Governor's new carbon-cap rule could include Seattle's lone steel manufacturing plant

By: Mary Strow
12:00 am
October 5, 2015

Last month, Gov. Jay Inslee directed the state Department of Ecology to start “writing a rule that would cap and reduce carbon pollution.” This directive came after the governor’s carbon cap-and-trade proposal died in the 2015 legislative session.

Ecology also released a list of entities it says emit at least 100,000 metric tons of carbon dioxide equivalent per year; some (if not all) of them could fall under the governor’s new carbon cap. One of the companies on the list is Nucor Steel, a West Seattle steel manufacturing plant that has operated in the city under various owners for more than 100 years.

Nucor was on a previous Ecology list when Inslee’s cap-and-trade bill was being considered by the Legislature earlier this year; company officials spoke out against that proposal for being costly and onerous, saying it would put them at a competitive disadvantage.

By all accounts Nucor strives to be a good corporate citizen. Last spring it partnered with Washington STEM to develop lesson plans for high school teachers and students. In 2014, Seattle Times columnist Ron Judd wrote about Nucor – not only how it operates and what it produces but also its relationship with the community, its investment in its employees and its history in Seattle:

It’s tempting to employ the cliché and suggest that Nucor Steel, the state’s oldest and most prolific recycler, is not your grandfather’s steel mill. But it actually is. Some of the 320 workers, in fact, are third-generation employees. The technology to melt down scrap steel for new uses is hardly new. How does Seattle’s hidden-in-plain-sight steel mill compete?

Guile, mostly. And constant refinement. Just as it did a century ago, steel still melts at about 3,000 degrees. But over the years, Seattle’s steel mill has evolved into one of the most efficient in the world, recycling steel more productively than competitors.

…the company has remained competitive through lean times in two ways: It outsteps its competitors by being nimble enough to retool quickly to produce smaller amounts of specialty products. And it has reinvested in its facility and workforce during frequent economic dips.

Unlike many competitors, Nucor didn’t slash its workforce as the plant dropped to about 65 percent capacity at the depth of the recent recession (it has since recovered to a slowly rising level of about 80 percent). In fact, the parent company, which has 22,000 employees nationally, hasn’t laid anyone off since 1967.

Instead, Nucor in 2009 plowed $500 million into employee-retention programs. It kept workers busy with plant maintenance and upgraded their skills through training.

With details of the new carbon-cap rule not yet available, and without knowing if it will in fact be imposed on Nucor, the company can’t respond specifically but is understandably concerned. Patrick Jablonski, Nucor Seattle’s environmental manager, says:

“Nucor Steel Seattle, Inc. is an environmental leader in the global steel industry. Our relentless focus on improving energy efficiency and use of low-carbon, hydroelectric power at our facility has resulted in our CO2 emissions being less than 20% of the industry average. We are the only steel mill in the state, competing against companies in emerging markets like China that have lax environmental standards and are heavily subsidized by their governments. In the tough market in which we participate, we have very little ability to pass on additional costs to our customers. If these important facts are not taken into account in Ecology’s final rule, there is a real possibility that it could result in rebar used in Washington will not come from an environmentally responsible mill in the state, but instead will be imported from a facility emitting more than 5 times the amount of CO2. Because of this, we are following the rulemaking process closely and engaging with the Department of Ecology to prevent this perverse outcome.”

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