Almost 70 years ago the state of Minnesota started investing in development of new technology that created decades of prosperity on the Iron Range. Today, a similar opportunity exists that could continue, and even build on that prosperity for more decades to come— all while helping the world address the existential crisis of climate change.
Today, Minnesota’s production of taconite pellets represents just one step in the production of steel and the current process involves the production of truly massive amounts of greenhouse gases. Indeed, the steel industry is responsible for nearly ten percent of total carbon dioxide emissions, globally.
No one doubts our need for steel in the modern age, yet we also need to find ways to make steel that won’t cook the planet. The good news is that the technology to make that possible is nearly here. A recent presentation by Jeffrey Hanson, of Babbitt-based Clearwater BioLogics, piqued our awareness of the ongoing efforts to “green” the steel industry. Several pilot projects are already underway in Europe and Scandinavia, where efforts to address climate change are well ahead of the U.S.
The so-called “greening” of the steel industry is a significant undertaking, but it’s one that could completely reshape how steel is made and that presents real opportunities for the Iron Range to grow and diversify. The industry has already taken baby steps in that direction, with the recent investments by Arcelor-Mittal US (now part of Cleveland Cliffs) and, most recently, by U.S. Steel. Cliffs is already producing taconite pellets that have been reformulated to be fed into a direct reduced iron processor and U.S. Steel soon plans to do the same at its Keetac facility.
The industry in the U.S. is rapidly moving away from traditional blast furnaces for steel production, a development that, by itself, helps to reduce greenhouse emissions. Arc furnaces make use of scrap steel and direct reduced iron, but they can’t be fed by traditional taconite pellets, so that portion of the industry will disappear in the not-too-distant future.
The shift to the use of electric arc furnaces still consumes huge amounts of energy, but it’s a major improvement over the traditional method.
The transition in the industry will require changes on the Iron Range, if the mining industry here is to survive. Domestic demand for traditional taconite pellets will continue to decline with the phase-out of blast furnaces.
But other technological changes, and the need to reduce greenhouse emissions, presents an opportunity for the Iron Range to do much more than simply shift to the production of DRI-grade pellets.
The recently-passed Inflation Reduction Act (IRA) offers the potential, with an assist from the state of Minnesota and industry to finally realize the goal of actual steel production in northeastern Minnesota while addressing greenhouse emissions at the same time.
The IRA is making an enormous investment in the production of clean hydrogren, providing tax credits that are expected to turn a long-touted, but mostly unrealized, energy future into a reality in the very near future. Hydrogen production, which could be undertaken here in Minnesota, opens up the possibility of fully integrated steel production on the Iron Range. It’s the lack of coal and natural gas in our region that has traditionally pushed most steel production to the lower Midwest, where plants had readier access to Appalachian coal and, more recently, to natural gas.
A transition to clean hydrogen in the steel industry would not only significantly reduce greenhouse emissions, it would eliminate the need to locate other steps in the steel production process closer to traditional sources of energy.
Basic efficiency suggests that you produce steel closest to your source of iron ore, assuming you have the energy to complete the process. Hydrogen production on the Iron Range could make that a reality. Rather than simply producing DRI-grade pellets, we could make the DRI right here and integrate arc furnaces right into the process. That provides additional energy efficiency because the hot DRI pellets wouldn’t need to be reheated or transported halfway across the country. The potential is there for a process that goes right from mine to steel on site. And if powered by clean hydrogen and other renewable sources of energy, it could be the greenest steel produced on the planet. Rather than being part of the problem in warming the planet, Minnesota and the Iron Range could be part of the solution, all while the industry employs far more people than it does today.
Back in the 1950s, the state of Minnesota showed vision by investing in the development of new technologies that provided an enormous payoff for the Iron Range and the state. Minnesota could do the same today by partnering with companies willing to invest in clean hydrogen and clean steel production. We don’t want to be left behind by the inevitable change that is coming.
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