Mesaba Energy Project May Move Forward

By KBJR News 1

May 27, 2011 Updated May 27, 2011 at 6:47 PM CDT

Taconite, MN (Northland's Newscenter)---A Minnesota legislative bill has cleared the way for the Mesaba Energy Project in Taconite to move forward with both a coal gasification plant and a natural gas plant.

For the past decade, Excelsior Energy's Mesaba Energy Project has been stuck in the beginning stages of a coal gasification plant.

New language in an omnibus energy bill passed, just before the end of the Minnesota legislative session, re–ensured approval for permits passed in 2003. The bill also expands the permits to cover not just the gasification plant but the natural gas plant as well.

"The main part of the legislation was allowing the plant to use natural gas as a fuel source as opposed to coal, and then if the second part of the plant were to come to fruition, then the coal would be used," said DFL Senator David Tomassoni. "It just gives it a dual track."

Since the coal gasification plant was first proposed the project has received millions of dollars in federal grants and a $9.5 million loan from the Iron Range Resources and Rehabilitation board.

Many remain skeptical that either plant will come to fruition especially in light of the fact that Excelsior energy has not yet secured an agreement from anyone to buy the power they would create.

"I don't know that a natural gas power plant, that does not yet have a power purchase agreement, or customer or permits or financing...I don't know that that represents that great innovative turn that we need around here," said Aaron Brown, a political blogger.

Iron Range lawmakers say passing the energy bill provides wiggle room for the project to get back on its feet and begin to pay back loans and create jobs.

"They haven't come to us for any more money, said DFL Rep., Carly Melin of Hibbing. "If it comes to that point, then certainly I might change my mind, but right now we at least want to give them the opportunity to have the project."

Minnesota Governor Mark Dayton still needs to sign the omnibus energy bill before Excelsior Energy can move forward with its plan.

Posted to the web: Jennifer Walch