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Regulators pressed Western Maryland paper mill to cut pollution but preserve jobs. Now, both will vanish.

Maryland environmental regulators were in talks with a Western Maryland paper mill about how to significantly reduce the facility’s output of a harmful pollutant when its owner shocked state officials last week by announcing plans to shutter the 131-year-old factory.

With data showing the Luke mill has at times exceeded the latest federal standard for sulfur dioxide emissions over the past two years, Maryland Department of the Environment officials and Ohio-based mill owner Verso Corp. said they were discussing what exhaust-scrubbing technology could be installed.

As recently as 2014, the mill was the state’s largest source of the toxic gas and lung irritant, produced by burning coal, oil and black liquor, a controversial papermaking byproduct that is considered renewable fuel.

But Verso officials say the costs of that technology were too much to bear on top of steady declines in demand for the coated paper products made at the Luke mill, including magazine pages.

“We’ve determined that with the mill’s current configuration and product mix, implementing the changes necessary at the facility as a result of the revised regulation would significantly increase the mill’s operating costs,” Verso spokeswoman Kathi Rowzie said. “While this was not the determining factor in the decision to close the mill, it was one of the factors that contributed to the decision.”

Once the Allegany County mill closes next month, emissions of not just sulfur dioxide but thousands of pounds of other pollutants and climate-altering greenhouse gases will cease. The plant was also the state’s largest industrial source of mercury, and among its largest producers fine particulate matter and smog-inducing nitrogen oxides, according to the Environmental Protection Agency’s latest National Emissions Inventory report, with data for 2014.

But environmentalists aren’t celebrating the loss of 675 mill jobs (plus likely hundreds of others in related industries) in a part of Maryland that already has limited economic opportunities.

Environmental Integrity Project Director Eric Schaeffer said the goal of federal Clean Air Act pollution standards isn’t to shutter factories.

“The goal is for the companies to find a way to meet them while continuing to manufacture,” said Schaeffer, a former EPA director of civil enforcement.

State records show the Luke mill already has cleaned up its emissions dramatically in recent years.

It more than halved its output of sulfur dioxide from 2010 to 2016, to about 9,000 tons as of last year, according to MDE records. Its reductions in nitrogen oxide emissions were nearly as significant over the same period.

While it reported emitting more than 100 pounds of mercury in 2014, it reduced that to just 2 pounds per year in 2017 and 2018, the state records show.

Much of those emissions reductions came as the mill reduced its reliance on coal for energy, shifting toward natural gas, according to the records. (The plant is also powered with black liquor, a substance created during the pulp-making process that would otherwise be waste. The company has received millions of dollars in Maryland green energy subsidies for its use of the fuel.)

Amid those reductions, Maryland regulators moved to impose the EPA’s latest sulfur dioxide standard on the mill. The pollutant is known to cause breathing difficulty and reduce lung function, and the federal standard is based on scientific study of its effects on human health.

In an effort to show it was achieving the standard of producing a concentration in the air of no more 75 parts per billion over a one-hour period, Verso chose to install air monitors around the Luke mill and collect data for three years.

But more than two years of information suggests that at the end of that monitoring period, further emissions reductions might have been required.

One monitor showed a sulfur dioxide concentration as high as 530 parts per billion, Maryland Department of the Environment spokesman Jay Apperson said. But none exceeded the federal standard in more than 1 percent of hours monitored, he said.

Failure to attain the standard would require Verso to develop a plan to reduce emissions starting sometime in 2020, Apperson said. Ahead of that, he said, regulators were already in talks with Verso about “potential cost-effective options … understanding the financial challenges the facility has been facing and its economic importance to the region.”

He did not respond to a request for the agency’s correspondence with Verso.

In response to questions about the discussions, Rowzie called the input from regulators “very helpful” but repeated comments that meeting the sulfur standard would be too costly for the mill. She declined to say how much pollution-scrubbing technology would have cost.

More significant, she said, were pressures on mill revenue. The facility has seen 5 percent annual declines in demand for coated paper over the past five years — and those losses accelerated to 11 percent in the first quarter of 2019, she said. An influx of imported paper into the United States was also a factor, she said.

Officials for publicly traded Verso declined to comment further.

Environmental groups were quick to point to those business pressures, and not environmental regulation, as the driver behind the mill closure.

Schaeffer said that other paper mills have complied with the sulfur dioxide standard, which EPA adopted in 2010, and that gave Verso years to prepare for compliance.

American Forest and Paper Association officials would not say how the sulfur dioxide rule and other pollution benchmarks have affected costs at mills around the country.

“Individual companies make their own operating decisions, including those around how to comply with standards and regulations and the related costs,” said Barbara Riley, the association’s spokeswoman. “They take into account available options and current infrastructure in making these decisions.”

David Smedick, campaign and policy director for the Maryland Sierra Club, said the Luke mill’s closure would mean significant air quality improvements in Western Maryland, and, to a lesser extent, around the state. Sulfur dioxide is considered a fairly localized pollutant, while nitrogen oxides can disperse more broadly in the atmosphere and contribute to smog.

More important, he said, are concerns about how to replace the lost mill jobs with greener industry that pays the decent wages the Luke workers are used to. The mill has employed generations of Western Maryland men; many workers now live in West Virginia.

While officials with United Steelworkers Local 676, which represents the bulk of millworkers, say they have feared the Luke mill’s closure for years, they were nonetheless blindsided by Verso’s announcement April 30. The company had been hiring this year.

On Jan. 1, Maryland regulators had awarded the Luke mill a new permit under Title V of the Clean Air Act, a segment of the landmark federal environmental legislation applied to any major source of air pollution. The document would have guided mill emissions for the next 4½ years.

Instead, the factory on the banks of the Potomac River is set to close June 30 — four years to the day before that permit is set to expire.

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