Thursday, August 19, 2010 By Aaron Brown
The matter, of course, is an old one, something I've railed on in language both subtle and deliciously over-the-top: Excelsior Energy's proposed Iron Range coal gasification power plant known as the Mesaba Energy Project. Today the Iron Range Resources Board approved the commissioner's request not only to extend the deadline for the original loan payments, but to revise the loan agreement itself to require lower interest payments over the next six years, at which time Excelsior would supposedly pay back all the money and some sort of bonus on any revenue collected in any potential sale of the Mesaba project. Of course, that doesn't get this boondoggle any closer to an investor or a workable engineering plan to turn coal into magic juice, but I suppose it was foolish of me to think officials might start thinking about that now. In truth, we've just started a new chapter in an ongoing farce.
This project, as it was originally proposed in 2001, was to become an innovative new way to burn coal that captured and stored carbon, providing untold numbers of new jobs and reinvigorating the East Range, which had then been knocked flat by the announced closure of the LTV mine. Initially, developers floated vague job numbers in the upper hundreds, with thousands of related jobs. Over time the project grew, shrunk, moved and changed to accommodate political and logistical reality. As it stands now, the Mesaba Project would be a somewhat clean coal power plant along the Scenic Highway 7 in Itasca County on the West Range that would employ 100 permanent people in a generous estimate.
Never mind the coal. That's the least of our problems right now. The real problem is that the developers have shown bad faith in their dealings with the Iron Range and have nothing but billable lobbying and legal service hours to show for the almost $9.5 million in Iron Range Resources loans and many millions more in state and federal grants they've received. Truth is, most members of the Range legislative delegation simply realize they're soaked for $9.5 million and, lacking pleasant alternatives, humility and/or guts, they're going double or nothing on another spin of the roulette wheel with their good friends, their old hockey buddies at Excelsior Energy.
My friend Rep. Tom Anzelc was the lone "no" vote on the agreement today, and had pushed to table the matter until the developers would explain their real plan for the next seven years and how their project would change (as it certainly will) to accommodate the new reality facing this kind of technology. As it stands, there is NO explanation for what the company will do and Excelsior faces no obligation, other than $100,000 a year, until 2017. At that time this discussion will have been going on for almost two decades. I should say there is no PUBLIC explanation for the changes, because I have since learned that some board members heard a proposal from Excelsior in a recent private "liaison" subcommittee meeting. Yes, they have legal private meetings at the agency so that unpleasant issues may be resolved quietly.
Let's get back to the deal, though. $100,000 a year is chump change for developers who have $2.3 million remaining in their federal energy fund. Excelsior can declare bankruptcy at any time and still walk away clean. They'll take some time now, try to lure a few unwitting municipal utilities into an ill-advised power purchase agreement. More likely Excelsior will draw another set of snake eyes and start looking for an exit plan.
Why would Range public officials entertain another decade of back-and-forth on this job creation dud? I submit for your consideration the following observations:
Aug. 4 - Sen. Tom Saxhaug/Rep. Loren Solberg golf fundraiser. Saxhaug made the motion to accept the altered agreement this morning.
Aug. 5 - Sen. Tom Bakk golf event and fundraiser. Bakk has carried more water for Excelsior at the legislature than anyone other than David Tomassoni.
That same week Sen. Tomassoni, chair of the Iron Range Resources board, held his cabin fundraiser. Excelsior developers attended all of these events, writing numerous checks. They've been attending events like these and writing checks since the dawn of the concept of the Mesaba Energy Project nine years ago. These checks didn't always go directly to the candidates. More often they went to local party units, which often fly under the radar for campaign finance report snoops. All of this is 100 percent legal. No laws were broken. But the economic development machine on the Iron Range is most definitely broken, if not rotten to its core. This one-sided money exchange is a crooked, cronyistic loophole built on personal relationships and a Midwestern desire to please the people who attend your gatherings. Tom Anzelc is the only Iron Range legislator who has never taken a donation from an Excelsior Energy official.
It is politically imprudent of me to talk about this just a couple months before an election where members of my own local political party, once again lumbering onto the biennial ballot, are greatly responsible for this Mesaba monstrosity's birth and continuation. But then again it was politically imprudent of them to do any of this in the first place. Only a combination of political sloppiness and arrogance would allow this matter to be frog marched in front of the board in a turbulent electoral environment like the one we have. Since I am free from the constraints of wanting to be elected to political office, I am free from caring what the powerful, dim-witted architects of this scheme think of me personally. I think they are killing my homeland through cronyism and bullshit boosterism. I'm sorry if I don't play ball like the old days.
Indeed, this is simply a rank injustice, which now transcends the matter of routine economic development policy and has become a metaphor for everything that is wrong, and everything I hate, about a place and a people I truly love. If you believe me, my decade of writing about the hope and potential of the Iron Range despite its many challenges, you know that I am telling the truth. I would gladly leave this issue to history, allowing the long arm of time to confirm my beliefs. My grandkids would sure get a kick out of that when they come up here to visit their summer cabins, maintained by hired hands from the dwindling local rabble, unless of course they end up in the rabble. Time is the one element the Iron Range cannot afford. Waiting on empty promises will kill our best chances for genuine innovation and entrepreneurship if it hasn't already.
I'm still a member of the DFL. I serve in my local DFL organization. I have dozens of friends in the local and state DFL. I am close now to resigning and becoming an independent as I have ever been. And I mean independent, because Gov. Tim Pawlenty's Iron Range Resources agency and former Sen. Norm Coleman were vital Republican co-conspirators on this whole operation. I'm not alone in my disgust, but the deafening silence from most in the Iron Range DFL on this topic is what troubles me most.
DISCLAIMER: I am Tom Anzelc's friend and campaign manager. We have obviously spoken about this matter and, while we are in agreement on his vote today, this post reflects my opinions only. I've covered this issue in some form since I was editor of the Hibbing Tribune in 2001. My single greatest regret about my time in journalism was not asking harder questions back about this project when I had a chance to expose the problems at the outset.