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November 2003

State Roundups
Minnesota

Duluth-Superior ripe for intermodal

The Twin Ports handle a sufficient volume of freight moving to Chicago to sustain a rail-based intermodal terminal, according to a report by the Transportation and Logistics Research Center at the University of Wisconsin-Superior.

Intermodal systems are the fastest growing segment of the railroad industry, filling a niche between trucking and rail carload service and offering significant savings to shippers.

The study identified four rail yards that would be suitable. The preferred site ranked in the report is the Canadian Railway Yard in Superior, as it is the most modern of the yards suggested and lies along the most direct route to Chicago and has room for expansion.

The study also suggested that there is sufficient intermodal freight originating in Ontario to restart marine intermodal service between Thunder Bay and Duluth-Superior, with some changes to previous shipping rules and fees. Service was discontinued in 1996, largely because taxes on the Canadian barge made it uneconomical.

Bill could power up Iron Range

Funding for a new Iron Range power plant was part of the energy bill wending its way through Congress in early October. Up to $800 million in loan guarantees would be available to Excelsior Energy Inc, which has proposed a clean-coal power plant for Hoyt Lakes, site of the recently closed LTV Steel mine and plant. The power plant would be one of the largest coal gasification projects in the country, at a cost of about $1 billion.

Excelsior has already received early funding from the state and the Iron Range Resources and Rehabilitation Agency, as well as certain legislative concessions, to begin raising funds for the project in earnest.

While the federal and state loan guarantees would push the project forward, Excelsior still must raise the money to build the plant and satisfy any concerns of the state's Department of Natural Resources and Pollution Control Agency.

The project may be seen as replacing jobs lost when LTV closed, but it could be a long wait: Construction wouldn't begin until 2005 at the earliest.

—Kathy Cobb