Midwest Energy is poised for another record year

When the James R. Barker, all 1,004 feet of her, left the Midwest Energy Resources Company's Superior Terminal on March 17 bound for the Minnesota Power plant at Taconite Harbor, the maritime community was all a-buzz because the Barker's departure meant that another shipping season had opened for the Port of Duluth-Superior.

And, oh by the way, the Terminal was almost surely on its way to another record-setting season.

Records have been a way of life at the Terminal almost since its opening, in 1976. The operation's transshipment summaries show all-time records in 20 of the years since then, with tons transshipped (the average of the total of tons received plus tons shipped) ranging from 2,206,055 in 1976 to 18,697,763 in 2004.

And 2005 should see another record, with Fred Shusterich, president of Midwest Energy Resources Company, confidently expecting to see 20 millions tons moving through the Terminal this season, but at a calendar-year rate of 21 to 22 million tons. (The Terminal's environmental permits are based on tons per calendar year.)

A $3.5 million, multi-phase enhancement project that began with the planning phase in 2001 and was completed early this year accounts for this year's dramatic increase. And that won't be all. "With all the stars and the moon in alignment, we could move 25.5 million tons a year," said Mr. Shusterich. "That's the ultimate. We can do 23.5 million no problem. We have air- and water-quality permits for 25.5 million tons of annual throughput, so that's our cap."

Amazingly, the new capacity comes without any expansion that is apparent to the eye of the unknowing beholder; the Terminal's footprint is exactly the same now as it was before the enhancement project began.

Mr. Shusterich, and rightly so, is reluctant to discuss specifics for North Star Port; he'd rather save that discussion for a paper in a technical journal.

For us, he sums up the enhancement by saying that the shipping records in seasons to come will be the results of technological and physical improvements throughout the Terminal operation. No opportunity for higher efficiency and capacity was overlooked.

"If we used to have a cushion, a bit of fat, in the process, it's virtually gone," said Mr. Shusterich. "Without risk of harm to personnel or damage to equipment, we have minimized the available buffer time.

"For example, our dumper cycle originally was designed for handling 3,700 tons per hour. Now it's running at nearly 5,000 tons per hour."

And what is this material that Midwest Energy handles so effortlessly? It's coal. Millions and millions of tons of coal.

The Terminal, owned and operated by Midwest Energy Resources Company, itself a wholly owned subsidiary of the Detroit Edison Company, was designed and built to do one task only, and to do it with exquisite efficiency — to accept rail cars full of low sulfur Western coal, hold it temporarily and then load it onto a waiting vessel that in turn will hustle it down the Lakes to an electric plant or industrial customer. Coal now received at the Terminal comes from the Powder River, Hanna and Uinta Basins. Service is provided by the Burlington Northern Santa Fe and Union Pacific railroads. Trains of specially designed aluminum cars, 123 per train, or unit, travel a thousand miles over two days to reach Superior and the 200-acre Terminal's 3.5-mile rail perimeter.

From there, using remote control, a single person controls the train, precisely moving it forward, turning each car upside down on its swiveling couplers and unloading it without uncoupling it from its mates in tandem. From there, the coal can be conveyed directly to a vessel or to the storage pile. At the storage pile, operators can blend three different coals to meet any customer's needs. (Btu's, sulfur and sodium are the key criteria.)

The Terminal clearly was founded on belief in the concept of economy of scale. Everything it does, it does in a big way.

To make its 25.5 million ton transshipment capacity possible, it can accommodate two of the 123-car unit trains on site at a time. It has unloaded as many as 139 trains in one month (September 2004). Its on-site storage capacity is five million tons, and it can keep separate eight different coal types. Its 1,200-foot dock can accommodate vessels up to 1,105 feet long and can load up to 11,500 tons per hour. It has loaded as many as 2,547,173 tons into vessels in one month (July 2002). Loading, too, is accomplished by one person using remote control.

Midwest Energy Resources Company also moves coal directly by rail to six utility and industrial customers in the Midwest. Mr. Shusterich expects to move 36 million tons this year to these customers. This is in addition to coal moving through the Superior Midwest Energy Terminal.

If you'll do the math, you'll conclude that the Superior Midwest Energy Terminal's $3.5 million enhancement has netted a capacity increase of about 40 percent. "This has been possible because of the expertise and dedication of our people," Mr. Shusterich said. "This project could easily have cost $40 million. But we put a lot of in-house talent, experience and expertise to work on it. What we accomplished is a credit to our people." The planning must have been exquisite, and especially the timing. The project didn't interfere with production because most of the work was completed during winter layup time.

One of the project's key improvements was in air quality. Dust, of course, is a concern in coal mining and handling. "The exhausted air from our terminal baghouse dust collection units now registers a concentration of .004 grains of coal per dry standard cubic foot of air. To our knowledge, this is the lowest concentration in the coal terminal industry," said Mr. Shusterich. For reference, there are approximately 15 grains in one gram. "We are the industry leader, not only in throughput but in environmental performance as well," said Mr. Shusterich.

The Terminal now employs 81 people, up from 55 in 1986 before an earlier round of improvements. Mr. Shusterich expects to hire a few more people for additional maintenance in light of this year's additional volume. "I'm a believer in the FRAM philosophy," he said. "Pay me now, or pay me later." (The line is from an air-filter TV commercial of recent vintage.)

Because of the Terminal's attention to detail and maintenance, its equipment runs at 98.5 percent availability, an enviable mark in any industry.

The Terminal was designed expressly to serve Detroit Edison. Sixteen other utilities and industries also are prime customers. This spring the Terminal began preliminary relations with utility customers in the Canadian Maritimes and has handled its first loads of coal bound for there. A marketing team is pursuing that and other opportunities.

As the operation grows in terms of capacity, it also grows in terms of professional status and personal growth. The company has launched formal, collegiate-level management training with the assistance of outside professionals.

What he has seen so far, Mr. Shusterich said, "reaffirms that we have great people. Further, this is an investment in the future. We have a great culture here," he said, "as affirmed by our motto: Whatever It Takes."

The unloading, storing, blending and reloading of the Superior Midwest Energy Terminal's astonishing volume of coal on such a grand scale is accomplished with an absolute minimum of fuss. A visitor to the Terminal immediately notes the orderliness of the place, an almost eerie sense of calm and extreme level of tidiness. (Thank you for observing the Please Wipe Your Feet signs before entering the office building.) The site is truly amazing.

"I think so, too," said Mr. Shusterich. "And that's what I think every day when I come to work."