As a 1988 graduate of Red River High School, James was a standout multi-sport athlete who excelled in cross country, golf, and most notably, hockey. Karner lettered four years in both cross country and hockey, and once in golf, showcasing a rare blend of endurance, precision, and athleticism. On the ice, he built one of the most decorated careers in Red River hockey history. He was a two-time All-EDC and All-City selection, and played a pivotal role on back-to-back state championship teams in 1987 and 1988. In 1988, he was named the State Tournament MVP, capping a legendary high school hockey career. At the time of graduation, Karner was the career leader in scoring at Red River, tallying approximately 85 goals and 75  assists for 160 points. In 2000, he was honored by the Grand Forks Herald as a selection to the prestigious All-Century North Dakota State Tournament Team. Following high school, Karner played two years in the USHL, helping lead Omaha to a third-place national finish in 1989–90. He then went on to play at Bemidji State University, where he helped the Beavers capture back-to-back NCAA Division II National Championships in 1993 and 1994. During the 1993–94 season, he led BSU in goals, assists, and points, and earned Titan Small College Second Team All-American honors.