Published February 3, 2008 in the Hibbing Daily Tribune

Iron Range stands at modern crossroads

By Aaron J. Brown

At the top of most lists stands the proposed Minnesota Steel plant near Nashwauk. Officials from India-based Essar Global recently told local leaders they expect financial close for their $1.6 billion investment in the project sometime in March, followed by construction. With hundreds of jobs and a lasting economic impact, this huge project is as close to reality as ever.

Meantime, just a few miles to the east, U.S. Steel announced a major expansion and environmental upgrade at their Keewatin Taconite plant Friday. Previously, the company had announced that their Iron Range taconite production was up in the last quarter of 2007, but down slightly for the year. A week earlier, news reports detailed a fine against U.S. Steel for environmental violations. It would seem that U.S. Steel is making an aggressive move to address both concerns.

Meantime, companies like Polymet and Franconia Minerals propose mining precious minerals on the East Range, a subject splashed across state headlines after a legislative hearing last week.

These are important stories not just because of the possible infusion of jobs, but because foreign and domestic companies are investing in the long-range future of mining in Northern Minnesota. Thus, our region could keep a continued economic base to finally achieve lasting diversification. However, this may be the last “up” cycle in the steel market for the Iron Range to truly modernize our economy and communities. To waste these good times could set us up for disaster during the next down cycle. This is no time for complacency or to allow poor judgment to cloud our real desire for jobs and prosperity.

So I come to another news-grabbing project on the Range. Excelsior Energy, a startup company run by lobbyists, proposes the $2.3 billion Mesaba Energy Project, a coal gasification plant to be built near Taconite. Project backers cite the plant as an innovative form of clean coal technology and another source of much-needed jobs on the Iron Range. And while this company continues to show masterful skill in spin, public relations and back room deals, it has continually failed to show exactly how it can build this plant or sell the resulting electricity.

Consider this: Mesaba can only be built if it has a customer and permits. Last summer and again in the fall, the state Public Utilities Commission denied a move to mandate Xcel to buy power from the yet nonexistent Mesaba plant, thus forcing Excelsior to find another customer. The power from Mesaba, even if produced at lowball estimates, would be too expensive to sell without additional subsidy. Existing power companies like Minnesota Power and Xcel plan to provide all the state’s electricity, including for new projects, without any additional coal plants.

Meantime, because of federal haze standards, permits are limited for projects near national parks like Voyageurs and the Boundary Waters. Many of the aforementioned mining projects are well ahead of Excelsior in the permit process. When Minnesota Steel and U.S. Steel get their permits officials estimate we will meet the maximum for the federal haze standard. That means that Excelsior might only get permits if they get federal laws changed.

In other words, Excelsior is “news” only because of massive federal and state handouts that feed their day-to-day operation. The Mesaba Energy Project can only be built with unprecedented regulatory shortcuts. Other coal gas plants have required government bailouts to survive which is why similar projects across the nation and world, including ones that ran experimental pilot plants, are being cancelled or suspended. When you consider the distant locations of coal, the equally distant locations for carbon sequestration, the limited markets for the power and the proximity of two major national parks, the Iron Range is among the worst possible locations for a power plant like this. The real reason the project was proposed here is our available government funds and willing minions from both political parties who carry literally every bill Excelsior asks them to carry, despite the project’s many problems.

So I am not interested in Excelsior officials’ bravado regarding pipeline permits or their paltry offers for public wastewater upgrades. Their promises ring hollow and their business plan exploits the sincere hopes of our people.

Meantime rural broadband internet is dismissed. Our health care system is inadequate. Our schools struggle to pay the bills even in good times. Why waste more time and money when real problems need solving?

Yes, there are many possibilities out there, but we Iron Rangers must consider the merits of each separately. So much of our children’s futures will be determined in the next few years, perhaps even the next few months on the Iron Range. Our economy, our health, our environment, our culture will all be shaped by our actions. We must not be passive witnesses to this important chapter in Iron Range history. We must grab hold of our own fate, encouraging development while defending the interests of Iron Range citizens – our schools, our roads and infrastructure, our tax dollars and the mining revenue dedicated to improving our corner of the world. An Iron Range that thrives in the future must be filled with people who make their own history, with feet planted in reality and hands reaching for opportunity. Real opportunity.

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