Major (and baffling) changes coming to Mesaba Energy Project?

Business North‘s Beth Bily is reporting that Excelsior Energy, an eight-year-old start up company, received some rather hushed assistance in the waning hours of this year’s legislative session from gubernatorial candidate Sen. Tom Bakk (DFL-Cook). It now appears the company is exploring the option of building a 100 mW natural gas peaking plant on the Iron Range instead of its original proposal of a much larger coal gasification (excuse me, Carbon Capture and Sequestration is the preferred term, or CCS) plant.

This whole thing is called the Mesaba Energy Project. It’s backed by a handful of deep insider energy industry lawyers and lobbyists, some with Iron Range roots. This blog and my columns have maintained a hugely skeptical position on this project, as it has the appearance of a sweetheart deal for a few energy insiders that exploits the economic desperation of the Iron Range and uses taxpayer dollars as most of its start up capital. You can catch up on my past writings here.

Anyway, it now looks like after Excelsior was shot down at the state Public Utilities Commission a couple months ago and found no customer since that they are taking another stab. No surprise that Bakk would be supportive, since he and everyone else at Iron Range Resources in 2001 and 2003 has had egg on their face over the structure of those $9.5 million in loans given to the project on little more than a concept and a mushy promise of repayment.

The glory of the Excelsior strategy is that to discuss the truth of the project is to dig so deep into minutia and use insider terms so vague that its hard to draw much attention from the media or public. This development is no exception and it’s perhaps fitting that this provision was ensconced entirely in back rooms during the legislative session.

Key questions that I’ll be exploring over these next few weeks:

  • How many jobs would a 100 mW peaking plant create compared to the 1,000 mW magic factory that was proposed back in 2001 when Iron Range Resources gave the first part of what would become $9.5 million in cushy loans? I’m betting not many at all, for the time, effort and money invested.
  • Why is Bakk doing stuff like this during a gubernatorial run?
  • Who is going to buy the energy from the natural gas plant?
  • Will someone, anyone, who voted for this thing just say “Sorry. We screwed up. We won’t do things like this again,” please? Write it in sanskrit and mail it to my house. I won’t tell anyone.

And it goes on and on.


  1. Your statement about the IRRRB sounds like their usual history.

  2. As to Excelsior Energy burning coal with a difficult (not yet successful in practice) technology – and now proposing a substitute project: natural gas turbine peaking plant, we may conclude that they have another solution looking for a problem.
    There is ample electric power on the Range already, provided by Minnesota Power.
    Mine-mouth coal power is wheeled into Minnesota from North Dakota by Great River Energy for 28 distribution cooperatives across the state.
    It is high time to kill the Mesaba idea, which was born out of the Hoyt Lakes-LTV taconite closing, years ago. Polymet is using this brown site and has a market ready for the metals in the nearby Cu-Ni-Pt-group orebody.

    – Gord Prickett, Aitkin County

  3. Anonymous says

    From what (little) I understand of the project, there is not much of a change to the technology. Turning the combined cycle gassification plant into a natural gas peaking plant is simply removing the electricity generation stages (probably including a gas turbine and a secondary steam turbines, I suppose).

    Early presentations from Excelsior indicated that gas peaking was a possible byproduct or alternative product depending on the economics. (by the way, I believe Hibbing PUC used to do this process many years ago at the site near the old L&M).

    For comparison, how much carbon is sequestered at Boswell or at the mine-mouth plants in the Dakotas? (quick answer: none!) How about the mercury, NOx, and other emissions per MWh compared to the proposed Excelsior plant?

    Stats on Boswell available at:

    Yes, it may be a boondoggle, but if so, argue on the economic merits.

  4. Who are you?

    In any event, I’ve been arguing about the economic (de)merits of this project for years. It’s a vast investment by the taxpayers, a huge risk and it won’t deliver as much as promised, if anything. The CCS process is still in an experimental phase and even if viable is probably not as viable in northern Minnesota as elsewhere because of our geology. The kind of natural gas that is compatible with the technology mentioned is more expensive than the commercial grade stuff most nat. gas plants use. This thing is just a self-perpetuating boondoggle.

    Keep in mind, that AS PROPOSED the Michelettis are proposing a “sequestration ready” project, not one that sequesters carbon. Without sequestration, we get a better deal out of the new Boswell technology than this stuff. Not that anything with coal is all that much to write home about, environmentally.

    But that’s insignificant. The whole thing is just a bad idea propped up by politics. It exists only as long as the public agrees to the delusion of its possibility.

  5. Anonymous says

    I fully agree. From the digging I’ve done, Aaron is right. This project is not justified nor a benefit to taxpayers of Minnesota. Good work..

  6. Anonymous says

    Tommy Ruk is where on this?
    This piece of work is on his final ego trip.

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