Carbon tax would be costly

The Obama Administration recently announced its intention to further regulate carbon dioxide (CO2) emissions from coal-fired power plants. Last year, emission limits were targeted for all new power plants. This new proposal is a presidential directive to move the Environmental Protection Agency toward including all power plants in the CO2 emissions standards. This latest move will present some significant challenges for North Dakota as regulations come out that exceed the capability of currently available technology.

The technology for capturing CO2 emissions is largely under-developed and not yet commercially available, so a likely outcome of this move would be a tax on carbon emissions. A so-called carbon tax could significantly raise the cost of producing electricity from coal to a point where the energy industry may abandon the inexpensive abundant resource in favor of a more expensive alternative. That would be a significant blow to the North Dakota economy.

As a member of Nodak Electric Cooperative, approximately 42 percent of the power you consume comes from renewable sources such as wind and hydro. The balance comes from North Dakota lignite coal. A byproduct of the coal combustion process is CO2. With more than half of our power coming from coal, any limitation on CO2 emissions could have significant impacts.

There are a lot of unknowns with this announcement from the administration. We won’t know until at least next year what will be considered acceptable emission limits or implementation timelines. One thing is certain, though. Without commercially available and economically feasible technology to capture CO2, these regulations will drive up the cost of electricity on North Dakotans and across the country.

New technologies are best developed by attracting investment in research and development necessary to find solutions rather than artificially drive up the cost of doing business through regulations and taxes. What we need is a thoughtful, deliberate approach that empowers all sectors of the energy industry to work toward new ways of utilizing all of North Dakota’s abundant resources.