Friday, May 9, 2008

More steel and speculation in this week's Biz North

Wayne Nelson and the writers at Business North do a fine job of covering the economic news of northern Minnesota and Wisconsin. This week's edition has a couple of interesting Iron Range stories.

First, this story reviews Essar Global's North American steel ambitions, something I talked about earlier in the week. This is the company that is in the process of buying Minnesota Steel, a proposed mining and steel-making operation on the Iron Range.

Then this story explores how the Iron Range is currently driving the region's manufacturing and service economy in advance of what is still believed to be a potential economic boom.

Brown on the Air: Mom's Cooking

My weekly commentary for Saturday's "Between You and Me" on 91.7 KAXE is entitled "High Heat" and talks about a couple kitchen stories and life lessons in honor of my grandma on this upcoming Mother's Day. The call-in show will discuss the nostalgic topic of "Mom's Cooking" while sharing great music and probably a recipe or two. It sounds like John Bauer will be filling in as host this week. Tune in between 10 a.m. and noon on Saturday, May 10. It should be fun. You can pick up KAXE on 91.7 FM in northern Minnesota or stream it online at www.kaxe.org.

Thursday, May 8, 2008

Great news! The Range is getting shafted by lobbyists!

Maybe you heard on the TV the great, fantastic super duper news that lobbyist-run Excelsior Energy got a gabildyzillion dollars in tax credits for their boondoggle Mesaba Energy Project. Wow! That's great! Except that the tax credits apply only if they build the plant, a prospect that requires private investment and a customer willing to buy the overpriced, unreliable power. Also they need to figure out how to make the vast granite shelf below the Iron Range part like the Red Sea so they can bury their carbon like they promised. I'll buy it when Moses registers as a lobbyist for Excelsior.


Literally at the same time Excelsior was sending out this press release they were ducking out of a scheduled PUC meeting that may well have put a stake through the heart of their entire project by closing off a mandated power purchase agreement they need to survive. At some point, the people of the Iron Range will grow tired of this insulting P.R. strategy and figure these people out for the hacks they are. May that day come soon.

Rural broadband needs a little less hooey and a little more Huey

You know, it's not necessarily cool to idolize the late Louisiana Gov. and Sen. Huey Long, who was assassinated at the peak of his power in 1935. Most people don't know who he was and, technically speaking, he was a corrupt despot. But he took a poor state, Louisiana, and brought it from one century into the next when most folks thought it'd be stuck back there forever. How? He just did it. He got the money and he built the roads, schools and hospitals. It was ugly. He fought powerful interests and used rough tactics. But his name is still on all the stuff in Louisiana.

Today, we have paved roads in northern Minnesota. They're not always great and should be improved, but they are paved. No one could fathom forcing rural Minnesota to go without paved roads just because they weren't close to the Twin Cities. Without these paved roads, we'd be mired in poverty forever just as Louisiana seemed to be in the 1930s when Long was governor and the rural roads were so bad farmers couldn't move their crops.

Well, today, the most pressing issue isn't unpaved roads. The issue is affordable high-speed internet access for every Minnesota (heck, American) at work and at home. It's the new utility that will bring us from one century into the next. It is a very expensive concept with millions of miles of cable to install. There are a lot of reasons not to do it, but those reasons will all seem pretty silly when the Internet -- and thus the economy -- is controlled by other countries in the future, counties that invested in high-speed internet throughout their population.

Here's a practical op-ed by the Blandin Foundation's Jim Hoolihan that ran in Wednesday's Pioneer Press regarding rural broadband. This is the first step toward what must be done. It's what Huey would do. We have access to as much or more resources in northern Minnesota than Huey did in Louisiana 1930. We could build the best rural internet network in the country. Not because our retiree population demands it (they don't), but because that's what needs to happen to make this region competitive in the future.

Getting along

Minnesota Public Radio has a story today on why Republicans and Democrats can't get along. Iron Range State Rep. Tom Rukavina is quoted near the end. His diagnosis: not enough free beer. His solution: more free beer. Makes sense to me.

Wednesday, May 7, 2008

City Pages reports on Iron Range past, present

I'm not sure what drew them to us, but City Pages -- the Twin Cities' alt weekly -- profiles a snippet of Iron Range history and provides a surprisingly detailed look at new nonferrous mineral mining technology on the East Range in this week's web edition. The history portion in particular puts a bit of a perspective on our early years here on the Range. I review how this history manifests in present times in my upcoming book "Overburden: Modern Life on the Iron Range." (October 2008, Red Step Press). Now that I have my semi-random plug in for the day, back to work ...

A one paper state?

Mainstream media, especially newspapers, continue to struggle in the Internet Age. As I've said before, there remain many questions about what will happen to the mainstream media this decade and beyond. But one things seems clear: The Twin Cities will probably be a one paper town sooner than you'd think. Minnesota will have only one newspaper that reaches a statewide audience. What it will be called, who owns it and what political agenda it may push remain to be seen. What I do know is that we'll be told that the change is good for readers and that investigative and political reporting will remain fair and deep. This will be a lie.

Excelsior petitions for delay in PUC ruling on Mesaba project

Excelsior Energy's Mesaba Energy Project will not be on the docket for Thursday's Public Utilities Commission meeting. The PUC had been expected to rule on two key aspects of the proposed coal gas plant, but Excelsior asked for and received a delay.


Why? Some mumbo jumbo about an appeal to a previous administrative decision.

The truth? Either ...

1) Excelsior has reason to believe that a more favorable decision for them can be achieved in the future through political gamesmanship.

2) They are in deep trouble and know that a devastating decision will come down the next time the PUC rules.

Maybe it's both, but I forecast a battle Royal over this wasteful boondoggle (a project that, in the end, will not produce jobs or power) this summer. The amount that the public doesn't know about this company and its project is vast. When we answer some of the questions, as I and others seek to do, I don't think this project can or should proceed.

Obama blasts through cable news flak

Well, I watched several consecutive minutes of cable television news last night and at no point did I feel the need for alcohol. That's a good night. Barack Obama has Fort Clinton surrounded on all sides. He should offer to pay her campaign debt and end this thing.

Meantime, let's take a look at his speech from last night. Not quite as good as Iowa, but a reminder of why folks like me like this guy. Don't worry, baby boomer friends. He'll be fine.


Tuesday, May 6, 2008

Obama, Clinton bar fight reaches "hard to watch" stage during awkward moment between de facto conclusion and police arrival

So you all know I'm in the tank for Obama so I'll spare the feigned objectivity here. I am, however, finding ways to enjoy this protracted race for the Democratic nomination even though it hasn't been very good for my guy.


Have you ever been to an Iron Range bar? At night? Sometimes, around 11 or so, a fight breaks out. Maybe between guys, maybe between girls. Doesn't matter because everyone's drunk. Every once in a while you have this dude or lady who, by points, is losing the fight. They're bleeding out their nose and eyes. Their t-shirt is all messed up. But they don't think they're losing. They take a punch and pretend like that was all part of their fight plan, to weaken their opponents fist with their face and neck. And for some reason, even though it's hard to watch and that everyone in the joint knows that the night will end with this person in the hospital, it invokes sympathy if not outright admiration from those watching. "Woah, she's up. She got up again! Damn!" That's kind of how I feel about Hillary Clinton in this whole deal. By the numbers, this is pretty much over. She had a clear path to victory before Iowa and then blew it by not having a Super Tuesday plan and by choosing an incumbency message in a change year. The only path to the nomination for her now involves both a complete collapse of Obama and a coup at the DNC. That could happen, but it probably won't. Still, in a strange way my view of Hillary Clinton is higher now that it has been in months.

I'll still be pulling for Obama tonight. Come on, Indiana and North Carolina. He's telling the truth about the ridiculous gas tax holiday (even Bill Hanna agrees with me) and he's survived the worst month of sustained negative TV coverage of any candidate in the race so far. Obama has been tested and he's ready. He's still basically even with McCain and poised to pull ahead when the Democrats unify. And they will. One way or the other.

But oh, what a fight! I'm betting that Clinton will still be standing in the corner of the bar, motioning for more tomorrow morning. The regulars are going to be talking about this fight for a long, long time.

Nashwauk is just one push pin on a big map for global steel company

It's been said before, but Essar Global's ongoing purchase plans of the Minnesota Steel project -- a proposed iron mining and steel-making operations near Nashwauk -- sends the Mesabi Iron Range deep into the complicated global steel market. For two decades, Iron Rangers have come to view the prospective mine and steel mill on the old Butler Tac site as a good "jobs" project, one that would make steel in the same place where ore is mined. Reading these world headlines about Essar's activities in North America shows me that we don't yet fully understand the long term goals of this company in our area, other than they need our ore -- just as all the other steel companies have needed our ore since the 1890s.

Close observers of this story knew that after Essar bought Minnesota Steel, they bought Algoma Steel in Michigan, a facility that processes iron ore much the same way the proposed Nashwauk steel plant was supposed to do itself. Now, Essar is vying for Esmark Steel, a Chicago-based steel company with customers throughout the continent. So Essar now holds ore interests, steel plants and a distribution system -- just like Rockefeller and Carnegie did back in the old days.

First, this business story from the Hindu Times of India:

Essar Steel consolidates presence in N. America

Mumbai, May 2 -- US-based Esmark, which the Essar Group is set to acquire with an enterprise value of $1.1 billion, is part of a well-planned strategy of the Indian steel maker to consolidate its presence in the controlled and well-protected North American steel market that is estimated to be over $100 million tonnes (mt).

Esmark will be Essar’s third acquisition in the North American and Canadian markets — it had acquired Algoma Steel for $1.6 billion and Minnesota Steel for an undisclosed amount in April last year.

With this acquisition, Essar will have a production capacity of 7 mt in the North American and Canadian market — 4 mt from Algoma and 3 mt from Esmark. Significantly, this is higher than that its current production capacity in India, which is at 4.6 mt.Market presence

Although Essar Steel has been exporting to the North American markets for some years now, it became clear to the company that to consolidate its presence in that market, it had to be physically present there. This was because the US steel market, which is one of the world’s largest, is known for its protective nature.

Then, today, we learn that the Steelworkers union may battle the Esmark sale over contract issues. This May 3 story shows some of the seeds of discontent. We also learn that Esmark controls steel facilities throughout the Rust Belt. Essar could conceivably hold a piece of all of the major mining and steel-making regions in the United States if these deals go through. That's not necessarily bad, but it would be foolish of us Iron Rangers to assume we are Essar's top priority. As future negotiations with this company play out, we need to make sure that our interests -- steady jobs, fair payment of taconite taxes to fund our schools and communities, and good business and environmental practices -- are represented at the table.

As far as whether Minnesota Steel ever makes steel or not, well, it would appear that the answer depends far more on the American economy than the continued growth of India and China. Essar is trying to break into the Indonesian steel market, which would provide a much more economical way to feed the steel demand in huge, growing Asian nations. (Just look at how convoluted the Indian steel market is right now; all of this now affects people sitting at the Wauk-In cafe in Nashwauk). If the U.S. needs steel, an efficient direct-reduced steel plant in Nashwauk will be very successful. If the U.S. economy falters more then it may be many years before demand gives Essar the reason it needs to continue onto the final phase of Minnesota Steel: the phase that includes actual steel production. Until then, it may just be another mine with far fewer jobs than we had originally hoped for.

Welcome to the new world order. Find yourself a Hindu translator and get ready for an interesting decade in northern Minnesota.

Monday, May 5, 2008

Anzelc speaks truth on Mesaba boondoggle

In this Mike Jennings story rescued from last Saturday's edition of the Hibbing Daily Tribune, my friend and colleague Tom Anzelc becomes the highest level public official to acknowledge the foolishness of the Mesaba Energy Project:

Efforts to sort out the legal and administrative tangle that has ensnared Excelsior Energy will continue next week, but Rep. Tom Anzelc says the right outcome is clear: It’s time to drop the idea of building a coal-gasification power plant on the Iron Range.

“I am more convinced than ever that this project is not in the public interest, that it does not have a willing purchaser of the power, that its location is suspect, and it flies in the face of the discussion in the country and in the world, frankly, of sequestering carbon,” Anzelc said Friday.

Backed by legislation meant to encourage innovative energy projects and funded by an array of government grants and loans, Excelsior’s proposed Mesaba Energy Project has run into opposition both locally and with the commission.

One telling blow came last August, when the commisson ruled that Excelsior’s proposed terms for selling the initial 603-megawatt output of its power plant to Xcel Energy would be counter to the public interest. The commission dealt Excelsior another defeat last month when it denied the company’s request for an indefinite stay on negotiations with Xcel aimed at persuading the giant utility to buy still more power from Xcel.On Thursday, May 8, the commission is scheduled to consider whether to place a deadline on further negotiations between Excelsior and Xcel. It will also take up a more complex question — whether based on its “clean energy” credentials and overall costs, Excelsior should be entitled to sell Xcel at least 13 percent of the electricity that Xcel provides its retail customers.

Read the whole story here. It includes State Sen. Tom Saxhaug repeating the old line on why people should go along with the project (Because electricity is important and stuff). Interestingly, Excelsior Energy's Tom Micheletti did not return calls for this story. After his desperate-sounding letter to the editor from last week, I wonder why not?

Sunday, May 4, 2008

Northern Cheapskate featured in Star Tribune

For those who don't know, my wife Christina is the Northern Cheapskate, blogging about family budgeting, money-saving tips and personal finance. She got a great write-up in Kara McGuire's Star Tribune "Ka Ching" column in the Money section today. Check it out. Here's the setup, which is followed by several specific tips that Christina suggested for families to save money:

Several of the best ideas came from Christina Brown, also known as the Northern Cheapskate (www.northerncheapskate.com).

She's traded her career as an academic adviser to be a full-time mom whose new job includes not only taking care of her 2-year-old and 10-month-old sons, but also stretching dollars. "As my toddler says, 'Daddy makes money, mommy saves it,' " she said.

Buck up, Dollar!

This is my weekly column for the Sunday, May 4, 2008 Hibbing Daily Tribune. I archive past columns at my writing page. A shortened version of this piece also aired as a radio commentary on KAXE's "Between You and Me" yesterday. Go to http://www.kaxe.org/ and click into the archives if you would like me from the past to read this to you. Or just read what's below. That works too.


Buck up, dollar
By Aaron J. Brown

A dollar doesn’t go as far as it used to. The dollar is “weak” right now. That’s according to stern-looking smart people on those obscure financial channels up in the 8,000s on your cable or satellite service. I think the one guy was wearing suspenders and a bow tie. So it must be true. Money from other countries is forming a circle around the dollar in the dark alley of international currency exchange. The British pound brandishes a chain. The Euro sharpens its shiv. The loonie slaps a homemade club against its palm. Even the hapless peso laughs menacingly at our weakened dollar while the yen burns holes in George Washington’s face with its eyes.

As much as I’d like to fake my way through a discussion of international currency, what I really want to talk about is how far we can make a dollar go during these tough economic times. Can a dollar get us through breakfast? Can a dollar sprout wheels and get me to work? No, but a dollar can win me a rifle in a Cub Scout raffle. What does that say?

We have to keep matters of currency in perspective. I may not be an expert but I have observed that what we perceive as “a lot” in this country is “not a lot” in other countries. Some currencies measure units in the tens of thousands. In Zimbabwe, one American dollar equals 30 million Zimbabwean dollars. With high food prices and under stocked stores, people there now pay hundreds of millions just for one meal’s worth of bread. A couple hundred million dollars here buys you an NHL franchise. Not a good one but, you know; there’s a bar in the VIP box.

For Americans, there’s just something magical about the dollar. As a kid, a crisp green dollar unleashes untold powers in the candy section of the local store, the only place that really matters. First the little pennies saved turn to nickels and dimes, then to the big round quarters with the man who looks like your friend’s grandma on it. Four friend’s grandmas and you can trade them in for … a dollar. And, oh, that first kid dollar can buy anything. A helicopter. Your dead pet’s reanimation. An army of ninjas. That country on the news that you think sounds like I’veGotaStan but that your parents say is Afghanistan but that when you buy it you’ll rename I’veGotaStan because you’ve got a dollar and that’s how it’s gonna’ be from now on.

It’s no wonder businesspeople keep their first dollar earned. Even businesses that fail probably wait until the last possible moment before cracking open that frame and shipping the first dollar off to the bill collector. For the optimistic, be they children or entrepreneurs, a dollar is everything.

I wonder if dollar stores keep their first dollar. Is that too predictable? Too cute? I bet they don’t. Dollar stores exist because of a far more adult, far more cynical view of the dollar. A dollar is nothing, they imply. Look at me, says a candle on the shelf. I don’t look like much, but I’m only a dollar. A dollar is nothing. You don’t need me but you don’t need that dollar either so let’s help this cashier in the humiliating vest make quota tonight. And look, I have a matching plate, says the candle. It’s only a dollar.

Yes, these are hard times for the dollar but let’s show it a little respect. You can do a lot with a dollar and if you’re smart, dollars beget more dollars. That’s the beauty of the system, the genius of hard work combined with compounding interest. It all works perfectly so long as we have faith in the Almighty Dollar. An illusion perhaps, but the dollars that visit my bank account every two weeks keep my lights on. Shine on, Mr. Washington.

Aaron J. Brown is a columnist for the Hibbing Daily Tribune. Read more or contact him at www.minnesotabrown.com.