Bismarck Tribune

By MAGGIE STEHRBy MAGGIE STEHR

Sen. Kent Conrad, D-N.D., gathered with state energy and agriculture officials Friday to highlight provisions in the federal energy bill that could bring substantial investment to the local energy industry.

On the grounds of the North Dakota Association of Rural Electric Cooperatives in Mandan, Conrad called the legislation a victory for the state.

The bill will funnel hundreds of millions of dollars to North Dakota energy companies, including tax breaks and loan guarantees for new biodiesel power plants, clean coal technology and wind energy, Conrad said Friday.

Despite the bill's broad sweep, it likely will not reduce pump prices, Conrad said. However, increased domestic energy production eventually could lower the rate of gas price increases, he said.

Lawmakers passed the sweeping legislation last week with broad bipartisan support, ending years of congressional stalemate over energy. President Bush is expected to approve the bill next week.

"This energy bill, while not perfect, will make a significant difference in North Dakota," Conrad said Friday. "It will significantly reduce the nation's energy dependence on foreign (energy) sources."

Conrad hopes to make North Dakota a leader in energy source production.

Next week, the senator will detail plans to construct a $750 million plant in Washburn that converts coal to liquid fuel.

The company, which Conrad has declined to name, has suggested the project investment could expand to $3 billion, with hundreds of employees, the senator said.

The state's 800-year coal supply now generates 90 percent of the state's electricity, said Jeff Burgess of the Lignite Energy Council in Bismarck.

Sparse local electrical transmission networks prevent further development of the state's vast coal resources, Burgess said Friday, but energy bill provisions ensure tax incentives for transmission investment.

The energy bill's Renewable Fuels Standard also requires the use of 7.5 billion gallons of such renewable fuels as biodiesel and ethanol by 2012.

The standard more than doubles U.S. production of renewable fuels, and will strengthen rural North Dakota communities, Conrad said.

Because the provision will increase demand for fuel-producing crops, North Dakota farmers could increase planting of such crops as soybeans and corn, said Robert Carlson, president of the North Dakota Farmers Union.

Carlson said Friday the standard will increase U.S. farm income by a $1.3 billion yearly average, and save the country more than $4 billion annually in imported oil.

Extended tax credit for renewable energy producers will further develop North Dakota's wind energy industry, said Lars Moller, president of DMI Industries in Fargo.

The wind turbine manufacturer will invest $250 million to install 200 megawatts of wind power across North Dakota - nearly quadrupling the state's current production, and creating at least 300 jobs, Moller said Friday.

The federal energy bill also increases oil production with a $30 million development of 10 oil recovery projects in Williston Basin, Conrad said.

Like many U.S. gas producers, North Dakota's only refinery - Tesoro Refinery in Mandan - is at record high output, said Ron Ness, president of the North Dakota Petroleum Council.

Conrad acknowledged environmental risks of greater oil refining in North Dakota, but said the nation's dependence on foreign oil creates economic and military vulnerability.

"We've got to do better," the senator said. "Let's not forget all the risks out there."