BISMARCK A North Dakota environmental group is suing a new branch of the government for mismanaging its conflicts-of-interest when it met last week to recommend more that $160 million in state funds for fossil fuel sector grants and loans.
The Dakota Resource Council is a conservationist group that raised concerns about conflicts-of-interest on the Clean Sustainable Energy Authority. This was in a letter addressed to the state Ethics Commission (Gov. Doug Burgum, a conservationist group, asked for more stringent rules to regulate conflicts of interest in the future in a letter dated Monday, December 20.
The letter comes as $28 million in grants, and $135,000,000 in loans that Clean Sustainable Energy Authority recommended last Wednesday were approved by the North Dakota Industrial Commission. This three-member business regulatory board is headed by Gov. Doug Burgum.
The Clean Sustainable Energy Authority was established by lawmakers in January. It consists of members appointed by energy industry groups to manage a new fund that includes $45 million in grants, and $250 million in loans. The board was established by lawmakers to help kick-start climate-friendly, lower-emissions projects in the fossil fuel and agriculture sectors of the state.
The Clean Sustainable Energy Authority’s first funding round saw a $2.8 billion project to build a natural gas to liquids facility in Williams County. A $1.8 billion effort was made to retrofit a coal-fired power station, Coal Creek Station, into a hub for hydrogen fuel production. An early engineering study was also conducted to determine if the plans to retrofit Coal Creek Station for carbon capture.
Members of the Industrial Commission unanimously voted in favor
The Clean Sustainable Energy Authority made funding recommendations last week
. They left $17million in grants and $115million in loans unclaimed in the Clean Sustainable Energy Fund for next year’s application rounds.
Multiple appointees to Clean Sustainable Energy Authority revealed conflicts of interest at last week’s meeting. Each case was decided by the authority to allow members to vote for the projects they disagree with.
Concerns were raised by the Dakota Resource Council over these decisions, which argued Monday that members should not be allowed to vote on whether to fund projects that have direct financial benefits to them or their employer.
According to the Dakota Resource Council, one of the most serious conflicts was that of Kathleen Neset, president of an oilfield consultancy. She disclosed contracts with Wellspring Hydro and the Clean Sustainable Energy Authority recommended $1 million in grant funding. The conservationist group also pointed out the conflicts of Al Christianson. He told authority members that he is on the board at Midwest AgEnergy and works for Great River Energy. Great River Energy is currently selling Coal Creek Station.
Scott Skokos (director of the Dakota Resource Council) wrote that North Dakota needs to establish strong conflict of interests rules to stop elected and appointed officials from using office to benefit themselves, their employer, or their business interests. He said that the Clean Sustainable Energy Authority meeting this month highlighted the need to develop rules as soon as possible.
Al Anderson, president and CEO of the Clean Sustainable Energy Authority, told Burgum on Monday that he believed the new state board handled all its conflicts in a professional manner.
These are experts in their field. Anderson stated to the Industrial Commission that because of the size of the state, there will be many conflicts. These were identified.
Although conflicts of interest are not a major problem for the newly formed board, they will be., Anderson said that they followed the guidance from the Ethics Commission earlier in this year.
Dave Thiele, Director of Ethics Commission, stated that he believes Clean Sustainable Energy Authority followed the guidelines that his commission gave. Thiele also mentioned that authority members have disclosed their conflicts.
Recusals can be quite serious, but so is a true conflict of financial interest.” he stated. Thiele stated that he was unable to comment on the severity and nature of individual conflicts cited in board members’ reports. The Ethics Commission assists in the establishment of new conflict-of-interest rules for state entities.
Skokos admitted that conflicts like those encountered by the Clean Sustainable Energy Authority don’t seem to be uncommon in North Dakota politics. However, he said that allowing conflicted members of the legislature to vote on projects in this instance is problematic because they make decisions that directly impact where the state’s money is invested.
The Clean Sustainable Energy Authority only disqualified a member from voting at a meeting of its technical advisor committee earlier this month. In that meeting, a representative of the University of North Dakota Energy and Environmental Resource Center didn’t cast a vote on a submitted application by his group.
The board unanimously approved funding for all but one of the applicants the Clean Sustainable Energy Authority recommended during their meeting last Wednesday.
Bakken Energy submitted a project to retrofit the financially challenged Great Plains Synfuels Plant near Beulah in order to produce hydrogen energy. The state approved funding for the project, despite opposition from the coal industry advocates. Christopher Friez, North American Coal, provided the one nay vote.
On Monday, six projects were approved by the Industrial Commission for final funding.
- Bakken Energys proposed hydrogen hub in Great Plains Synfuels received $10 million in grants, and $80 million as loans.
- Canadian company Cerilons has received grants of $7 million and loans of $40 million to finance the construction of a gas–to-liquids plant at Williams County. This will be the first such plant in North Dakota.
- $7 million in grants for University of North Dakota’s Energy and Environmental Research Center. This grant will be used to conduct preliminary engineering studies on the carbon capture at Coal Creek Station.
- Midwest AgEnergys plans carbon capture at Blue Flint Ethanol Facility in McLean County with $3 million
- $1 million in grants. Wellspring Hydros plans for the use of oilfield water waste to extract lithium products that can be used to create the batteries that power electric cars.
- $15 million in loans to Valence Natural Gas Solutions for mobile gas capture units in oilfields to solve the state flaring problem
Forum reporter Adam Willis (a Report for America corps member) can be reached at