Jobs, forest and climate: Wood products plant welcomed in northern Minnesota
Huber Engineered Woods has announced plans to build a $440 million OSB plant in Cohasset, just west of Grand Rapids.
DULUTH -- It's been a tough past 15 years for Minnesota's forest products industry. The housing collapse in 2008 contributed to the closure of three plants that made oriented strand board (OSB), a plywood-like product that's used to build houses.
Then in 2012 a fire destroyed the Verso paper mill in Sartell.
Meanwhile, other plants have closed in Duluth, Brainerd and Deerwood, and big paper mills in International Falls and Grand Rapids have downsized.
That historical context is why a lot of people were excited when a company called Huber Engineered Woods announced plans to build a $440 million OSB plant in Cohasset, just west of Grand Rapids.
The company hopes to break ground this fall or next spring, next to a large coal-fired power plant that Minnesota Power plans to close by 2035.
"It's the biggest deal in 40 years since the last mill was built in Minnesota," said Scott Dane, director of Associated Contract Loggers & Truckers of Minnesota and the new executive director of the American Loggers Council.
The new Huber facility is projected to create more than 150 direct jobs. Dane said it will also provide a huge boost to the region's loggers and the truckers who transport timber to the mill.
"What this announcement does is gives a lot of encouragement to those who have been struggling over the years, that there is something new coming and encourage them to reinvest in their businesses and commit to the long term," Dane said.
The company said it will need about 400,000 cords of wood a year to feed its new plant.
As mills have closed in recent years, the amount of timber harvested from Minnesota's forests has dropped by more than a million cords every year, from more than 4 million cords to about 2.8 million.
That's bad for loggers but also, many people argue, for the forests.
A healthy forest is a diverse forest, with different species and different ages of trees, said Jon Drimel, who manages the Minnesota Department of Natural Resources' timber program. That diversity helps protect forests from wildfire and disease, and provides benefits for wildlife.
"So, having that diverse forest is important,” Drimel said. “And our main tool to do that is through harvest and forest management."
Drimel said the new plant will be located in the center of Minnesota’s timber basket, which will give loggers more options to sell their product.
“We've got millions of acres of forest land in the north that need to be managed. And you do that by harvesting trees,” said Sen. Tom Bakk, Independent-Cook, who authored the bill to provide production incentives for 10 years to Huber.
“But you can't harvest trees (if) there's no one to sell them to,” Bakk said. “So the state has a very strong interest in trying to find somebody that will add some value to the timber resource that we have.”
The new plant could have important benefits for climate change as well, which may seem counter-intuitive. After all, trees pull carbon dioxide out of the atmosphere. So how could cutting down more trees help the climate?
Eli Sagor, an extension specialist with the University of Minnesota at the Cloquet Forestry Center, said when trees die in the forest, they decompose, and that carbon is released.
"When we harvest those trees and turn them into long-lived wood products like oriented strand board, which is a building material, it then gets put into a building where that carbon remains locked up for decades, many decades," Sagor said.
And then the aspen that's harvested to feed the OSB plant naturally regenerates after it's cut, Sagor said.
"So that then frees up that forested acreage to grow new trees, sequestering more carbon, storing more carbon and continuing that cycle."
Big industrial projects in northeastern Minnesota often get framed as "jobs vs. the environment,'' in that you have to sacrifice one for the other.
Sagor, however, sees this project as a win, both for rural economies and for Minnesota's forests.
Craig Sterle, a retired DNR forester and past state president of the Izaak Walton League, largely agrees. But he's disappointed in a provision passed by the Legislature that exempts the project from needing an environmental impact statement. Instead, agencies will conduct a more basic environmental review known as an environmental assessment worksheet.
"As part of the timber mill being built, I would like to have seen an EIS so that if there are questions to be asked, they could be done in a scientific way and in a public way,” Sterle said. “But we're gonna have to be satisfied with an EAW, I guess, is the way it's playing out."
The project's benefits will also come at a steep cost.
In addition to the nearly $30 million in production incentives approved by the legislature, the project also depends on a $20 million investment from the state Department of Employment and Economic Development, and a $15 million forgivable loan recently approved by the Eveleth-based state development agency Iron Range Resources and Rehabilitation.
"I'm not a huge fan of big incentives, but that's the world we live in,” said IRR Commissioner Mark Phillips. “You know, if you want to land a project like this, this is the thing that other places do."