American Lignite Energy

American Lignite Energy LLC (ALE) is a company formed by North American Coal, Headwaters Energy Services and Great River Energy for the development of a coal-to-liquids plant to produce diesel and jet fuel from lignite. The plant would also generate electricity for Minnesota and Wisconsin.

The formation of the company was announced in May 2007 in order to "evaluate the project" after the completion of "several preliminary engineering, environmental and market studies" on the project. The companies explained that ALE "will continue activities to determine if development of a coal-based refinery is viable" and stated that "although this is a very large development with many uncertainties, the partners are confident that the project warrants additional investigation because of its significant potential."

According to the company's initial press release the proposed plant would "produce approximately 32,000 barrels of fuel per day and utilize approximately 10 million tons of North Dakota lignite annually. Final site identification is under way. If the project were to move forward, engineering and permitting of the facility could take at least two years. Financing and construction of the facility would take at least four additional years."

In January 2009, American Lignite Energy put plans for the facility on hold while awaiting direction from the new administration and Congress. A state commission has given American Lignite until the end of 2009 to decide whether or not to move forward with plans for construction.

January 2010 update: In January 2010, ALE requested a second extension to continue studying the project. The company said it is waiting to see what Congress does with energy legislation, before determining whether the project is viable.

Great River Energy is no longer involved with the project. Company spokesman Lyndon Anderson said Great River is meeting customer demand through other sources and does not foresee the need for new power generation through 2020.

Pitch for Subsidies
In testimony before the U.S. Senate Appropriations Subcommittee On Energy and Water Development in August 2007, John Weeda, Plant Manager, Coal Creek Station, Great River Energy, stated that:


 * "The project would utilize proven technology to capture carbon dioxide emissions from the plant, which then could be utilized for enhanced oil recovery in western North Dakota. It incorporates carbon capture (CO2) into its design that is expected to remove and sequester 70 percent of the total CO2 produced in the process. The CO2 will be sold to North Dakota oil field operators for use in enhanced oil recovery, which is a commercially demonstrated technology for sequestering CO2. Enhanced oil recovery has been practiced for decades in Texas and in the Canadian Weyburn fields since 2000. The Williston Basin's demand for CO2 is projected to be greater than American Lignite Energy’s CO2 production."


 * As a result, the carbon footprint for American Lignite Energy fuels will be equal to the domestic fuels they replace and better than fuels derived from imported petroleum. Electricity from the project’s generating facility will have a CO2 intensity equal to or better than that of a natural-gas-fired combined cycle plant."


 * However, if the United States desires a coal-to-liquids industry – and more energy independence – the development of the industry will require federal incentives to help address financial market risk associated with oil price volatility and commercializing the industry."

Funding
The North Dakota Industrial Commission has committed $10 million toward the project, of which, ALE states, $1.2 million is "expected to be expended in the next phase of engineering, permitting, and site development." The full amount is condition al ALE providing matching funding.

ALE have also stated that "engineering activities are being supported in part by the North Dakota’s Lignite Research Fund."

The company will decide whether to go forward with the project in April 2008. Construction would probably begin in late 2010.

Project Details
Sponsor: American Lignite Energy LLC (North American Coal, Great River Energy) Location: Western North Dakota (probably Underwood) Capacity: 32,000 barrels per day Type: Coal-to-liquids Projected in service: 2013 Status: Early development

Citizen Groups

 * Dakota Resource Council, Cindy Klein, cindy [at] drcinfo.com
 * North Dakota Sierra Club, Wayde Schafer, wayde.schafer [at] sierraclub.org

Related SourceWatch Articles

 * North Dakota and coal
 * United States and coal
 * Carbon Capture and Storage
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Proposed Synfuels Plants in the United States
 * State-by-state guide to information on coal in the United States (or click on the map)