BISMARCK, N.D. — North Dakota granted a fourth extension of state aid for study of a plan to build a coal-to-liquid fuel factory, while the project's developers wait to see if the political climate in Washington changes after the presidential election.
Dallas-based North American Coal Corp. and Headwaters Inc. of South Jordan, Utah, formed American Lignite Energy LLC in 2007 to oversee construction and operation of the $4 billion plant at a yet-to-be chosen site in western North Dakota.
David Straley, a North American Coal Corp. spokesman said a decision on whether to start construction depends on a change of political climate and favorable coal legislation. The extension granted by the North Dakota Industrial Commission runs through 2012.
"We have another year to reevaluate," Straley said Monday. "We're still on hold — nothing in (Washington) D.C. has changed."
The state Industrial Commission in 2007 committed up to $10 million in state aid from coal tax collections to help evaluate the project's potential. Karlene Fine, the Industrial Commission's director, said $1.35 million has been used so far for study of the project.
The commission originally gave American Lignite Energy until the end of 2008 to decide if the project was feasible. It has extended the deadline annually since then. At present, its three members are all Republicans: Gov. Jack Dalrymple, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem.
The plant would use low-grade but abundant lignite coal from North Dakota to produce 460 million gallons of gasoline a year. The factory also would generate electricity that developers plan to sell to markets in Minnesota and Wisconsin.
North Dakota has filed a federal lawsuit challenging a Minnesota law that restricts imports of coal-generated electricity from new plants.
Straley said the coal-to-liquid fuel plant would create about 700 jobs in western North Dakota, with an average salary of about $70,000 a year.
Developers say they can capture at least 70 percent of carbon emissions from the plant before they enter the atmosphere and inject them underground, for storage or to force more oil and natural gas to the surface for processing.
North Dakota has 25 billion tons of proven lignite reserves, the largest in the world, according to state geologists and the Bismarck-based Partners for Affordable Energy, a coalition that supports coal-based electricity.
Gasoline made from lignite can compete with petroleum-based fuel with oil prices at $35 to $45 a barrel, backers have said. A barrel of crude oil has been fetching about $100 in recent days.