As Minnesota spends millions to restore peatlands, it sells mining rights for $12 an acre

Minnesota is selling the rights to mine peat out of protected wetlands and state-owned forests for as little as $11.85 an acre, even as taxpayers spend up to 250 times that amount to restore previously degraded peatlands.

Taxpayers could spend up to $3,000 an acre on peatland restoration as state and federal agencies begin ambitious reclamation projects next year. The Environmental Protection Agency recently gave Minnesota $20 million to restore up to 10,000 acres of the bogs that form peat, because of their unique importance to rare wildlife, water quality and, most of all, greenhouse gas emissions.

State lawmakers also set aside $9 million to restore several thousand acres of peat.

The same agency that will help lead the restoration work, the Minnesota Department of Natural Resources, is selling the right to mine peat on 8,194 acres of public lands for a total of $127,604 a year. Many of the peat mines are on state School Trust Lands, where the DNR is required by state law to “secure the maximum long-term economic return ... with sound natural resource conservation and management principles.” The money raised from those lands is split among public school districts and charter schools across the state.

Chris Lenhart, a professor and wetlands restoration expert at the University of Minnesota, laughed when told what the state charged for its peat mining rights: “That is a mismatch, for sure.”

Joseph Henderson, director of the DNR’s Lands and Minerals Division, said the agency considers a bigger picture than just the dollars per acre when it negotiates with mining companies.

“We have an incredibly small amount of [peatland] that is commercially viable,” he said. “We listen to the counties, and they want these rural jobs. A lot of these are mom and pop operations with maybe a dozen employees, and they want them in the community.”

Minnesota’s peatlands formed some 10,000 years ago, after the last glaciers receded and plants sprouted in the cold, wet earth left behind. The soil in the bogs and fens was too wet and oxygen-starved for matter to fully decompose. So all the starry-shaped mosses and black spruce trees, the tamaracks and carnivorous yellow flowers that grew up, blossomed and died formed layers of peat — a muck-like mass of all the semi-decomposed organic material built up over millennia.

That peat stores a staggering amount of carbon, more than all the trees in all of Minnesota’s forests combined. Minnesota has vast deposits of peat — an estimated 6 million acres — second only to Alaska in the United States.

When the wetlands where peat is formed are drained, oxygen creeps into the system and the peat begins to decompose. As that happens, the stored carbon is released.

Scientists estimate that about 1 million acres of former peatlands — one-sixth of the state’s total — have been drained over the last 100 years. Those lands have become the state’s fourth-highest source of greenhouse gas emissions, more than all the homes and apartments in Minnesota combined, more than all the sedans and passenger cars, and just behind natural gas, coal and “light duty trucks,” which includes small and midsize pickups.

The vast majority of destruction to the state’s peatlands was done decades ago for farming, much of it on public land in what was believed to be for the public good, Lenhart said.

Farmers and public workers dug thousands of miles of ditches to convert swamp and marsh into crop fields and grazing pastures. The state and conservation groups, such as the Nature Conservancy, have focused peat restoration efforts on plugging those old ditches to restore water tables, so mosses can return and start to accumulate peat once again.

Peat has also been mined in Minnesota for decades. Mining has harmed far fewer acres of peatlands than farms and timber operations, but it still has a big impact on the wetlands where it happens, Lenhart said.

“Harvesting moss can become a big problem over time,” he said. “You eliminate a lot of plants that take a while to grow back. You can restore peat if you do it right, but it’s hard to regrow and it’s really slow and it can easily go wrong and damage sensitive areas.”

People have harvested peat for fuel for thousands of years in the British Isles and other parts of Europe. As awareness of peat’s importance to emissions has grown in recent years, the U.K. and Ireland have tried to phase it out and have imposed stricter regulations on mining.

Minnesota explored offering its peat to companies as a fuel source in the 1970s and 1980s but never found a market for it. The peat mined in Minnesota and elsewhere in the United States is typically used for horticulture, according to the U.S. Geological Survey.

It’s used as a potting soil in nurseries and sold by the bag for people to spread on lawns and in backyard gardens. Some of it is used to help grow golf course greens or sports fields.

To get at the peat, mining companies first drain a bog, said Mariel Jones, a graduate student at the University of Minnesota who studies peatlands.

They typically clear-cut the area of trees and brush and peel back the top-most layer of living moss that covers the peat, Jones said.

With the peat uncovered, it dries into what looks like a soft, airy soil. The companies then attach large vacuums to the back of tractors, drive over the peat and suck it away.

Abandoned peat mines rarely recover enough moss and vegetation to start building peat again, according to research from the University of Waterloo in Ontario.

“It only happens about 30 percent of the time,” Jones said.

Even in the places where a bog survives, it can take hundreds of years to accumulate the peat that was taken.

“There’s this idea that peat is the same as wood, a renewable resource that you can go out and take from it but as long as you don’t take too much it will grow back,” Jones said. “But because of the timescale and the other effects, it’s not actually as renewable as we’d like to think.”

State wetland experts estimate that it costs Minnesota between $1,250 and $3,000 an acre to restore peatland. But records from Reinvest in Minnesota and the Conservation Reserve Enhancement Program show that the state has spent closer to $3,500 securing the easements that would restore peatlands since 2000.

Taxpayers do not need to reclaim peat mine sites, Henderson said.

“The companies are mandated in law and by their permit to reclaim the sites, and if they don’t we will not release them from their lease,” he said.

The DNR has to balance its responsibility for protecting public peatlands and overseeing their restoration with its role in raising revenue by selling peat mining rights for royalties for the School Trust. But peat sales have only ever made up a sliver of its annual revenue. The School Trust earns the vast majority of its money, more than $35 million a year, from iron and taconite royalties and timber sales. Since 1980, peat leases have earned the fund an average of $43,000 a year, which would be enough to give each of the 510 school districts, academies and charter schools in the state about $84.

“We’ve set up the law so the DNR has a very mixed mission,” said Paula Maccabee, a lawyer with the conservation group WaterLegacy. “You have the entity that is making the royalties from the mining and has longstanding relationships with these companies deciding what to do about wetlands.”

The EPA gave the DNR $12 million to restore peatlands on public land. By the state’s own math, that money may restore fewer acres — between 4,000 and 9,600 acres — than the DNR is leasing to mining companies for one one-hundredth of that cost.

While the DNR negotiates all leases to mine peat on public lands, they have to be approved by the state’s Executive Council, made up of Gov. Tim Walz, Lt. Gov. Peggy Flanagan, Secretary of State Steve Simon, Auditor Julie Blaha and Attorney General Keith Ellison.

Blaha referred questions to the DNR. No other members of the council returned messages seeking comment.

Henderson and DNR Commissioner Sarah Strommen presented the terms of the latest peat mine lease to the Executive Council in 2023, recommending its approval. The council unanimously approved it, allowing a Canadian company to mine 1,190 acres in Koochiching County for the next 25 years for $11.85 an acre. The government also receives $7.50 per ton of peat moss extracted.

The reason Strommen and Henderson told the council it was in the public interest to mine the peat?

The harvest will be “generating revenue for the state and Koochiching County,” they wrote.