In Ohio Valley, Coal Equals Jobs; And Clean Air Bill Worries Many
Tighter acid-rain law could topple some businesses here like dominoes
ACROSS the river from Powhatan Point, Ohio, a smokestack three football fields high spews whitish-gray smoke. Laden with sulfur dioxide, it is the type of smoke linked to acid-rain deterioration in lakes and forests hundreds of miles away. But curtailing this smoke threatens grave economic problems for the Ohio River Valley immediately below.
If the United States enacts tighter clean-air standards this year (the first step, a Senate vote, is expected tonight) plants will close and thousands of people here will lose their jobs.
``It's a tough situation,'' says Bob Albert, assistant manager of Ohio Power's coal-fired Kammer plant, which is emitting the smoke. ``And the hard part about it is that I don't think the people who are making the decision have a very good handle on what the impact is going to be down here.''
``Devastation - that's a good word for it,'' says R.Emmett Boyle, president of an aluminum-smelting company, a big electricity user supplied with power by the Kammer plant.
The industrial Midwest is raising loud protests as Congress moves toward passage of clean-air legislation. Industry-supported studies suggest that even lenient clean-air provisions would:
Close down hundreds of plants. These include important Midwest industries, such as coke ovens and steel foundries.
Put at risk an estimated 738,000 jobs in a six-state region. Illinois, Indiana, Michigan, Ohio, Pennsylvania, and West Virginia represent nearly one-third of the nation's total jobs at risk if clean-air legislation becomes law, says a recent study by CONSAD Research Corporation in Pittsburgh.
Boost costs disproportionately. Rep. Philip Sharp (D) of Indiana estimates nine Midwest and Southeastern states would have to clean up 77 percent of the nation's sulfur-dioxide pollution even though they are responsible for only about half of it. Under the most stringent clean-air bill before Congress, electric utility rates would skyrocket in the region, according to Edison Electric Institute. West Virginia would see the largest rate increase in the nation, averaging 28.9 percent, closely followed by Ohio (26.1 percent) and Indiana (25.3 percent). California, by contrast, would see rates rise 1.7 percent.
Environmental groups charge that industry has purposely inflated the numbers.
``Unemployment bound to occur from improvement of health standards is overstated and quite exaggerated,'' says Casey Padgett, a lobbyist for Environmental Action, based in Washington, D.C. And, as far as utility rates are concerned, ``the bill is coming due in the Midwest - they've been paying lower rates for years.''
But there is no denying what is likely to happen here in the Ohio Valley. Some utility plants will easily meet the anticipated first phase of tighter standards. Others will face the dilemma of closing or raising rates so high they put customers out of business.
Such are the prospects for the Kammer plant, a midsized coal-fired plant just south of Moundsville, W.Va. It burns high-sulfur coal just within legal limits. So any tightening of acid-rain provisions in US law would quickly put the plant's managers in a quandary. They have no room for a scrubbing unit and their boilers will not handle most low-sulfur coals.
The plant successfully experimented with a low-sulfur coal from Virginia recently. But to get that coal, the company had to ship it by train, transfer it to a barge, float it upriver, unload it, then truck it one mile. Added cost: $11.50 a ton or a 34 percent increase in fuel costs just from transportation. Current transportation costs are near zero: a conveyor belt links the plant to a mine around the bend upriver.
But when all needed modifications are made, plant manager Gene Bischof estimates he would have to raise rates by 40 percent to burn low-sulfur coal. A boost like that could put Kammer's big customer, Mr. Boyle's Ormet Corporation, out of business.
``A 40 percent increase in my raw material [costs] - and my raw material is electrical energy - will be catastrophic,'' Boyle says. Fully 35 percent of the cost of making aluminum is the electrical bill. His Hannibal, Ohio, plant spends $800 million a year on power - enough to light Columbus, Ohio.
Should Ormet close, the future of Kammer is not good, Mr. Bischof says (although Ohio Power might close an even less efficient plant before closing Bischof's facility). Should Kammer close, then the fate of its sole coal supplier, Consolidated Coal's Ireland mine, is also up in the air. If Consolidated could not find a new buyer for the Ireland mine's high-sulfur coal, it would take a hard look at it and three other mines in the vicinity, says a Consolidated spokesman.
Potential direct job losses: 1,300 at Ormet, 240 at Kammer, and 300 to 350 at Consolidated.
``The domino effect is the sad thing,'' says Ken Carpenter, a 24-year employee with Ormet. The threat of acid-rain legislation has hung over this region so long workers seem resigned to whatever happens. But it will not lessen the blow Mr. Carpenter and others here will face.
``You just work day to day,'' he says.