MAC: Mines and Communities

Steel industry prepares strategies vs. energy bill

Published by MAC on 2007-08-31

Steel industry prepares strategies vs. energy bill

Metal Bulletin

31st August 2007

As Congress returns to Washington after a monthlong vacation, steel industry insiders are working out strategies to confront legislation they consider threatening.

The steel industry is concerned about an energy bill passed by the House prior to the recess, which would require most utility companies to generate at least 15 percent of their power from renewable sources like wind power and solar by 2020 (AMM, Aug. 7).

Metal producers immediately condemned the bill, saying it would force utility companies to pass on the cost to them. Manufacturers said that while they see renewables as part of the answer to their need for cheaper, more reliable energy supply, a mandate was a step in the wrong direction.

The challenge for the steel industry is deciding how best to approach the issue. They could either choose to expand the definition of "renewable" in the language of the bill to include nuclear and other forms of energy, or they can try to simply kill the bill completely.

The industry wants to find an approach that would benefit the electric-arc furnace (EAF) and integrated steel mills equally, one source said. As it stands, the bill is thought to hurt the integrated more, but not by a lot, a source said. Conferees could be named as early as next week, and those members will be the first to get attention from steel industry representatives on Capitol Hill. After that, they will go to their various Steel Caucus members looking for assistance. "But they can't make exceptions just for the steel industry," one source said.

Meanwhile, rumors that Sen. John Warner (R., Va.) might retire when his current term expires in 2008 are making some steel industry sources nervous. Although it hasn't been introduced yet, a climate change bill by Warner and Sen. Joe Lieberman (I., Conn.) is considered by many to be imminent. That bill would likely cherry-pick from other climate change bills and include a cap-and-trade program, something the steel industry is steadfastly against. Sen. Barbara Boxer (D., Calif.), chairwoman of the Senate Committee on Environment and Public Works, would probably favor their bill since Warner has clout in his party. Warner in turn might push hard for the bill in an attempt to carve out an environmental legacy for himself.

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