Steel Mills

Nucor Challenges Big River Steel Air Permit

Written by Sandy Williams

Nucor Steel has filed an objection to the air quality permit issued to Big River Steel in an effort to block construction of the $1.1 billion mill.  The challenge to the Arkansas Department of Environmental Quality decision will push back the ground breaking for the new steel mill to the first quarter of 2014.  Big River had anticipated beginning construction this year.

In its 697-page document outlining its objections to the permit, Nucor claimed the ADEQ could not have had sufficient time to properly analyze the application and the technical review.

“As of June 24, 2013, modeling for the facility did not pass regulatory requirements,” the permit objection states. “ADEQ did not have, and could not have had, sufficient time to adequately analyze the [a]pplication and issue the Draft Permit. Release of the public notice was premature, and should have waited until the technical review was complete. Consequently, the Draft Permit should be withdrawn in order to give ADEQ sufficient time to analyze the information.”

Other objections by Nucor include:

  • The direct investment in Big River by a State of Arkansas agency, the Arkansas Teachers Retirement System, created a conflict of interest for the ADEQ.
  • The potential for additional support facilities and customer/supplier facilities were not considered when determining air quality modeling.
  • Big River Steel has not finalized the plans for design and placement of all their emission sources.

“We are confident we issued an appropriate permit that is compliant with state and federal law, and our process was not compromised or influenced by any of the funding sources,” said Katherine Benenati, ADEQ Public Outreach and Assistance Division Chief in an email to SMU.

“ADEQ is the environmental regulatory agency for the State of Arkansas and is beyond reproach,” said AEDC spokesperson Scott Hardin.

The challenge will be reviewed by the Pollution Control and Ecology Commission which has the authority to uphold or overturn the ADEQ decision. The PCE has 120 days from the date of the preliminary hearing to make a decision. If upheld, Nucor has the option of pursuing a legal appeal through the court system.

In an interview last month, Grant Tennille, Director of the Arkansas Economic Development Commission told SMU that “we expect and are prepared for that permit to be challenged but we feel it will hold up.”

“We (AEDC) believe this is an issue that will be worked through and feel confident once resolved Big River will proceed as planned,” said Hardin in an email to SMU. “The complaint is holding up the groundbreaking, which will now hopefully take place in the first quarter of 2014.”

Big River Steel has been a welcome boon for the Arkansas economy.  The mill is expected to create 525 jobs at an average wage of $75,000 in addition to 2000 construction jobs during the building of the facility.  Potentially, another 2000 jobs could be created by customers and suppliers locating close to the mill. To encourage construction, Arkansas legislators approved a $125 million bond package along with additional incentives from state and local officials.

The project has not been without controversy, however.  Nucor has two mills in the near vicinity and has fought vigorously against the construction of Big River, going as far as suggesting Nucor would shift workers out of Arkansas if the mill is built.  Nucor has argued the mill is not a good investment for Arkansas considering the reduced operating capacity of the industry. The company also expressed concern that the addition of Big River Steel would increase labor costs and compete for customers and labor and create environmental challenges for the state.

IHS Global Analysis, who did the third-party review for the AEDC, said operating margins  would support BRS if no other major facilities are added within the industry other than those already announced. If other were added, however, the industry would be in a “highly competitive, zero-sum environment.”

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