Citizens Against the Mesaba Project

Return to Home | Return to Take Action | Draft EIS Comments Page One | Draft EIS Comments Page Two

FINAL EIS COMMENTS

Mesaba Energy Project, PUC Docket No. E6472/GS-06-668
DOE Final EIS for the Mesaba Energy Project (DOE/EIS-0382)

Citizens Against the Mesaba Project (CAMP)
PO Box 583, Grand Rapids, MN 55709

To: Administrative Law Judge Steve M. Mihalchick

From: Ed Anderson
Co-Chair, Citizens Against the Mesaba Project

Re: PUC Docket No. E6472/GS-06-668
OAH Docket No. 12-2500-17512-2

November 29, 2009

Comments on Adequacy and Impact: DOE Final EIS (FEIS) for the Mesaba Energy Project

Overview:
The purpose of the initial scoping was supposed to ensure that the Final EIS is complete and to identify areas of local concern. Instead, it appears that the overall objective of this document is to minimize the adverse environmental impacts, push a federal policy for "clean coal", and facilitate a project that has no hope of ever realizing the DOE objectives outlined in the Clean Coal Power Initiative.

This project is in serious financial jeopardy and has been determined to not be significantly cleaner than other coal plants with state of the art emissions control technology. The FEIS also states quite clearly that Carbon Capture and Sequestration (CCS) is not feasible for this plant, so the DOE would allow MEP I to release 5 million tons/year of carbon dioxide into the atmosphere if this plant is built. Other projects receiving DOE funding have leapfrogged ahead of the MEP. This project is not necessary to demonstrate IGCC technology. The MEP cannot demonstrate CCS which is the main touted advantage of IGCC. The MEP truly is just another coal plant with a complex financing scheme designed to place the public at huge financial risk.

Review of the Final Environmental Impact Statement prepared by the Department of Energy (DOE) and the MN Department of Commerce (DOC) finds that both public and agency concerns continue to be inadequately addressed. Volume 3 of the FEIS contains hundreds of pages of public comment, almost all of which relate to adverse impacts and/or inadequacies in the document. Public and agency comments from the JPA scoping were not adequately addressed and not carried through to the Draft EIS, and comments from the DEIS were not addressed and not carried forward to the FEIS. This has resulted in virtually all of the public input being dismissed and buried under many layers of bureaucratic nonessential verbiage. The Joint Permit Application was actually a better representation of the project and its impact than the FEIS. The DOE and DOC have brought us further from the truth with each version of the EIS. It is unbelievable that of the hundreds of comments received, virtually every concern voiced by the public is minimized, not adequately addressed, or simply ignored. This pattern is readily apparent by reading through the DEIS and FEIS responses to public comment.

The quality of the public comments has been outstanding. These comments have been compiled by citizens with a wide range of expertise including biology, forestry, mechanical and aeronautical engineering, economics, medicine, law, accounting, hydrology, and geology. These experts, along with teachers, business executives, small business owners, mine and mill workers, artists, farmers, retirees, and many other individuals from various walks of life have spent countless hours analyzing the JPA and DEIS.

Bias of the Department of Energy
This FEIS is not designed to show the actual environmental impact of the MEP. Instead it focuses on minimizing the adverse impacts in order to facilitate the project. The DOE has publicly supported the Mesaba Energy Project on several occasions through different media sources. It is stated in the EIS in the Summary Section, DOE Purpose and Need; "DOE's purpose in considering the Proposed Action (to provide cost-shared funding) is to meet the goal of the CCPI Program (NETL, 2006b) by demonstrating the commercial readiness of the Conoco-Phillips E-Gas™ gasification technology in a fully integrated and quintessential IGCC utility-scale application. The principal need addressed by DOE's Proposed Action is to accelerate the commercialization of clean coal technologies that achieve greater efficiencies, environmental performance, and cost-competitiveness." The DOE has also supported the project with $36 million of public money as stated in Section 2.1.1.1 of the draft EIS. The DOE also remarks that it may continue to support the project through a federal loan guarantee program.

The Department of Energy has shown considerable bias toward the Mesaba Project and has ignored citizen and other governmental agency comments and concerns regarding environmental impacts. If the true impact of the Mesaba Project is to be known, it seems clear that an Environmental Impact Statement needs to be compiled without DOE involvement.

Although we believe the DOE's objectives related to their Clean Coal Power Initiative are misdirected, they do appear to be clear. The DOC objectives are not quite as clear. The DOC mission statement includes "ensuring equitable commercial and financial transactions, reliable utility services, and advocating the public's interest before the PUC". The Mesaba Project does not appear to meet the DOE & DOC objectives by any stretch of the imagination. We certainly don't feel that the DOC is advocating in the public's interest. This is the wrong project, and it's in the wrong place. The public deserves to have their concerns and comments taken seriously. We hope you'll show us that you really do value public input, and demonstrate that in your recommendation.

Deficiencies of the Final EIS:
In addition to public comments which have been ignored, agencies such as the Army Corps of Engineers, MPCA, and the MN DNR also submitted numerous comments over a wide variety of issues. These issues included Excelsior's unverified claims of need for power, site selection, water discharge and mercury deposition, air emissions, and impact on the CMP trout fishery and local recreation to name just a few. Although the FEIS does address some of the more minor concerns of the ACOE regarding alternative site selection, many of the agency comments have not been addressed at all, and others have been addressed inadequately.

For example, the ACOE voiced concern that the West Range site is in an environmentally sensitive location, and is an area "rich in aquatic resources". The ACOE also noted that nothing in the EIS "need and purpose" validates the claim that this plant must be built in the Taconite Tax Relief Area, and further noted that they were not convinced the West Range Site is the least environmentally damaging alternative. The ACOE concerns are minimally and insufficiently addressed in the FEIS.

In another agency example, the FEIS claims that the CMP trout fishery issues are resolved by implementing ZLD, yet goes on to say that the project proponents and the MN DNR will need to work out an agreement to keep the lake open for recreational use. The report makes no mention of the fact that Excelsior Energy's proposed ZLD system has yet to be designed and engineered, and that this design information has previously been requested by the MPCA. This includes almost a full page of yet unanswered questions under the MPCA DEIS comments section 4.5.2.1 ZLD. Specifics on the ZLD system are critical to analyzing air and water impacts, and according to the MPCA are essential for permitting.

Additionally, Best Available Control Technology (BACT) is not in Excelsior's plan despite previously being pointed out by the MPCA. The FEIS just makes mention of this and "punts" it to the Minnesota Pollution Control Agency. Obviously, further substantial changes to Excelsior's plan will have to be made if this plant has any hope of obtaining the numerous environmental permits needed.

There also continues to be a double standard whereby Excelsior Energy is allowed to make unsubstantiated claims such as need for power and positive economic impact, yet when such claims are challenged, the FEIS states that it is "not within the scope of the FEIS" or the reader is simply referred back to another section of the FEIS which also does nothing to address the question.

Agencies such as the Minnesota DNR, MPCA, MDH, and Department of the Interior have all reviewed the Draft EIS and found multiple areas of concern. Many of these concerns were submitted during the scoping process but were not addressed. When we read through all of these comments, it is obvious that Excelsior Energy has done an inadequate job of putting this proposal together. Public and agency comments with regard to siting and routing show that there are serious environmental concerns at both the East Range and West Range Sites.

Deficiencies of the Applicant:
The deficiencies of the Applicant are increasingly evident and were quite apparent at the January 2008 hearing in Taconite. Excelsior's own experts had difficulty answering basic questions raised by CAMP and other members of the public. Excelsior stated they would provide additional information to clarify issues raised at these meetings, yet no information has been provided to clarify the questions raised. Some specific questions to which Excelsior was to provide further information are outlined in CAMP's previous comments to Judge Mihalchick submitted in this docket January 29th, 2008.

Excelsior Energy has done a poor job of anticipating permitting needs from the start, beginning with the initial site selection on the East Range. It changed the "preferred site" to the West Range to avoid implementing expensive pollution control measures for discharged water, and because it finally realized air permits would be difficult if not impossible to obtain on the East Range. Since then, Excelsior has been forced to use the same expensive control technology at the West Range, and permitting is still problematic. In this respect, the MEP really does not even have an alternative site option. This is a blatant failure on the part of Excelsior Energy, and their ongoing failure to adequately plan and anticipate should not mean that siting is approved for a more environmentally sensitive site without existing infrastructure, especially when many valid government agency and public comments remain unanswered.

It is also apparent that Excelsior Energy is more than willing to make false and/or misleading statements as to the actual impacts of this project. We have seen numerous examples of this over the past several years. One more recent example is that Excelsior would have been unable to obtain water discharge permits with their original proposal. Bob Evans repeatedly denied the fact that water quality would be negatively impacted due to discharge of cooling tower blowdown. His misinformation and avoidance of the facts happened repeatedly during the Citizen's Advisory Task Force, and has continued throughout the EIS process. Senator Saxhaug was quoted in Excelsior's ZLD press release as saying "Excelsior didn't have to do this to get licenses, but they have agreed to do all they could to demonstrate they intend to be good environmental stewards. This is a very promising development." Excelsior has fought hard to avoid eliminating water discharge and has repeatedly shown us that the focus is on dollars, not environmental stewardship. ZLD is extremely expensive to implement, and will mean a loss of efficiency with regard to power output. A major reason Excelsior changed their preferred site to the West Range was because the East Range site required ZLD due to the more stringent mercury criteria of the Lake Superior watershed.

The reality is that completely eliminating water discharge is the only way they can proceed. If Excelsior Energy really had intentions of being environmental stewards and wanted to "mitigate environmental impacts", measures such as ZLD and carbon dioxide capture and sequestration would have been in the plan from the beginning.

Whether this type of misinformation shows us a determined willingness to misrepresent the truth or reveals Excelsior Energy's inability to anticipate basic environmental impacts and permitting requirements is unclear. What is clear is Excelsior Energy's inability to properly design and site this project.

Site Selection
The most important factor in both site selection and environmental impact should be the impact on humans. The FEIS is notably different from the DEIS in that a large section of the FEIS now discusses the potential impact on the gray wolf and Canada lynx. There appears to be more emphasis on threats to animal populations than is given to the human impact. Acceptable health risks, noise and traffic impacts, air quality etc. are discussed, but nowhere in this process has anyone asked "who wants this"? Certainly Excelsior Energy wants this. The DOE and DOC want this. Some area business leaders want this. It appears that there is little opposition to this plant at the East Range site, although that might change if people actually believed it may go there.

In contrast, there is tremendous opposition to the Mesaba Project on the West Range. Over a 2-3 month petition drive in 2006, CAMP collected over 900 signatures in opposition to this project. Local politicians were openly supportive early on, then learned that this is such a political hot potato that their open public support essentially dried up with one exception who apparently doesn't have his finger on the pulse of his constituency. The state representative in whose district this plant would be built is adamantly in opposition to the Mesaba Project. The vast majority of public comments for the JPA scoping, DEIS, and Siting docket are in opposition to this project. Even the chair of the PUC at one time said this project is in the wrong place. Opponents to this project have filled the rooms during public meetings on the West Range and in St. Paul at the PUC. Just as the FEIS hands off critical issues such as BACT to the MPCA instead of requiring Excelsior to have it in their plan from the start, the various governmental agencies have been reluctant to kill this project. There has been ample opportunity at several levels to say "enough is enough". No one agency has yet had the fortitude to say "this is a bad idea", and then act on it. It is well past time to end Excelsior's attempt to place a bad project in the wrong place, and we hope that will now occur in this docket.

November 30, 2009

TO: Steve M. Mihalchick, Administrative Law Judge

FROM: Charlotte Neigh, Co-Chair, Citizens Against the Mesaba Project

RE: Comments on Adequacy and Impact � DOE Final EIS for the Mesaba Energy Project

(DOE/EIS-0382); MN PUC Docket # E6472/GS-06-668

FEIS IS FUNDAMENTALLY FLAWED

Numerous instances of failing to adequately address or glossing over serious concerns demonstrate that the Department of Energy (DOE) has produced an EIS designed to support the Mesaba Energy Project (MEP) rather than to honestly assess its impact on people and the natural environment.

The DOE's inherent bias stems from its long-standing commitment to and investment in the Clean Coal Power Initiative (CCPI) and its predecessor, the Clean Coal Technology Demonstration Program. The earlier program funded the Wabash River Plant, the base design of which is supposed to be significantly advanced by the MEP. The DOE has already invested $22.25 million of CCPI cost-sharing funds in the MEP and would be embarrassed to acknowledge that those funds have been wasted. The DOE has nothing to lose by pretending that the MEP deserves to continue, since the balance of the cost-sharing funds would not be payable until after the MEP is built and operating. This is unlikely, given Excelsior's inability to sell the output.

Instances of bias undermining the reliability of the FEIS include DOE's:

Erroneous assumption that the U.S. has about 240 years of recoverable coal reserves;
Glossing over the Army Corps of Engineers (USACE) concerns that the environmentally damaging siting of the MEP is not justified by its purpose;
False claim that the ConocoPhillips technology "may not be demonstrated elsewhere" if the MEP is canceled;
Reliance on IRPs of various Minnesota utilities to bolster the alleged but unproven "need";
Disregarding the 5 million tons/year of CO₂ that would be released from Unit I of the MEP, while acknowledging (despite Excelsior's deceptive touting of its CCS "plan") that carbon capture and sequestration is not "feasible" for the MEP; and
Assumption that MEP is an Innovative Energy Project, although that issue is pending before the Minnesota Court of Appeals, which might agree with the ALJs rather than the MPUC.

240 YEARS of COAL RESERVES NOT A VALID ASSUMPTION

In the 6/8/09 online Wall Street Journal, Rebecca Smith reported that:

The federal government's method of calculating coal reserves is flawed;
The estimate of a 240-year supply may be "wildly overconfident";
Relatively little of the coal in the ground can be profitably extracted;
The U.S. Geological Survey has determined that less than 6% of the coal in the biggest beds of Wyoming's Gillette coal field could be mined profitably, even at prices higher than today's;
DOE's Energy Information Administration is reassessing its tally in light of this new data.

In July 2007 Energy Watch Group reported that:

Quality of data on coal reserves and resources is poor, globally and nationally;
Proved and recoverable reserves have not been adequately distinguished from inferred/assumed/speculative resources;
USA passed peak production of high quality Appalachian and Illinois basin coal in 1990;
Considering that Wyoming subbituminous coal has a lower energy content, USA coal production in terms of energy peaked in 2002.

NEED & PURPOSE: ARMY CORPS OF ENGINEERS/ NEPA/CLEAN WATER ACT

USACE HISTORICAL CONCERNS (See USACE letters: 12/13/06 to Excelsior Energy; 12/27/06 to DOE's Richard Hargis; 6/5/07 to Richard Hargis)

USACE wanted to merge its reviews under the National Energy Policy Act (NEPA) and the Clean Water Act (CWA) Section 404 with the DOE's EIS to avoid doing a separate NEPA analysis. To this end, throughout 2005 and 2006, USACE's Minnesota staff conferred with staff from DOE, Excelsior Energy, and Short Elliott Hendrickson.

In its 12/13/06 letter to Excelsior Energy, USACE was attempting to avoid deficiencies in the Draft EIS. The letter explained that the CWA Section 404 review process considers: Purpose and Need; Range of Alternatives and Alternatives Carried Forward; Selected Alternative; and Design Phase Impact Minimization. USACE pointed out that:

The "basic project purpose" is to provide additional base load power generation in Minnesota;
The "overall project purpose" is to be a commercially-viable IGCC power generator that satisfies projected Minnesota power needs;
The "need statement" projected 3,000 to 6,000 MW of new base load over the next 15 years, but additional information was needed to demonstrate that claim;
A justification for why it is not practicable to seek sites outside the TTRA was lacking;
Construction of a new power plant using innovative technology does not require siting in or near special aquatic sites but the project is proposed "within a specific area of Minnesota particularly rich with aquatic resources" and so the applicant must overcome a presumption that an alternative upland site would be less environmentally damaging.

In its 12/27/06 letter to DOE's Richard Hargis, USACE presented many of the same concerns after reviewing an advance copy of the DEIS. In its 6/5/07 letter USACE noted that it was not endorsing Excelsior's conclusions regarding its site selection process, and "have some question as to whether (its) preferred alternative is the least damaging practicable alternative . . . ".

APPENDIX F1

Appendix F1 in volume 2 of the FEIS contains the documentation submitted in support of Excelsior's application for a CWA Section 404 permit. The introductory language claims that the information supports: purpose and need; and the screening process used to select its preferred and alternative sites. Information is also offered regarding "Incentives provided by the State and Federal government in support of the Project", which is an obvious attempt to influence USACE's decision with irrelevant and possibly intimidating political considerations.

Overall purpose and need is stated as:

"1. Confirm the commercial viability of generating electrical power by means of a fuel flexible integrated gasification combined cycle ("IGCC") technology in a utility-scale application; and

2. Help satisfy Minnesota's need for new and diverse sources of baseload electric power."

COMMERCIAL VIABILITY OF IGCC TECHNOLOGY IS BEING DEMONSTRATED BY 23 OTHER PROJECTS

The need to confirm the commercial viability of IGCC technology is claimed as a primary justification for the MEP. This ignores the fact, well known to DOE, that other demonstrations of IGCC technology are underway. The National Energy Technology Laboratory (NETL), in a presentation of "DOE's Technology Policy for RD&D of IGCC and CCS" in April 2009, lists six existing IGCC plants and 18 active projects (including MEP).

ACTIVE IGCC PROJECTS

Duke Energy's 630 MW IGCC facility is under construction in Edwardsport, Indiana and is expected to begin commercial operation in 2012.
In Kemper County, Mississippi a 600 MW IGCC Project is scheduled to be in service by 2013.
In Taylorville, Illinois a 600 MW IGCC Project was selected in July 2009 to proceed to the term sheet negotiation phase for a DOE Loan Guarantee (MEP's loan application has not achieved this step) and is scheduled to be in service by 2014.
The Cash Creek Project in Kentucky is at least 630 MW and is expected to be in service by 2012.
ConocoPhillips is using its own E-Gas technology: to demonstrate new advancements improving conversion efficiency and economies of scale for CCS at a 683 MW IGCC power plant adjacent to its existing refinery in Sweeny, Texas, capturing about 85% of the CO₂ from the process stream and sequestering more than 5 million tons into a depleted oil or gas field. This project has received DOE funding.

There are twelve other IGCC projects of various sizes, using various fuels and technologies (including ConocoPhillips), at various stages of development; most of them are more advanced than the MEP in ability to capture and sequester CO₂.

MINNESOTA'S NEED FOR NEW COAL-BASED POWER NOT DEMONSTRATED

Due to the special 2003 enabling legislation, the MEP was exempted from Minnesota's usual requirement for a Certificate of Need, leaving its proponents free to claim that its output is needed without having to prove it. At page 4 of Appendix F1 is the claimed need "for more than 2,000 MW of new baseload electric generating capacity by the year 2020". This is "documented in recent utility integrated resource plans (IRPs) filed with the Minnesota Public Utilities Commission (MPUC) and in other regulatory and commercial filings", such as certificate of need (CON) applications and requests for proposals (RFPs).

Table 1 shows "baseload needs identified in completed IRPs and RFPs". The probative value of this list is negated by the fact that Excelsior Energy has intervened in all of the recent significant IRP and CON dockets before the MPUC and has failed to convince the ALJs or the Commissioners that Mesaba's output should be a resource for the various utilities.

The fact that the Nashwauk PUC issued an RFP for 300 MW to supply the proposed Essar iron and steel project, does not prove that such a need cannot be met by existing baseload. The NPUC has reported receiving numerous responses to its RFP and Essar has decided there is no hurry to finalize any supply arrangements because the market is in its favor.

In the strange world of the CCPI, the phasing out of a Minnesota Power coal plant and the conversion of some of Xcel's coal plants is cited as evidence that the MEP is needed so that more coal can be used. Such tortured logic does not support a finding of need for the MEP.

End of Comments by Charlotte Neigh

From: Ronald R. Rich
Sent: Monday, November 30, 2009
To: 'Honorable Steve M. Mihalchick'; 'Richard Hargis'
Subject: Inadequate Estimates of Air Emissions in FEIS for Mesaba Energy Project

Judge Mihalchick and Mr. Hargis:

The Final Environmental Impact Statement for the Mesaba Energy Project is inadequate because it significantly underestimates the worst case and average annual criteria and hazardous air emissions. Some of the most serious errors and omissions concern the air emissions from the proposed flaring of gasifier syngas. For flare emissions the FEIS makes three major assumption errors:

The assumed "99% destruction" efficiency of the two proposed flares is impossible given the proposed flare design as validated by communication with the flare vendor. A realistic estimate of 87.5% used instead for the proposed design would result in levels of most such air emissions (1-0.99)/(1-0.875) = 12.5 times higher than estimated in the FEIS.

There is no allowance made for continual flaring of syngas from the third gasifier that is supposed to act as a standby to improve operational reliability of the facility. The FEIS seems to consider only an overly short and infrequent duration "startup" and "shutdown" period implying that the third gasifier will not operate when the other two are on. This operational mode is unlikely - such gasifiers require significant amounts of time to start and stop and cannot act as a standby if turned off. As a consequence, average annual air emissions will be much higher than estimated.

The worst-case air emission scenarios neglect completely the drastic increase in air emissions from the flare stack (or its bypass) during such "unplanned events". Especially when the flares are overwhelmed or are bypassed during such an event. During these "events", a significant local and regional acute hazard can occur because the quantity and concentration of air pollutions released could reach lethal levels. Estimates of such releases need to be included.

Concerning Point 1: At the January 29th, 2008 public hearing on the Mesaba Energy Project Draft Environmental Impact Statement (DEIS), I made several comments on environmental issues that were missing or inaccurate. Given hearing time limitations, I focused on one of the more egregious and most significant air emission errors - the woefully under assumed emissions of criteria pollutants from the proposed gasifier flares. I am particularity aware of underreporting of these emissions because a part of my business was (and still sometimes is) monitoring of flare emissions from processes with an almost identical gas composition to the coal gasifier syngas proposed to be flared.

As you may recall at that hearing, I publicly questioned Excelsior about their flare assumptions, particularly how they intended to achieve a "99% destruction" of criteria and hazardous pollutants from the flare without further downstream treatment. Because I know through measurement and using combustion theory that "destruction" (actually only oxidation) of carbon monoxide and other pollutants through the type of flare proposed would typically be about 87.5% at the 40-50% carbon monoxide the gasifier would produce. This percentage number is extremely important because even at 90% instead of the assumed "99%", emissions of carbon monoxide alone would be more than 10 times higher than the values assumed in the DEIS. Other pollutants would be similarly increased.

No representative of Excelsior Energy, the DOE, any of the Mesaba Project consultants or the State of Minnesota could address the question I posed at the hearing. Therefore, you (Judge Mihalchick) ordered Excelsior Energy to provide the information on which their assumption was based. The understanding was that such information was to be provided to me well prior to the close of the 30 day comment period and addressed in the FEIS.

After e-mail requests to you (Judge Mihalchick) I received a letter from Excelsior attached as "Excelsior Flare Statement". The letter admitted to mistakes in emission calculations, but still claimed 99% flare destruction. And attached to the letter was one from the proposed flare vendor (John Zink Company, LLC) along with a contact name (a Mr. Robert Schwartz). In the letter to Excelsior, Mr. Schwartz declared that "he had been provided with information regarding the flares..." and "it was his opinion that flaring efficiency...will be 99% or greater."

- Submitted "Flare Manufacturer E-Mail" communications -

John Zink Company, LLC

From: Ronald R. Rich
Sent: Monday, February 25, 2008 2:51 PM
To: Schwartz, Bob
Subject: Additional Flare Information for the Mesaba IGCC Units

Mr. Schwartz:

I called you last week and previous week too concerning which model flare you proposed to use for the Mesaba IGCC project and how such a flare would achieve 99% reduction of what is a primarily (48%+) carbon monoxide (CO) gas discharge containing CO₂ and some hydrogen and with no organic chemical constituents. Both times I left messages, and I have not heard back from you.

As I said in the messages, I am interested because my company manufactures specialized gas analyzers (that have been used to measure flare discharges from processes (containing between 10% to 27% carbon monoxide) and we have never measured CO destruction efficiencies that high (always between 87% and - rarely - 95%). Since the lower flammability limit of the IGCC CO would be greater than 12.5%; I would not expect destruction efficiency to exceed 87.5% for a flare in their application. If it did, I would be interested in applying your technology to other CO emitting applications.

I will be commenting on Thursday concerning assumed flare destruction efficiency, including my company findings, so would be very appreciative if you would share sufficient information on what you are proposing for Mesaba and why it is your opinion you can achieve such a high destruction efficiency of a primarily CO mixture with only a flare.

Thank you.

----------

From: Schwartz, Bob
Sent: Tuesday, February 26, 2008 1:16 PM
To: Ronald R. Rich
Subject: RE: Additional Flare Information for the Mesaba IGCC Units

Re: Excelsior Energy, Inc., Mesaba IGCC Flare

Dear Mr. Rich:
We are in receipt of your email of February 25, 2008 regarding the performance of referenced flare. From the information contained in your email it appears that you have focused on CO in your analysis. In so doing, you have overlooked the very substantial amount of hydrogen present in the gases to be flared. Hydrogen, with its very wide flammability limits, plays an important role in the combustion performance of the IGCC flare. The lack of organic chemical constituents is of no consequence; the hydrogen will initiate burning and contribute to the efficiency level given in our letter of February 13, 2008.

Sincerely yours,

Robert Schwartz
Senior Technical Specialist

----------

Ronald R. Rich
From: Ronald R. Rich
Sent: Tuesday, February 26, 2008 1:56 PM
To: 'Schwartz, Bob'
Subject: RE: Additional Flare Information for the Mesaba IGCC Units

Bob:

Thank you for your response. I did not overlook the hydrogen content (which would tend to lower the LFL as you indicate) nor the CO₂, and water vapor content (which would raise the LFL and is also present in the gasifier). And all systems we have ever measured have had a hydrogen content that allowed higher destruction efficiencies than pure CO alone. However, none has ever exceeded 95% destruction.

No one from Mesaba, Fluor or Conoco-Phillips to my knowledge has publicly disclosed the H2, CO₂, and H2O content in their gasifier. Especially during startup and shutdown when hydrogen levels are lowest. They have only disclosed the CO content in response to my questions ("in the high 40's" percentage) - which was not corrected when I used 48% as "typical". IGCC CO concentration (from public data) appears to range from 30% to 60% on startup.

So, in the absence of data, I assumed any H2 LFL reduction and any CO₂ and H2O LFL increase together would approximate the 12.5% LFL of 100% CO.

If you have additional data, I would really appreciate receiving it. Especially since no comparable flare exhaust we have ever measured has exceeded 95% destruction even in the presence of substantial excess H2 (60% H2, 30% CO 10% N2, H2O, and CO₂).

Thank you again.

----------

- Email Request for Hearing Comment Period Extension -

Ronald R. Rich
From: Ronald R. Rich
Sent: Friday, February 29, 2008 1:04 PM
To: 'Honorable Steve M. Mihalchick'
Subject: Lack of Excelsior Energy Response on Air Emission Asumptions
Follow Up Flag: Follow up
Flag Status: Completed

Judge Mihalchick:

As an energy and environmental engineer, president of a company that develops, monitors and controls air emissions from coal-fired power plants, gasifiers and similar processes, and as the representative of the Swan Lake (Itasca County) Association, I also request that a much more thoroughly prepared Draft EIS be submitted with an appropriate comment period, or there be additional time allowed for comment on the Final EIS. I would further request an additional hearing to address environmental issues that could not be addressed in the time allotted previously.

I base this request on:

My review and understanding of the DEIS and the numerous undisclosed and unsubstantiated assumptions apparent in the DEIS made by Excelsior, their consultants and their vendors regarding air emissions from Mesaba I.

The possible confusion between emission totals in the DEIS and the draft air permit application concerning Mesaba I alone and Mesaba I and II together which alone may have resulted in half the actual emissions being undisclosed for some pollutants.

The seemingly evasive and inadequate responses to my specific and general questions concerning air emission assumptions provided by Excelsior, their consultants and their vendors at the Jan. 29th, 2008 public hearing for Mesaba I and Mesaba II in Taconite over which you presided. This lack of response wasted valuable participant questioning time and prevented any hope of proper evaluation of the numerous assumptions made concerning Mesaba I and II that I had intended to address.

My experience in receiving what should have been a simple follow-up request at that hearing that you allowed (thank you) concerning one significant air emission assumption of the Mesaba I and II � that from the gasifier safety flares. I still have not received an proper numerically or monitoring verified answer to that line of questioning as promised by Excelsior. They provided the vendor name and told us at the hearing that that vendor used "models" or "data" to determine performance. That vendor has provided only his "opinion", followed by questioning of my knowledge, and now silence. I can only conclude that Excelsior has through ignorance or intent underrepresented the actual air emissions of CO by a factor of 10 to 20. This amount is so significant as to call into question the entire EIS process.

There are many other possibly inadequate assumptions that need to be questioned and possible addressed and for which time and an additional hearing should be provided.

In the interests of the citizens of Minnesota, please provide an extension and an additional hearing.

Respectfully Submitted,

Ronald R. Rich
President
Atmosphere Recovery, Inc.

----------

- End of email communications -

I wanted to understand on what his opinion was based, especially since his company makes flares primarily for the petrochemical industry, not syngas applications. So I called and left messages for Mr. Schwartz at least twice. Receiving no response, I sent and received the e-mails attached above as "Flare Manufacturer E-Mails". And when I received no response to my final e-mail, I subsequently called Mr. Schwartz who then confirmed: 1, there was no special syngas flare proposed, only standard types from the petrochemical industry; 2, he was unaware if his company had ever built a flare for coal syngas generation; 3, no one in his company had ever measured the destruction efficiency of any of their flares; and 4; there was no technology downstream of the flare or auxiliary burners in the flare (other than a pilot) that would increase destruction levels beyond what a standard flare would perform. He also confirmed that he had only been contacted about the destruction efficiencies after the January 29th hearing. I asked him to respond to my e-mail.

After this call, no further communications were received from him or Excelsior. As you may recall I requested a hearing comment period extension (on February 29, 2008 - also attached) as well as an additional hearing to address the many DEIS air emissions inadequacies that could not be addressed in the first. Both were denied.

I have had a chance to review the Mesaba Energy Project Final Environmental Impact Statement (FEIS). Even though the FEIS document took almost two years to produce, and even though Excelsior Energy, Fluor, Conoco-Phillips, the DOE and the State of Minnesota were all aware of my comments (and never satisfactorily addressed them at the time), the flare "99% destruction" issue is not addressed in any way in the FEIS.

The FEIS still states:

Flares (p. 2-39)

"The elevated flares for each phase would be designed for a minimum 99 percent destruction efficiency for CO and H2S."

As my communication with the flare vendor has determined, there is no basis for such a "99% destruction" statement other than wishful opinion by someone who has not measured or (apparently) even calculated theoretically the value that would actually result. At a 48% CO syngas loading (the presumed operational concentration of CO in the gas sent to the flare) the best that would be achieved is less than 90% destruction, and more likely with the undisclosed high water and CO₂ loading lower than 87.5%. That means the FEIS under-discloses air emissions from the flare by a factor of over ten (10) and the flare becomes the single largest air emission source at the plant. This assumption alone renders the FEIS inadequate.

Further, "destruction" in the flare of H2S merely changes its form to sulfur dioxide (SO2) and sulfur trioxide (SO3), and it is unclear from the FEIS if this flare SOx has been consistently included in the SOx totals (only SO2 appears to have been considered anyway - another inadequacy).

Concerning Points 2 and 3:

The FEIS states:

Flare (Page 2-28)

"During unit startup or during short-term combustion turbine outages, an elevated flare at the gasification island would be used to burn off partially combusted natural gas and scrubbed/desulfurized off-specification syngas. Syngas sent to the flare during normal planned flaring events would be filtered, water-scrubbed, and further treated in the AGR and mercury removal systems to remove air contaminants prior to flaring. Flaring of untreated syngas or other streams would only occur as an emergency safety measure during unplanned plant upsets or equipment failures."

And:

Flares (Page 2-39)

"... The flares would normally be used only to oxidize treated syngas and natural gas combustion products during gasifier startup operations. The flares would also be available to safely dispose of emergency releases from the Mesaba Generating Station during unplanned upset events."

And:

Flares (Section 3.3-1)

"The primary emission point from either site will be the flare and CTG/HRSG stack".

And:

2.2.5.2 Plant Demonstration and Operations

"Although the plant would include three gasification trains (from slurry preparation through dry char removal), only two gasification trains would be required for full output (at 50 percent capacity each). The spare train would normally be in standby service unless maintenance was being performed on one of the gasifier trains."

Three gasifiers are planned for each phase - two to provide gas to turbines and one to act as a "standby" to improve plant reliably. Throughout the FEIS, minimal startup/shutdown time assumptions are used (apparently at most a total startup-shutdown cycle of 8 hours, 20 times per year). At other times the "standby" gasifier is (apparently) assumed to be off.

The gasifiers proposed by Excelsior and provided by Conoco-Phillips are "proprietary". Information on their assumed startup and shutdown times are not disclosed anywhere in the FEIS. However, similar (but smaller) gasifiers have startup times of 20 hours or more from a "cold" condition, and can't act as a reliable backup unless kept "hot" and producing some level of syngas. While it is possible that syngas from the third gasifier could be used to supply the two turbines and little flaring would occur, this is not what is stated in the FEIS.

The FEIS appears to assume the third gasifier is "off" almost all the time so that the emissions from the fares are very low. And throughout sections 4 and 5, the only measures for "Best Available Control Technology (BACT)" for the flare mentioned is: "incorporating good flare design; flaring only fully treated syngas."

Flares are traditionally not even considered pollution control devices by the MPCA. They are considered "safety" equipment. And "good" flare design can't meet the FEIS projected criteria and hazardous air emissions. Table 2.2-11 does not even consider the flare output from the third gasifier. But zero air emissions are not possible in normal "standby service" which requires at least partial operation.

Even Excelsior indicates the air emissions from the flares are very significant during startup and shutdown (an eight-hour "Normal" CO flare emission 0.14 g/s versus a "Startup" eight-hour CO of 336.73 g/s) more than 2,400 times more air emissions than when "Normal". Therefore ignoring flaring during "standby" operation appears to be a major omission from the FEIS. And the "water" scrubbers could not remove any amount of the most significant air emission from the gasifier (CO) or several other air containments either.

In addition, estimates of "unplanned upset events" discussed on pages 2-29 and 2-39 are also not included in the air emissions estimates. The "worst case" air emissions would actually occur during "emergency releases" and "overpressure events". The extreme case is an explosion of a gasifier, but this is typically prevented by relief valves and "blow-out" disks. There is no estimate provided as to how often these events will occur, but when they do, flare destruction efficiency would fall drastically - often to nearly zero. A flare simply can't keep up when too much gas flows in too short a period. During those times, concentration of up to 480,000 ppm of CO can be vented. Along with vast amounts of all the other criteria and hazardous pollutants the FEIS claims will be flared to "99% destruction".

On page 4.17-18, Excelsior states that: "Potential releases of carbon monoxide from the syngas process stream of the gasifiers could result in the longest downwind toxic impact distance. The potential releases may pose a health hazard to plant workers and closest residents to the proposed power plant."

So it is essential an adequate FEIS disclose a conservative estimate of how often "emergency releases" will occur. The Mesaba FEIS does not even try.

Finally, not a single public comment on the inadequacy of the flare emission assessment was included in the "Public Comments" Section in the FEIS and no substantial correction was made to the wholly inadequate assessment of flare emissions in the DEIS even attempted.

The inadequate and erroneous assessment of the flare air emissions in the FEIS are a very significant and render all other air emissions estimates suspect. I urge you to review the record, find that the Mesaba FEIS is inadequate, and require a more thorough and scientifically-based air emissions assessment.

Thank you.

Steve M. Mihalchick
Administrative Law Judge
Minnesota Office of Administrative Hearings
PO Box 64620
St. Paul, Minnesota 55164-0620
Subject: Adequacy and Impact - DOE Final EIS for the Mesaba Energy Project (DOE/EIS-0382); MN PUC Docket # E6472/GS-06-668

Dear Sir:

I am requesting the following comments be included in the record regarding the adequacy and impact of the Final EIS for the proposed IGCC demonstration plant to be sited in Taconite Minnesota.

Rather than providing authentic oversight, the DOE has institutionally supported the Mesaba Energy Project. To facilitate their organizational goals, the DOE has become a partner of Excelsior Energy. There is no basis for the assumption that demonstration of IGCC would grant the single most important advantage the United States could obtain in global competition for new markets.

5.5 RELATIONSHIP BETWEEN SHORT-TERM USES OF THE ENVIRONMENT AND THE MAINTENANCE AND ENHANCEMENT OF LONG-TERM PRODUCTIVITY

The Proposed Action would support the DOE objective of demonstrating and promoting innovative coal power technologies that can provide the United States with clean, reliable, and affordable energy using abundant domestic sources of coal. The long-term benefit of the proposed project would be to demonstrate advanced power generation systems using IGCC technology at a sufficiently large scale to allow industries and utilities to assess the technology's potential for commercial application. The ability to show prospective domestic and overseas customers an operating facility rather than a conceptual design or engineering prototype would provide a persuasive inducement for them to purchase this advanced coal power technology. Successful demonstration would enhance prospects of exporting the technology to other nations and may provide the single most important advantage that the United States could obtain in the global competition for new markets.

Mesaba Energy Project Summary

The CCPI only allows for Federal co-funding of proposed private sector/industry projects for which an application has been prepared, submitted, selected, and awarded in response to a formal funding opportunity announcement issued by DOE. DOE issued the CCPI Round 2 funding opportunity announcement in 2004. Thirteen applications for co-funding of proposed industry project demonstrations from across the nation were received and evaluated in response to the CCPI Round 2 funding opportunity announcement. These applications represented diverse technologies and proposed the use of a variety of coals consistent with the requirements embodied in the funding opportunity announcement. Pursuant to Federal regulations, the choices available to DOE were limited to those applications submitted in response to the funding opportunity announcement. Two of the 13 applications were for co-funding of proposed archetypal IGCC projects. In all, four of the 13 applications were selected, including both proposed archetypal IGCC projects, one of which was the Mesaba Energy Project (NETL, 2006a). The two archetypal IGCC projects that were selected for co-funding involved the demonstration of different gasifier types, which is important in achieving a diversity of technology approaches and methods in the CCPI. They also involved different coal types, operating environments, and environmental considerations, all of which enhance the potential for widespread commercialization of IGCC technology in a competitive marketplace. The Mesaba Energy Project was selected because of the opportunity to demonstrate the specific technology proposed—the Conoco-Phillips E-Gas™ gasification technologyA—in a fully integrated and quintessential large commercial utility-scale IGCC setting. No other applicants proposed this specific IGCC technology. Other projects that proposed to demonstrate other technologies are not alternatives to the proposed project for NEPA purposes.

Major Changes to Final EIS Site West Range

Ron Gustafson expressed concern in Comment 53-09 in the DEIS regarding Option 1A of the DEIS. Option 1A, rail alignment, proposed additional rail loop to serve the Mesaba Energy Project will pass within 400 ft of one residence and within 1000 ft. of 3 residences. The FEIS did not address this comment. The FEIS cut and pasted a previous response regarding impacts in the city of Taconite. It did not address impacts on Diamond Lake Road and residents living within 400 feet of the unloading operation.

In the FEIS the preferred railroad location unloading point is now located ½ mile closer to residences on Diamond Lake Road. This will increase noise disturbances and fugitive dust from the coal cars. While it seems the governing agencies are concerned about the wetlands, what about the health and well-being of the people in this area? The closest resident will be 470 feet from the coal unloading point. An acceptable alternative needs to be determined that will lessen the impact on these residences. The final preferred railroad location is more impacting on residences.

Rail Alignment-Alternative 3B (Table S-7 Changes Between Draft and Final EIS)

In response to agency comments on the DEIS to avoid and minimize impacts on wetlands, a new rail alignment, Alternative 3B, is now the preferred alternative. New alignment results in the following changes:

Routes rail loop around hill located to the northeast of the plant footprint avoiding substantial wetland acreage;

Adjustment in rail elevation affects base elevation of plant footprint by several feet resulting in reduced grading requirements (only the active coal yard would incur changes in elevation, not the entire footprint); and

Relocation of coal unloading point (nearly 2,000 feet closer to Diamond Lake Road) required by new rail loop would affect the duration of rail cars being located and moved in the vicinity of Diamond Lake Road residences.

Table S-8. Summary Comparisons of Impacts (Phases I & II)

Rail Alt. 3B within 0.5 mi of 16 residences (closest within 470 ft).

Both adequacy and impact need to be addressed regarding the Access Road 3 Option in the Final EIS. CR 7 has a 7 ton weight restriction during spring. In its current condition, materials cannot move to Access Road 3 during the weight restriction period. Will the undesirable by- products of IGCC be stored on site during this period? This impact needs to be addressed with a detailed action plan.

Access Road 3-West Range (Table S-7 Changes Between Final and Draft EIS)

Access Road 3 within 0.5 mi of 2 residences (both within 1,250 ft).

3.15.2.1 Load Limits

Minnesota roadways are generally categorized into two specific groups. One group consists of all state trunk highways, which includes all state, U.S., and interstate highways, and certain other routes designated by the commissioner of transportation. These are commonly referred to as 10-ton routes. All routes other than state trunk highways and designated routes are commonly referred to as 9-ton routes. Minnesota statutes provide for maximum loads, which may be carried upon any wheel, any single axle, any group of consecutive axles, and the gross vehicle weight (MN State Patrol, 2006). In the spring of each year, county and town roads not paved with concrete are restricted to 10,000 pounds on single axles and 5/9 of the weight restrictions prescribed for two or more consecutive axles, unless otherwise posted. The starting and ending dates for these restrictions is determined by the commissioner of transportation for each of the frost zones in the state. Any road may be restricted at any other time by the appropriate jurisdiction when conditions threaten damage or deterioration. Bridges with rated capacities less than the maximums permitted on Minnesota highways will have restricted weights posted and all drivers must observe these restrictions.

3.15.2.3 West Range Site and Corridors

Roadways

The West Range Site is bordered on the west by CR 7. Though not officially designated as a state byway, CR 7 is locally referred to as Scenic Highway 7. CR 7 is a winding two-lane roadway stretching from Taconite to Bigfork. CR 7 is a 9-ton roadway except during spring load restrictions when it is posted at 7-tons/axle. The posted speed limit on CR 7 is 55 miles per hour. CR 7 is designated as a County State Aid Highway and receives funds from the state mainly for construction and maintenance (Itasca County, 2003).

Another existing road corridor in the project area is the Cross-Range Heavy Haul Road, which is a gravel road in place for generations as a way to allow heavy or slow loads to be transported between mines across the Iron Range; however, because of numerous winding and high gradient topography, Excelsior has not pursued the use of this road any further. In the West Range project area, the Cross-Range Heavy Haul Road (named Diamond Lake Road) also serves as access to a cluster of homes in the Big Diamond Lake/Dunning Lake area.

Corporate values of Excelsior Energy

The FEIS Summary S-5 states that Excelsior Energy was founded in Minnesota because of the firm's leadership team with the electric power industry in Minnesota. The FEIS does not adequately assess the corporate values and leadership of Excelsior Energy.

As an example:

Minnesota Power is the former employer of Tom Micheletti and an elite company celebrating their 100th anniversary in business. Newspaper articles were submitted as testimony at the PUC hearings in St. Paul, Minnesota. In the Herald Review dated December 13, 2006, Tom Micheletti is quoted as saying "They're lying." in reference to comments made by Minnesota Power Executive Vice President David McMillan. Tom Micheletti has referred to his former employer, Minnesota Power as anti Range Power in the media.

Excelsior Energy has not made contact with any of the impacted receptors.

Mesaba Energy Project Summary

The DOE Proposed Action to co-fund the Mesaba Energy Project as an application selected under CCPI Round 2 constitutes a decision only to select a specific technology for commercial-scale operational demonstration. DOE has not participated in the identification or selection of alternative sites or alignments for the Mesaba Energy Project. Excelsior Energy was founded in the State of Minnesota because of the experience of the firm's leadership team with the electric power industry in Minnesota. Therefore, the initial consideration of potential sites by the project proponent (Excelsior) was limited to the State of Minnesota.

Conflicting Information in the FEIS - Diamond Lake Road

3.15.2.3 West Range Site and Corridors identifies Diamond Lake Road as the Cross Range Heavy Haul Road. 3.18.2.1 identifies Diamond Lake Road as a roadway that at times requires a four-wheel drive vehicle to navigate. Currently, this road is being utilized to move the heavy construction equipment working on the rail line to serve ESSAR Steel. In its present condition it cannot sustain further heavy equipment usage. The traffic impacts and noise impacts have not been adequately addressed. The statements in the FEIS lead the reader to assume there is little to no traffic occurring in this location. We aren't even identified as noise receptors.

Another existing road corridor in the project area is the Cross-Range Heavy Haul Road, which is a gravel road in place for generations as a way to allow heavy or slow loads to be transported between mines across the Iron Range; however, because of numerous winding and high gradient topography, Excelsior has not pursued the use of this road any further. In the West Range project area, the Cross-Range Heavy Haul Road (named Diamond Lake Road) also serves as access to a cluster of homes in the Big Diamond Lake/Dunning Lake area.

Receptor 2, Residence Big Diamond Lake

Receptor 2 was located along a cluster of residential and summer homes along the northern edge of Big Diamond Lake. These homes are situated along an undeveloped roadway with access off of CR 7 and proceeding east north of Big Diamond Lake. The roadway itself (Diamond Lake Road) consists of dirt and red clay and is, at times, difficult to navigate without a four-wheel drive vehicle.

Noise and Property Values - West Range Site

The west range location results in greater noise impacts due to the closer proximity of residences. As well as noise impacts, the property values of the closest residences will likely be impacted. The West Range site is not an appropriate location for this plant. The East Range site has no residential properties within the preferred rail alignment.

Mesaba Energy Project Summary S-63

Aesthetics, Land Use, and Socioeconomics - The power plant footprint at the West Range Site is within 1 mile of approximately 50 residences; no residences are located within 1 mile of the footprint at the East Range Site. The proponent's preferred rail alignment would be closer to more residential properties (approximately 16 within 0.5 mile) at the West Range Site than the proponent's preferred rail alignment for the East Range Site (none within 0.5 mile). These conditions could potentially affect property values for the closest residences.

Noise - The closer proximity of residences to the power plant footprint and rail alignment at the West Range Site would result in greater noise impacts from plant activities.

Carbon Capture

The FEIS Summary Conclusion confirms that carbon capture and sequestration is not considered feasible for the Mesaba Energy Project at this time. Therefore, the impact of the 214 million tons of CO₂ generated over the 20 year commercial life of the generating plant needs to be taken into consideration.

Response to Comment 4-01 by Ron Gustafson

As stated in response to Comment 1-02, Excelsior submitted to the PUC a "Plan for Carbon Capture and Sequestration" for the Mesaba Energy Project, which is included in Appendix A1 (Volume 2) of the Final EIS. The plan provides information about the potential costs and economic effects of CCS scenarios that could be implemented for the project to the extent that these costs can be determined in the absence of regulations or incentives aimed at controlling CO₂ emissions. In Appendix A2 (Volume 2), DOE states that, in the absence of such regulations or incentives, the "...imposition of CCS on the project will effectively make the cost of electricity non-competitive" and, therefore, CCS "... is not considered feasible for the Mesaba Energy Project at this time" (i.e., for the CCPI demonstration). However, Appendix A2 also states that "CCS was not a requirement of the [CCPI] Round 2 announcement, was not proposed in Excelsior's application submitted in response to the announcement, nor is it included within the project as negotiated and awarded in the DOE Cooperative Agreement." With respect to the potential economic effects of CCS on the Mesaba Energy Project, DOE also concludes in Appendix A2: "Without an order from the PUC that incorporates the costs associated with CCS within the power purchase agreement, the Mesaba Energy Project would not be economically viable.

Emergency Response

The FEIS failed to adequately address my comments on what additional equipment would be required. As well, the impact of the additional costs on local taxpayers needs to be reviewed and made public. This is of particular concern, since Excelsior Energy successfully lobbied the Minnesota Legislature for an exclusive exemption to the Energy Plant Personal Property Tax.

4.13.3.2 Impacts of Operation

Emergency Response

The operation of the proposed generating station would increase demand for emergency response in the City of Taconite. The city's volunteer fire department may need to expand from the current staff of 14 to a staff of approximately 20, which is comparable to the number of fire and emergency personnel in the City of Cohasset. The Cohasset fire and emergency response staff of 21 has served Minnesota Power's Clay Boswell plant successfully for over 25 years with a response requirement of three or four visits a year (Excelsior, 2006b). The City of Cohasset had a population of 2,481 in 2000 compared to a population of 2,087 for Bovey, Coleraine, and Taconite combined. Also, to comply with OSHA Standard 1910.120, the Mesaba Generating Station would be expected to provide and train its own first responders and first aid specialists to respond until local emergency personnel arrive. The Itasca County Director of Emergency Management (Itasca County Sheriff) would have principal responsibility for oversight of response to a major emergency involving the Mesaba Generating Station at the West Range Site. Locally, the incidents and injuries during operation of the generating station, as predicted in Section 4.17, are not expected to increase the demand on medical services substantially beyond available capacities of facilities in Grand Rapids and Hibbing.

Table S-8. Summary Comparison of Impacts (Phases I & II) - Page S-55

Power Plant Site: Demands by the generating station may require staff at local fire and emergency response agencies to increase by 30 to 50%. Large numbers of construction workers (>1,500 during 3 years of peak construction) may affect capacities of local law enforcement agencies. Security requirements for the generating station may affect capacities of local law enforcement agencies.

Commenter 4 - Ron Gustafson-Comment Response Document
Comment 4-04 - Response

The anticipated need for an increase in Taconite's volunteer fire department staff to 20 individuals was based on a comparison to the City of Cohasset, where the Minnesota Power Clay Boswell plant is located. The emergency response staff of that city has adequately responded to the levels of incidents experienced at the Boswell plant, which provides a reasonable basis for comparison to the Mesaba plant. The population in the City of Cohasset is approximately 2,587, while the combined population of Taconite, Bovey, and Coleraine is approximately 2,181. It is expected that the costs associated with additional personnel, training, and equipment for local and regional emergency response agencies would be the responsibilities of the respective jurisdictions and their taxpayers.

Table 5.3-1. Mitigation Measures for the Mesaba Energy Project

These impacts require extensive planning and coordination. The response in the FEIS is not adequate. Due to the questionable corporate values of Excelsior Energy an objective 3rd party should have oversight of the mitigation measures.

Construction:

To prevent unnecessary traffic congestion and increased road hazards, Excelsior would coordinate with local authorities and implement transportation measures, especially during the movement of oversized loads, construction equipment and materials.

Where traffic disruptions would be necessary, Excelsior would coordinate with local authorities and implement detour plans, warning signs, and traffic diversion equipment to improve traffic flow and road safety.

Excelsior would implement a noise mitigation plan, which includes the contact of affected receptors during steam blowing and major construction events

Operation:

Excelsior would implement road improvements at the intersection of CR 7 and US 169 to minimize traffic congestion and road hazards currently associated with this intersection. Improvements include adding turning and acceleration lanes.

Ron Gustafson
Linda Castagneri

November 30, 2009
DOE/EIS-0382, MN PUC Docket # E6472/GS-06-668

Steve M. Mihalchick
Administrative Law Judge
Minnesota Office of Administrative Hearings
P.O. Box 64620
St. Paul, MN 55164-0620

Regarding comments on Adequacy and Impact of the Final Environmental Impact Statement for the proposed Mesaba Energy Project.

To Judge Mihalchick:

The below comments are being submitted regarding the adequacy and impact of the Final Environmental Impact Statement (EIS) for the proposed Mesaba Energy Project (MEP). I have made an attempt to identify page and section numbers for easier reference, please note page numbers are not used in Volume II, Appendix.

Pg. S-3 DOE Purpose and Need
The purpose of an environmental impact statement is to determine what impacts a proposed project would have on the environment. The discourse by the Department of Energy (DOE) throughout the EIS readily promotes the demonstrational E-Gas technology under a legislative Clean Coal Power Initiative (CCPI) program. This politically biased approach has lead to an inadequate assessment of the environmental impacts of the proposed project. This inadequacy comes out in several comments submitted by the United States Department of Agriculture Forest Service, the Environmental Protection Agency and the United States Army Corps of Engineers in Volume II, Appendix E.

Pg. S-3 Alternatives Determined to be Reasonable by DOE
Nowhere in this section is it mentioned impacts on the environment. It is a significant push "to accelerate commercial deployment of advanced coal-based technologies" supported by congress through congress through the CCPI program.

Pg. S-63 Conclusions
The DOE displays threatening language if a "No-Action" alternative is selected. Language such as; "delays in commercialization of the E-Gas IGCC technology" and "widespread commercialization would likewise be delayed or jeopardized" reflect the DOE's biased approach to the EIS. The DOE acknowledges that there are issues unresolved even after federal governing agencies submitted concerns during the Draft EIS, which have not been adequately addressed in the final EIS.

Pg. 1-3, 1.2.1 Clean Coal Power Initiative
The DOE states coal as an "abundant" energy resource. I submitted comments in the draft EIS (75-08 of Vol. III) pertaining to the DOE's claimed 240-year supply of coal. My comments were dismissed with this response: "DOE estimated the number of years of available coal". How did they determine their 240-year supply? No background information was given, yet studies, (most notably the Energy Watch Group report - enclosed), indicate that that figure is grossly overstated. In addition there have been reports by the Wall Street Journal that reflect the disparity of a 240-year coal supply.

The DOE is promoting this "demonstration" project to further advance commercialization of Integrated Gasification Combined Cycle (IGCC) projects. There are several IGCC projects in the process of deployment, too many to list here, the most notable being Conoco-Phillips 700 MW IGCC E-Gas project in Sweeny, Texas. This project is IGCC and utilizes Conoco-Phillips E-Gas technology. Other comparable projects ranging in 400 MW to 750 MW facilities are: Summit Power, Penwell, TX (has applied for CCPI Round III funding); Great Lakes Energy, Alma, MI; Cash Creek Project, Owensboro, KY; Mississippi Power, Kemper County, MS; Duke Energy, Edwardsport, IN; Taylorville Energy Center, Taylorville, IL (is advancing in loan guarantee program from DOE).

The DOE mentions long-term ideology of Carbon Capture and Sequestration (CCS), yet openly admits the MEP is not economically feasible for CCS.

The DOE heavily explains CCPI funding "to reduce project risks associated with project financing and technical challenges for emerging clean coal technologies..." As described in more depth in these comments coal is not clean and should not be referred to in such terms.

Pg. 1-4 Bullet points
There are several areas in the bulleted points that Excelsior Energy has not shown their ability as project managers. The last two should be of particular concern as Excelsior Energy has already shown that their management of financing the MEP is highly questionable. They have been unable to pay just the interest payments on IRRR loans and successful procurement of a power purchase agreement or investors has eluded them.

Pg. 1-6, 1.2.2 State Legislative Incentives
The MEP is being contested as an "innovative energy project" in the Minnesota Appellate Court system at the time of submitting these comments.

Pg. 1-7, 1.2.2 State Legislative Incentives continued
The MN PUC has dismissed the Power Purchase Agreement for Docket Number E6472/GS-051993. The proposed project has no buyer for the electricity. This is a significant problem. Why build an expensive technologically unproven power plant if there is no one to purchase the electricity.

Pg. 1-25, 1.6.4 Connected Actions
It should be noted that the proposed pipeline to Essar Steel MN has been downgraded in size and Essar may be able to utilize an existing pipeline. Nashwauk PUC was unable to solicit other potential customers.

Pg. 5.1-1, 5.1.2 Impact of Commercial Operation
Referring to the first sentence, the MN PUC has determined that the cost of electricity of the MEP is not in the public interest and is not the least cost resource and in May of 2009 dismissed the power purchase agreement for Docket E6472/GS-051993. To date there is no buyer for the electricity generated by the proposed facility. How can the project be economically viable if the proposed project managers cannot find buyers for the generated electricity?

It should be noted that the proposed project cost was submitted in 2005 at $2.16 Billion and is out of date. The ACoE has determined cost increases to large construction projects at 10% per year since the above cost figure was submitted. Therefore cost adjustments (4½ years or 40.5%) should be applied to the proposed MEP to help aid in determining economic feasibility of the project. Considering the ACoE's determinations the proposed project cost should be adjusted to reflect the increase with a projected cost closer to $3.1 Billion.

There has been repeated reference to a 20-year life expectancy of the proposed project. It is not credible to state that a project of this magnitude would expire in so short of time. History shows that power-generating facilities are heavily invested in and are made operational well beyond a "commercial life" of 20 years. Any environmental and economic feasibility projections should be based on a 50-year operational life expectancy at a minimum.

Regarding comments on Maximum CO₂ emissions - This addition of CO₂ is not conducive to Minnesota's long-term goals of reducing Greenhouse Gas (GHG) emissions by 20% by 2012 and 30% by 2018. There are no plans to retire any current power-generating facilities in the short or long-term projections in the state.

Pg. 5.1-2, 5.1.2.1 Carbon Dioxide Capture and Geological Storage
There is no new information submitted by Excelsior Energy or DOE. The DOE has already acknowledged in the Draft EIS Appendix A2, which is repeated verbatim in the Final EIS. Since the DOE has previously determined that CCS is not economically feasible for this project, why has the DOE made exaggerated assumptions as to the viability of CCS for the MEP?

Using calculations provided by the DOE in this document I wish to address issues that the DOE has not considered or possibly ignored with CCS technology. It should be noted that comments similar to these were submitted in Vol. III (19-03 and 75-13). Using the DOE's CO₂ emission number of 212 million tons (10,600,000 x 20 years) over a 20-year period and theoretically capturing 30% (63,600,000 million tons of CO₂) with a 93% storage rate, (Vol. III 19-03 adjusted in FEIS from 33-60%), would equate to 59,148,000 tons of CO₂ theoretically being sequestered over a 20-year period. There are no studies available to quantify the implications of sequestering these quantities of CO₂ into the earth's crust for just this one project alone. Sequestration is known to cause fracturing (earthquakes). Small sequestration projects are being planned or implemented, but nowhere near the scale of this theoretical CCS plan. There are no studies available to determine groundwater contamination possibilities on a large-scale sequestration endeavor such as is described by the DOE. The DOE needs to closely examine CCS of large-scale proposals and potential rapid or incremental releases of CO₂ back into the atmosphere and potential groundwater contamination to a dwindling potable water supply due to earth fracturing. We need to be asking ourselves if we are creating a bigger problem trying to solve GHG emission reductions by CCS. I do not believe the DOE has adequately addressed these troubling issues and is diverting large sums of resources for short-term gain. This country would be better served by using its limited resources for rigorous energy efficiency and renewable energy options.

Pg. 5.2-7 Class I Visibility/Regional Haze Analysis
Regarding the first paragraph, it should be noted that the USDA Forest Service has submitted comments in Appendix E of Volume II that have not been addressed since submitting information for the draft EIS. "Our concerns with this project have not changed since our last comment letter sent to you on December 17, 2007" and "We would like to make it clear that we feel the impacts modeled to visibility at EITHER site require mitigation" are two statements made by the Forest Service noting that their concerns have been ignored by the DOE. There are several other serious issues the Forest Service has concerning DOE's "forward thinking advancing IGCC" language directed at the project instead of factual analysis of the environmental impacts the proposed project would have if the project were built.

Pg.5.2-42, 5.2.8.5 Climate Change Greenhouse Gases, and the Mesaba Project
"...it cannot be assumed that, if the Mesaba Generating Station were not built, these additional emissions would be avoided - other fossil fuel power plants might be constructed in its stead, or existing plants might produce more power, thereby increasing their CO₂ emissions."

The above comment defines a thought process that does not encourage reduction of GHGs. This mentality is prohibitive language that only signifies the deep-rooted political agenda of fossil fuel based industries. It is this mentality that has gotten us in the situation we are in and should be curtailed. If the DOE continues to entertain such thought processes, climate change will escalate beyond our ability to stabilize GHG emissions. It is imperative, and our moral obligation, to reduce and reverse the adverse affects that our industrialized society has created. The United States is responsible for the industrial revolution - therefore the United States is responsible for reducing GHG emissions.

Pg. 5.2-43, 5.2.8.6 Potential Mitigation through Carbon Capture and Sequestration
To build a power-generating facility utilizing coal that the DOE acknowledges is not economically feasible for CCS, is equal to committing additional significant amounts of GHGs for decades to come.

It is highly unlikely that Excelsior Energy could find other funding resources for their project. Financial institutions are extremely wary of funding these high-risk ventures. Several projects have been proposed, but no financiers have come forward. If the coal and oil industries actually believed IGCC and CCS are viable economic technologies, they would be investing and building such projects themselves.

Pg. 5.2-44, 5.2.8.7 Climate Change, Greenhouse Gases, and the Clean Coal Power Initiative
"The IPCC report ../ /.. identifies carbon capture and sequestration for coal-fired power plants as one of the 'key mitigation technologies' for development before 2030."

Since it is not economically feasible for the MEP to develop CCS, then it should not be considered in the CCPI program.

Pg. 5.5-1, 5.5 Relationship Between Short-term Uses of the Environment and the Maintenance and Enhancement of Long-term Productivity
"The Proposed Action would support the DOE objective of demonstrating and promoting innovative coal power technologies that can provide the United States with clean, reliable, and affordable energy using abundant domestic sources of coal."

Coal is not "clean", from the moment it's dug out of the ground to end combustion. The cost of electricity has been determined by the MN PUC to not be in the public interest and not the least cost resource. We have all seen significant electricity cost increases in MN, which will continue to escalate with any carbon management plan that Congress determines to enact. These findings are not considered "affordable". Coal is not as "abundant" as the DOE insists. The DOE's response to 75-08 of Vol. III of the EIS; "In its capacity as the Federal agency responsible for the nation's energy resources, DOE estimated the number of years of available coal reserves in the U.S." is a non-statement and does not acknowledge "attainable" coal reserves (please see attached Energy Watch Group report enclosed) which are now being recognized even in the coal industry. Other studies exist that come to similar conclusions. This irresponsible denial of the true amount of coal reserves is dishonest to the American people. It is counter-productive to continue to support a fossil fuel based industry in light of these findings. The MEP is acknowledged as a "demonstration" project by the DOE so it can hardly be described as "reliable" since the proposed project may very well not be successful in its demonstration.

Regarding the second paragraph: How can the proposed project be seen as minimizing emissions when it would be an additive and cumulative source of emissions that is currently not there?

Regarding this statement in the third paragraph; "Local officials, business leaders, and many residents consider the potential environmental impact that would occur during construction and operation of the IGCC generating station to be acceptable tradeoffs for the long-term productivity of Iron Range communities." Nowhere is it acknowledged in the EIS of the many business leaders, local and state officials, and approximately 1000 signatures gathered in opposition to the proposed project. To consider the long-term impacts of the project as "acceptable tradeoffs" reflects an attitude proposed by the project managers that have not fully disclosed the basic economic and environmental impacts of the proposed project. A cost-benefit analysis (which was requested by several commentors) was not conducted. As a result the true economic impact is unknown.

Throughout the EIS document the DOE repeatedly expresses their need to satisfy the CCPI requirement to accelerate the commercialization of clean coal technologies. A determination by a political body should not supersede the importance of a true analysis of impacts to the environment for this project.

Thank you for your consideration in comments regarding the Final Environmental Impact Statement for the Mesaba Energy Project.

Respectfully submitted,
Amanda Nesheim

FINAL EIS COMMENTS

Mesaba Energy Project, PUC Docket No. E6472/GS-06-668 DOE Final EIS for the Mesaba Energy Project (DOE/EIS-0382)

Comments on Adequacy and Impact: DOE Final EIS (FEIS) for the Mesaba Energy Project

Mesaba Energy Project, PUC Docket No. E6472/GS-06-668
DOE Final EIS for the Mesaba Energy Project (DOE/EIS-0382)