AISI explains new PM2.5 air-quality regulation's impact on steel

Recently, SMU sat down with Paul Balserak, the American Iron and Steel Institute’s (AISI’s) vice president of environment. Having previously worked at the US Environmental Protection Agency (EPA), he is uniquely placed to give some of the key takeaways from the new regulation.

Steel impact

With any new federal regulations coming down the pike, it’s often hard to sort out what exactly the impact for the steel industry will be, if any. The US industry is in a delicate balance, and more red tape could affect the cost of domestic steel vs. the rest of the world.

“Yes, I think the concern is that steel is a very competitive international market, and we’re in a country … where already at 12, we had the tightest PM controls in the world,” Balserak said. He noted that we are “more stringent already than Europe is.”

Balserak said that the background PM on average across the country is 8 micrograms per cubic meter, “and a lot of that comes from natural sources like wildfires or dust, which are sources that really can’t be regulated.”

“You can’t really regulate wildfires,” he pointed out. He noted the concern is “the only sources that can actually be forced by the government to try and reduce PM is industry.”

“It will create a bottleneck on expansions and siting of new plants and new capacity, and it will add cost to the existing operations because they now have to go through this onerous costly permitting program. And we’ll have to put on new controls that will be costly,” Balserak said.

Attainment vs. non-attainment areas

A thumbnail sketch of the new regulation is that the country is divided into areas roughly corresponding to the size of counties. Sometimes, the areas will overlap with the counties themselves. By the new standards, the areas will be either judged in attainment or non-attainment.

If you’re operating in an area that is classified as in non-attainment, in order to modify an existing permit or get a new permit approved, the process becomes much more complicated, according to Balserak. He said with the new standards, many urban areas in the US will become non-attainment areas.

“So the opportunities for increasing your capacity or expanding your plant in that area is going to be severely limited,”Balserak said.

“You have to model what your anticipated increase of PM emissions would be, and you have to find an offset somewhere, either on your site or another source in the non-attainment area that can lower their PM commensurate with your modeled increase to offset,” commented Balserak.

He also said you “have to meet what’s called LAER (lowest achievable emission rate), so technologies for meeting this PM level would be based on the most stringent technology available without considering cost.”

All domestic manufacturing would be affected by these new rules, including steel-intensive industries like automotive. The calculus of where to locate a plant could change, according to Balserak, as attainment areas would have less stringent permitting rules. But permitting even in many attainment areas will still be much more difficult under the new annual standard.

What’s next?

The next step is for the new EPA rule to be published in the Federal Register. From there, between EPA attainment demonstrations across the country, followed by state-commissioned programs on how to implement the standards, it will be a few years before any concrete change occurs.

However, Balserak noted that this is a final rule from EPA. He said next possible steps could be industry petitions for litigation. You could potentially ask EPA to reconsider specific issues or the effectiveness date of the rule. Still, he was quick to point out that AISI has not yet spoken to any of its members regarding this option, and no decisions have been made on this matter. More broadly, though, with the potential to affect the entire economy, this issue is definitely something for us to all keep our eye on.