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Exclusive Reports
} From the May 4, 2001 print edition

AK Steel spars with EPA over pollution

Company faces orders to reduce contaminants

Don Baker   DBJ Staff Reporter

AK Steel Corp. is in the middle of an environmental firestorm.

While the Middletown-based steelmaker successfully pushes its plants and equipment to maximum productivity, state and federal governments say the company has been pushing toxic discharges beyond allowable limits.

AK Steel officials would not comment for this story, but documents the company filed earlier this year with the U.S. Securities and Exchange Commission reveal AK Steel had five environmental liabilities pending against it in the last year. Company officials also have threatened to shut down part of the Middletown plant if environmental costs and fines are too high, a move that would eliminate 2,000 jobs.

AK Steel officials have said publicly that tens of millions of dollars worth of new environmental controls and potential fines could force it to choose between continuing to make steel in Middletown and buying cheaper steel slabs on the open market.

"Everyone is concerned, because that doesn't just affect the city of Middletown, it affects all the surrounding municipalities," said Middletown Mayor Robert "Sonny" Hill Jr. "You take a man making $18 or $20 an hour who has a home and car to pay for and he loses his job and all he can find is a $7 or $8 an hour job, it would be devastating."

Hill, who retired from AK Steel after 36 years as a maintenance foreman, said any plant closing or job cuts of that magnitude would have a lasting impact on his city and a trickle-down effect that could wipe out other jobs at companies that support AK Steel's operations in Middletown.

He said the biggest concern for the company are the potential fines of $25,000 per day for violations of the Clean Air and Clean Water acts. The federal government alleges AK Steel has violated these laws at various times dating to 1993.

"All we can do is hope and pray that God will step in and change their minds on that and lift the $25,000-a-day fines," Hill said. "I don't understand why the government wants to help all the steel mills, then will go in and do something like this."

Government officials say they are just protecting the community by forcing AK Steel to comply with environmental laws.

"The public cares about clean air and clean water. Companies that take short cuts in controlling pollution threaten our environment," said Lois Schiffer, assistant attorney general for environmental and natural resources.

But the issue of the alleged environmental violations by AK Steel in Middletown aren't new. In SEC documents, AK Steel said it was notified by the Environmental Protection Agency, after an inspection of the Middletown plant in the fall of 1996, that it would face allegations that it violated the Clean Air and Clean Water acts.

On June 29, 2000, the EPA filed a complaint against AK Steel in the U. S. District Court for the Southern District of Ohio for alleged violations of the acts. The next day, the state of Ohio asked the court to allow it to join in the federal lawsuit. "AK Steel intends to vigorously contest this matter," the company states in documents it filed with the SEC.

The EPA says it is negotiating a settlement, but is going forward with the legal action.

The Middletown City Commission passed a resolution supporting AK Steel at its March 20th meeting, and the independent union representing about 3,200 workers at the Middletown plant also has voiced concern that the government is trading jobs for the environment.

But upgrading environmental controls at the Middletown plant could cost as much as $80 million, not including fines.

The company also may have to build a water pretreatment facility at its plant in Middletown because of alleged concentrations of ammonia and phenol in plant wastewater. The company has petitioned the EPA for an exemption.

There are alleged environmental violations at several facilities AK Steel bought as part of its acquisition of Armco Inc. in 1999, including the plant in Butler, Pa., where the company was reportedly discharging nitrates into a creek that's also a backup drinking water supply for a nearby town.

In June 2000, the U.S. EPA ordered AK Steel to supply an alternative drinking water system for the town of Zelienople, near the Butler plant. The company fought the order but agreed to a settlement this March.

AK Steel has said its discharges are in compliance with the permit issued to it by the state of Pennsylvania. However, a conservation group has said that shouldn't matter because there was still potential danger to area residents.

"AK Steel definitely hasn't been a good corporate neighbor," said Suzanne Forrester, drinking water project coordinator for the Pittsburgh office of Clean Water Action. "We think this company has been not just unresponsive, but irresponsible in their actions toward this community."

The company's Mansfield plant, which is the site of a 19-month worker lockout, also became the subject of EPA investigations in November 2000. And the company is negotiating with the Ohio Attorney General's office and the Ohio EPA over a 1995 notice that alleged noncompliance with a 1993 order and various state regulations regarding hazardous waste management, according to the SEC documents.

Get Copyright Clearance Copyright 2001 American City Business Journals Inc.
Click for permission to reprint (PRC# 1.1642.427744)

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