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The U.S. Department of Energy's list of
priority projects no longer includes the $1.4 billion coal
gasification plant in the Iron Range, which critics of the plant
say means it has fallen out of favor in Washington.


      The project led by Excelsior Energy of Minnetonka has received
about $22 million in financial support from the federal government,
$10 million in state funding and a $9.5 million loan from Iron
Range Resources.


      DOE spokeswoman Tiffany Edwards told the Duluth News Tribune
that the project was taken off the list because an environmental
impact statement was completed in November. However, the newspaper
reported that other projects that have completed the statements
remain on the list.


      For about five years, the Mesaba Energy Project near Bovey in
northeastern Minnesota could reliably be found on a DOE chart
tracking the progress of key projects in which it has invested. But
the Excelsior Energy project isn't on the department's latest
chart.


      Excelsior Energy general counsel Thomas Osteraas said he
believes the project will be completed. 


"We remain committed to
moving the project forward, and we continue to do that," he said.


      Osteraas said the project is no longer on the DOE priority list,
because the final Environmental Impact Statement had been
completed.


      Excelsior intends to build two 600-megawatt generators. They
would be fueled by coal that has been converted into a synthetic
gas that will burn more cleanly than conventional pulverized coal.
Excelsior estimates the project would employ more than 1,500 people
during construction. Another 107 people could be hired to run the
plant.


      Charlotte Neigh, a high-profile critic of the project and member
of Citizens Against the Mesaba Project -- commonly known by its
acronym CAMP -- takes its omission from the list as an indication
the project may be running out of gas.
      


She said the other coal projects still on the DOE chart include
some sort of plan to capture and store greenhouse gases on-site, a
feature lacking in Mesaba's design.
      


The project has been moving toward groundbreaking, but has faced
setbacks. 


In March, Excelsior announced that the Minnesota Public
Utilities Commission had approved a plant site permit for the
project. But the same commission also rejected an agreement that would
have obliged Xcel Energy to buy electricity from the plant.
Consequently, Excelsior lacks a guaranteed customer for the power
it generates.
     


 Iron Range Resources Commissioner Sandy Layman told the
newspaper last week that her staff was monitoring the progress of
the Mesaba Energy project.
     

 "The agency is aware of the uphill battle, but we continue to
stand behind them, recognizing the challenge that they face, absent
a power purchase agreement," she said.
      

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The U.S. Department of Energy's priority
project list no longer includes the $1.4 billion coal gasification plant in the Iron Range. The project has already received more than $40 million in government grants and loans to get off the ground.

Iron Range project off fed's priority list

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