USWA Says Colorado Air Quality Control Commission Applies Tougher Air Pollution Standards to Rocky Mtn. Steel Mills; Company Can Install New Furnace or Shut Down Old One.

Business/News Editors

PUEBLO, Colo.--(BUSINESS WIRE)--Jan. 18, 2002

According to the United Steel Workers of America (USWA), the Colorado Air Quality Control Commission voted unanimously Thursday to deny Rocky Mountain Steel Mills' (RMSM) request for a stay of Title V of the federal Clean Air Act permit resulting in application of tougher New Source Performance Standards (NSPS) to the steel mill. The agency's action was a setback for Oregon Steel (NYSE:OS).

According to the USWA, the ruling gives RMSM 60 days to comply with the new, tighter air quality standards. Since the 1977 construction and operation of the second electric arc furnace, Rocky Mountain Steel, and previous owner CF&I, have failed to comply federal Clean Air Act standards and limitations for this furnace. Section 113 of the Clean Air Act provides for civil penalties of up to $27,500 per day for each violation of emissions standards or limitations.

The USWA says the Colorado Department of Public Health and Environment and the U.S. Environmental Protection Agency (EPA) have both been attempting to bring RMSM into compliance with the Clean Air Act and related state air quality laws for several years. The USWA added that Rocky Mtn. Steel Mills has failed to comply with New Source Performance Standards (NSPS) that apply to RMSM's second electric arc furnace that was constructed after October 1974. The EPA determined in December 1999 that RMSM's Electric Arc Furnace No. 2 is subject to the more restrictive NSPS pollution standards for furnaces built after October 1974. EPA directed the State to require the former CF&I Steel Mill to comply with the NSPS standards under its operating permit.

According to the USWA, RMSM has been resisting the agencies' attempts to impose the Clean Air Act's stricter limits. According to documents RMSM filed with the Commission in December 2001, Thursday's action will require RMSM to invest $15 million in upgrading its equipment. The furnace produces molten steel and heats the charge materials with electric arcs from carbon electrodes.

In a December 14, 1999, letter the EPA determined that electric arc furnace No. 2 must comply with the significantly more stringent New Source Performance Standards (NSPS) Subpart AA, including stricter emission standards (i.e., 3% opacity for captured emissions and 6% opacity for uncaptured emissions except during tapping and charging as opposed to the Colorado standard of 20% opacity at all times), enhanced monitoring, record keeping, reporting and maintenance requirements than those previously-applied by the State of Colorado, says the USWA.

The USWA also cited that the State of Colorado has sued RMSM to force compliance with state air pollution laws. On the eve of a February 2001 trial, RMSM agreed to pay $1 million RMSM Company back to court after RMSM balked at implementing the provision for independent nighttime air monitoring subject to stipulated penalties. The matter is set for trial in June of 2002.

"The citizens of Pueblo have a right to clean air, and it is our sincere hope that this latest regulatory action will finally force Rocky Mountain Steel Mills to follow the law," said Terry Bonds, USWA District 12 Director. "It is time for RMSM to live up to its responsibility to be a good neighbor. The citizens of Pueblo do not, and should not, have to live with the illegal and toxic air pollution being spewed from the mill. The pollution includes arsenic, cadmium, chromium and lead, causing the EPA and the State of Colorado to conclude that air emissions from RMSM pose an unacceptable cancer risk to the Pueblo community. Rocky Mountain Steel Mills must not be allowed to continue to operate with an unfair economic advantage over those many other steel mills that comply with the law."

Oregon Steel makes a number of steel products including rail for passenger, freight and commuter lines, a wide variety of pipe products, plate, rod and bar. According to the USWA, members of United Steelworkers Locals 2102 and 3267 went on strike against Oregon Steel's CF&I Steel subsidiary on October 3, 1997, to protest RMSM 's unfair labor practices and substandard contract offer. When they ended their strike three months later, management unlawfully refused to reinstate the vast majority of Steelworkers to their jobs.