Steel Industry Says Climate Plan Will Raise Electricity Costs

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For Immediate Release
June 25, 2013

WASHINGTON, D.C. – The trade association representing the nation’s largest steel producers said the plan laid out in President Obama’s speech today on climate change “would place the steel industry at a substantial disadvantage to its foreign competitors and raise electricity costs.” 

“The regulations proposed by the President today will invariably raise electricity costs and decrease service quality for major industrial customers, like the steel industry,” said Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI). “The North American steel industry is heavily dependent on affordable and reliable energy, which is typically 20 percent or more of the cost of making steel. We are the most energy efficient steel industry in the world, having voluntarily reduced our energy intensity by 27 percent since 1990. However, we compete globally against countries, like China, where the industry is often state-owned, controlled and subsidized, including for electricity costs. Policies, like those proposed by the President today,raise energy costs on domestic companies and threaten our ability to remain competitive in this international manufacturing environment.”


Gibson said that increasing regulations on the utility sector to force a quick reduction in carbon emissions is also unfair to many specific regions of the country and will encourage “fuel-switching,” since there are no proven technologies to control CO2 emissions from power plants: “The shift from coal to natural gas is already well underway due to the low price of natural gas and other EPA Clean Air Act regulations. However, certain areas of the country – including many of the states where there is a high concentration of steel production – have more abundant coal sources; whereas, other regions are better suited for production from wind and solar sources. The Administration’s plan makes coal-fired electricity supply less affordable and less reliable to major industrial customers, such as steel producers – which will threaten the loss of valuable manufacturing jobs in the United States. We will be closely watching to see how EPA handles the transition period to minimize the cost and reliability impacts on regions that are still dependent on coal-intensive electricity generation.”


Contact: Lisa Harrison
202.452.7115 / lharrison@steel.org

 

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking technology. AISI is comprised of 24 member companies, including integrated and electric furnace steelmakers, and 125 associate members who are suppliers to or customers of the steel industry. AISI’s member companies represent over three quarters of both U.S. and North American steel capacity. For more news about steel and its applications, view AISI’s website at www.steel.org.