Brown: Reforming broken rural economies in greater Minnesota

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In a gravel clearing cut into a pine forest outside Babbitt, a geologist scrambles up a ladder to view a gauge on a pipe. His readings portend the opening of a new but poorly understood gas industry on the Iron Range.

In Nashwauk, crews ready the state’s first new mine in a generation, a facility that would become the most modern iron ore producer in the region. But the company doing it faces headwinds from eight years of corporate skullduggery and bankruptcy chaos.

And in Mountain Iron, a manufacturer of solar-energy components recently expanded its workforce to 350 people, more than some mines. And yet, political change could halt the company’s progress.

These three stories could represent a brighter future for northeastern Minnesota; or each might evaporate for myriad reasons. But all three are further developed than controversial nonferrous mining proposals that have dominated statewide headlines and political debate for two decades. Taken together, they might create more jobs and tax revenue annually than even the most optimistic estimates for copper-nickel mining in Minnesota.

Let’s set aside, for now, the merits of copper-nickel mining. For or against, we still have a problem. The fixation on that one issue consumes so much political oxygen that other ideas die on the vine. Single-issue thinking prevents the expansion of local expertise into new technologies and markets. Young people are never inspired to pursue useful trends. Neglect quietly kills opportunities before most people even know they exist.

This is bad for communities. Bad for local tax revenue. Heck, it’s even bad for the mining industry, which will languish without diverse technology, talent and markets.

The Iron Range is just one part of greater Minnesota, and no two parts are exactly alike. But political trends clearly show greater Minnesota unifying around a set of shared frustrations with the status quo, many of them economic.

For as long as I can remember, the Iron Range has cried for “jobs, jobs, jobs,” as famously phrased by the region’s most successful politician, the late DFL Gov. Rudy Perpich.

But even Perpich acknowledged that something changed forever after the iron mining industry contracted in the 1980s. He would be nicknamed “Governor Goofy” for his efforts to try new things to fill the economic void. Later, his words became twisted into hope that new employment might be wrested by force to replace mining jobs lost forever to automation and corporate consolidation.

This mantra dominates the thinking in many rural places, including those affected by the decline of agriculture and manufacturing jobs. Thus, we risk yelling “jobs, jobs, jobs” into a wishing well. Politicians may harness rural economic grievances to get elected, but that doesn’t fix the problem. The scope of this failure cannot be measured in presidential administrations, but rather in decades that now balloon into generations.

The mines don’t employ as many people today because the trucks and production plants grew bigger and more advanced, not because of environmental regulation. The collapse of the family farm at the hands of corporate agriculture caused waning fortunes in farm country.

These gains in efficiency could have been used to improve lives in the communities responsible for the success of these industries. But they weren’t.

We can’t change the economic story in rural places by begging for more of the same. And frankly, we in rural Minnesota must lead this change.

So, let’s look at the projects I mentioned earlier. I’ll show you what I mean.

This month, Pulsar Helium will drill its second test well after its first test generated commercially viable stores of helium and carbon dioxide. Company officials say there could be enough helium in the region to inspire competition.

That’s interesting, but not inherently a job-creation boon. When I visited the site this fall, it was clear that only a handful of workers are needed to operate a gas rig. The value comes in how that valuable gas might be used in the broader economy.

Helium is a crucial coolant for medical equipment, and supports certain types of welding and semiconductor production. Because helium gradually escapes when stored in tanks, using it close to its source could build cost-effective partnerships with other industries.

For instance, Pulsar signed an agreement last month with Chart Industries of New Prague, Minn., to provide carbon capture technology and recommendations to process and store the lighter-than-air helium and capture carbon dioxide. This is just one relationship with another Minnesota company that could be expanded in the future. The state leads in medical technology and manufacturing, so helium could become a unique local advantage.

On the iron ore front, Mesabi Metallics in Nashwauk has already invested $2 billion in its mine and production facility. This is a staggering number for a company that still draws sharp criticism for missed deadlines and two previous bankrupt owners.

Now, with a reorganized Essar Group at the helm, this broken promise could be made whole with iron ore production as soon as 2026. That is, if it can find customers for high-grade iron pellets until a direct-reduced iron plant can be added a few years later.

If successful, Mesabi Metallics could become a producer of iron used in new steelmaking technology, a fact that would set it apart from its Minnesota competitors.

Without this kind of capacity to make direct-reduced-grade pellets and value-added iron products, Iron Range mines will wither over the next two decades. In November, Chinese researchers announced a new steelmaking process that sprays fine iron powder into a hot furnace for iron or steel production. Their tests show that it is 3,600 times more efficient than a blast furnace.

Legacy companies and iron-mining communities must act on changing technology or face terrible economic consequences. It’s not enough to “support mining.” You have to support progress within the industry while protecting the workers and their families who might be affected by change.

Finally, energy.

Heliene in Mountain Iron is just one company with a relatively small share of the global solar picture. But Minnesota is the only Midwestern state that incentivizes solar-component production. Companies here can also capitalize on federal incentives to increase their market share.

The incentives for solar could change dramatically when President-elect Donald Trump, an outspoken renewable-energy skeptic, takes office. But a word of caution to those who might delight in rolling back progress in this industry. Solar is now the cheapest form of energy that humans produce. That’s a fact that transcends politics and climate science, or at least should.

In a September report, the International Solar Alliance suggested the world will have up to 75 Gigawatts of solar power capacity by 2050, just as other forms of energy are predicted to spike in costs. Rooftop solar power is still too expensive for many people to install now, but adoption is filtering down from the upper class into the middle class as we speak. Here again, why not build it in Minnesota?

These three projects deserve scrutiny, to be sure. There’s nothing magical about them. But they are examples of value-added economic diversity in greater Minnesota, a pursuit far more attainable than resurrecting dead economies of the past.