North Dakota Coal Industry is Alive and Well

Via The Star Tribune:

The chimneys of Coal Creek Station, North Dakota’s largest power plant, tower 60 stories over the prairie. Nearby, an excavator that looks like a giant crane looms over a big coal mine.

The mine feeds the plant owned by Maple Grove-based Great River Energy, which churns out electricity for hundreds of thousands of Minnesotans. Four other coal mines dot the North Dakota countryside, mostly supplying neighboring power plants.

This “mine-to-mouth” model produces some of the cheapest power in the country and has enabled coal to remain an economic anchor in North Dakota, even as the industry crumbles in other parts of the United States.

Mines have actually been hiring in North Dakota in recent years, a sharp contrast to other coal regions. Utilities have been investing significant money in coal-powered plants.

“The coal industry has rolled back considerably from what it was 10 to 20 years ago, but we haven’t seen that in North Dakota,” said Dean Bangsund, an economist at North Dakota State University.

Still, the forces causing electricity producers to forsake coal nationally are creeping into the landscape. Wind power is surging, and it can be even cheaper than electricity produced from North Dakota’s coal-fired plants.

Great River has responded by retooling its Coal Creek plant so production can be more easily reduced when it’s windy. Other plants are doing the same, or looking at it. But the more they reduce production, the less coal they need — what could be a troubling prospect for the coal mines in the long-term future.

 The state’s coal industry “isn’t immune to what’s occurring in the rest of the U.S., but it may be the last place where it hits,” Bangsund said.
Cheap coal

While oil and its market gyrations are often in the headlines, coal has been a stable bedrock of North Dakota’s energy industry for decades.

Beneath North Dakota lies North America’s largest deposit of lignite. It’s a soft coal with less thermal energy and more water than higher-quality coal mined elsewhere in the United States. Shipping lignite by train or barge to far-flung power plants makes little economic sense.

But place a power plant amid a lignite deposit and the economics change drastically. From the mid-1960s to the mid-1980s, five big power plants were built in North Dakota, all near mines.

 Coal fuels about 70 percent of the electricity generated in North Dakota, well above the national norm and Minnesota’s 39 percent rate. Yet Minnesota benefits from North Dakota’s supply.

“We’re exporting half of the power we produce, and Minnesota is by far our biggest market,” said Jason Bohrer, head of the Lignite Energy Council in Bismarck, a trade group for both coal mines and power plants.

Otter Tail Power and Minnkota Power — which serve more than 100,000 Minnesota residents — have ownership stakes in N.D. lignite-fired coal plants. Duluth-based Allete Corp. owns a lignite mine that supplies a nearby power plant, which in turn has an electricity supply agreement with Minnesota Power, Allete’s main subsidiary.

Great River has an even larger stake in North Dakota. A wholesale co-op, Great River sells electricity to 28 retail co-ops that span Minnesota and serve 685,000 customers. Coal Creek, with a 1,145 megawatt capacity, is by far Great River’s largest electricity generator; it has enough to power up to 700,000 homes. (A megawatt is a million watts).

The company has invested hundreds of millions of dollars at Coal Creek over the past decade, reducing emissions and increasing the plant’s ­efficiency.

 Coal Creek’s fuel arrives by 36 conveyor belts stretching a little over a mile from the Falkirk mine, which is owned by Texas-based North American Coal Corp. The mine and plant have a symbiotic relationship. Managers from each even get together for weekly planning meetings.

The power plant employs 265, the mine 462; and both offer some of the state’s best-paying hourly jobs. Utility workers and coal miners in North Dakota make over $95,000 a year on average, according to data from the U.S. Bureau of Labor Statistics.

And in North Dakota, coal-mining employment actually rose from 943 in 2001 to 1,203 in 2015, before dipping by about 30 jobs last year, federal data show. Nationally, coal-mining jobs fell nearly 15 percent from 2001 through 2015, and they nose-dived further in 2016.

“Up here, everybody feels pretty safe, and it’s mainly because of the power plant,” said Perry Meske, who has worked at the Falkirk mine for 31 years.

Meske runs a 6,500-ton dragline, which looks like a giant crane but actually excavates dirt and rocks, exposing coal seams below. Bulldozers rip the coal, which is carried away in massive trucks as tall as a house. (The pit is reclaimed when the digging is done.)

Meske and his co-workers at Falkirk are well aware of the coal industry’s precariousness outside of North Dakota. Federal mining inspectors at Falkirk — some of whom have relocated from dying coal regions — offer reminders.

“They’ve told me stories about how many places have closed up,” Meske said.

See the full article here.