Watch group questions ethics of energy loans and grants


BISMARCK, ND (AP) – State regulators have approved $ 28 million in grants and $ 135 million in loans for six energy projects, while watchdog group raised concerns over conflicts of interest on the clean energy council which recommended candidates for funding.

The North Dakota Industrial Commission, at a meeting last week, approved financial assistance for projects ranging from hydrogen production to lithium mining, as recommended by the Clean Sustainable Energy Authority.

At the energy authority’s meeting earlier this month, many members revealed conflicts of interest based on their or their employers’ relationships with some of the candidates.


The conflicts ranged from consulting relationships to companies, to employers investing in candidates’ projects, as well as to a member sitting on a candidate’s board of directors. Whenever one member disclosed a conflict at the meeting, the other members decided to allow them to vote anyway, the Bismarck Tribune reported.

The Dakota Resource Council challenged the process in a letter the group sent to the North Dakota Ethics Commission. Dakota Resource Council executive director Scott Skokos wrote that members of energy authorities with conflict of interest who participate “can use their vote or technical recommendation to influence a decision that would allow the money to flow directly to them,” or directly to their company or institution ”.

The energy authority was created by the legislature earlier this year and is responsible for monitoring projects vying for financial aid approved by lawmakers, including $ 45 million in grants and $ 250 million in loans. via a line of credit from the Bank of North Dakota.

Skokos said the Ethics Commission should require the Clean Sustainable Energy Authority to follow ethical standards similar to banks by prohibiting members from voting or giving advice on projects in which they have a stake.

“In our opinion, the ethics committee should adopt rules prohibiting any appointed or elected official from voting on an issue which will directly or indirectly benefit them financially or their employer,” he said. “The rules should also include penalties for people who fail to disclose a conflict or recuse themselves” even after disclosing a conflict.

Of the energy authority’s eight voting members, the letter identified five as having conflicts of interest: Kathy Neset, Al Christenson, Joel Brown, Jim Arthaud and Chris Friez. He also appointed technical adviser Charles Gorecki, CEO of the Energy and Environmental Research Center at the University of North Dakota. Clean Sustainable Energy Authority director Al Anderson said Gorecki’s replacement Tom Erickson did not vote earlier this month when a dispute arose because the research center was a candidate for a project involving carbon capture at the Coal Creek station.

Anderson discussed the issue of conflicts of interest with the Industrial Commission at last week’s meeting, saying he was comfortable with the process followed by the energy authority. He added that more people involved in the program have disclosed conflicts than those named in the letter from the Dakota Resource Council. He said he sought advice from the Ethics Commission last summer on how to handle such situations.

Ethics Commission executive director Dave Thiele said in an interview that he encouraged the energy authority to use the Industrial Commission code of conduct as a starting point.

Anderson said he took Thiele’s advice and that the advice given to energy officials was to err on the side of disclosure, that “if any of these people have a problem, they should report it, although that wasn’t necessarily a major problem one. “

Governor Doug Burgum chairs the three-member industrial commission and asked at the meeting whether any of the recommendations would have been different had the people in conflict not voted.

“It didn’t change the discussion that took place,” Anderson said. “It wouldn’t have changed any of the voting results that happened either.”

The energy authority’s recommendations were unanimous with the exception of one vote against Bakken Energy’s grant and loan application for its hydrogen hub project.

Anderson said he would address the Dakota Resources Council’s concerns with the Ethics Commission, and Attorney General Wayne Stenehjem encouraged him to visit his office as well.

Thiele said he was not surprised that conflicts of interest arise, given that the energy authority’s subject matter experts are businessmen.

“You might almost expect it given the nature of what they do,” he said. “These are the types of people we want out there because they really understand this industry, but what (the Dakota Resource Council) is raising is legitimate.”

The ethics commission is developing uniform conflict of interest rules for state councils and commissions, and those rules would apply to the energy authority, he said.

“The key is you put it down, you get all the facts and, as a group, you determine if the challenge is appropriate,” he said, adding that boards need to find a balance between members’ need for participation and the extent of conflict.

He said he appreciates the Dakota Resource Council’s comments as the Ethics Commission seeks to finalize its rules.

The projects approved by the Industrial Commission are as follows:

– A $ 10 million grant and an $ 80 million loan for Bakken Energy’s proposal to establish a hydrogen hub involving the Great Plains Synfuels plant near Beulah.

– A grant of $ 7 million and a loan of $ 40 million for Cerilon, which is developing a plant in Trenton that will convert natural gas into liquid fuels.

– A $ 7 million grant to the Energy & Environmental Research Center, which is working on the engineering and design of a system to capture carbon dioxide emissions from Coal Creek, the largest coal-fired power plant in the state.

– A $ 3 million grant to Midwest AgEnergy for its carbon capture and storage project at Blue Flint Ethanol in McLean County.

– A $ 1 million grant to Wellspring Hydro to source lithium and other products from salt water produced in oil fields. Lithium is used to make batteries and other products.

– A $ 15 million loan for Valence Natural Gas Solutions to expand the use of its mobile devices that capture natural gas that would otherwise be flared.

Burgum said the combined projects would capture more than 18 million tonnes of carbon dioxide per year, which is equivalent to about a third of the state’s carbon emissions. Carbon dioxide is a greenhouse gas that contributes to climate change.

“It’s a program that I know that all other energy states wish they had,” Burgum said. “All of these things could be a game-changer for North Dakota, and I think they’re going to have a significant impact beyond that state’s borders to shape these industries.”

The energy authority is expected to make recommendations for the remaining $ 17 million in grants and $ 115 million in loans during additional funding rounds next year.


Comments are closed.