Beth Steel move may hurt U.S. competitiveness Steel industry already behind overseas rivals

September 18, 1991|By Kim Clark

While cleaning up the air around Baltimore and saving the company costly pollution fines, Bethlehem Steel Corp.'s decision to suspend operations at its Sparrows Point coke ovens could hurt the U.S. steel industry's competitiveness, industry experts said yesterday.

Idling the coke ovens will delay or scuttle a couple of federally funded experiments that might have allowed similar facilities nationwide to operate with far lower pollution.

And, industry officials say, closing the three Baltimore batteries (where coal is baked into a hard, pure form of carbon called coke) will force Bethlehem to buy more coke from overseas producers, including some who are gaining a technological edge on U.S. companies, and others who produce cheaper coke using dirtier methods than even the worst U.S. plants.

"We are behind other countries," warned Donald Barnett, a steel industry historian.

Mr. Barnett said the move reflects the federal government's contradictory policies toward the basic industry. He noted that while federal anti-pollution laws likely sparked the closure of the coke ovens, the action may also waste federal research grants.

Shutting down the ovens will mean, for example, that a nearly finished $45 million coke oven gas cleaning plant won't even be fired up, federal officials said.

Bethlehem had applied for and received almost all of a $13.5 million U.S. Department of Energy grant for building and testing the experimental gas plant, which was to have cleaned and processed 74 million cubic feet of coke oven emissions each day.

The DOE had hoped the experiment at Sparrows Point would prove a technology to cut the sulfur dioxide emissions of the nation's 30 coke plants in half, said Carol Beeman, an agency spokeswoman.

But now the DOE must wait at least two years before the plant can be tested -- and faces the possibility that Bethlehem might not restart the coke ovens at all.

"We are disappointed by the delay," she said.

"It was a lot of money," she said of the $11.9 million of federal funds spent on the project. And, Ms. Beeman said, the DOE doesn't have any similar research project that might replace the Sparrows Point plant.

"This was the only project we had that dealt with cleaning up coke oven gases," she said.

In addition, Bethlehem's announcement has thrown into confusion the fate of a recently started local trial of a one-of-a-kind device that might have cooled down coke without creating billows of smoke.

After 13 years of research and rejection, Ted Kress, a Brimfield, Ill.-based steel equipment maker and inventor, had won a steelmaker's permission to test his machine.

The Environmental Protection Agency had promised up to $5 million for Bethlehem's testing of the Kress Corp. device.

EPA officials yesterday did not answer requests for information about the fate of the grant.

But Dean Fortin, an engineer who works on the Kress experiment at Sparrows Point, said that the company hadn't worked all the bugs out of the device and didn't know what would happen to their tests when Bethlehem stops cooking coke.

Although British and Australian steelmakers have expressed interest in the machine, Mr. Fortin said that he didn't know if Kress would find an alternative testing site. "It is frustrating," he said.

Bethlehem officials have said that they expect to meet the Sparrows Point yard's annual demand for 1.5 million tons of coke from company facilities in Pennsylvania, but industry experts said the company will also likely buy more coke overseas.

Although the recession has freed up plenty of coke-making capacity in the United States, Frederick Keedy, a Chicago-based broker of steel ingredients, said that Bethlehem would still be able to buy Australian or Japanese coke for about 10 percent less than the $110 average cost of a ton of domestically produced coke. Japan and Australia have some of the most technologically advanced coke plants in the world.

And though the quality is less consistent, the company would save even more if it bought coke from Poland or the Soviet Union, where there are no anti-pollution laws, he noted.

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