American-made Metals Infrastructure Requirement Will Test Steelmakers’ Environmental Compliance Capabilities

The Biden administration earlier this month announced that projects funded by the $1.2 trillion bipartisan infrastructure bill must only use steel and iron made in the U.S., a decision that could result in increased metal manufacturing and pollution in Indiana.

The Office of Management and Budget released a memo April 18, telling federal agencies that all infrastructure projects funded by the 2021 Infrastructure Investment and Jobs Act must use iron and steel that has been produced in the U.S. at all stages of the manufacturing process.

The guidance could lead to an increase of steel and iron production at mills located in Indiana, which would require an expansion of heavily polluting processes that already stress the industry’s ability to prevent toxic releases into the air and waterways.

Iron and steel are at the heart of construction. Products made from the metals, like rebar and other reinforcing materials, are used to build bridges, tunnels, highways and other important infrastructure.

As of 2017, 21% of structural steel used in the U.S. was sourced overseas, and 14% was fabricated outside the U.S. The U.S. currently ranks fourth in the world in raw steel production and eighth in production of pig iron, the crude iron used to make steel and other alloys.

The steel industry suffered economic difficulties during the early years of the pandemic, but has since rebounded, with some companies reporting record earnings.

President Joe Biden said fully rebuilding the economy requires federal support for American manufacturing.

“From day one, every action I’ve taken to rebuild our economy has been guided by one principle — Made in America,” Biden said in a speech April 14. “It means using products, parts and materials built right here in the United States of America. It means bringing manufacturing jobs back and building supply chains here at home, not outsource from abroad.”

The U.S. government is empowered to order federal agencies to buy products made in the U.S. through the 1933 Buy American Act, a Great Depression-era law that required government contracts above $10,000 to use U.S.-manufactured products or raw materials. The law, which had multiple exceptions and waivers, was watered down through trade agreements and executive orders over the last 89 years.

The Biden “Buy American” guidance could result in an increase in steel and iron manufacturing, but companies with facilities in Indiana have been reluctant to say whether they expect that to happen.

U.S. Steel Corp., whose Gary Works in Gary, Indiana is one of the world’s largest steel mills, told the Indiana Environmental Reporter that any projections on whether the administration’s guidance would result in more production is “purely speculation” at this point. Cleveland-Cliffs Inc., the largest producer of flat-rolled steel in North America which recently purchased several mill facilities in northwest Indiana, did not respond to questions.

But both companies have projected that the conflict in Ukraine, the main military emphasis of which is currently in one of the world’s major metal-producing areas known as the Donbas Basin, will lead to an increase in domestic steel production for use here and abroad.

The Biden administration’s guidance could push manufacturing up even higher, a possibility that could have significant consequences for Indiana’s environment.

Indiana is the top steel producer in the U.S., making 24.3 million tons of steel in 2021, mostly at steel mills abutting Lake Michigan.

The state’s mills have led production or been at the top for many years, but the productivity has threatened the Hoosier state’s air and water quality.

The Indiana Department of Environmental Management and the U.S. Environmental Protection Agency have cited U.S. Steel and Cleveland-Cliffs facilities for violating state and federal laws regulating air and water pollution.

Cleveland-Cliffs purchased the steelmaking and other facilities previously owned by multinational steelmaker ArcelorMittal S.A. in 2021. The company’s Indiana Harbor and Burns Harbor mills have violated their air and water permits several times since 2015.

The Indiana Harbor facility received civil penalties of $7,000 in 2016 for emitting double the amount of particulate matter emissions at a kiln and $6,200 for more air permit monitoring violations. In 2017, IDEM and EPA inspectors on eight different occasions found that the facility discharged oil into the Indiana Harbor Ship Canal, a potential violation of the Clean Water Act. The company entered into a consent decree with the state and EPA to resolve the allegation and agreed to take corrective actions to prevent future oil discharges.

Cleveland-Cliffs’ Burns Harbor facility has had a long history of monitoring violations, making it difficult to tell how much the facility has impacted the state’s environment.

In 2015, IDEM fined the company $5,000 for permit violations involving particulate matter emissions.

Between 2018 and 2020, the Burns Harbor facility violated legally mandated monitoring requirements, including not collecting monitoring data, not calibrating monitoring devices and reporting emission limit deviations long after they occurred. The violations resulted in a $100,800 civil penalty.

In August 2019, the Burns Harbor facility experienced a failure in the blast furnace water recirculation system, sending large amounts of cyanide and ammonia into the Little Calumet River. The release killed thousands of fish and led to the closure of beaches along the Indiana Dunes National Park, but ultimately did not affect drinking water in the area.

During the investigation of the release, IDEM inspectors found multiple sample collection and testing violations, including using potentially illegal procedures to dilute water samples. ArcelorMittal denied manipulating data, but monitoring violations continued at the facility during its sale to Cleveland-Cliffs.

Cleveland-Cliffs has said it plans to reduce its greenhouse gas emissions 25% by 2030, but the company has had difficulties meeting its permitting requirements, with at least five documented effluent limit compliance violations found within the last year.

The U.S. Steel Midwest Plant also has had a troubled discharge record. In 2017 the plant discharged nearly 300 pounds of hexavalent chromium, a cancer-causing compound, into the Burns Waterway, resulting in a consent decree with federal and state authorities that forced the company to pay a $601,242 civil penalty and take on additional regulatory requirements.

A little more than six months after the spill, the plant reported discharging double its allowed amount of total chromium, and IDEM inspectors found multiple operation, self-monitoring and effluent limits compliance violations.

In 2018, an anonymous complaint made to IDEM resulted in inspectors finding the facility discharging foam and scum into the Burns Waterway. The inspectors later found the causes were oil and grease in some instances and sulfuric acid in others.

U.S. Steel was charged a $950,000 civil penalty for multiple failures in adhering to its permit requirements.

In 2021, The company said a missed shipment of acid kicked off a series of events that led to a
discharge of a large amount of iron into the Burns Waterway, turning it a reddish-orange color. The U.S. Department of Justice said the discharge was a violation of the 2017 consent decree and is investigating what penalty will be assessed.

U.S. Steel’s largest facility, the Gary Works, has had a similar troubled history, with multiple emissions, monitoring and inspection violations since 2015.

Gary Works in 2018 was assessed a $23,800 civil penalty for allowing hazardous waste to mix with stormwater at the facility, which then migrated to a graveled area nearby. The facility also received a $9,000 penalty for allowing hydrochloric acid from a pickling process tank to leak into a floor trench and into a lift station.

Recently, U.S. Steel entered into an agreement with IDEM to settle allegations the company violated its permits by exceeding effluent limits for mercury, oil and grease, neglecting to collect cyanide samples during a three-month period and discharging mercury and stormwater into the Grand Calumet River in separate events. The company will have to pay a $189,400 civil penalty and take on more regulatory measures.

IDEM told the Indiana Environmental Reporter that changes to a facility’s operation, including increasing capacity and operating units or making changes to the type or volume of pollutants emitted or discharged, may require permit modifications.

The agency said it has sufficient staffing to implement federal and state regulations, and that it intends to continue monitoring facilities in northwest Indiana and other parts of the state.

“Facilities must meet emissions limits outlined in their permits whether they are operating at 100% capacity or 50%,” the agency said.

The agency recently announced Cathy Csatari, a senior environmental manager in the Hazardous Waste Section, as the new director of the IDEM Northwest Regional Office. Csatari has experience inspecting steel mills, refineries and permitted treatment, storage and disposal facilities.

IDEM also recently introduced a new website to improve transparency and help Hoosiers track “sites of interest” in northwest Indiana, including the U.S. Steel and Cleveland-Cliffs facilities.

With a click, Hoosiers can see the facility’s permits, latest inspection report, any incidents that may have recently occurred and any court-ordered actions the facility has been ordered to undertake.

The facility sites will also contain direct links to documents facilities have submitted to IDEM through the agency’s Virtual File Cabinet.

Hoosiers can also sign up for email updates on the facilities.

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