CONGRESS PASSES ENERGY BILL WITH HUGE BOOSTS FOR NORTH DAKOTA’S ENERGY INDUSTRY, DORGAN SAYS

Bill supports production of energy from wind, ethanol, biodiesel, hydrogen and fossil fuels

Friday, July 29, 2005

(WASHINGTON, D.C.) --- The federal energy bill approved this week by Congress includes several provisions authored by U.S. Senator Byron Dorgan (D-ND) that will expand markets for North Dakota products, encourage the growth of the state’s diverse energy industry, and help reduce the nation’s dependence on foreign sources of oil.

“This bill will help development of North Dakota’s wind, ethanol, biodiesel, hydrogen and fossil fuel industries,” Dorgan said. “As we move into the future, it’s important that we act to develop these domestic sources of energy so we can move away from this dangerous addiction we have to oil from Saudi Arabia, Kuwait and other unstable parts of the world.”

Dorgan, who also served on the conference committee that negotiated the bill’s final version, won approval of his provision to require refiners to use at least 7.5 billion gallons of ethanol annually in their gasoline blends by 2012. The bill also extends for two years a production tax credit for renewable energy that has played a key role in spurring development of North Dakota’s vast wind resources. The credit was set to expire at the end of the year.

“North Dakota’s growing renewable energy industry will get a welcome boost from this bill,” Dorgan said. “We already have several new ethanol plants in the works, and the production tax credit will certainly draw more developers to ‘the Saudi Arabia of wind.’ This can only mean good things for agriculture, energy and economic development in North Dakota.”

Another Dorgan initiative calls for an aggressive move toward a hydrogen-based economy with a $3.75 billion investment over five years for research, development and demonstration programs with private industry to develop hydrogen fuel cells, hydrogen-powered automobiles, and a nation-wide fueling infrastructure. The legislation includes the goal of putting 100,000 hydrogen-fueled vehicles on the road in the United States by 2010, and 2.5 million of the vehicles by 2020.

The hydrogen research funding will support activity at the University of North Dakota’s Energy and Environmental Research Center (EERC), which through another Dorgan effort was recently named a National Center for Hydrogen Technology.

The bill also includes tax incentives to boost production and use of hydrogen, biodiesel and other alternative fuels, as well as more traditional fossil energy, including lignite coal.

A summary of the bill’s provisions most important to North Dakota is below.

Renewable Fuels Standard: Requires refiners to produce and use a minimum level of 7.5 billion gallons of ethanol in their gasoline blends annually by 2012. This will add substantial value to North Dakota’s grains and spur economic development in the state’s ethanol and biodiesel industries.

Hydrogen: Calls for an aggressive development project that would authorize a $3.75 billion investment over the next five years for research, development and demonstration programs with private industry to develop hydrogen fuel cells, hydrogen powered automobiles, and a nation-wide fueling infrastructure. The legislation includes the goals of 100,000 hydrogen-fueled vehicles on the road in the United States by 2010, and 2.5 million of them by 2020.

Production Tax Credit: The production tax credit for renewable energy is extended for two years. It was set to expire at the end of this year. Though the tax credit can be used by producers of several different types of renewable energy, developers of wind energy in particular have cited it as a key incentive to encouraging growth of the industry. The credit was also expanded to allow more groups to make use of it.

Clean Coal Facilities: The bill includes tax credits that encourage investment in clean coal facilities. Lignite, which is abundant in western North Dakota, is eligible for these tax credits.

Transmission Lines: Incentives encourage the construction of new power lines to export North Dakota energy, which is already constricted by a shortage of lines leaving the state.

Loan Guarantee: Creates a loan guarantee for the construction of a clean, lignite-coal facility in North Dakota that would integrate coal, renewable fuels, hydrogen and carbon sequestration.

Mercury Removal: Requires the Department of Energy to establish a program to develop and test technologies to remove elemental mercury from Fort Union lignite coal.

Advanced Oil and Gas Recovery: Creates a demonstration program—involving 10 $3 million projects—in North Dakota’s Williston Basin and in Montana that would use carbon dioxide injection to recover oil and natural gas.

Indian Energy Development Opportunities: Encourages energy development on tribally owned lands, while ensuring that fundamental trust responsibilities remain intact.

Rural Electric Cooperatives: Minimizes new Federal Energy Regulatory Commission (FERC) burdens for cooperatives, while exempting small electric coops from most FERC regulations. The bill also provides for voluntary—rather than mandatory—participant funding for all new transmission projects, and other FERC-related provisions.

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