To do its government-mandated part in cleaning up the nation's air and water, over the past decade the steel industry has installed pollution control equipment worth $8.5 billion.
Industry and government studies show that this massive investment has paid equaly massive dividends in environmental terms. But industry is calling on the government to reconsider whether the country can afford a far greater investment in eliminating the remaining few percentage points of pollution.
According to the American Iron and Steel Institute (AISI), "During the 1970s, more than 15 percent of the industry's capital was diverted to pay for environmental control equipment." The industry argues that "excessive environmental requirements" have been a key factor in reducing American steelmakers' competitiveness and profitability.
AISI estimates show that current environmental control measures add $27 a ton to the $400 per ton cost of steel. The industry argues that this rapidly escalating cost will shut down more US steel mills, elminate up to 162,000 jobs, and increase imported steel's share of the US market to dangerous levels unless government policies change.
AISI has issued a list of 12 specific ammendments for Congress to consider in reworking the Clean Air Act. These would give industry more time and flexibility in meeting environmental requirements. AISI calls for regulatory changes as well to reflect not only the need for pollution controls but the overall need "to achieve a healthy environment within a healthy economy."
To back up its case, AISI has released an Arthur D. Little report which calculates that by 1985 the industry will have eliminated 96 percent of critical air pollutants and more than 98 percent of water pollutants at a total capital cost of $10.8 billion. The report goes on to estimate that current policies could raise the steel industry's pollution control costs to $18.5 billion at a time when steel productivity is already suffering from a shortage of capital investment.
The Little report concludes that the nationhs 400 steel plants, employing up to 450,000 people in 37 states, could lose heavily to overseas competition. It points out that in 1950 the United States produced about 50 percent of the world's steel. Indeed, the US remained a net steel exporter until 1958.
Today the US imports 15 percent of its domestic needs and produces only 15 percent of the world's steel supply. The US will find steel imports doubling to an annual rate of more than 40 million tons a year, the report warns, unless government policies change.
The Little report estimates the industry's current annual operating costs add up to $2.3 billion for environmental controls. This could reach an annual $3.2 billion by 1985 according to the Massachusetts-based research firm.
The industry argues that it cannot afford excessive environmental costs when its modernization requirements call for a doubling of capital commitments from the current $4.3 billion to $8.7 billion per year.
Says AISI spokesman Sheldon Wesson: "The steel industry has consistently maintained that it favors environmental controls for the purpose of maintaining and improving public health. We have never disputed the fact that the investment is worthwhile in terms of social benefits. The only quarrel we have is with regulations or standards which we feel go beyond the need to protect the public health, into costly expenditures which are not related to public health but are merely cosmetic or which are devoted to standards that are unrealistic or unnecessarily stringent."
The steel industry's charges about the high costs of environmental controls are not new -- and not confined to industry estimates. A 1979 report from the Battle Columbus Laboratories for the US Environmental Protection Agency showed that costs increase sharply when industry attempts to clean up relatively minor remaining amounts of pollution.
For overall carbon steel production, the report estimated a 26 cent per kilogram cost to remove 90 percent of pollutants. The cost rises to $4.98 for a 97 percent and $32.20 for a 99 percent level.
Defenders of current environmental policies agree with the steel industry that costs of present measures are high. But they argue that industry's determination to apply the "cost-effective" test to environmental controls leaves out benefits.
Ronald Brownstein, a staff writer and editor for Ralph Nader's reports, says that industry's "failure to mention benefits is a fraud because there are costs involved in not controlling the pollution."
"The only difference," he says, "is that the steel companies don't pay.The public pays in decreased property values, in medical bills, in lost lives."
Mr. Brownstein and others admit that it is virtually impossible to calculate the value of the environmental and health damage prevented by current controls.But he cites estimates of annual benefits reaching as much as $38 billion from air quality controls and $12 billion from water qualty controls by 1985 if current regulations remain.
Joel Hirschhorn, project director at the congressional Office of Technology Assessement, contends that the steel industry's serious problems will remain regardless of any rollback of environmental regulations. He points out that when the industry's capital spending increased from $2.8 billion in 1979 to $4.3 billion in 1980, its expenditures on new environmental control equipment actually decreased from $650 mil lion to $510 million.