Release Date: May 14, 2007

WASHINGTON, DC - The successful partnership between the Department of Energy and Dakota Gasification Company, a subsidiary of Basin Electric Power Cooperative, recently marked another major milestone with the payment of $39.2 million to DOE under a revenue sharing agreement signed in 1988. 

Energy Secretary Samuel Bodman receives a $39.2 million revenue sharing payment from (left) Ron Harper, CEO of Basin Electric Power Cooperative. Looking on are members of the North Dakota Delegation, from right, Senator Kent Conrad, Representative Earl Pomeroy, and Senator Byron Dorgan.

The Great Plains plant is the only U.S. commercial-scale gasification plant that produces synthetic natural gas from coal.  This pioneering gasification facility is paving the way for future applications of coal gasification and coal-to-liquids technologies to further develop and enhance domestic energy supplies, as well as mitigate international pressures on energy prices.

In the early 1980s, DOE guaranteed a $1.5 billion loan to the original developers of the Synfuels Plant. The developers defaulted on that loan in 1985, and the DOE repaid the lender and took control of the plant. DOE operated the plant from 1985-88, during which time the decision was made to offer the plant for sale through a bidding process. Under the terms of the sales agreement, in order for DOE to recover funds spent to repay the defaulted loan, the buyer, Dakota Gasification Company, agreed to share revenue from gas sales with DOE through 2009. The amount of revenue shared is based on a formula that takes into account natural gas prices and other economic indicators.

In addition, since 2000, CO₂ from the plant has been transported via a 205-mile pipeline to the Weyburn Oil Field in southwestern Saskatchewan, Canada.  More than 10 million tons of CO₂  has successfully been captured and transported to the oil field.  It has also doubled the field's oil recovery rate through a process called enhanced oil recovery.  This process injects CO₂ into the reservoir to improve oil recovery, while a large portion of the injected CO₂ remains permanently sequestered.