In Escanaba, $200M for a paper mill, but no new jobs required

The paper mill does not have to create new jobs, only to retain its 1,200-person headcount as of October 2022

By Jamie A. Hope | February 3, 2023

One of the first things Michigan’s Democratic-led Legislature did this year was to rush money — hundreds of millions of dollars — into corporate coffers. An appropriations bill of corporate welfare called for sending $946 million from taxpayers to various entities. Escanaba Mill, a paper mill, will receive $200 million.

Senate Bill 7 was passed by a vote of 60-48 in the House and 24-14 in the Senate. Eight Republicans — four in each chamber — joined Democrats to approve the bill. Democrats have a 56-54 majority in the House and a 20-18 majority in the Senate.

Gov. Gretchen Whitmer signed the bill Tuesday.

James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, questions the value of sending money to the paper mill. Michigan already has the SOAR program — the Strategic Outreach and Attraction Reserve — to dole out corporate welfare, he notes. Why not use it?

Lawmakers granted SOAR another $150 million with Senate Bill 7.

The paper company, whose parent company is the Swedish firm Billerud, is not required by the appropriation to create new jobs. The paper mill will, though, have to retain its Oct. 1, 2022, employment level of 1,200 jobs for 10 years.

The company says it will soon pursue a $1 billion investment.

Michigan has shed thousands of paper mill jobs over the past 20 years. In 2001, the industry had over 17,000 jobs in the state. That number dropped to approximately 11,000 in 2011, and moved to over 12,000 as of 2021.

Billerud did not respond to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

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Elon Musk, Ram admit: With green energy, there’s always a catch

Nuclear energy is needed to make wind and solar go, Musk says, while internal combustion engines provide the “range extender” for a Ram EV truck

By James David Dickson | February 3, 2023

“Wind & solar, combined with batteries, will solve sustainable energy for Earth,” Elon Musk tweeted on Jan. 31.

He quickly added an asterisk in a second tweet: “Hydro, nuclear fission & geothermal will also be significant parts of the solution.”

So, wind and solar are the future, when you add in stuff that works reliably, like nuclear energy. Got it.

Ram found itself in the same predicament this week, when it rolled out a Ram EV truck with the mother of all asterisks: A “range extender” in the form of a gas engine,” as reported by Car and Driver.

That’s right. To make sure its EV truck works and can get people to point B, the Ram EV truck won’t have a bigger or better EV battery. It will rely on the technology that’s been known reliable for a century, the internal combustion engine.

Jason Hayes, director of environmental policy at the Mackinac Center, sees in Musk’s tweet and the Ram’s range extender an admission: Green energy, on its own, is not reliable.

Hayes argues energy reliability in Michigan is being dismantled by a premature transition to technologies, such as wind and solar, that are not ready to take over from coal, natural gas and nuclear.

“We are moving away from the notion that we can use technology to provide continuous reliable electricity to the notion that the planet requires us to stop using unless the planet has decided to produce electricity via wind or the sun,” Hayes told CapCon. “Our lives will change markedly.”

Hayes warned of this scenario in a June 2021 blog post, “While Michigan’s Electricity Rates Increase, Reliability Suffers.”

As Hayes wrote then:

It is essential for Michigan residents to realize that their ability to choose is being restricted as utilities build an electrical system that now operates on much thinner margins than in the past. Utilities are closing large, reliable, fossil fuel and nuclear plants and attempting to replace them with reliably unreliable wind and solar.

But intermittency and unreliability are unavoidable artifacts of a system designed around energy sources powered by the often unexpected caprice of weather.

Two years later, DTE Energy is moving to a peak-hour pricing system whose energy costs will rival California’s during the summer months.

Related reading: DTE’s peak-hour rates in Michigan are on the cusp of California’s