage entails the injection of captured CO2 deep into the subsurface, where the CO2 can either be permanently stored in deep saline formations or used to recover additional oil and gas from hydrocarbon reservoirs. In both cases, the CO2 remains permanently and safely stored deep underground. Much of the research and development on CCUS has been carried out through the collaborations within the Plains CO2 Reduction (PCOR) Partnership, led and managed by EERC (www.undeerc.org/pcor). Research conducted through the PCOR Partnership and elsewhere has shown that CCUS is safe and commercially viable provided that the geologic site chosen for storage is appropriate. The rocks of North Dakota’s Williston Basin are particularly well-suited for the permanent storage of CO2 and, in many instances, directly underly the locations of large industrial sources such as coal-fired electric power plants. This is a synergy that provides prime opportunities for successful CCUS projects. 

The subsurface geologic storage of CO2 represents an optimal situation for achieving reduced GHG emissions to the atmosphere. A key element to the successful commercial deployment of the geologic storage of CO2 is site selection. A good storage site has the storage capacity needed to store the desired amount of CO2 and suitable containment to ensure that the CO2 does not migrate vertically out of the storage zone. Other key criteria include sufficient depth, and geologic stability and chemistry, all of which help ensure the long-term storage suitability of the site. Once CO2 injection begins, various monitoring methods are implemented to verify that the CO2 is behaving as expected, to quantify the amount of CO2 injected, and to ensure that there are no negative impacts on human health, the environment, or property. Equally important to commercialization is the ability to provide assurances to the public that impacts on human health and the environment will not occur sometime in the distant future.

Open for Business
In addition to being a key technology in addressing global climate emissions, CCUS will provide significant economic opportunities for the state of North Dakota. In 2021, Governor Burgum announced an ambitious goal for North Dakota to be carbon-neutral by 2030, a goal to be achieved through innovation, not regulation. Since his announcement, the state has attracted over $15 billion in potential investments in CCUS, with more expected to come. Deployment of this technology is an emerging opportunity that has the potential to create tens of thousands of skilled, high-paying jobs in the state while securing the future of our existing energy infrastructure.

In 2009, North Dakota established several key legislative positions relative to CO2 capture and storage. In addition to clarifying that the subsurface pore space needed to store CO2 belongs to the surface owner, the state also provides for the long-term liability of the stored CO2 after the project ends. To further embrace the concept of CO2storage, the North Dakota Century Code was crafted to state: “It is in the public interest to promote the geologic storage of carbon dioxide. Doing so will benefit the state and the global environment by reducing greenhouse gas emissions. Doing so will help ensure the viability of the state's coal and power industries, to the economic benefit of North Dakota and its citizens. Further, geologic storage of carbon dioxide, a potentially valuable commodity, may allow for its ready availability if needed for commercial, industrial, or other uses, including enhanced recovery of oil, gas and other minerals. Geologic storage, however, to be practical and effective requires cooperative use of surface and subsurface property interests and the collaboration of property owners. Obtaining consent from all owners may not be feasible, requiring procedures that promote, in a manner fair to all interests, cooperative management, thereby ensuring the maximum use of natural resources.”

State lawmakers understood that practical and effective geologic storage of CO2 requires cooperative use of surface and subsurface property interests and the collaboration of property owners. As such, the state statutes for geologic storage established procedures that promote, in a manner fair to all interests, cooperative management, thereby ensuring the maximum use of natural resources.

Incentives for geologically storing captured CO2 come from the state and federal level. For example, in April 2019, Governor Burgum signed legislation that provides an economic incentive to use CO2 captured from North Dakota’s coal-fired power plants for enhanced oil recovery (EOR) by injecting the CO2 underground. At the federal level, the IRS 45Q tax rule provides for tax credits of up to $85 per metric ton of CO2 stored. Additional incentives for participation in the storage of CO2 is the per ton payment that the landowner will receive in compensation for using the pore space or royalties paid to mineral owners for the production of hydrocarbons (that would not have otherwise been produced) through the application of an EOR process using anthropogenic CO2. Incentives also come from voluntary markets and premiums paid for commodities with a reduced carbon intensity. The demand for CO2 in the at-scale deployment of EOR in North Dakota will likely dwarf the CO2 that the state currently produces, requiring imports from other states.

From an energy generation point of view, the use of CO2 as a tool to extract more resources could produce an additional 4 billion barrels of oil from North Dakota’s unconventional (e.g., Bakken) and legacy (~pre-Bakken) oil fields. The EOR process will store nearly all the CO2 used to get that incremental oil, resulting in a lower-carbon-intensity product.
More Reliable Energy

Addressing climate change is a large-scale global challenge that is compounded by our growing demand for energy. To reduce the risks associated with climate change, the amount of CO2 released by human activity must be substantially reduced. However, increasing reliance on low-carbon renewable energy sources may sacrifice grid resilience and reliability. These concerns have been amplified during recent extreme weather events in the United States when much of the country was without power. A significant challenge in reducing the reliance on fossil fuels in the energy sector is to find solutions to overcome the intermittency issues associated with renewable energy in an economically feasible manner. Traditional power plants equipped with CCUS technology can play an important role to ensure that the low-carbon power generation of the future can evolve without sacrificing resilience and reliability. CCUS-enabled power production will contribute to energy security that complements a balanced all-of-the-above energy policy.
In the face of growing world populations and rising worldwide standards of living, CCUS provides an opportunity to use fossil fuels with a significant reduction in GHG emissions. CCUS lies at the intersection of energy, the economy, and the environment, which makes it a critical approach to meeting our state and country’s clean energy needs.

A Growing Portfolio
As of December 2022, the North Dakota Industrial Commission, the regulatory body that oversees the injection of CO2, has approved three CO2 storage facility permit applications and is reviewing two additional permit applications. This is just the beginning. Other announced projects in the state that will be pursuing CO2 storage permits, including the formation of a partnership to create a hydrogen hub in the state. The hub will focus on the production of low-carbon hydrogen, much of which will be derived from fossil fuels, with the CO2emissions captured and geologically stored.

For the past 23 years, more than 40 million tons of CO2 has been transported in a pipeline across North Dakota to oil fields in Saskatchewan where it was permanently stored during commercial EOR. Earlier this year, North Dakota’s first commercial-scale CO2 EOR project got underway in Bowman County. The CO2 being used in this project is brought by pipeline from Wyoming for simultaneously producing low-carbon-intensity oil with permanent CO2 storage.

Added Benefits
Through a combination of leadership, vision and strategic investments, North Dakota has positioned itself as the global frontrunner for CCUS, an accomplishment critical to providing economic options and opportunities to North Dakota’s pore space and mineral owners and for ensuring the continued viability and future growth of our energy, agricultural, and supporting industries. CCUS will be a critical component of safe, resilient, reliable, affordable, low-carbon energy derived from coal, oil, gas, biofuels, and renewables. CCUS will also be critical for low-carbon agriculture products, resulting in an advantage for North Dakota commodities and products competing in national and global markets for generations to come.

Author: Energy and Environmental Research Center

(Printed in Issue 1, 2022 of Carbon Capture Magazine, View Carbon Capture & Storage Directory)