View Full Version : Steel execs decry emissions bill

05-08-2008, 05:13 PM

The domestic steel industry would be hurt if the government forces steelmakers to follow stricter emissions standards proposed in Congress, industry executives said Wednesday.
"We need to make sure that we don't damage an industry like ours that is thriving. Inevitably, we will suffer" under those stricter greenhouse-gas emission standards, said U.S. Steel Corp. CEO John P. Surma to more than 1,100 people at an American Iron and Steel Technology industry conference at the David L. Lawrence Convention Center, Downtown.

Industry executives at a town-hall forum expressed their concerns about the impact of emission standards proposed in the Climate Stewardship and Innovation Act of 2007. The legislation is co-sponsored by Sens. Joseph Lieberman, I-Conn., and John McCain, R-Ariz., the presumptive Republican presidential candidate.

The steel industry will have a problem meeting stricter emission standards, especially the integrated steel mills that burn iron ore and carbon that creates carbon dioxide in the steelmaking process, said steel analyst Charles Bradford of Brdford/Soleil Research.

"You can't get around it," Bradford said.

Using an electric arc furnace to melt scrap to make steel isn't the solution to all the pollution problems because those mills can't make all grades of steel that can be made in a blast furnace, Bradford said.

"I think the steel industry has a distinct problem," he noted.

Under the bill, the industry must return to 2004 emission levels in five years, then reduce emissions by about 2 percent through 2020. The goal is to cut by greenhouse-gas emissions by two-thirds before 2050.

Improvements in technology can help reduce emissions, and the North American steel industry already has reduced its energy use by about 30 percent since 1990, Surma said. But, by 2050, steelmakers may need another way of making steel to meet the standards proposed in the bill, he said.

The problem with the congressional proposal is that no one has studied the economic impact, Surma said. What amounts to a greenhouse-gas emissions tax on steel products could drive production to foreign countries.

If the government would raise greenhouse-gas emission standards and place a tax on products made by gas-emitting industries, business would be driven to countries such as China and India, where environmental regulations are less strict, Surma said.

"We really can't afford to have the manufacturing base move to China," which accounts for about 34 percent of the industry's greenhouse-gas emissions, said Keith E. Busse, CEO of Steel Dynamics Inc. of Fort Wayne, Ind.

As global demand for steel increases, producers are finding ways to increase capacity of existing mills by "tweaking" plants, as well as building new ones, said Russ Rinn, executive vice president of Commercial Metals Co., which is building a 300,000-ton mill in Arizona.

Only since 2004 has the steel industry's market shown growth, said Louis L. Schorsch, chief executive of ArcelorMittal USA.

"The bad years are really fresh in our mind," Schorsch said.