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Andrew Tellijohn / Capitol Bureau, Published January 21 2011

Permit frustrations aired: Minnesota House committee discusses streamlining process

ST. PAUL – U.S. Steel Corp. announced plans to expand its Keetac iron ore production facility three years ago so it could produce more taconite pellets.

But it still awaits needed government permits, delaying hiring hundreds of workers.

U.S. Steel estimates construction would create 500 temporary jobs and provide 120 permanent jobs on the Iron Range. Despite spending $20 million so far to provide information, update plans and go through the permitting process, the Pittsburgh-based company said its $300 million project near Keewatin, Minn., is on hold indefinitely as it waits for the end of a state environmental review.

“This is a huge project for us and a huge commitment from U.S. Steel to the state of Minnesota,” said David Smiga, the company’s assistant general counsel for environmental issues.

Stories like that of U.S. Steel are driving state Republican lawmakers, with support of Democratic Gov. Mark Dayton, to reduce time the state takes to conduct environmental reviews and issue permits needed before many businesses expand or open new Minnesota facilities.

And it isn’t just large companies or big projects facing delays.

Lon Aune was one of four county engineers from northwestern Minnesota who carpooled to St. Paul on Thursday to share permitting frustrations with a House energy and environment committee.

Aune said he is not against regulation, but he has seen delays, even on small projects, that have stretched project timelines, hurt farmers and, at times, put residents in danger.

“We are not able to get our projects competed in a timely manner to meet the needs of our residents,” said Aune, Marshall County engineer. “These delays we’re seeing are taking projects that are very simple in northwest Minnesota and causing them to drag out three, four, sometimes five years, so the residents aren’t able to travel on a safe road. They’re not able to get the proper drainage to get their crops out, things of that nature.”

Rep. Dan Fabian, R-Roseau, made streamlining these processes the subject of the House’s first bill of the session, calling on government agencies, particularly the Minnesota Department of Natural Resources and the Minnesota Pollution Control Agency, to speed up their reviews.

“It’s about reducing timelines,” Fabian said. “It’s about creating jobs; it’s about taking burdens off of local governments; it’s about lifting some of the heavy weights off of businesses that are trying to expand.”

Specifically, the bill calls on the DNR and PCA to make it a goal that environmental or resource management permits be issued or denied within 150 days of submission and requires those agencies to accept electronic submissions, an effort to speed things up. But the bill, which could receive final House approval within two weeks, does not require all permits be issued in 150 days; it is just a goal.

The bill also would reduce final approval times for environmental impact statements and allow project proposers to prepare draft environmental statements for government review rather than having to wait until governmental agencies do the work.

DNR and PCA officials already are examining their permitting and environmental review processes. Jeff Smith, director of the PCA’s industrial division, said the organization manages between 15,000 and 18,000 permits a year and receives more than 6,000 applications each year. Usually, he said, the process goes smoothly.

The 20 to 40 each year that take longer generally are the largest and most complicated, involving ethanol, mining, power plants and similar industries. They take longer because they are complex and because they draw interest from environmentalists, community groups and others.

“We don’t need to streamline everything,” Smith said. “It’s a tiny blip of the total permits we issue.”

Steve Hirsch, director of the DNR’s ecological and water resources division, said it is rare for a permit to take 150 days, though environmental reviews do occasionally go longer than expected. Officials are evaluating the environmental review portion of the bill and have yet to form a position, Hirsch said.

Fabian’s bill passed an energy and environment committee Thursday, though it was not without some critics. Some lawmakers expressed concern that streamlining efforts are moving too quickly.

Legislative Auditor Jim Nobles testified this week that his staff is conducting a review of environmental permitting statewide. His office will release a report in late February and Rep. Kate Knuth, DFL-New Brighton, said lawmakers should wait until they have seen it before advancing Fabian’s bill because they “don’t have full understanding of what is causing delays.”

Reviews are helpful

Rep. Jean Wagenius, DFL-Minneapolis, said environmental reviews help legislators learn what work and are important for protecting the environment.

“It’s a very valuable tool,” she said.

She also said putting writing environmental impact statements in the hands of businesses seeking permits puts the wrong entity in charge of the bill.

The Minnesota Chamber of Commerce has been involved in helping shape the proposed changes. Tony Kwilas, director of chamber policy, said that change won’t prevent government officials from questioning or requiring changes to the document but will cut time upfront because companies have a stronger incentive to finish them.

David Strand, executive director of the Minnesota Center for Environmental Advocacy, said his organization believes permitting and reviews should be as efficient as possible. He added that truly long reviews are rare.

“It’s the toughest, most complicated cases where this happens,” he said. “I think that’s time well spent.”

The northwestern Minnesota engineers said too much time can hurt.

Kittson County Engineer Kelly Bengtson said projects in his county generally range in cost between $1 million and $2 million, but have a tremendous impact on agriculture work in the area.

“It’s getting difficult to deal with,” he said. “We’ve seen our projects delayed more often the last five years.”

Excelsior Energy faced many of the same slowdowns as U.S. Steel as it worked through the Mesaba Energy Project, a power plant proposed for northeastern Minnesota.

Company officials expected a long, complex path toward approvals, which started in June 2006 and concluded spring of 2010. Power plants require proposers to make two alternative facilities available for consideration, which lengthened the process and prevented Excelsior from considering other aspects of the project.

“It was very time consuming and costly,” said Tom Osteraas, Excel’s general counsel. “We’re only now at a point where agencies can focus on air and water permits.”