Mesaba MISO Delivery Study –> FAILED
August 24th, 2006
Above: Mesaba plan – October 25, 2005, DOE meeting                                             Way below: More Mesaba articles!
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Here is a MISO study powerpoint from the MAPP NM-SPG meeting last week:
nm-spg-mesabi-update081606-1.ppt
You can also find this study and others at www.mncoalgasplant.com (give us a couple days to get everything posted!)
More humorous stuff. The prior G477 MISO study of the East site interconnection said it couldn’t be interconnected — that if it was, only 90MW of the electricity could be delivered, and therefore, it FAILED.
Now this study, G519 revisited, comes out. There have been I think three versions of G519, and the prior one I’d read was silent as to whether the electricity was deliverable to market, and this powerpoint shows that the West site FAILED too!!! They can’t generate it on the West site and deliver it to Xcel territory. awhhhhhhhh…
They couldn’t connect this thing even if they wanted to… what will it take for them to get the message that the stars are not lining up for this site? For this project?
Here are the editorials from this weekend’s Grand Rapids Herald Review:
Editor:
There is growing community opposition to the proposed coal gasification plant on the Scenic Highway near Taconite. Lately, every time I open the paper, a new letter expresses concern over some aspect of this project. Several of my friends and neighbors are involved with Citizens Against the Mesaba Project, and I have subsequently learned a lot about the Mesaba Energy Project and Excelsior Energy.
Initially, Excelsior Energy made their proposal to the city of Hoyt Lakes soon after LTV shut down. The East Range region was desperate to replace the 1,400 lost jobs, and the 1,000 jobs promised by the Mesaba Project couldn’t have come at a better time for a community suffering from such a blow.
However, before very long, the number of permanent jobs promised by Excelsior Energy decreased to about 600, and Excelsior representative began talking about Mountain Iron as a preferred site. This site was closer to people’s homes, and local citizens expressed strong opposition. It seems that the people of Hoyt Lakes still have no idea why the preferred site moved west, and now it has come even further west with only about 100 permanent jobs expected.
In my opinion the total benefit to Itasca County seems to be minimal and comes at great financial risk to taxpayers. I believe there are also significant environmental and health concerns we should all be aware of.I encourage everyone to learn more about this project at www.camp-site.info. Please attend the Department of Commerce public scoping meeting Tuesday, Aug. 22 at the Taconite Community Center. Your concerns will be taken into consideration as a matter of public record.
Glenn Perry
Bovey
And one from Delores White:
Legislators should have done the research
Editor:
Itâ??s my understanding that it has been a few years since Tom Micheletti first proposed to the Legislature that Excelsior Energy be given the necessary legislation to put a coal gasification plant on the Range. This would indicated to me that the Department of Natural Resources and the Pollution Control Agency would have had time to do a feasibility study in order that our leaders could make an informed decision on this matter. If there were studies done, why doesnâ??t the public have access to those studies? Why does the public have to do its own research to get information and answers? The only information we are getting is from Excelsior Energy and anything they tell us has to be sorted out to get accurate information.
Shame on our legislators if they did not research this proposal before allowing this plant to reach this stage in permitting.
Delores White
Bovey
From the Timberjay – the online version is confusing, large parts are repeated, but here is what I think it’s supposed to look like:
Thursday, August 24, 2006Â Â Â Â Volume 17, Issue 33
By Marshall Helmberger
Should the Iron Range become home to a series of large coal gasification power plants, to produce electrical energy for the Upper Midwest? Are Iron Rangers willing to accept the industrial development, the powerlines, and the associated environmental costs of such projects if it means more jobs? And are other Minnesotans willing to pay more for electricity to make those jobs possible?
Those are just some of the questions at the heart of the debate over Excelsior Energyâ??s proposed Mesaba Energy project, which could be built near Hoyt Lakes or near Taconite, depending on decisions made by the stateâ??s Public Utilities Commission over the next year.
That proposal, which calls for phased construction of two 600 megawatt power plants, will be the subject of a public comment session at the Hoyt Lakes Arena this Thursday, Aug. 23, beginning at 7:00 p.m. The comments are being sought as part of the scoping for an environmental impact statement on the proposal. A similar comment session will be held Wednesday, Aug. 22, at the Taconite Community Center, also at 7 p.m.
Excelsior Energyâ??s proposal to build the nationâ??s largest coal gasification power plant to date, has attracted widespread political support in St. Paul and in the nationâ??s Capitol, and that support has brought a slew of special legislation that gives the company unprecedented rights and guarantees. Supporters say the project fits well with the Bush administrationâ??s goal of developing so-called clean coal technologies, like coal gasification, that have the potential to sharply reduce harmful power plant emissions, such as sulfur dioxide, mercury, and carbon dioxideâ?? believed to be a leading contributor to global climate change. The project, with backing from the White House and Sen. Norm Coleman, has received $800 million in federal loan guarantees that supporters say are critical if the $1.97 billion project is ever to be built.
Closer to home, the state Legislature has exempted the project from requirements that force other utilities to prove thereâ??s a need for the power they plan to produce, and even passed a law that requires the stateâ??s largest electrical utility, Xcel Energy, to buy the power generated by the plant. The Legislature also granted Excelsior eminent domain authority that will allow the private company to push large new powerlines across private property, with or without approval from landowners.
State Sen. Tom Bakk, a strong supporter of the project, said the legislative incentives were needed to ensure that the plants were located on the Iron Range. Bakk said he believes new base generating capacity will be needed in the Upper Midwest over the next 20 years, and he sees Mesaba Energyâ??s plans as one way to meet that need, while bringing jobs to the Iron Range at the same time.
Bakk said he sees the project as an opportunity for diversification of the Iron Range economy, which has tended to rise and fall with the health of the iron mining industry. And while power plant proposals typically generate significant public opposition, Bakk doesnâ??t think that will happen here. â??Itâ??s an area thatâ??s comfortable with smokestacks,â? he said.
Opposition is growing
But some are more comfortable with smokestacks than others, and a growing number of critics say the project is a poor fit on the Iron Range and is an unwelcome detour on the stateâ??s path towards a more decentralized energy system that focuses on smaller scale projects and more renewable energy sources.
Thatâ??s one of Jim Bernsteinâ??s primary complaints. Bernstein, who served as Commerce Commissioner in the Ventura administration, helped draft the stateâ??s current energy roadmap. He says the Mesaba Project represents a wrong turn for a long list of reasons, and thatâ??s why Bernstein recommended against the project when Excelsior Energy co-founders Tom Micheletti and Julie Jorgenson first brought the idea to him in 2002.
Among Bernsteinâ??s objections was the fact that the energy wasnâ??t needed on the Iron Range, which meant any power produced there would have to be transported to the Twin Cities through construction of a major new powerline through the stateâ??s recreational heartland. Such power lines not only lose power along the way, they are incredibly expensive and generate huge amounts of public opposition. Bernstein said all those factors weighed heavily against siting the project on the Iron Range. â??If Minnesota Power had come to me and said they needed the power on the Range, it would have been a totally different story,â? he said.
The high cost of powerline construction will ultimately be paid by Xcelâ??s customers, notes Bernstein, and that is likely to come in the form of a substantial rate increase for the majority of the stateâ??s residents.
Bernstein said decisions on where and when to site new power generation should be made based on objective criteria, such as need, cost, and environmental factors, rather than a political desire to create jobs. â??When Tom Micheletti first approached me, he sold it as job creation for the Iron Range. It was all about jobs,â? he said. Bernstein said he thinks the jobs potential has been oversold. â??They started out talking about more than 1,000 permanent jobs, but thatâ??s been steadily scaled down,â? Bernstein said.
In filings with the stateâ??s Public Utilities Commission, the company is now projecting 107 permanent jobs in the projectâ??s first phase.
Sen. Bakk said heâ??s not surprised by the latest jobs number, given the highly automated nature of modern plants. â??Thatâ??s the number I kind of expected. I toured a similar coal gasification plant in Terra Haute [Indiana], and there werenâ??t many people there.â? But Bakk said construction jobs would be another benefit of the project as well as potential spin-off jobs for vendors serving the plant.
Environmental pluses and minuses
To Ed Anderson, a Grand Rapids physician and a member of Citizens Against the Mesaba Project (CAMP), the trade off of jobs for environmental damage is a poor one for residents of the area. Anderson is also a member of a citizens advisory task force that was recently appointed by the Department of Commerce to provide input on the Mesaba Project.
â??When you look at all the issues, and see the costs involved versus the jobs theyâ??re now talking about, we just feel itâ??s not in balance,â? he said. While Anderson acknowledges that the air emissions of the plant would be less than with a conventional coal-fired plant, he notes it would still entail about 5,000 tons per year of pollutants, ranging from particulates to sulfur dioxide. Anderson said little is known at this point about the public health impacts of those emissions. â??The reality is that there are going to be emissions, and increased illness here,â? Anderson said.
Sen. Bakk believes the environmental pluses of the project outweigh the negatives. â??Environmentally, this is a very good project,â? said Sen. Bakk. â??The emissions are significantly less than with a conventional coal plant. Some numbers Iâ??ve seen show a 90 percent reduction. Thatâ??s why the federal government has put money towards it, to try a new technology.â? Besides lowering emissions, coal gasification allows for the capture of carbon dioxide emissions, which is seen as a major step forward in efforts to control global climate change.
Ross Hammond, P.E., the former manager of NSPâ??s Riverside power plant in St. Paul, agrees that coal gasification has real potential. Hammond now works for Fresh Energy, a Minnesota-based organization that promotes energy efficiency and renewables.
â??I like the technology,â? said Hammond, â??but it has to be built in the right place in the right way.â? The right place, according to Hammond, is near geologic formations that allow carbon dioxide captured in the gasification process to be pumped underground, where it wonâ??t contribute to climate change. â??Northeastern Minnesota is one of the worst places to do that,â? he said, because the hard bedrock in the region wonâ??t absorb the carbon dioxide. That means carbon dioxide produced by a plant on the Iron Range will most likely be emitted to the atmosphere, said Hammond, negating one of the key advantages of the new technology.
Sen. Bakk agreed that the sequestering the carbon dioxide is an important goal, but he said he is unaware of whether or not that might be possible for a plant located on the Range.
State Sen. Tom Bakk, a strong supporter of the project, said the legislative incentives were needed to ensure that the plants were located on the Iron Range. Bakk said he believes new base generating capacity will be needed in the Upper Midwest over the next 20 years, and he sees Mesaba Energyâ??s plans as one way to meet that need, while bringing jobs to the Iron Range at the same time.
Bakk said he sees the project as an opportunity for diversification of the Iron Range economy, which has tended to rise and fall with the health of the iron mining industry. And while power plant proposals typically generate significant public opposition, Bakk doesnâ??t think that will happen here. â??Itâ??s an area thatâ??s comfortable with smokestacks,â? he said.
Opposition is growing
But some are more comfortable with smokestacks than others, and a growing number of critics say the project is a poor fit on the Iron Range and is an unwelcome detour on the stateâ??s path towards a more decentralized energy system that focuses on smaller scale projects and more renewable energy sources.
Thatâ??s one of Jim Bernsteinâ??s primary complaints. Bernstein, who served as Commerce Commissioner in the Ventura administration, helped draft the stateâ??s current energy roadmap. He says the Mesaba Project represents a wrong turn for a long list of reasons, and thatâ??s why Bernstein recommended against the project when Excelsior Energy co-founders Tom Micheletti and Julie Jorgenson first brought the idea to him in 2002.
Among Bernsteinâ??s objections was the fact that the energy wasnâ??t needed on the Iron Range, which meant any power produced there would have to be transported to the Twin Cities through construction of a major new powerline through the stateâ??s recreational heartland. Such power lines not only lose power along the way, they are incredibly expensive and generate huge amounts of public opposition. Bernstein said all those factors weighed heavily against siting the project on the Iron Range. â??If Minnesota Power had come to me and said they needed the power on the Range, it would have been a totally different story,â? he said.
The high cost of powerline construction will ultimately be paid by Xcelâ??s customers, notes Bernstein, and that is likely to come in the form of a substantial rate increase for the majority of the stateâ??s residents.
Bernstein said decisions on where and when to site new power generation should be made based on objective criteria, such as need, cost, and environmental factors, rather than a political desire to create jobs. â??When Tom Micheletti first approached me, he sold it as job creation for the Iron Range. It was all about jobs,â? he said. Bernstein said he thinks the jobs potential has been oversold. â??They started out talking about more than 1,000 permanent jobs, but thatâ??s been steadily scaled down,â? Bernstein said.
In filings with the stateâ??s Public Utilities Commission, the company is now projecting 107 permanent jobs in the projectâ??s first phase.
Sen. Bakk said heâ??s not surprised by the latest jobs number, given the highly automated nature of modern plants. â??Thatâ??s the number I kind of expected. I toured a similar coal gasification plant in Terra Haute [Indiana], and there werenâ??t many people there.â? But Bakk said construction jobs would be another benefit of the project as well as potential spin-off jobs for vendors serving the plant.
Whatâ??s next?
While the political stars may have aligned for the Mesaba Project, it now faces what could be a far more difficult process as it seeks to negotiate a power purchase agreement with Xcel Energy and wade through the lengthy siting and permitting process established by the Public Utilities Commission. Excelsior filed its formal application with the PUC on July 6, which starts the clock ticking on a one-year deadline for final action by the state agency.
The power purchase agreement is likely to be the most critical step in the process. All sides agree that without that agreement, the plant has no future. While the Legislature passed a law entitling Mesaba to a power purchase agreement, the legal wrangling over the meaning of that legislation continues. â??Itâ??s certainly a bone of contention,â? said Janet Gonzalez, an attorney with the PUC. The controversy was only exacerbated by Excelsiorâ??s decision to seek approval for two 600 megawatt plants, while the legislation only authorizes a purchase agreement for 450 megawatts. According to Gonzalez, the PUC could order Xcel to buy the extra power from Mesaba, but only if it determines that the electricity generated there represents the least costly optionâ?? a test few believe Mesaba will meet.
Currently, the purchase agreement is the subject of a contested case hearing before an administrative law judge. Both sides should have an initial round of testimony into the judge by Sept. 5, but final PUC action on the matter isnâ??t likely to be completed until March, 2007. The PUC has the authority to accept, reject, or modify any agreement reached by the two sides.
And if the proposal does move forward, the PUC will decide where the plant will be built. While Excelsior has indicated it prefers the Taconite location, the PUCâ??s Bob Cupit says that his agency currently considers both sites to be viableâ?? and that the final decision will likely come down to overall cost. â??We assume that either site could be designated at the end of the process,â? he said.
Here’s Marshall Helmberger’s very thoughtgful Editorial about the Mesaba Project:
Marshall Helmberger – Photo from MPR site
Whatâ??s the value of 100-200 permanent jobs on the Iron Range? Some would no doubt call them priceless, and advocate anything that offered good paying employment in the region.But we all know that everything good comes with a cost and smart consumers know to look before they leap. We wouldnâ??t buy a new car without knowing the price tag and we sure as heck shouldnâ??t buy a power plant without understanding the full implications of our decision.
Unfortunately, that appears to be what the Legislature, Gov. Tim Pawlenty, and Sen. Norm Coleman have done with Excelsior Energyâ??s proposal to develop a series of large coal gasification power plants on the Iron Range. While even critics agree that coal gasification has tremendous promise as a way to burn coal with far fewer emissions than conventional power plants, those stack emissions are just one piece of a complex and incredibly expensive project that will have implications not just for employment on the Iron Range, but for Minnesotaâ??s energy future.
If judged by the standards set for all other power plants in Minnesota, Excelsiorâ??s $2 billion-plus Mesaba Energy Project would have never advanced past the drawing board. But politics has overruled questions that would have normally derailed this project early on. Excelsior co-founders Tom Micheletti and Julie Jorgenson understood the allure of economic development on the Iron Range and used what now appear to be inflated promises of as many as 1,000 permanent jobs to build a case for their project, based on political appeal rather than sound economic and environmental considerations.
The stateâ??s other utilities have said they donâ??t need or want the power Excelsior proposes to generate, so the state Legislature passed a law requiring Xcel Energy to buy it whether they need it or not. When critics pointed out that the private sector would never invest in such a high-risk project (the first of its kind in the nation) located hundreds of miles from those who are supposed to use the power, Sen. Norm Coleman brought $800 million in federal loan guarantees to the table. While such political intervention has increased the odds that the plant will be built, it wonâ??t make the plant a better fit with Minnesotaâ??s current energy roadmapâ??which emphasizes decentralized power generation and renewablesâ?? nor will it make the power it generates any more affordable for customers.
We may eventually learn that this proposal is financially viable, but at this point we donâ??t know how much it will cost to produce the power, or to transmit it hundreds of miles to the users of that energy. We do know it is almost certain to cost more than Xcel Energy currently pays for power, which means that jobs on the Iron Range will come with a potentially hefty price tag for customers of the stateâ??s largest utility. Until we know how big that price tag will be, it is irresponsible for the Legislature to force Xcel Energy to buy power from Mesaba.
Creating those jobs on the Range will also come at a huge personal cost for the hundreds of landowners in central and northeastern Minnesota, who will lose homes and recreational property to make way for the massive new powerline this project will entail. We all know from the stateâ??s earlier powerline battles, how contentious and divisive the use of eminent domain can be. If the energy being transmitted along a new power line were desperately needed in the Twin Cities, that would be one thing. But this isnâ??t about need, itâ??s about politics, and those 100-200 permanent jobs on the Iron Range.
Those jobs will carry a toll as well for those who want Minnesota to tap more of its wind energy potential. A preliminary study of the projectâ??s impact to the stateâ??s power distribution system has already indicated that it could require the state to reduce its commitment to wind energy, to prevent imbalances in the grid. That would cost jobs in parts of western Minnesota and limit the financial windfall that wind power has offered to many struggling farmers in that region.
And while coal gasification can reduce the emissions normally associated with coal-fired power plants, it canâ??t meet the environmental benefits of our best energy source, which is conservation. Investing $2 billion in energy efficiency technologies would produce far more employment in Minnesota and leave the state further down the path towards energy independence. Thereâ??s no coal mined in Minnesota, so every pound of coal burned in a Minnesota power plant represents more dependency and more dollars shipped from the state. Every watt we can produce in homegrown alternatives or save through more efficient lighting and industrial operations is like money in the bank.
Thereâ??s no doubt that good jobs are needed on the Iron Range, but at what point do we say the price is too high? The potential for higher rates and lost jobs in other parts of the state puts the onus on Excelsior Energy to prove this makes sense. Until we have the answers to these and many other questions, the jury should remain out on the wisdom of the Mesaba Energy project.
Dog, dog, dog… Oh, my Dog!
August 24th, 2006
Huh… It seems I’ve been booted off the northfield.org aggregator (aggravator?) list because I’ve violated their guidelines by using an expletive undeleted in the headline of a prior post! That’s verboten in their guidelines! Guidelines? What guidelines? I didn’t get any guidelines when I got the blog on April 9, 2005, I wasn’t ever sent guidelines or referred to guidelines. I never signed any agreement of any sort. I never requested to be aggregated on terms that included guidelines and for sure never requested to be aggravated! Turns out they’re posted on the northfield.org site, under the headline of “Submit a blog to our Blogosphere” in the “Submit News or Pictures” section, and that was posted a couple of months ago. Apparently this wasn’t the first time I’d violated their “guidelines” and I wasn’t told then… oh, did I mention, my blog was removed without a word to me or explanation of why! No warning, no communication at all! WTF? I guess it’s “Northfield Nice” and they don’t want to know what I might have to say, might not want to be reminded that no one had ever told me that there were guidelines or where to find them. When I started, I got a blog in a short email from Griff, the site and a password, zero instruction, answers to I think three questions total, until they discontinued “hosting” blogs a couple months ago and I switched. No terms of service, no contract, no nothing…
Is this any way to run a blogosphere?
Great meeting in Taconite!
August 23rd, 2006
This is the line waiting to get into the meeting!Â
Like WOW! The public comment hearing on Excelsior’s Mesaba plant near Taconite was just about perfect. Standing room only again, but this time in a big gymnasium!
Specific comments, positive clear statements, couldn’t ask for much more. CAMP had a display room. Maybe now Excelsior Energy will start getting that the West Site is not going to fly.
MPR on Excelsior/Mesaba today
August 22nd, 2006
Check out the MPR piece today on Excelsior’s Mesaba project and water…
Excelsior Energy debate goes to the public
Tonight’s the public hearing for Comment on scope of EIS:
MINNESOTA DEPT. OF COMMERCE PUBLIC MEETINGS ON
MESABA COAL PLANT ENERGY PROJECT
Tuesday, August 22nd, 2006 at 7:00 pm
(info session starts at 4pm)
Taconite Community Center
26 Haynes Street
Taconite, MinnesotaWednesday, August 23rd, 2006 at 7:00 pm
(info session starts at 4 pm)
Hoyt Lakes Arena
102 Kennedy Memorial Drive
Hoyt Lakes, Minnesota
DOC will conduct two public scoping meetings in which agencies, organizations, and the general public is invited to present oral comments or suggestions with regard to the range of alternatives and environmental issues to be considered in the EIS.
Again, here’s a Comment form you can use: commerce-eis-scoping-comment.pdf
See you tonight!
Micheletti goes overboard again!
August 21st, 2006
WOW! 3,781 words, and Senators up for re-election “signed” on to this. They may think they’re doing the right thing, but I hear Micheletti talking. They know from being “author” and “co-authors” of the original bill that it’s bait & switch. And they certainly wouldn’t be so defensive in writing this! Not only that, but in my humble legal opinion, it’s an unmitigated load of crap! I’ll work on a few evidentiary links, to be posted soon. 3,781 words, who needs more evidence…
This was in Sunday’s Hibbing Daily Tribune, a “Guest Editorial”
Sen. David Tomassoni is a chief author of the legislation that has enabled the Mesaba Energy Project to be developed on the Iron Range. Sen. Tom Saxhaug and Sen. Tom Bakk
co-authored the legislation.
The Mesaba Energy Project (Unit One ) is a 606 megawatt IGCC (Integrated Gasification Combined-Cycle) power plant under development on a site already zoned industrial near Bovey. All Iron Range/Arrowhead legislators have scrutinized the details of this project and support it because it will bring significant economic development and environmental benefits to the Range while supplying critically needed new power generating capacity for Minnesota.
There have recently been articles and letters in some Range papers that have contained false and misleading information. While there are always pros and cons to any proposed new development on the Iron Range, we would like to make sure that our constituents are fully informed about the Mesaba Project and allowed to form their own views based on true facts.
The project is an important component of national energy security plans. Rapid adoption of the IGCC technology is a national energy security priority that has broad, bipartisan support in Congress. IGCC is one of few means we have at our disposal to reduce reliance on foreign energy imports. The technology provides a means to use coal, our nationâ??s most abundant fuel, while protecting our environment. The Mesaba Project was selected for funding in a competitive solicitation by the U.S. Department of Energy, as the culmination of a two decade program to develop and commercialize coal gasification. According to the DOE, the Mesaba Energy Project is a stepping stone to the FutureGen plant, which will be the worldâ??s first coal power plant to have near-zero emissions.
Minnesota policy makers, by passing enabling legislation for the project, secured the right to have a groundbreaking national showcase located on Minnesotaâ??s Iron Range. We certainly need the jobs and investment the Mesaba Project will bring, and our workforce has the skills to construct and operate clean base load power plants to meet our regionâ??s every-growing electric supply needs. The electricity blackouts and brownouts recently on both coasts, and the energy supply warnings from our own Midwest grid operator, should be ample warning to us all about the need to plan for capacity to meet our needs.
The project supplies Minnesota with needed power generation that will be stably priced and avoid putting pressure on natural gas supplies. Minnesota has a need for 3000-6000 megawatts of new base load power generation in the next 15 years, after maximizing all feasible new renewable power generation additions and conservation. This need equals 10 Mesaba projects! If the State does not find a way to use coal to meet this growing demand, consumers will pay for very expensive electric power generated from natural gas-fired power plants. Homeowners and businesses are already experiencing the increasing and volatile costs for natural gas they use for home heating and commercial production. If new coal facilities are not built, Xcel Energyâ??s demand for natural gas will increase from 2 percent of statewide demand in 2004 to approximately 20 percent of statewide demand in 2011. Range consumers will feel the results in their pocket books as we compete for scarce natural gas supplies to keep our homes warm, our grocery stores open and our taconite plants operating.
The project will change how coal is used for power generation, with an advanced process that cuts emissions by 2/3 or more. The IGCC technology reduces emissions by 2/3 from those of the next best clean coal technology on the market. Its emissions are 1/1000 of the emissions of some existing coal plants in Minnesota. It will be the first coal plant in the country to remove at least 90 percent of all mercury from the coal. Sulfur in the coal is removed in 99.9 percent pure form that can be marketed for fertilizer production rather than producing scrubber sludge which must be landfilled. Instead of producing ash that must be landfilled, the IGCC process produces a marketable aggregate substitute that can be used in road construction. Other environmental benefits include a much smaller plant footprint and greatly reduced water consumption from the process. The project is readily adaptable to a retrofit that will avoid emitting carbon dioxide, through a planthat can be implemented in the event that greenhouse gas limits are imposed by Congress in the future.
Excelsior Energy, the sponsor of the project, has recently filed more than 2,000 pages of detailed information about the project in its application for environmental permits. Those filings are on file in every public library on the Iron Range. In addition, Excelsior held a public meeting a few weeks back in Marble, at which a dozen representatives of Excelsior were on hand to answer residentsâ?? questions about the project. Many additional meetings will be held to obtain public input in the permitting process, and a citizensâ?? advisory committee has been formed that includes many local residents.
These efforts will help to fully inform citizens about the facts concerning the project so that each form their own, informed view on the project. Below are corrections to somerecent factual mischaracterizations of the project.
Myth: The project poses unacceptable operating risks that will somehow harm taxpayers, ratepayers or the environment.
Fact: Three large companies with extensive experience in the IGCC industry will construct and guarantee the operating and environmental performance of the plant. Fluor is one of the worldâ??s largest publicly owned engineering, procurement, construction and maintenance services companies serving the power industry. In recent years, Fluor has built coal-fired and natural gas-fired power plants with a total capacity of more than 12,000 MW. Siemens Power Generation is one of the worldâ??s largest companies serving the power industry. It manufactures a wide array of power generating equipment and develops, constructs and operates power plants for utility and industrial customers. ConocoPhillips, the licenser of the IGCC technology for the project, is one of the worldâ??s largest energy companies. The Wabash River plant is the prototype for the facility, and has demonstrated the reliability and environmental performance of the technology to the satisfaction of the U.S. Department of Energy. Under the power purchase agreement, consumers only pay for electricity that is actually produced by the plant.
Myth: The project has received hundreds of millions of dollars in subsidies, which is somehow an indication that it is a bad idea for Minnesota.
Fact: The project has secured $36 million in loans from the U.S. Department of Energy by being selected in a competition that included some 20 proposed projects from throughout the country. The projects were analyzed by a score of energy experts at the DOE. In fact, Minnesota Power also submitted a request for funding of a coal gasification project, but the Excelsior proposal won out. Excelsior has also secured a total of $9.5 million in loans from Iron Range Resources, which accrue interest at 20% annually. Both of these sources will be repaid at start of construction. In addition, the project was selected by the state Public Utilities Commission to receive $2 million per year for five years from the renewable development account, for which the legislation we worked to enact made it eligible. All of these funds help pay the significant up front engineering, permitting and development costs associated with a clean coal technology project. These costs are one of the key barriers to entry of the IGCC technology and the project will pave the way for other similar facilities around the country and the world, which will displace pollutingconventional coal plants.
In addition, the Mesaba Project was made specifically eligible for a federal loan guarantee under the Energy Policy Act of 2005, which was supported by our two United States senators and Congressman Oberstar. This guarantee will reduce the cost paid by consumers for advanced clean coal power so that it is the same as the cost of power from a conventional coal plant. Minnesota and the Iron Range in particular, are fortunate that Congress has specifically identified the project to receive this important benefit thatwill allow Minnesota to be the national leader in deploying advanced coal technology.
Myth: The project will not have a market for its output, which is expensive.
Fact: Even though the project uses advanced technology that would normally be somewhat more expensive than a conventional coal plant, the cost of power from the project will be the same as the cost from a new, traditional coal plant with much higher emissions. This is because of the projectâ??s selection for the very federal subsidies that critics of the project donâ??t like. The Minnesota Legislature and the governor enacted legislation in 2003 that entitles the project to a long-term power sales contract with Xcel Energy, and requires that it be considered as an alternative to all fossil fuel power plants proposed by Minnesota utilities. The Minnesota legislature and the federal government have repeatedly enacted such mandates when utilities have been slow or unwilling to support innovation. Without such mandates, we would not have any wind or biomass projects, such as the cities of Hibbing and Virginia are developing. Similarly, without mandates, the Blandin/UPM papermill and Boiseâ??s mill in the Falls would not have been able to build their cogeneration plants which provide them with lower cost steam and electricity. Similarly, replacing proposed natural gas and conventional coal fired generation with IGCC will provide cleaner, cheaper and more stably priced electricity for consumers. The proposed power purchase agreement is pending for approval at the Minnesota PUC. In support of this approval, Excelsior has filed the most detailed project description andcost analysis ever undertaken in connection with such a proceeding.
Myth: The projectâ??s unique capability to be adapted to capture and store carbon dioxide, rather than emitting it into the atmosphere, is a drawback.
Fact: Detractors who criticize the carbon dioxide emissions of the plant are missing the point. The project and IGCC are integral parts of the solution to the global climate change problems of greenhouse gas emissions from power generation â?? the global warming problem we are hearing so much about these days. All coal and natural gas-fired power plants emit carbon dioxide, but the IGCC technology is the only one with an identified means to avoid carbon dioxide emissions. Professor Daniel P. Schrag, a nationally acclaimed Ph.D. geologist and professor in the earth and planetary sciences department at Harvard who heads up Harvard Universityâ??s interdisciplinary Center for the Environment, has filed testimony at the Minnesota Public Utilities Commission in support of the Mesaba Project that details the critical role the Mesaba Project and IGCC must play in anymeaningful solution to greenhouse gas emissions from power generation.
Myth: The project has the ability to exercise eminent domain without state oversight and
the cabins of the landowners who object to the project will be condemned.
Fact: The project has very limited eminent domain rights, only for sites and routes selected by the Minnesota PUC as those that minimize societal and environmental impacts.
These impacts are detailed in more than 2,000 pages of information filed with the PUC as part of the projectâ??s environmental permitting effort. The project as proposed will not need to condemn any cabins or homes.
Myth: State and federal regulators are not adequately regulating the project.
Fact: The Mesaba Project must obtain approximately a dozen material preconstruction site and federal permits and prove that it can satisfy extremely rigid emission and discharge criteria. Excelsior Energy must obtain numerous other state and local permits in connection with the construction and operation of the project. As part of this permitting process, the project has filed more than 2,000 pages of detailed analysis about projectimpacts, prepared through more than two years of engineering and environmental analysis.
Its application for those permits, which is pending before the federal agencies, the Minnesota PUC, Pollution Control Agency, DNR and other review authorities, is a one year process with many public hearings and opportunities for input. The U.S. Department of Energyâ??s National Energy Technology Laboratory is also conducting a federal Environmental Impact Statement process that also provides opportunities for public input.
Myth: The projectâ??s exemption from certificate of need gives it a free pass and the power is not needed.
Fact: All regulators and utilities in Minnesota acknowledge that there is a critical need for new base load power generation facilities in the range of 3000-6000 megawatts in the next 10-15 years. In recognition of the fact that Minnesota utilities were being slow to act and were not offering innovative solutions to meet our needs, the Legislature in 2003 recognized the urgent need to get on with a solution to our growing power needs and a cleaner way to produce electricity, and provided the Mesaba Project with some regulatory incentives to build the project on the Iron Range. If the project does not come online in a timely manner, Minnesota will use massive amounts of natural gas for power generation, exposing ratepayers to the volatile and rising costs of this limited resource. Burying ourheads in the sand and ignoring this need will not keep the lights on.
Myth: Wind energy can meet all of Minnesotaâ??s future energy needs.
Fact: Wind and other renewables should and will play a key role in Minnesotaâ??s energy needs; but it is not the only solution. A diverse combination of renewables, conservation and coal-based technologies will be needed to meet the stateâ??s growing energy needs. The integrated gasification combined cycle (IGCC) technology of the Mesaba Energy Projectoffers an excellent way to use coal with greatly-improved environmental performance.
Myth: The project has been relocated from the East Range to the West Range in violation of the legislation that enabled the project to be developed.
Fact: The legislation specifically provides that the project can be located on up to three sites on the Iron Range and does not specify where those sites must be located. Excelsior has proposed a site on the West Range and a site on the East Range, but recommends the West Range site for the initial plant facilities. The ultimate site selection is made by the Minnesota PUC. Minnesota officials specifically requested that Excelsior give up its original proposed site on the former LTV mining site so that its ore processing facilities â?? which are not useful to the project â?? could be used by the Mesaba Nugget and Polymet copper-nickel projects. The West Range site, which is zoned industrial and is amid taconite tailing dumps visible in all directions, has access to two rail lines, a transmission corridor, water resources and a natural gas pipeline, making it extremely suitable for the project with relatively minimal interconnection and upgrade expenditures.
Myth: Itasca County, Nashwauk and Taconite are spending county and city taxpayer dollars on ill-advised infrastructure investments to support development of the project, and the project will end up costing the Range money.
Fact: The idea that a project that will bring more than $1.5 billion of investment to the region will be a drain on the local government coffers probably doesnâ??t require too much of a response. All Range legislators worked hard to get the funds that are about to be expended by Itasca County and the cities of Nashwauk and Taconite included in last yearâ??s bonding bill by the State of Minnesota to support common infrastructure needs of the project and the Minnesota Steel Project. Itasca County will decide how those funds will be spent, and the cities and Itasca County do not have to repay those funds. $4 million may be expended for engineering and planning purposes prior to start of construction of either of the projects. The remaining funds will be expended only when private industry commits to spend more than $1 billion, in the case of Minnesota Steel, and more than $1.5 billion,in the case of the Mesaba Project.
The project is likely to provide more than $1 million per year in real estate taxes to Itasca County, in addition to the new tax base that will be created as result of the projectâ??s construction and operation. This fact is borne out in a comprehensive economicimpact analysis completed by the UMD Business School.
Myth: The project has significant impacts on the environment near the site.
Fact: Nearly all pollution deposited in Minnesota comes from out of state sources. This includes mercury. The project represents a huge improvement in environmental impacts from using coal for power generation, as coal is not burned in the projectâ??s IGCC process. Instead, the coal is converted to a gas, from which nearly all impurities are cleaned prior to using the gas as fuel to generate electricity. The project will lead the way in ensuring that future power plants nationwide do not use older polluting technologies â?? which is the only meaningful way to improve Minnesotaâ??s natural environment. The project will be the first in the world to remove nearly all mercury from the coal, as well as virtually all sulfur and particulate emissions that are associated with respiratory and other health problems, and these benefits will be multiplied by future plants in Minnesota and elsewhere. If the project is not built, conventional coal plants will be built (probably on sites outside of Minnesota) to meet demand and the adverse human health impacts identified by the projectâ??s opponents will be much greater than if the project is built.
Myth: The project will not provide meaningful jobs to local residents.
Fact: According to the University of Minnesota – Duluth, the project will provide over 1,000 high-paying jobs at the peak of construction and almost 3,000 full-time, part-time and temporary jobs for each unit of the project (two units are being permitted, which alone would entail a 6-8 year construction period). During the 30 years or more of operation, about 110 permanent, full-time equivalent, direct jobs will be required to operate the first unit of the project, and an additional 80-90 permanent jobs when the second unit becomes operational. UMDâ??s economic impact study further confirmed a largenumber of additional indirect jobs associated with the construction and operation of the plants.
Myth: The project will diminish property values in the region.
Fact: The direct investment in the project will stimulate the local economy. Each unit of the project will bring more than $1.5 billion of private industry investment to the Iron Range. Common sense alone would indicate that property values increase in the vicinity of major power plant developments. Take a look at Grand Rapids and Bass Brook Township when Boswell Unit 4 was built. Or ask the residents of the city of Becker, Minn., when NSPâ??s Sherco unit was built in the mid-1980s. Residents of these areas will confirm the huge economic boost brought by these projects. The Mesaba Projectâ??s clean profile will add to these benefits. The projectâ??s IGCC technology will make the region a showcase for this important technology. The UMD study forecasts that in addition to the direct spending to build the first unit of the project, the project will entail $300 million indirect spending on operations during a typical year and a recurring $60 million in increased indirect spending across the Arrowhead region and $91 million throughout the state during the operating life of the project.
Myth: The projectâ??s operations will reduce wind power generation and negatively affect the stateâ??s transmission resources.
Fact: This is just plain false. The state needs new base load power plants even after we max out on development of wind resources, because the wind is not always blowing, particularly on the hot days off summer, when our power resources are stretched to the limit. Upgrades to existing transmission lines will be required for any new power generation resource in the Upper Midwest region, as the existing power grid is out of date and inadequate to meet the need for new power resources in Minnesota. The upgrades being planned by the regional grid authority (MISO) in conjunction with the project and other power projects will be cost effective and provide significant stability and other benefitsto the regional grid.
Myth: The projectâ??s use of Canisteo Mine Pit water is a negative.
Fact: The projectâ??s use of Canisteo pit water, which is close to overflowing, addresses a significant flooding risk for the town of Bovey. Further, because of similar flood problems, the state is currently paying to pump water out of the Hill Annex State Park pits, water that will also be pumped and used by the Mesaba Project. The cost of managing the rising pit water levels in the future will be covered by the project instead of state or local taxpayers.
Myth: Excelsior is just a â??small group of lobbyists.â?
Fact: Excelsiorâ??s senior management team is comprised of eight senior power industry executives that have more than 150 years of combined experience in developing, financing, constructing and operating power plants.
Tom Micheletti, one of the co-CEOs of Excelsior (whose family has deep ties to the Iron Range), has significant experience as a utility industry senior executive at MinnesotaPower, NSP and Southern California Edison.
Julie Jorgensen, the other co-CEO, has considerable experience developing and operating power plants, most recently in the role of CEO of CogenAmerica, a successfully, publicly-traded company that provided power and steam to utilities and industrial customers throughout the U.S.
Both Tom and Julie are respected leaders in the power industry and have proven records of high integrity, community involvement and an interest in making things better on the Iron Range.
While Tom and Julie are indeed registered as lobbyists in the State of Minnesota (as is anyone who spends any time on legislative, permitting or regulatory matters), what is so bad about talented people advocating for job creation and economic development on the Iron Range? And whatâ??s so bad about people who would lobby for a cleaner environment and propose an innovative solution to our electricity needs?
Now that weâ??re getting close to the approvals for the project and the start of construction, it is probably typical for detractors who have been unsuccessful over the past five years in drumming up opposition on the merits to pull out the stops, put a twist on good things, and say they are bad and play loose with the facts. But in the end, we know that citizens of the Arrowhead region will see through all the myths and false statements, and will support a project that we and all other Arrowhead legislators have worked so hard to make a reality over the past five years. If you have concerns about the project, we urge you to get the facts, and you will come to the same conclusion that we and many others have reached: The Mesaba Energy Project, especially once all three of its sites are developed, will be a major contributor to a cleaner environment and a better life for us all in Northeastern Minnesota.
Sen. David Tomassoni
Sen. Tom Bakk
Sen. Tom Saxhaug