Sparrows Pt. coke plant proposed

The Baltimore Sun

Seventeen years after the smoke-belching coke ovens at Sparrows Point were shut down because of chronic pollution, the plant's new owner is considering a new plant at the sprawling Baltimore County steel mill, a move that would mean new jobs and help cement its future but is also likely to raise concerns in a community tinged with memories of black soot and foul air.

The Russian steel company Severstal, which completed an $810 million deal to buy the Sparrows Point plant this month with promises to bring the facility to full throttle, said producing its own coke would cut costs and help it deliver on its pledge. Company officials said that if they decide to move ahead, Severstal would work to reassure community groups that newer coke plants meet federal environmental standards.

"In order to be cost competitive, this coke plant is key," Gregory Mason, Severstal's chief operating officer, said in an interview during a visit to Sparrows Point.

Coke is a critical part of the steelmaking process because it is used to fire the giant blast furnaces in which iron ore is smelted. It is made by baking coal in special ovens at extremely high temperatures until the heat converts it into coke.

State and federal environmental agencies sued Sparrows Point's longtime owner, the now-defunct Bethlehem Steel Corp., in the 1990s, contending that the coke plants were a major source of potential carcinogens, including benzene. The ovens produced high levels of nitrogen oxide, which increased ozone-related air pollution and harmed aquatic life by reducing oxygen levels in the Chesapeake Bay. The ovens also produced sulfur oxide, which contributes to the formation of acid rain.

Modern coke plants use new technology that destroys pollutants before they are released, environmental experts and steel analysts say.

"Traditionally, it has been the greatest source of pollution at a steel plant," said Christopher Plummer, managing director of Metal Strategies Inc., an international metals research and consulting firm. "But those days are gone. These are completely different units and far exceed the maximum guidelines of federal standards."

In general, industrial plants such as coke ovens have become more environmentally friendly in recent decades because of more stringent federal standards, but that doesn't mean they're not emitting pollutants, an air pollution expert said.

"These plants will not violate air quality standards, or else they would not be allowed to be built," said John Walke, clean air director at the National Resources Defense Council, a national environmental group. "But at the same time, nobody is doing a fine-tuned analysis to figure out if they will pose any risk to the public."

Should Severstal decide to move ahead at Sparrows Point - a decision it emphasized has not been made - the regulatory process would probably be a long one. Sparrows Point would have to obtain new permits and revisions to some existing permits for everything from air quality standards to waste and water quality standards, said Gary Kelman, director of permitting and customer services at the Maryland Department of the Environment. The standards, which can be stringent, are set by the state environmental agency in conjunction with the federal Environmental Protection Agency.

There would also be public hearings. Kelman expects public scrutiny to be high, especially given past environmental problems at the plant. It could take three years to complete the review, Kelman said.

"This would generate extensive public interest, I would think, because of the community associations," Kelman said.

Area activists and elected officials have been fighting a liquefied natural gas terminal that AES Corp., a Virginia power supplier, proposed building two years ago at the old Bethlehem Shipyard at Sparrows Point. They say the proposed LNG terminal is too close to the Dundalk area, especially to the historically black neighborhood of Turners Station, and could endanger residents in case of an accident or terrorist attack.

Critics also contend that needed dredging would stir up sediment that would be harmful to the bay.

Word that Severstal is planning a coke plant and increased production at Sparrows Point has at least one community activist skittish.

"We've heard that Severstal wants to build a full-blown steel facility," said Russell S. Donnelly, a longtime environmental activist who lives in nearby Edgemere. "They want to put it back to like Bethlehem Steel in its heyday. That puts us back to ground zero with all the pollution."

Donnelly said he is skeptical that the newer coke ovens do not pollute the air.

"That doesn't make me feel more comfortable," Donnelly said. "I know the steel plant. My daddy worked there for more than 30 years."

As the steel industry has begun expanding again in the United States after decades of contraction and consolidation, the swiftly rising price of imported coke is prodding companies to consider producing their own. The price of imported coke has nearly tripled over the past four years, to about $360 per ton, according to the U.S. Census Bureau Foreign Trade Division. Shipping costs also have increased.

"Many companies believe that having control over your raw material supply is an important strategy going forward," said Lawrence Kavanaugh, vice president of manufacturing and technology at the American Iron and Steel Institute, an industry trade group. "If you don't control your own raw materials, you're subject to whatever is out there on the open market."

Severstal executives first said they wanted "to secure a local coke contract for Sparrows Point" in a conference call with analysts after the company announced its deal to buy Sparrows Point in March and elaborated on that statement during a subsequent visit to Sparrows Point.

"This facility needs its own coke," Mason said. "The best thing would be if we could build a coke plant on-site."

He and Ronald J. Nock, president and chief executive officer of Severstal North America, said it would be cheaper and more efficient for Sparrows Point to produce its own coke. On-site production would also boost the yield because coke often breaks down and some is lost during transport, Nock said.

The executives also noted that a coke plant would provide more jobs at Sparrows Point. Bethlehem laid off 400 workers and relocated 100 when it shut down its ovens.

Sparrows Point, once the largest manufacturing employer in Maryland, with 30,000 workers at its peak, now has about 2,500.

Over the next five years, Severstal plans to invest $500 million to bring Sparrows Point to full capacity of 3.6 million tons a year. The $500 million investment does not include the cost of a coke plant, which can cost hundreds of millions of dollars to build, said spokesman Michael Henson.

If Severstal moves forward with a coke plant at Sparrows Point, company executives acknowledge that the plant will have to overcome local issues of perception.

"Coke might not have the right connotation," Nock said. "But we're talking about clean technology."

Unlike the old ovens, the newer plants destroy pollutants inside the ovens before they can be released into the air. SunCoke Energy Inc., a division of the oil company Sunoco Inc., has built three facilities in the United States that employ the new technology. The company recently broke ground on a fourth plant and has submitted permits for another.

The newer ovens pull air in, preventing gases from escaping and furthering combustion that destroys pollutants. The only byproduct produced is waste heat, which is converted into steam and electricity. The electricity can be used on-site or be returned to the power grid.

The cost to build a coke plant varies, depending on the number of ovens. SunCoke, in partnership with U.S. Steel, is building a plant in Granite City, Ill., at a price tag of $290 million. It will produce 650,000 tons of coke a year.

Severstal officials said they are willing to make the investment.

"We would like to bring the best environmental technology in manufacturing, including coke production," Nock said.


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