LOCAL IMPACTS
CO2 Sequestration in MN | Environmental Effects | Health Impacts | Economic Impacts | Finance & Infrastructure | FAQsCO2 Sequestration in MN
Below is the Executive Summary text extracted from "POTENTIAL CAPACITY FOR GEOLOGIC CARBON SEQUESTRATION IN THE MIDCONTINENT RIFT SYSTEM IN MINNESOTA", a 138 page (7 MB - large) pdf which you can download from this link.
This link will download a pdf (60 KB) of the Executive Summary (pages 7-10 of the above pdf) that is posted below.
Here is another pdf document (64 KB) from the University of Minnesota providing an executive summary concerning "terrestrial sequestration" in Minnesota.
POTENTIAL CAPACITY FOR GEOLOGIC CARBON SEQUESTRATION IN THE MIDCONTINENT RIFT SYSTEM IN MINNESOTA: EXECUTIVE SUMMARY
Increasing concern about climate change has necessitated the assessment of ways to reduce greenhouse gas emissions, while concurrently increasing our preparedness for climate change and variability. For example, in 2007, the Minnesota Legislature set goals to reduce our emissions 15% by 2015, 30% by 2025, and 80% by 2050. These reductions can be achieved by reducing combustion of fossil fuels, and by reducing other activity that generates greenhouse gases. Changes in land use can induce increased storage of carbon in soil and vegetation, thus facilitating terrestrial sequestration of emissions from the full range of sources, including vehicle emissions. In the case of stationary sources of carbon dioxide (CO2) emissions, however, such as the coal-fired electrical generating stations, ethanol plants, and other stationary sources that make up over one-third of Minnesota CO2 emissions, the technology to capture CO2 is available, pending developments in methods and costs. The likely fate of CO2 captured from stationary sources would be storage by geologic sequestration, also known as carbon capture and storage, by injection into underground geologic formations where it can be stored for long periods of time to prevent its escape to the atmosphere. This method is in the early deployment phase worldwide, but estimates indicate it may permit 15 to 55% of the emissions reductions needed to avoid dangerous levels of climate change. In addition, analyses indicate that achieving these reductions will be less costly if geologic carbon sequestration is an option. Another geologic technique is mineral carbonation, in which CO2 is reacted with material from mining, producing mineral products for disposal or use in construction. While Minnesota has favorable geology for this option, the method is not fully developed and the costs remain high.
With respect to the deep injection method, an option for Minnesota is export of CO2 from stationary sources by pipeline to one or more potentially willing jurisdictions such as North Dakota or Illinois, where apparently suitable geologic repositories have been confirmed. It is possible, however, that saline formations in Minnesota could be confirmed as geologic CO2 repositories, possibly enabling carbon storage without the requirement for negotiations with neighboring jurisdictions and export by pipeline. The only rocks in Minnesota that potentially have the required reservoir properties below about a kilometer depth, the depth required for efficient CO2 storage, are sequences of sedimentary rocks associated with the Midcontinent Rift, a southwestward extension of the Lake Superior basin that extends to Kansas. Criteria for confirmation of potential include depth, porosity, permeability, presence of a seal, integrity relative to previous drilling or fractures, appropriate chemistry relative to lack of drinking water potential and chemical trapping mechanisms, and adequate data availability.
As part of efforts by Minnesota to take steps toward dealing with the climate change issue, therefore, this report summarizes current knowledge and knowledge gaps regarding the potential capacity for geologic carbon sequestration in the Midcontinent Rift System (MRS) in Minnesota, as required by 2007 state legislation, while also discussing the mineral carbonation option. By reviewing published, unpublished, and new data, the report reviews available information pertinent to the potential long-term storage of carbon in Minnesota geologic formations. To do so, the study assesses the potential for porous and permeable sandstone layers deeper than one kilometer below the surface that are capped by less permeable shale, with emphasis on formation properties that determine injectivity, storage capacity, and seal effectiveness. Included is discussion on characteristics of key sedimentary units within the Midcontinent Rift System in Minnesota, including (1) likely depth, temperature, and pressure; (2) physical properties, including the ability to contain and transmit fluids; (3) the type of rocks present; (4) structure and geometry, including folds and faults; and (5) hydrogeology, including water chemistry and water flow. In addition, computer modelling methods are discussed and applied to the Minnesota context to the extent that could readily be achieved. The study thus identifies the most promising formations and geographic areas in Minnesota for physical analysis of carbon sequestration potential.
The prospective rocks primarily are known with respect to their depth and thickness on the basis of geophysical surveys. These seismic, gravity and magnetic interpretations indicate that sedimentary basins associated with the Midcontinent Rift in Minnesota are to a large degree associated with depths and volumes that are compatible with sequestration of CO2. The area where sedimentary rocks are more than 1 km thick, including both the most promising rocks, Bayfield Group sandstones, and overlying rocks that contribute to making up required depth, are presently thought to encompass two north-south belts on either side of the Twin Cities, running from Pine County and Washington County, south to Iowa (box). Available geophysical information thus indicates that there is sufficient sedimentary rock depth and thickness in the Midcontinent Rift System sedimentary basins in the region for further consideration of sequestration capacity to be warranted.
Estimated extent of sedimentary rocks thicker than 1 km in Minnesota, the depth required for potential carbon sequestration, based on 3D gravity modelling by Allen (1994), and scattered shallow drillhole intersections. Additional 3D gravity modelling, taking advantage of currently available methods and computing power, is needed to clarify and refine these estimated extents, prior to further geophysical surveys, drilling, and modelling meant to clarify the extent, thickness, and character of the rocks, to determine if potential is present
There is little in available geophysical information, however, that addresses porosity or permeability of these rocks. Although factors other than porosity can affect seismic velocity, the available velocity data from seismic refraction surveys do not look promising, as most values exceed 12,000 ft/sec, which are values higher than those typical of highly porous rock. Nonetheless, further work using new methods, such as velocity or waveform analysis of either existing or, if necessary, new seismic reflection data could be implemented to potentially better address porosity. Another approach might be to use magnetotelluric methods to look for conductive brines in the sedimentary section, which would indirectly indicate porosity, while additional 3D gravity modelling is needed to clarify extent and thickness, using currently available methods and computing power. Thus while depth and thickness of the rocks are amply demonstrated, required information on porosity and permeability is inadequately established from geophysical surveys, and the same conclusion applies to a review, synthesis, and limited new analyses of their lithostratigraphy, depositional history, physical properties, and hydrogeology. Therefore, these rocks may not be sufficiently well characterized to permit a fully informed judgment on their suitability as a site for the sequestration of CO2, but the limited available information indicates that the MRS has attributes that make it far less suitable for sequestration than other sites currently being considered across the country. On the positive side, the MRS contains the only sedimentary rocks in Minnesota that extend to depths required for sequestration, including sandstone bodies that at relatively shallow depths of 2500 ft (762m) or less are known to locally have moderate porosity and permeability. Shale and mudstone intervals are present, which appear to be of sufficiently low matrix permeability to serve as seals. An additional positive attribute is the lack of previous exploration, as reservoirs that have a history of exploration and production tend to have been penetrated by large numbers of often-undocumented drill holes that may not have been properly abandoned, presenting a significant and unquantifiable risk of leakage. These attributes thus suggest that the MRS can not yet be ruled out as a potential site for deep geologic sequestration of CO2.
On the negative side, however, the known and inferred properties of the MRS in Minnesota and neighboring areas indicate that there is only a very small probability that it contains the geologic attributes necessary to serve as a site for deep geologic sequestration of CO2. Geophysical logs of deep exploratory boreholes in Iowa and Wisconsin, petrographic analyses of sandstone in those states as well as Michigan and Minnesota, and the limited number of tests on samples from Minnesota cores as part of this project indicate that sandstone at the depth required for sequestration is relatively low in porosity and permeability. Permeability has been measured to be orders of magnitude too low for sequestration to be viable everywhere it has been tested in the MRS. Furthermore, the MRS is associated with a more complex tectonic history compared to other sites being investigated, and therefore features such as faults and fractures may play a larger role in site evaluation. For example, low permeability beds in the MRS that are necessary to serve as seals on top of potential CO2 reservoirs are known to contain fractures with evidence of fluid flow. Fractures associated with faults are believed to serve as conduits for deep MRS groundwater to travel upward across such seals to overlying freshwater aquifers today. Identification and mapping of such features will be a more difficult task compared to the relatively simple structural settings being assessed elsewhere. Thus while much information is available for regions elsewhere in the US, such a body of geologic knowledge does not exist for the Midcontinent Rift. If it is determined that further research is warranted, a comprehensive investigation encompassing geophysical surveys, multiple deep and thoroughly analyzed exploratory boreholes, followed by stratigraphic, structural, tectonic and hydrogeologic interpretation will be necessary to bring the understanding of these rocks up to a level analogous to that presently available for where sequestration is being implemented. Early-phase characterization of the rift thus would require significantly more time and expense than was expended for initial assessments elsewhere.
Also part of the current study was numerical simulation initiated at the University of Minnesota Department of Geology and Geophysics, to obtain insights into current methods, to clarify needed information, and to take steps toward building the capacity that would be required for iterative simulation should subsequent steps proceed. Concurrently, this research contributes to broader knowledge relevant to topics such as groundwater as well as mineral and energy resources, and positions Minnesota to contribute to carbon sequestration research more broadly. Current numerical modelling is, however, in the initial stages required in a comprehensive CO2 project since a wide range of geologic conditions as well as injection and storage scenarios have yet to be fully explored. Significantly more detailed studies, both in the field and via numerical modeling, will be needed for the analysis to play needed roles in eventually determining whether the MRS has characteristics favorable to CO2 storage. A limited range of injection scenarios have been tested, however, varying solute injection rate as well as aquifer and caprock permeability and porosity between scenarios. Within the ranges of geologic parameters currently expected in the rift, the current model suggests that the following reservoir properties would be feasible for CO2 storage if they were to be confirmed: aquifer permeability, 10-15 m2 to 10-13 m2; aquifer porosity, 4% to 20%; caprock permeability, 10-21 m2 to10-18 m2; and caprock porosity, 6% to 16%. Currently under way is an expansion of modeling capabilities to include multiphase behavior, as well as varying reservoir geometries and conditions. A subsequent phase of modeling could proceed as a three-year effort to improve the numerical multiphase fluid flow modeling environment. Initial work would be possible without the aid of field studies, as model geology could be improved by analysis of existing or new rock cores, while shallow wells that intersect saline brines could be sampled in order to support reactive transport modeling. Results from these improved models would then contribute to selection of sites for geophysical surveys, which in turn would support improved model iterations. Similarly, model iterations and scenarios would contribute to drillhole site selection, if called for, and again, direct data on rock composition and geometry together with brine composition from deep borehole sampling would again improve model iterations, continuing the cycle. Iterative field investigations and modeling would continue until required confidence levels concerning the feasibility of CO2 storage are reached, at which time field tests of CO2 injection and storage could be considered.
In summary, a spring 2007 bill passed by the 85th Minnesota Legislative Session as S.F. No. 2096, the omnibus environment, natural resources, energy and commerce appropriations, signed by Governor Pawlenty on May 8, 2007, provided for carbon sequestration studies, including funding to the Minnesota Geological Survey (MGS) for the purposes of geologic carbon sequestration assessment. A draft report therefore was prepared by staff of Minnesota Geological Survey and University of Minnesota Department of Geology and Geophysics, and a technical review meeting attended by local, state, and national authorities was held January 17, 2008. Appreciation is expressed to all participants in the technical review. On the basis of the contents of this report, along with broader considerations, the report authors present the following conclusions and recommendations.
Conclusions:
- At the outset, it is stressed that currently available data indicate that there is a very low probability of success in confirming suitable geologic conditions for deep geologic sequestration of CO2 in Minnesota. At the same time, it is acknowledged that these same data are inadequate to rule out the most prospective rocks
- Sedimentary rocks of adequate thickness are present in two north-south belts on either side of the Twin Cities, but limited data to date have indicated that their properties are not favorable for CO2 storage
- Minnesota may require, however, knowledge at a higher level of certainty than presently possible to indicate whether geologic carbon sequestration is a potential option for implementation within the State - for this, more geophysical surveys, drilling, and numerical modeling of CO2 storage will be required to permit a reasonably informed judgment.
Recommendations:
- Concurrent with any further geologic analysis and assessment of other emission reduction options, effort presumably is required in CO2 source characterization, analysis of pipeline systems, drinking water protection, arrangements for the activity, and community consultations, along with further analysis of the mineral carbonation option
- Should it be established that a more a conclusive determination of in-state sequestration potential is needed, taking into consideration costs, a 3-year program including deep (~2 km) drilling will be required
- A one-year pre-drilling phase costing about one million dollars would include geophysical surveys, further analysis of cores and water chemistry, including analysis of regional diagenesis, and numerical modeling of CO2 storage
- Drilling in the second year should be conducted at the minimum expense required to satisfactorily answer the questions at hand, possibly as much as ten million dollars. Inexpensive coring methods should be explored, while it is recognized that oilfield methods, including comprehensive downhole logging, may well be needed. A third year would then be required for analysis of field data, including integration of the data by further numerical CO2 storage modeling, leading to reporting.
The key conclusion of the report is, therefore, that, unlike better known rocks in oil or coal producing regions, we have little information on the Rift. A major effort costing tens to hundreds of millions of dollars would therefore be required to test the Rift sedimentary rocks in Minnesota for required reservoir capacity and properties, and the probability that these requirements would not be confirmed, despite this effort, is high.
ENVIRONMENTAL EFFECTS
What is in Coal?
Coal is composed primarily of carbon and sulfur but it also contains nitrogen and small amounts of mercury, lead, and arsenic. Coal gasification creates a low-BTU "syngas" by exposing coal to high temperature and pressure. The syngas is then burned in a combustion turbine connected to an electric generator. The coal gasification process produces electricity, airborne emissions and noncombustible ash or slag. Additional heat which cannot be utilized in the steam turbine will be dissipated using cooling water. Some of this cooling water will evaporate in the process, and the remainder will be discharged along with concentrated levels of mercury, sulfates, and dissolved solids. Mesaba Energy Project Outputs
The two coal gasification plants (Mesaba I/II) proposed by Excelsior Energy near the Scenic Highway in Itasca County would result in annual airborne emissions of:
- 10 million tons of carbon dioxide
- 54 pounds of mercury
- 1,271 tons of SO2
- 2,770 tons of NOx
- 1,909 tons of CO
- 432 tons of particulate matter
- 176 tons of volatile organic compounds
Known Impacts
- Mercury is a carcinogen and neurotoxin that bioaccumulates up the food chain. Even low levels of exposure can have a health impact.
- Carbon in the form of CO and CO2 acts as a greenhouse gas.
- SO2 and NOx are associated with increased smog, acid deposition and air pollution.
- Particulate Matter (PM) are fine particles of soot that cause heart disease, breathing problems, and other health concerns.
- Volatile Organic Compounds contribute to smog formation and cause breathing problems.
- Lead causes neurotransmitter problems in children.
- Arsenic pollutes groundwater used for drinking.
www.health.state.mn.us/divs/eh/fish/index.html
Carbon Capture and Sequestration
Carbon Capture and Sequestration (CCS) is purportedly the primary benefit of IGCC technology. However, Excelsior has no intent to capture CO2 unless required to do so. Excelsior claims its plant would be "capture ready", but current technology would enable capture of only 30% of Mesaba's 10 million annual tons. Sequestration of CO2 is not possible in Northern Minnesota. In fact, the plant is about as far as possible from any potential geologic sequestration site. Piping the CO2 under high pressure to western North Dakota or Canada would cost hundreds of millions of dollars or more. CCS would cause a significant loss of efficiency for the plant, making Mesaba's high cost power even more expensive. Long-term sequestration of CO2 on a large scale has not been proven, and there would be significant health and safety concerns related to CO2 escaping from the pipeline or the geologic reservoir.
Water contamination
Excess heat from the IGCC process must be dissipated. Excelsior Energy plans to use in excess of 15,000 gallons of water per minute from the Canisteo Mine Pit to cool Mesaba I/II. As the additional heat evaporates the water it concentrates the elements already present in the mine pit water. Thus cooling the plants increases the concentration of mercury, lead and arsenic in the cooling water. Once the concentration of these elements nears a critical level the waste cooling water must be released into a watershed. Excelsior Energy proposes sending the waste cooling water into the Canisteo as well as Holman Lake, which is connected to the Mississippi River via the Swan River. This waste cooling water will also contain scale and corrosion inhibitors, bleach, acid, and biocides that are used to protect the cooling towers at the two plants.
The Army Corps of Engineers have expressed concern that the plant would be located in an "area particularly rich in aquatic resources". They indicate Excelsior may have excluded several potential sites that would be "brown field" and have less wetland impact.
Contamination of the Canisteo Mine Pit water would ruin the pit as a lake trout fishery, and the pit would be closed to recreational use. This would also threaten the drinking water of Coleraine and Bovey as shown in recent Minnesota Department of Health wellhead reports. Discharge of cooling water would not be allowed if this plant were sited on the East Range which is in the Lake Superior watershed because mercury requirements are more stringent. Excelsior has acknowledged that "Zero Liquid Discharge" is possible, but would cost millions of dollars so is not planned for the Scenic Highway site.
Bovey Wellhead Report - 222 KB pdf
Coleraine Wellhead Report - 204 KB pdf
Army Corps of Engineers Report - 392 KB pdf
Summary
Excelsior Energy has not been able to prove its claims that IGCC technology is a "clean" way of using coal to produce energy, even relative to traditional pulverized coal burning. IGCC is far from clean because mercury, carbon dioxide, carbon monoxide, sulfur dioxide, nitrogen oxides, lead, arsenic, volatile organic compounds and particulate matter are all emitted into the atmosphere.
Water contamination will ruin a rare lake trout fishery, contribute mercury, sulfates, and other chemicals to the Mississippi watershed, and threaten city drinking water.
Millions of tons of greenhouse gases will be emitted annually. There is no plan for Carbon Capture and Sequestration (CCS).
Excelsior has chosen not to prevent contamination of local waters and not to implement the available CCS technology anytime soon. They describe their project as a "state of the art facility" that will "preserve and protect the environment" but this is far from reality.
HEALTH IMPACTS
Coal Gasification and Health
Coal gasification has been billed as "clean technology", but the reality is quite different. There's a multitude of health risks associated with coal gasification specifically related to the various pollutants. This "clean technology" consists of two phases (Mesaba I/II) that will annually emit in excess of 10 million tons of carbon dioxide as well as over 5000 tons of pollutants such as sulfur dioxide, nitrogen oxides, volatile organic compounds, mercury and other heavy metals.
Excelsior commissioned a study that claims "health benefits" from this technology by comparing it's environmental and health impacts to those of a fictional supercritical pulverized coal plant (SCPC) located near the Twin Cities. Excelsior attempts to show benefit by comparing itself to an older, dirtier technology located near higher density population.
The report of the Administrative Law Judges (ALJs) shows that the Mesaba Project could achieve significantly reduced sulfur dioxide emissions compared with SCPC technology, but will only slightly reduce particulate matter (PM) emissions, and will have higher nitrous oxides (NOx) emissions. The ALJ report also indicates that IGCC technology "is not inherently better at controlling mercury emissions than traditional solid fuel based technologies." The Mesaba Project will add thousands of tons of pollutants to our air annually, and in doing so can not provide any "health benefits."
Particulate Matter (PM) can make any of us feel sick. Those especially affected include people with asthma, emphysema, chronic bronchitis, and heart disease. Children and the elderly are at higher risk.
Excelsior's study tells us that Mesaba I/II would be responsible for the deaths of 10.7 people in the U.S.A each year; 24% of deaths would occur in Minnesota. In addition the report states that "It can be seen that mortality risks associated with the IGCC Power Station are both somewhat lower and more concentrated around the facility than the risks associated with the Alternative" (fictional) "SCPC plant."
The proposed stack height has been lowered 100 ft for "aesthetic reasons". This will make the local pollution impact and health consequences even greater than described in the study.
Morbidity (illness) related to PM
The report gives numbers of people experiencing illness each year in Minnesota as a result of Mesaba I/II as follows:
- Acute bronchitis: 1.6
- Non-fatal heart attack: 1.9
- Asthma exacerbation: 100
- Lower respiratory symptoms: 19
- Minor restricted activity days: 791
- Work loss days: 18,313 (Excelsior indicates this number is incorrect in the study)
- Clinic/urgent care visits? Lesser illness is difficult to quantify.
A study in the New England Journal of Medicine, February 2007 reported increased risk of heart attack and stroke related to particulate matter exposure. Death related to heart disease and stroke increased 76% with each increase of 10 µg per cubic meter in long-term PM2.5 exposure. It appears that previous estimates of illness and premature death caused by air pollution have been too low, and would mean that the Mesaba Project would be responsible for an even greater rate of death and illness than reported in their study.
Mercury and health: up to 54 lbs of mercury will be released from the Mesaba I/II per year. The "mercury impact zone" includes 720 lakes over 320 square km. 487,000 fish are annually harvested from these lakes and 7,780 women of child-bearing age and children live here. Chronic mercury exposure in a developing fetus can cause mental retardation, growth deformity, seizures, blindness, deafness, and severely delayed development.
Chronic mercury exposure of infants and small children can cause impaired reflexes, delayed motor development, impaired attention, impaired memory, and impaired language.
Excelsior's report also tells us that low level mercury exposure from fish consumption may lead to heart attack, and hardening of the arteries, especially in adult males.
Nitrogen oxides and ozone play a major role in formation of particulate matter and ground level ozone (smog). Ozone causes respiratory illness and lung inflammation. Ozone forms in the presence of nitrous oxides, volatile organic compounds, light, and heat. The Mesaba plant would produce 2,772 tons/yr of nitrous oxides and 152 tons/yr of volatile organic compounds.
On high ozone days there is a marked increase in hospital admissions and emergency room visits for asthma and other respiratory illness.
"EPA National Air Quality and Emission Trends Report"
On hot sunny days, the MN Department of Health states that ozone concentrations can rise to unhealthy levels, and ozone transport can cause elevated levels in rural areas.
Elevated ozone levels worsen asthma, can cause throat, lung and nose irritation, cause chest pain, cough, and shortness of breath, and can make people more susceptible to respiratory infections.
One third of healthy adults are sensitive to the effects of ozone. Outside exercise increases this risk. Children are more susceptible to the effects of ozone because they are smaller, breathe faster, and play outside on nice sunny days. Children are more likely to develop asthma and require hospitalization for asthma when exposed to ozone.
Electro-Magnetic Fields (EMF): Electric and magnetic fields are invisible lines of force that surround any electrical device. Electric fields are produced by voltage which is easily shielded by soil, walls, etc. Magnetic fields are produced by current and easily pass through most materials including skin.
The International Agency for Research on Cancer (IARC) (an agency of the World Health Organization) classifies EMF as possibly carcinogenic to humans (childhood leukemia).
The California Department of Health commissioned a seven year, nine million dollar study and concluded that EMF should be considered "possibly carcinogenic", and may be "carcinogenic".
The Minnesota Department of Health "considers it prudent public health policy to continue to monitor the EMF research and support prudent avoidance measures".
In June 2005 the British Medical Journal published a case control study of childhood cancer related to high voltage power lines in England and Wales. It found that children living within 200 meters of overhead power lines had a 70% increased risk of leukemia. Children living up to 600 meters away had a 20% increased risk of leukemia.
Particulate Matter Study
An article containing information about particulate matter and women's health is linked here.
Here is the link to the abstract of a study released in "The NEW ENGLAND JOURNAL of MEDICINE" that links cardiovascular events in women with particulate matter.
ECONOMIC IMPACTS
Debunking the "Jobs" myth:
Excelsior Energy would have citizens of Itasca County believe that one of the main reasons to support the Mesaba Energy Project is that it will bring jobs to the area and boost the local economy. We recognize that good paying jobs and economic development are necessary for a healthy local economy. This project would bring some good jobs to the region, but at what price? We need to weigh the beneift of job creation against the enormous public financial burden, environmental impact, and public health impact. Because the benefit (job creation) is inconsistent and keeps trending downward this balance seems impossible to attain.
Promised Jobs: In 2001, the Mesabi Daily News reported that Excelsior Energy had an ambitious plan to be up and running by 2006, creating 1000 permanent jobs when the plant went on line. In 2002, the Hibbing Daily Tribune quoted Excelsior CEO Tom Micheletti as saying the plant would provide 600-800 construction phase jobs and around 600 permanent jobs. Over the past year, Excelsior's documents have given construction phase job numbers that vary by over 60%. Documents submitted to the PUC in 2006 now list 107 permanent jobs for Phase I and no numbers given for Phase II. In the past year, the Grand Rapids Herald Review quoted Micheletti as syaing Phase I/II would provide 200 jobs; Mike Wadley (ex-Excelsior VP) said 170 jobs for Phase I/II at a Taconite public meeting; and Micheletti quoted 150 jobs at a meeting in Trout Lake Township. The numbers keep going down, and even the CEO seems to have no idea how many jobs he will create.
Permanent Jobs: According to Tom Micheletti, "This will be the most advanced coal plant in the world." Who will be qualified to work in such a plant? To find out, we contacted the Human Resources representative at the Wabash Facility in Terre Haute, Indiana, sister coal-gasification plant to the proposed Mesaba plant. Of the 105 positions in the Wabash facility, about 14% require a minimum of a 4-year college degree. The other 86% of those jobs require specialized training in a specific area (e.g. journeyman electrician, boilermaker, millwright), plus extensive previous experience in either a power plant, refinery, or similar industrial/military background. These are highly specialized jobs that will pay well, but very few local residents will be qualified for these positions. When asked about security, janitorial, and food service jobs, we were told that these positions are contracted out. So it is possible some of those contracts will go to local companies.
The construction phase contracts are unlikely to be awarded to local companies. Excelsior's PUC application states, "The labor will be provided through the local Building Trades." But the fact sheet lists Fluor as the construction contractor, and Siemens as the joint construction contractor. These are not Minnesota companies.
Conclusion: The number of jobs claimed by Excelsior Energy are inconsistent, have diminished markedly over time, therefore the benefits of this project are impossible to determine. The enormous public financial risk created by Excelsior's cost-shifting to taxpayers, combined with the substantial adverse environmental and health impacts greatly outweigh any economic benefit.
FINANCE & INFRASTRUCTURE
Project Financing
In May 2006 the federal Department of Energy estimated a total project cost for Mesaba Unit I of $2.156 billion. A 10/07 industry report says that IGCC costs have escalated between 30% and 50% since the beginning of 2006.** A more recent cost estimate for Mesaba is not available.
The developers have refused to say how much of their own money is being invested. The DOE also stated that "the financial risk associated with this technology demonstration is, in general, too high for the private sector to assume in the absence of strong incentives".* The developers have found ways to shift some of this risk to the public.
Public funding for Mesaba so far totals $55.5 million:
- $9.5 million from Iron Range Resources (IRR);
- $10 million ($2 million/year for five years) from the state's Renewable Development Fund; and
- $36 million from the federal Department of Energy.
Infrastructure Funding
It is difficult to keep track of the public monies being spent on infrastructure that would benefit Mesaba because so far the funds have been budgeted to provide services (railroad and natural gas pipeline) for Minnesota Steel that would also serve Mesaba if it is built. Best available estimates (now outdated) of some of the public infrastructure costs for Mesaba total $55,477,725. This includes:
- $14,730,500 for roadway;
- $21,526,000 for railroad;
- $7,480,000 for gas pipeline;
- $1,224,000 for potable water ;
- $3,281,000 for sewer;
- and an additional 15% for design and construction administration.***
Itasca County and the NPUC have promised the state***** to issue bonds sufficient to complete construction of the railroad and natural gas pipeline to serve Minnesota Steel if sufficient funds are not provided by the state. If bonding is necessary, they hope to issue revenue bonds designed to minimize the risk to taxpayers. However, if there is no market for the revenue bonds, it may be necessary to issue general obligation bonds, for which the property taxpayers would be at risk. The County's infrastructure coordinator advised the Commissioners in October 2007 that the railroad bonds will be very difficult to sell.
The City of Taconite has annexed the area where the Project is to be built and would be responsible for sewer and water service (previously estimated at $4.5 million, not including upgrades to wastewater treatment). It is not clear how this would be financed.
* Dept. of Energy's Notice of Intent, Federal Register Vol 70, No. 192, 10/5/05
** emerging energy research, Clean Power Generation Advisory, 5 October 2007
*** Infrastructure Cost Estimate by SEH 2/2/06
**** SEH Update 9/4/07
***** Grant Agreement with Minnesota DEED
FREQUENTLY ASKED QUESTIONS
Who Is CAMP?
Citizens Against the Mesaba Project (CAMP) was formed in response to Excelsior Energy's proposed Mesaba Project. In the summer of 2005 when the preferred site changed from an abandoned mine site near Hoyt Lakes to an area of lakes, forest and wetlands near the Scenic Highway, local residents starting paying closer attention. It was difficult to get good information about the Project, especially why this location was preferred. Even more questions arose from attending Excelsior's public presentations. A group of concerned neighbors studied Excelsior's documents, dug deeper, developed a more complete understanding, and evolved into a grassroots organization to oppose the Project. CAMP has no paid staff and is supported by volunteers and donations.
How Did The Mesaba Project Get This Far?
A couple of former employees of Xcel Energy (NSP) wanted to take advantage of the Bush administration's "clean coal initiative" to build a coal-gasification power plant in Minnesota. They convinced the people of Hoyt Lakes that such a plant on the former LTV site would provide hundreds of jobs and developed support for this among the Iron Range legislative delegation. They got $1.5 million from Iron Range Resources (IRR) in 2002. During the special legislative session in 2003 a deal was struck: the Iron Range delegation would vote to allow Xcel Energy to have more nuclear waste storage if enough other legislators would support a coal-gasification project to be built on the Iron Range. The resulting legislation included financial and regulatory benefits for such a coal-gasification plant, which the developers used to get an additional $8 million from IRR and an agreement for $36 million with the federal Dept. of Energy. When the Project ran into problems with the Hoyt Lakes site, the developers looked for another site on the Iron Range. They credit Rep. Loren Solberg and Sen. Tom Saxhaug for bringing them to Itasca County.
Don’t We Need The Power?
Usually this question would be answered by the Minnesota Public Utilities Commission. But this regulatory safeguard was avoided by a provision in the special legislation that exempted the Project from a certificate of need. Excelsior has attempted, so far unsuccessfully, to force Xcel Energy to purchase the output of Mesaba Units 1 and 2. Xcel's service territory does not include the Iron Range and new high voltage transmission lines (HVTL) would be needed to send the additional power south to the Twin Cities area.
The Army Corps of Engineers, using its authority under the Clean Water Act, has requested additional information to demonstrate Excelsior's claim that Minnesota will need 3,000 to 6,000 additional MW of power over the next 15 years and justification for why it is not practicable to seek sites for the power generating project outside the Iron Range. These factors will be considered as part of the environmental review process.
Army Corps of Engineers Report - 392 KB pdf
Isn’t This A Done Deal?
Far from it. Excelsior needs a long-term contract with a customer to purchase the output of the plant(s) or it won’t be able to finance the Project. In August 2007 the PUC determined that Excelsior's proposed power purchase agreement (PPA) with Xcel Energy was not in the public interest because it was too risky and costly for Xcel's ratepayers. The PUC directed Excelsior and Xcel to continue negotiating. However, Xcel has pointed out several fundamental problems that present "challenges" to reaching an agreement. Minnesota Power has also actively opposed the PPA and could take its opposition into the court system.
Before permits can be granted for siting the plant, the HVTL and the natural gas pipeline, an environmental review process must be satisfactorily completed. The release of the draft environmental impact statement has been expected for months but has repeatedly been postponed by the Dept. of Energy. The EIS likely will reveal significant problems that could prevent permits from being issued.