Wind power brings business to the Duluth area
Hardly anyone likes paying upwards of $3 per gallon at the gas pump, but high oil prices are stimulating at least one part of the Twin Ports' economy.
In 17 years on the job, Gary Nicholson, president of Lake Superior Warehousing Co., can remember no year busier than the current one. Lately, his business has been awash with components for giant-sized wind turbines, as well as massive crucibles used to help extract crude from the vast oil-sand deposits of Alberta, Canada.
"The high cost of oil has driven a lot of investment in energy," Nicholson observed.
The American Wind Energy Association estimates that between $8 billion and $10 billion is now being invested in wind power annually.
Much of that money is being pumped into the nation's heartland.
"There's a huge wind resource here in the Midwest that no one had really begun to tap until recently," Nicholson said.
Duluth appears well-positioned to feed equipment to an area that's ripe for wind power development. The Pacific Northwest Laboratory placed North Dakota, South Dakota, Minnesota and Iowa in the top 10 states in terms of wind power potential.
"We're in the center of North America, and I think recent shipments have awakened a lot of people in the energy industry to the capabilities of the port of Duluth," said Ron Johnson, the Duluth Seaway Port Authority's trade development director.
Much of the wind power technology being installed in the Midwest was developed and manufactured in Europe. Accordingly, the Twin Ports have handled large shipments of wind farm equipment imported from Germany, Denmark and Spain.
But recently, Duluth also has become a conduit for American-built wind power equipment bound for both domestic and export markets.
This year, Lake Superior Warehousing has handled wind turbine blades manufactured by LM Glasfiber of Grand Forks, N.D., and wind tower sections produced by DMI Industries Inc. of West Fargo, N.D.
The Duluth Seaway Port Authority stands to benefit from the heightened activity at Lake Superior Warehousing.
Adolph Ojard, the Port Authority's executive director, explained that his agency receives compensation in several forms, including dockage fees from visiting vessels and a $1-per-ton wharfage fee.
The Port Authority also collects 8 percent of the revenues Lake Superior Warehousing receives from its operations at the port terminal in Duluth and 35 percent of its overall profits.
Last fiscal year, Lake Superior Warehousing's operations generated about $1 million for the Port Authority -- about one-quarter of its total revenues.
So far this year, Lake Superior Warehousing has handled 10 vessels -- about three times as many as it did during the same period in 2006. It takes a team of about 35 to 40 people working together to handle a single ship, Nicholson said.
Nicholson's roots run deep in the wind power industry. In the 1980s, he served as the U.S. administrator of operations for a Danish firm called Viking Wind Farms. He has long believed in the potential of wind power to grow in the U.S., and has been working to forge strong ties with wind turbine manufacturers for years.
"Lake Superior Warehousing has been chasing this business for as long as I've been here," he said.
Johnson sees a bright future for the continued development of wind farms, particularly in light of growing concerns about global warming.
The world's capacity to generate power from the wind has been growing at an annual rate of 22 percent for the past five years, according to the American Wind Energy Association.
Besides attempting to attract shipments of wind power equipment, Duluth also is courting a manufacturer.
The Duluth Seaway Port Authority recently partnered with the Arrowhead Partnership for Economic Expansion (commonly known as APEX) to present a pitch to Clipper Windpower Inc., a California company that manufactures wind turbine nacelles, or engine enclosures. C
lipper already has a production plant in Cedar Rapids, Iowa, and has expressed interest in expanding its Midwest operations.