Beth Steel mulls coke oven restart Permit application filed with state for Sparrows Point plant

February 22, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Bethlehem Steel Corp. is exploring whether to rebuild and reopen a controversial coke oven battery at its Sparrows Point mill, which it closed in 1991 after environmental disputes that cost the company $3.5 million in fines and led to the layoff of 400 workers.

The company said it has not decided whether to rebuild one of its three old coke ovens, which bake coal until the heat converts it into coke. Coke is used to fire ultra-hot steelmaking furnaces.

But Beth Steel has filed a permit application with the state Department of the Environment. The company said it expects the review to take 18 to 24 months.

"We filed [the permit application] far in advance of any corporate commitment," Beth Steel spokesman Ted Baldwin said.

The commitment would be a big one: A similar facility at Beth Steel's other major steel plant, in Indiana, opened in 1994 at a cost of $200 million, Mr. Baldwin said.

A leading analyst who follows the company questioned whether the money would be well spent.

"Building coke ovens is a big mistake; you can't find any return on your investment," said Charles A. Bradford of UBS Securities in New York.

He said it is easy -- and cheaper in today's market -- to import coke or to use coke from the furnace at Beth Steel's Bethlehem, Pa. plant, where it stopped making steel last year.

But Robert Schenosky, an analyst at Smith Barney Inc., said a rehabilitated coke oven would protect Beth Steel against sharp swings in raw-material prices.

"The long-term question is, do we produce it ourselves or continue to purchase it overseas?" he said.

Before the company weighs cost issues, however, it will have to convince Maryland environmental regulators that the proposed oven will meet clean air and water standards.

The regulators will be looking especially hard at proposed emissions levels of nitrogen oxide, lead, sulfur dioxide, volatile organic chemicals such as benzene and toluene, and particulates such as soot, dust and metals, said Merrylin Zaw-Mon, director of air and radiation management administration at the Department of the Environment. "We had a lot of problems [in 1991] because they were using old technology," Ms. Zaw-Mon said.

Indeed, state and federal environmental enforcers contended that Sparrows Point was a major source in the Baltimore area of potentially cancer-causing gases. The coke ovens there also produced unacceptable levels of nitrogen oxide, which harms aquatic life by lowering oxygen levels in Chesapeake Bay waters and raises ozone-related air pollution, and sulfur dioxide, which contributes to the formation of acid rain.

Under a consent decree filed in 1992 in U.S. District Court in

Baltimore, Bethlehem Steel agreed to comply with all state and federal air pollution laws if it ever restarts its coke ovens. It also agreed to pay the $3.5 million fine.

Angelo Bianca, the state agency's administrator of air quality permits and compliance, said newer coke ovens capture more chemicals and particles before they go out the smokestack.

But Mr. Bianca noted that Beth Steel's proposal, filed in December, does not yet include a design proposal detailed enough to let the department judge how well its new oven would contain emissions.

Ms. Zaw-Mon said the company will likely be required to do risk-assessment studies comparing its proposed emissions to established public health screening standards, and to study where prevailing winds are likely to blow the pollutants from the plant.

The permit process also will require a public hearing, she said.

"It's quite an involved permit," she said.

The 1991-1992 dispute was part of the larger decline of the Sparrows Point mill, once the largest manufacturing employer in Maryland. Job cuts at the mill, from a peak of 30,000 workers in 1959 to today's 5,300, equal almost 25 percent of the state's loss of manufacturing jobs since the 1950s.

Mr. Baldwin said the plant shipped 3.2 million tons of steel last year, down from an estimated 5 million tons when the plant was in its heyday. But many of the job cuts reflect higher productivity: The mill shipped 2.9 million tons in 1985, when it had 9,500 workers.

Mr. Baldwin said the company has invested $1.6 billion during the past decade in Sparrows Point, which has annual sales of about $1.5 billion. It is the company's second-largest steel mill.

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