[Federal Register Volume 70, Number 192 (Wednesday, October 5, 2005)]
[Notices]
[Pages 58207-58211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19972]


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DEPARTMENT OF ENERGY


Notice of Intent To Prepare an Environmental Impact Statement and 
Notice of Proposed Floodplain and Wetlands Involvement for the Mesaba 
Energy Project Integrated Gasification Combined Cycle (IGCC) 
Demonstration Plant Northern Minnesota Iron Range, Itasca County, MN

AGENCY: Department of Energy.

ACTION: Notice of intent and notice of proposed floodplain and wetlands 
involvement.

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SUMMARY: The U.S. Department of Energy (DOE) announces its intent to 
prepare an Environmental Impact Statement (EIS) pursuant to the 
National Environmental Policy Act (NEPA), the Council on Environmental 
Quality NEPA regulations (40 Code of Federal Regulations [CFR] parts 
1500-1508), and the DOE NEPA regulations (10 CFR part 1021) to assess 
the potential environmental impacts of a project proposed by Excelsior 
Energy Inc. (Excelsior), to design, construct, and operate (potentially 
under an agreement with an operating company) a coal-based, Integrated 
Gasification Combined Cycle (IGCC) electric generating facility on the 
Iron Range of northern Minnesota (hereafter termed the ``Mesaba Energy 
Project'' or the ``Project''). The proposed Project, selected for 
further consideration under DOE's Clean Coal Power Initiative 
competitive solicitation, would demonstrate advanced technologies to 
produce electricity via the IGCC process, including advanced 
gasification and air separation systems, feedstock flexibility, 
improved environmental performance, and improved thermal efficiency. 
The Project would represent the first phase of a proposed two-phase 
generating station, each phase of which would nominally generate 600 
megawatts of electricity (MWe) for export to the electrical grid. The 
EIS will consider the impacts of both phases, even though DOE's 
potential funding would only be provided in support of phase one. The 
EIS will evaluate the proposed Project and reasonable alternatives. 
Because the proposed Project may affect floodplains and wetlands on the 
Iron Range of

[[Page 58208]]

northern Minnesota, the EIS will include a floodplain and wetlands 
assessment, and DOE will prepare a statement of findings in accordance 
with DOE regulations for Compliance with Floodplain and Wetlands 
Environmental Review Requirements (10 CFR part 1022). Wetland 
permitting and mitigation would be conducted in accordance with the 
rules and policies of Section 404 of the Clean Water Act and under the 
Minnesota Wetland Conservation Act.
    The EIS will help DOE decide whether to provide approximately $36 
million in cost-shared funding (the estimated total Project cost is 
$1.97 billion). DOE may also provide a loan guarantee, pursuant to the 
Energy Policy Act of 2005, to guarantee a portion of the private sector 
financing for the Project.
    The purpose of this Notice of Intent is to inform the public about 
the proposed Project; invite public participation in the EIS process; 
announce the plans for a public scoping meeting; explain the EIS 
scoping process; and solicit public comments for consideration in 
establishing the proposed scope of the EIS. Because the proposed 
facility is considered a Large Electric Power Generating Plant, the 
Project is subject to the Minnesota Power Plant Siting Act (Minnesota 
Statutes 116C.51-.69), which requires the preparation of a state-
equivalent EIS. The EIS requirements under NEPA and the Minnesota Power 
Plant Siting Act are substantially similar, and it is DOE's intent to 
prepare, in cooperation with the Minnesota Department of Commerce and 
the Minnesota Public Utilities Commission, an EIS that will fulfill the 
requirements of both laws.

DATES: To ensure that all of the issues related to this proposal are 
addressed, DOE invites comments on the proposed scope of the EIS from 
all interested parties. Comments must be received by November 14, 2005, 
to ensure consideration. Late comments will be considered to the extent 
practicable. In addition to receiving comments in writing and by 
telephone (see ADDRESSES below), DOE will conduct two public scoping 
meetings in which agencies, organizations, and the general public are 
invited to present oral comments or suggestions with regard to the 
range of alternatives and environmental issues to be considered in the 
EIS. The scoping meetings will be held at the Taconite Community 
Center, 26 Haynes Street, Taconite, MN, on Tuesday, October 25, 2005, 
beginning at 7 p.m., and at Hoyt Lakes Arena, 106 Kennedy Memorial 
Drive, Hoyt Lakes, MN, on Wednesday, October 26, 2005, beginning at 7 
p.m. (see ``Public Scoping Process below.'') The public is invited to 
an informal session at each location beginning at 4 p.m. on the date of 
each meeting during which DOE personnel will be present to discuss the 
proposed Project and the EIS process. Displays and other forms of 
information about the proposed agency action and the demonstration 
plant will be made available to the public for review.

ADDRESSES: Written comments on the proposed EIS scope and requests to 
participate in the public scoping meeting should be addressed to the 
NEPA Document Manager for the Project: Mr. Richard Hargis, M/S 922-
342C, U.S. Department of Energy, National Energy Technology Laboratory, 
P.O. Box 10940, Pittsburgh, PA 15236-0940. Individuals who would like 
to otherwise participate in the public scoping process should contact 
Mr. Richard Hargis directly by telephone: 412-386-6065; toll free 
number: 888-322-7436 ext. 6065; fax: 412-386-4775; or electronic mail: 
[email protected].

FOR FURTHER INFORMATION CONTACT: For information regarding the Mesaba 
Energy Project or to receive a copy of the draft EIS for review when it 
is issued, contact Mr. Richard Hargis as described above. Those seeking 
general information on the DOE NEPA process should contact: Ms. Carol 
M. Borgstrom, Director, Office of NEPA Policy and Compliance (EH-42), 
U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, 
DC 20585-0119; Telephone: (202) 586-4600, Facsimile: (202) 586-7031 or 
leave a toll-free message at: 800-472-2756.

SUPPLEMENTARY INFORMATION:
    Background and Need for Agency Action: Since the early 1970's, DOE 
and its predecessor agencies have supported research and development 
programs that include long-term, high-risk activities for the 
development of a wide variety of innovative coal technologies through 
the proof-of-concept stage. However, the availability of a technology 
at the proof-of-concept stage is not sufficient to ensure continued 
development and subsequent commercialization. Before any technology can 
be considered seriously for commercialization, it must first be 
demonstrated. The financial risk associated with technology 
demonstration is, in general, too high for the private sector to assume 
in the absence of strong incentives. Congress established the Clean 
Coal Power Initiative (CCPI) in 2002 as a government/industry 
partnership to implement the President's National Energy Policy (NEP) 
recommendation to increase investment in clean coal technology and 
reduce the use of imported energy sources. That recommendation 
addresses a national challenge of ensuring the reliability of electric 
supply while simultaneously protecting the environment.
    The goal of the CCPI program is to accelerate commercial deployment 
of advanced coal technologies that provide the United States with 
clean, reliable, and affordable energy. Through cooperative agreements 
established pursuant to the CCPI program, DOE would accelerate 
deployment of innovative technologies to: meet near-term energy and 
environmental goals; reduce technological risk to the business 
community to an acceptable level; and provide private sector incentives 
required for continued activity in innovative research and development 
directed at providing solutions to long-range energy supply problems.
    Proposed Action: The proposed action is for DOE to provide, through 
a cooperative agreement with Excelsior, and possibly through a loan 
guarantee for up to 80% of the total Project cost, financial assistance 
for the proposed Project. The proposed IGCC demonstration plant would 
be designed for long-term commercial operation following completion of 
an anticipated 12-month minimum demonstration period under a 
cooperative agreement with DOE. The Project would cost a total of 
approximately $1.97 billion; DOE's share would be approximately $36 
million. The Project would represent the first phase of a proposed two-
phase generating station; each phase would nominally generate 600 MWe 
(net) for a nominal combined generating capacity of 1,200 MWe (net). 
DOE plans to complete the EIS within 15 months following publication of 
this Notice of Intent and, subsequently, to issue a Record of Decision. 
The EIS will consider the impacts of both phases, even though DOE s 
potential funding would only be provided in support of phase one.
    The Project would use ConocoPhillips' E-GasTM Technology 
for solid feedstock gasification. The starting point for the project 
design is the 262 MWe (net) Wabash River Coal Gasification Repowering 
Project (Wabash) in Terre Haute, Indiana, which was built under the 
DOE's Clean Coal Technology Program (predecessor to the CCPI) and has 
been in operation since 1995. Wabash has achieved an emissions profile 
that compares favorably to alternative technologies being proposed and 
permitted today for

[[Page 58209]]

new coal-based power projects. Based on subsequent DOE-funded studies 
of potential performance and technological upgrades, and nearly 1,600 
design and operational lessons learned from Wabash, the E-
GasTM team identified five areas for continued research and 
development to improve and advance gasification technologies toward 
commercial acceptance. The areas address improvements in operational 
availability, capital costs and financing, operating costs, feedstock 
flexibility, and environmental performance.
    Based in part on the achievements and lessons learned from Wabash, 
the Mesaba Energy Project directly addresses the principal barriers 
hindering IGCC penetration into the power market. The Project would 
integrate numerous design improvements that would substantially advance 
the original Wabash technology, design, and systems integration. The 
Project would demonstrate the following features and technologies to 
improve and advance IGCC processes toward commercial acceptance:
     Increased Capacity--With more than double the generating 
capacity of Wabash, the Project would demonstrate the economies of 
scale attainable at larger commercial operations. When complete, the 
installed cost is expected to be 30% lower per kilowatt than a plant 
based on the original Wabash design.
     Advanced Gasifier--The Project would demonstrate a 
significantly more advanced full-slurry quench, multiple-train gasifier 
system. Two gasifiers would be operated simultaneously to supply two 
combustion turbines and one steam turbine, each coupled directly to its 
own generator. One or more additional or redundant gasifiers would be 
included to help ensure an operational availability of about 90% or 
better.
     Air Separation Unit (ASU)--The Project would be the first 
IGCC plant in the U.S. designed to demonstrate a configuration to 
extract bleed air from the combustion turbine to reduce the parasitic 
load of the main air compressor in the ASU, increasing net plant output 
and reducing capital cost. Nitrogen extracted from air entering the ASU 
would be recycled for injection into the combustion turbine to reduce 
formation of nitrogen oxides by reducing the flame temperature of the 
combustor and the time that combustion gases remain at elevated 
temperatures.
     Feedstock Flexibility--The Project would demonstrate 
greater feedstock flexibility with the capability of gasifying 
bituminous coal (Illinois No. 6), sub-bituminous coal (Powder River 
Basin), blends of sub-bituminous coal and petroleum coke, and/or other 
combinations of these feedstocks.
     Improved Environmental Performance--The Project is 
intended to improve upon Wabash by deploying processes and technologies 
that would make it among the cleanest coal-based power generating plant 
in the world. Emission levels for criteria pollutants (sulfur dioxide, 
nitrogen oxides, carbon monoxide, volatile organic compounds, and 
particulate matter) and mercury are expected to be equal to or below 
those of the lowest emission rates for utility-scale, coal-based 
generation fueled by similar feedstocks. In addition, carbon dioxide 
emissions are expected to be 15 to 20% lower than the current average 
for U.S. coal-based power plants fueled by similar feedstocks.
     Thermal Efficiency--With a design heat rate of about 8,600 
Btu/kilowatt-hour when using bituminous coal, Mesaba would demonstrate 
a significant heat rate improvement over Wabash.
    From a broad perspective, the Project would demonstrate the 
commercial development, engineering, and design necessary to construct 
a large feedstock-flexible reference plant for IGCC and thus establish 
a standard replicable design configuration complete with installed cost 
information for future commercialization. Major components of the 
Project would include feedstock acceptance and storage; slurry 
preparation; oxygen preparation via the ASU; feedstock gasification and 
slag handling; synthesis gas preparation (i.e., particulate matter 
removal, char re-injection, water scrubbing, acid gas removal, and 
mercury removal); sulfur recovery; synthesis gas combustion (using 
nitrogen dilution to reduce formation of nitrogen oxides) with 
concomitant electricity production (using combustion turbine 
generators); and electricity production via heat recovery (using steam 
turbine generators).
    The ConocoPhillips E-GasTM gasification technology 
utilizes a slurry-fed, two-stage gasifier to convert carbonaceous 
feedstock to a synthesis gas (syngas) and a vitrified, inert slag. The 
first stage is operated at an elevated temperature using oxygen and 
feedstock-water slurry to drive off volatile matter from the feedstock 
and facilitate the removal of its mineral content as a molten slag. The 
first stage also produces a raw, hot syngas that requires cooling and 
cleaning before being used as fuel gas to generate power in the gas 
turbines. The second stage provides the initial cooling of the hot 
syngas by quenching it with slurry, without using any additional 
oxygen. The thermal heat of the hot syngas from the first stage 
volatilizes the slurry fed to the second stage and converts that 
portion of the feedstock to additional syngas.
    The two-stage gasifier, coupled with E-GasTM unique 
application of a firetube syngas cooler design, minimizes the size and 
temperature level requirements for the high temperature heat recovery 
system, which is cost-effective and yields high conversion 
efficiencies. Raw synthesis gas exiting the gasifier contains entrained 
solids that are removed and recycled to the first stage of the 
gasifier. Recycling of these solids also enhances efficiency and 
consolidates the solid effluent from the process into one stream as 
slag leaving the gasifier. Sulfur in the initial feedstock is recovered 
in the process as a molten liquid and sold as a byproduct. The process 
yields a desulfurized syngas that can be used as a fuel gas for power 
generation in advanced combustion turbines.
    Excelsior plans to construct the Mesaba Generating Station in two 
phases, of which the Project would represent the first phase. Plant 
start-up, system and feedstock testing, and long-term performance and 
reliability demonstration for the Project would require approximately 
one year, after which the plant could continue in commercial operation. 
A minimum 12-month demonstration period is planned to begin in 2011.
    Alternatives: NEPA requires that agencies evaluate reasonable 
alternatives to the proposed action in an EIS. The purpose for agency 
action determines the range of reasonable alternatives. Congress 
established the CCPI Program to help implement the President's NEP 
recommendation to increase investment in clean coal technology by 
addressing national challenges of ensuring the reliability of domestic 
electric and energy supplies while simultaneously protecting the 
environment. The Program was structured to achieve NEP goals by 
promoting private sector initiatives to invest in demonstrations of 
advanced technologies that could be widely deployed commercially to 
ensure that the United States has clean, reliable, and affordable 
energy.
    Private sector investments and deployment of energy systems in the 
United States place DOE in a more limited role than if the Federal 
Government were the owner and operator of the energy systems. In the 
latter situation, DOE would be responsible for a comprehensive review 
of reasonable alternatives for siting the

[[Page 58210]]

system. However, in dealing with applicants under the CCPI 
solicitation, the scope of alternatives is necessarily more 
restrictive, because DOE must focus on alternative ways to accomplish 
its purpose and need, which reflects both the application before it and 
the functions that DOE plays in the decision process. Moreover, under 
the CCPI Program, DOE's role is limited to approving or disapproving 
the project as proposed by the applicant. Therefore, the only 
alternative to the proposed action, other than the alternative site 
discussed below, is the no-action alternative.
    Alternatives considered by Excelsior in developing the Project will 
be presented in the EIS. Legislation enacted by the State of Minnesota 
in 2003 provides the Project an exemption from obtaining a Certificate 
of Need (see Minn. Stat. 216B.1694 Subd. 2 (a)(1)), but also requires 
the Project to be located in the Taconite Tax Relief Area (in 
northeastern Minnesota) [(at Minnesota Statutes 216B.1694 Sub. 1(3))]. 
Therefore, the range of sites considered by Excelsior will necessarily 
be limited to a plant located within the Taconite Tax Relief Area of 
Minnesota.
    Excelsior is proposing a preferred and alternative site for the 
proposed Project. The preferred site is the West Range site, which is 
located just north of the city of Taconite in Itasca County, Minnesota. 
The East Range site is the alternative site, and is located about one 
mile north of the city of Hoyt Lakes in St. Louis County, Minnesota. In 
the case of the West Range site, the Project's generating facilities 
would connect to the power grid via new and existing high voltage 
transmission line (HVTL) corridors to a substation near the 
unincorporated community of Blackberry; in the case of the East Range 
site, the generating facilities would connect to the grid via existing 
HVTL corridors that lead to a substation near the unincorporated 
community of Forbes. Excelsior would reconstruct and/or reinforce the 
HVTL infrastructure within the final corridors selected. In conjunction 
with both phases of the Project, Excelsior anticipates that network 
reinforcements would be required within other existing HVTL corridors 
leading to load centers and/or at substations down-network of the 
existing substations identified. In addition to these siting and 
transmission alternatives, the EIS also would analyze alternatives for 
feedstocks and feedstock blends; access to the facility and means of 
transport (road and rail) for feedstocks, byproducts, and wastes; water 
sources; wastewater disposal; and connection to existing natural gas 
pipelines.
    Both sites are fairly remote wooded areas, with access to water 
supplies, rail and highway transportation, natural gas pipelines and 
high-voltage transmission lines. At either site, construction of the 
proposed facilities would require approximately 85 acres for the IGCC 
complex associated with the Project; an identical amount of land would 
be required for the Phase II facilities. Since both sites are 
``greenfield'' sites, development of infrastructure at either site 
would include railroad spurs, plant road construction, water pipelines, 
natural gas pipelines and upgrades to high voltage transmission lines. 
A major difference between the sites is that the West Range site lies 
outside the Lake Superior Basin Watershed.
    Construction of the proposed Project potentially would affect 
jurisdictional wetlands located within the West Range or East Range 
sites and their associated transportation/utility corridors. 
Approximately 300 acres of wetlands are located within the boundary of 
the 1,260 acres of property currently optioned for the West Range Site. 
Additional wetlands exist within transportation and utility corridors 
located outside the optioned property and through which project-related 
infrastructure must traverse on route to this site. Construction and 
operation of the proposed Project at the West Range site potentially 
would result in long-term impacts to wetlands within the optioned 
property and these transportation/utility corridors; construction of 
buried and overhead utilities could result in temporary construction 
impacts to additional wetlands therein. Approximately 300 acres of 
wetlands are located within the boundary of the approximately 825 acres 
of property currently identified for the East Range Site. The potential 
for wetland impacts from facility construction and operation on the 
East Range Site is similar to those identified for the West Range Site. 
No floodplain areas are located on the West Range or East Range sites, 
but construction of surface, buried, and overhead utilities will 
traverse the floodplain areas of several rivers and streams. Wetland 
impact avoidance, minimization and other mitigation will be described 
in accordance with Section 404 of the Clean Water Act and the Minnesota 
Wetland Conservation Act. The final EIS will include a floodplain and 
wetlands assessment and a statement of findings in accordance with DOE 
regulations for Compliance with Floodplain and Wetlands Environmental 
Review Requirements (10 CFR part 1022).
    Under the no-action alternative, DOE would not provide partial 
funding for the final engineering, construction, and operation of the 
plant. In the absence of DOE funding, the sponsor may still construct 
the Project, but it might not demonstrate all features as proposed for 
CCPI Program support.
    Preliminary Identification of Environmental Issues: The following 
environmental issues have been tentatively identified for analysis in 
the EIS. This list, which was developed from reviews of the proposed 
technology and of the scope of the Project and similar projects, and 
which is presented to facilitate public comment on the planned scope of 
the EIS, is neither intended to be all inclusive nor a pre-determined 
set of potential impacts. Additions to or deletions from this list may 
occur as a result of the public scoping process. The environmental 
issues include:
    1. Atmospheric resources: Potential air quality impacts resulting 
from emissions during construction and operation of the Project, 
including potential impacts on Class I areas in the vicinity (Voyageurs 
National Park and Boundary Waters Canoe Area Wilderness) and local odor 
impacts.
    2. Water resources: Potential impacts on surface and groundwater 
resources and water quality, including effects of water usage, 
wastewater management, storm water management, and soil erosion and 
sedimentation in the Mississippi River and Great Lakes Basins.
    3. Cultural resources: Including potential effects on historic and 
archaeological resources and Native American tribal resources.
    4. Ecological resources: Potential onsite and offsite impacts to 
vegetation, wildlife, protected species, and ecologically sensitive 
habitats.
    5. Floodplains and Wetlands: Including potential impacts on 
wetlands located within the East Range and West Range sites and their 
associated transportation/utility corridors, and potential impacts on 
floodplains within the transportation/utility corridors for both sites. 
In accordance with DOE regulations (10 CFR part 1022), the final EIS 
will include a floodplain and/or wetlands assessment and a statement of 
findings.
    6. Terrestrial resources: Land requirements and compatibility of 
plant facilities and operations, access roads, rail alignments, and 
potential new corridors for HVTL and natural gas lines with adjacent 
and surrounding land uses.
    7. Utility and transportation infrastructure requirements for 
delivery

[[Page 58211]]

of feedstocks and process chemicals to the facility.
    8. Health and safety impacts, including construction-related safety 
and process-related safety associated with handling and management of 
process chemicals.
    9. Noise: Potential impacts resulting from construction and 
operation of the proposed plant and from transportation of feedstocks, 
process materials, and plant byproducts.
    10. Community resources: Potential impacts on local traffic 
patterns, socioeconomic impacts of plant construction and operation, 
including effects on public services and infrastructure resulting from 
the influx of construction personnel and plant operating staff, and 
environmental justice issues.
    11. Aesthetic and scenic resources: Potential visual effects 
associated with plant structures and operations.
    12. Cumulative effects that result from the incremental impacts of 
the proposed plant when added to the other past, present, and 
reasonably foreseeable future activities in the Iron Range area.
    13. Connected actions, including the effects of construction and 
operation of the second phase of the Mesaba Generating Station 
resulting in a combined, nominal 1,200 MWe (net) power generating 
facility on the selected site.
    Public Scoping Process: To ensure that all issues related to this 
proposal are addressed, DOE will conduct an open process to define the 
scope of the EIS. The public scoping period will end on November 14, 
2005. Interested agencies, organizations, and the general public are 
encouraged to submit comments or suggestions concerning the content of 
the EIS, issues and potential impacts to be addressed in the EIS, and 
alternatives that should be considered. Scoping comments should 
identify specific issues or topics that the EIS should address in order 
to assist DOE in identifying significant issues for analysis. Written, 
e-mailed, faxed, or recorded comments should be communicated by 
November 14, 2005 (See ADDRESSES).
    DOE will conduct public scoping meetings at the Taconite Community 
Center, 26 Haynes Street, Taconite, MN, on Tuesday, October 25, 2005, 
beginning at 7 p.m., and at Hoyt Lakes Arena, 106 Kennedy Memorial 
Drive, Hoyt Lakes, MN on Wednesday, October 26, 2005, and beginning at 
7 p.m. In addition, the public is invited to an informal session at 
each location beginning at 4 p.m. on the date of each meeting to learn 
more about the proposed action. Displays and other information about 
the proposed agency action and the demonstration plant will be 
available, and DOE personnel will be present to discuss the proposed 
action and the NEPA process.
    DOE requests those who wish to speak at either public scoping 
meeting to contact Mr. Richard Hargis, either by phone, fax, e-mail, or 
in writing (See ADDRESSES above). Attendees wishing to speak, but who 
have not requested to do so in advance, may register at the meeting and 
will be provided opportunities to speak following previously scheduled 
speakers. Speakers who may need more than five minutes should indicate 
the length of time desired in their request. Depending on the number of 
speakers, DOE may need to limit speakers to five minutes initially but 
will provide additional opportunity as time permits. Speakers may also 
provide written materials to supplement their presentations. Oral and 
written comments will be given equal consideration.
    DOE will begin each meeting with an overview of the proposed 
Project. The meeting will not be conducted as an evidentiary hearing, 
and speakers will not be cross-examined. However, speakers may be asked 
questions to help ensure that DOE fully understands their comments or 
suggestions. A presiding officer will establish the order of speakers 
and provide any additional procedures necessary to conduct the meeting.

    Issued in Washington, DC, on this 29th day of September, 2005.
John Spitaleri Shaw,
Assistant Secretary for Environment, Safety and Health.
[FR Doc. 05-19972 Filed 10-4-05; 8:45 am]
BILLING CODE 6450-01-P