Steel: Forging a future

The cost of compliance

Steel: Forging a future
2013-04-07T00:00:00Z 2014-03-05T10:41:11Z The cost of complianceBowdeya Tweh The Times nwitimes.com
April 07, 2013 12:00 am  • 

Industry officials, environmental regulators and activists agree progress has been made in improving the environmental profile of steel mills around the country.

But it’s not cheap to make those changes, despite the interest in reducing discharges of toxins and harmful substances, according to representatives from steel trade groups and companies. Compliance with newer environmental rules will push domestic steel companies to alter their operations to produce the least amount of pollution and energy.

Many environmentalists say changes now being proposed are long overdue after years of struggle in the court of public opinion as well as judicial courts.

"There's always a tension there between regulators and businesses, and that's probably a good thing," said University of Wyoming Prof. Timothy Considine. "It keeps everyone on their toes."

 

Newer standards

Cooling water intake at facilities and regulating emissions of ozone, particulate matter and mercury are among standards that have been proposed for revision in recent years.

The steel industry also is eyaluating the development of rules by the Environmental Protection Agency related to greenhouse gas emissions.

Thomas Gibson, American Iron and Steel Institute CEO, said the industry tracks issues of importance such as those affecting industrial boilers and how certain pollutants such as polychlorinated biphenyls, benzene and mercury will be regulated under the Clean Air Act. While the industry avoided the development of a cap-and-trade system in Congress' 111th session, he said it’s difficult to say whether it could return in the future.

Among nine manufacturing sectors in the EPA’s 2008 Sector Performance Report, the steel sector had the largest decline of total air emissions.

Gibson said the industry has been able to make some improvements without the new rules.

Since 1990, the U.S. steel industry has reduced energy use per ton of steel produced by 27 percent and carbon dioxide emissions by 33 percent per ton of steel shipped, according to the AISI. Also, 88 percent of steel products nationwide are recycled.

Thomas Easterly, an Indiana Department of Environmental Management commissioner, said there is no available technology to help control emissions other than companies using less energy or changing the fuel used in their operations. Steel mills can, however, use electricity generated at coal-fired power plants.

Integrated steel mills, including some in Northwest Indiana, rely on using carbon-heavy metallurgical coal or coke. Carbon dioxide is a natural byproduct of liberating oxygen from the carbon-containing material in blast furnaces.

"We're back to making sure that the requirements are based on sound science and actually protect the values we say we're going to protect," Easterly said.

The AISI's Gibson said climate change is a global problem and can only be addressed through a framework that includes all countries. He said one method to deal with climate change has been cap-and-trade, which has been adopted in Europe. But he said people should note steelmakers in Western Europe now are looking elsewhere as they make investment decisions.

“Less carbon-dependent technology will help, but you can't change the capital mix overnight,” Gibson said. “That will take time.

"Carbon regulation is a concern (and) leakage is real. A nation that didn't have an obligation would have a competitive advantage at whatever cost we would assign."

The AISI said some rules, including greenhouse gas emission regulations, could create obstacles to permitting for new and existing facilities and add costs to domestic steel producers. As a result, members want to push Congress to promote completing cost-benefit analyses of regulations at the state and federal level.

“The longer it takes for a federal rule to be proposed, commented, promulgated, the more it impinges upon a corporation’s decision to do an expansion project or new project,” said Kay Nelson of the Northwest Indiana Forum.

 

Varying costs

The costs of complying with environmental rules can vary greatly depending on facility capital needs and what standards need to be met.

The environmental community views the cost as necessary to protect human health and life. In 2011, the EPA said the cost of more stringent rules on fine particle and ground level ozone pollution under Clean Air Act amendments would reach $2 trillion in 2020 while saving 230,000 people from early death in that year alone.

Brian Urbaszewski, director of environmental health programs at the Respiratory Health Association of Metropolitan Chicago, said businesses invariably find ways to comply with environmental rules. He said the rules often create new technology and are targeted to bring improvements to the area.

From the industry's perspective, capital improvement projects for environmental remediation or pollution-reducing equipment at steel facilities could cost millions of dollars. IDEM's Easterly said companies making capital investments want some assurance they will be able to operate at a profit for a substantial period of time.

By not forcing companies in other countries to play by the same rules, Esmark Steel CEO Thomas Modrowski worries production could be driven offshore where similar rules are not in place.

"The cost to wring out the last couple percent of emissions is overreaching and puts an unfair financial burden on domestic steelmakers when compared to their competitors around the globe," he said.

Easterly said one of the biggest costs to companies depends on the rating of an area's air quality. IDEM is currently challenging Lake and Porter counties' designation of nonattainment for ozone, which means the region did not meet the most recent federally required clean air standards for that element.

Nonattainment areas must implement a plan to meet the standard, or risk losing some forms of federal money. An area may be a nonattainment area for one pollutant and an attainment area for others.

“Attainment” is desirable because it allows companies operating pollution-creating equipment to use the best available control technology. Under the “nonattainment” designation, technology must be installed producing the lowest achievable emissions rates, and then companies must buy emissions credits as an offset for what they emit. Easterly said that leaves companies in a nonattainment region at the mercy of the market when seeking to buy credits.

“I don't think we've gotten any permits for major production projects in Northwest Indiana as a result of that,” Easterly said.

 

Steel mills of the future

The clearest proof of the steel industry’s progress in environmental performance is in the sky, Easterly said.

The thick haze that once served as a welcome to Northwest Indiana's industrial corridor along Lake Michigan's south shore is gone. East Chicago native and Esmark Steel CEO Modrowski said nearly 50 years ago, people would leave their laundry outside for a few hours, and it would become speckled red from iron oxide dust.

Easterly said steel companies have reduced discharges into air and water depending on the pollutant by about 90 percent since the 1970s.

Prof. Donald Fosnacht, at the Natural Resources Research Institute at the University of Minnesota at Duluth and a former Crown Point resident who worked at Inland Steel for more than 20 years, said the best-performing steelmakers in the future will be those that become successful at reducing their environmental and physical footprints.

Larry Davis, an electrical maintenance technician at ArcelorMittal Burns Harbor and a Save the Dunes member, also said it's important to ensure mills employ technology to reuse wastes and move away from the practice of building landfills and injecting toxins into deep wells.

In the coming years, Davis expects integrated steel mills' environmental profiles will continue to be hurt as a result of coke and lingering plant emissions. Coke plants are rows of ovens that bake coal for several hours in a low-oxygen environment to produce a material that can be fed to blast furnaces for pig iron production. Sinter plants use recovered iron-containing waste materials and agglomerate them into a product that can be fed back to blast furnaces.

Davis said wastewater treatment also remains a challenge for steel mills as a result of the large volumes of water used in processes that have to be treated.

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