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U.S. Steel: $1 billion for works in Clairton
Company says project will bring jobs, steelmaking and cleaner air
Saturday, December 01, 2007

Prayers were answered yesterday in Clairton, the City of Prayer.

U.S. Steel announced plans to spend $1 billion at its Clairton plant, a strategic investment the steelmaker says would create cleaner air and more than 600 construction jobs and guarantee steelmaking in Pittsburgh for years to come.

As part of what local officials are calling the largest capital project since Pittsburgh International Airport was completed in 1992, U.S. Steel would build two new coke batteries, a plant that would generate electricity from gas produced by the coke-making process, and add state-of-the-art environmental controls to its existing operations.

The investment, which would occur over a period of years, still must be approved by the steel producer's board of directors and receive approval from regulatory officials, including the Allegheny County Health Department. It also is subject to changes in business conditions.

Allegheny County Chief Executive Dan Onorato compared the project to building PNC Park, Heinz Field and the new Penguins arena simultaneously -- with no public money.

"This will guarantee steelmaking in Southwestern Pennsylvania for the next 50 years or longer," Mr. Onorato said.

U.S. Steel Chairman and Chief Executive Officer John P. Surma said the proposal would be the largest capital investment in the company's history.

"The advances in technology comprehended in this plan will put us on a path for ... improved environmental performance and, to the extent we can affect it, improved overall air quality in this region," Mr. Surma said.

The host of government officials and United Steelworkers union officials who attended the company's press conference enthusiastically endorsed the project. However, one group is concerned that the details of a project that involves steelmaking's most environmentally threatening operations may not get a thorough hearing because of its economic benefits.

"There's been a lot of pressure on the health department to get permits approved," said Myron Arnowitt, the state director for Clean Water Action, a nonprofit environmental organization. "We just want to make sure there is a good analysis of whether this is going to meet the clean air standards or not."

Coke is a baked coal that is used to fuel blast furnaces at the company's Edgar Thomson plant in Braddock and U.S. Steel's other North American operations. The Clairton plant can produce 4.7 million tons of coke annually and just under 1 million tons are consumed at the Braddock plant.

The proposal would not increase Clairton's capacity and would not result in major changes in the number of workers at the plant, currently about 1,200.

"It's a major investment for this plant, so that's good," said Andrew Miklos, president of USW Local 1557, which represents Clairton workers.

Mr. Surma said the coke batteries being replaced went into operation in the 1950s and that it does not make sense to rehabilitate them to meet current regulatory standards. Their replacements would rely on technology developed by Uhde GmbH, part of Germany's ThyssenKrupp Group. Uhde has built coke plants in Western Europe and Asia using what U.S. Steel officials say are state of the art environmental controls.

A cogeneration plant that would use gasses produced at Clairton to generate electricity for that plant, Edgar Thomson and the Irvin plant in West Mifflin could alleviate the spiralling costs of electricity that U.S. Steel and other Western Pennsylvania manufacturers have complained about to Gov. Ed Rendell. More analysis is needed before a decision is made to proceed with that project, Mr. Surma said.

"The hard economics look very favorable," he said.

The investment is the latest expression of what Mr. Surma referred to yesterday as "moderate optimism" regarding the company's long-term outlook. It comes on the heels of U.S. Steel's $1.2 billion acquisition of Canadian steelmaker Stelco in October and its $2 billion purchase of Lone Star Technologies, a Dallas-based steel tube producer, in June.

Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.
First published on December 1, 2007 at 12:00 am