By Jim Baer
On April 28th, Sunoco Inc. and U.S. Steel jointly announced
plans to build a heat recovery coke manufacturing facility,
contiguous to U.S. Steel’s steelmaking facility in Granite City, Ill.
This project, at least five years in the making, represents a
$570 million joint capital investment program to support
U.S. Steel Granite City Works.
U.S. Steel is providing $280 million in this joint capital
investment program.
The new coke facility will include 120 heat recovery ovens capable of producing approximately 650,000 tons of screened blast furnace coke per year, which will be sold to U.S. Steel under a 15-year contract.
What it does is make U.S. Steel's Granite City plant much more energy-based self-sustaining while meeting the strictest of new environmental standards. Ground was broken on May 5th of this year, and the construction project is expected to last upwards of 18 months. This was hardly a small potato shovel in the earth event. Attending the groundbreaking ceremonies were the following: Illinois Gov. Rod Blagojevich, U.S. Rep. John Shimkus; Illinois State Rep's Tom Holbrook, Jay Hoffman and Jay Bieser; Illinois State Sen. William Haine; Ed Hagnauer, mayor of Granite City; John Goodish, executive vice president and chief operating officer of U.S. Steel Corp. and Mike Thompson, president of SunCoke Energy Inc. Sharon Owen, general manager of U.S. Steel Granite City Works represented the local concern. This is a big project for U.S. Steel, owners of Granite City Works since 2003. "This significant new investment demonstrates U.S. Steel's commitment to environmental stewardship, highlights our commitment to Granite City and the surrounding communities, and helps ensure that our entire company remains well positioned in an increasingly competitive global industry," says Goodish.
The impact upon the Granite City Community and Southern Illinois in general is significant. More than 900 construction jobs will be at the peak, and many brand new permanent jobs are created. The U.S. Steel plant in Granite City has been a landmark for a business that was founded in 1878 and is 130 years old. Its closest rival by age is Anheuser-Busch Inc., which was founded slightly earlier in 1876.
"This is a big step forward to assure the economic viability of our future," says the plant's G.M. Sharon Owens. The project, on the north side of Highway 203 in Granite City (the blast furnace is on the south side) will sit on 41 redeveloped acres. The modern, state-of-the-art cogenerative coke conversion ovens will replace 10 aged boilers at U.S. Steel that will be taken offline once construction is complete.
How the Whole Project Works
Simply stated, the Coke Plant will consist of three batteries of 40 coke ovens each, a total of 120 coke ovens. Tiny grains of coal, produced mainly in West Virginia, Virginia and Alabama will be baked, and will yield approximately 650,000 tons of coke per year. Heat recovery steam generators will recover the waste heat energy from the coke manufacturing process as high-pressure steam, which in turn will be sent to the Granite City Works for use to produce electricity at a steam turbine generator and as plant steam at Granite City Works.
The electricity produced by this generator will take the place of electricity that is presently obtained from the Granite City area at a higher cost. Granite City Works has two main goals and they are safety for its workers and producing tubular steel products of value at economical rates. This project clearly will be built and operated in such a way as to safeguard the local environment. The new heat recovery coke facility clearly uses SunCoke's proven low emissions technology, which produces high-quality blast furnace coke. This technology is identified in the 1990 Clean Air Act, which directs EPA to use SunCoke's technology as a "basis for setting emission standards for new coke oven batteries" and establishes the basis for Maximum Achievable Control Technology (MACT).
"All the environmental permits have been signed by local and state authorities and we will operate in a very sound manner," says Owens. "We are finding new ways to become more self-sufficient, to control costs and have less dependency from outside sources," says Owens. "Business is good, we are full (of orders) right now," says Owens.
Joe Ribbing, financial controller, who has been with Granite City Steel for 39 years, says local support made all the difference. "(Mayor) Hagnauer of Granite City and local authorities went to great lengths to make this project happen. We got a lot of support locally and from state officials," says Ribbing.
U.S. Steel in Granite City competes directly with steel manufacturers in China. The cost of raw materials, i.e. coke, iron ore, magnesium and other products are seeing prices spiral upward. The efficiency of this project will reverse some of those trends.
SunCoke Energy Inc. Weighs In
Tim Wojtowicz, vice president of project development at SunCoke Energy Inc., based in Knoxville, Tenn. knows the benefits of this investment. "Our technology for producing coke is economical and environmentally favorable to U.S. Steel. Coke from our plant will replace expensive coke imported from China—and will do it while providing local jobs and clean energy. We are starting a similar coke plant with the same proven technology (in Haverhill, Ohio) with the power going into the local energy grid."
Wojtowicz points to the maintenance simplicity of this project. "Once these ovens are complete, they will run for the next 30 years without needing a major battery rebuild. This is a very robust design," he points out. "This is a very simplified process. The entire operation is monitored through a central control room," he says.
The Granite City Benefits
No one is more sold on the project than Granite City's Mayor Ed Hagnauer. "First of all, the largest benefit of having this project happen at U.S. Steel's Granite City Works facility is that it ensures the viability of the steel mill in Granite City for the next 35 years. That means approximately 2,300 employees will continue to be employed there for many years to come. It also means that the largest contributor to the school district and other government entities will remain in full effect. Through independent economic studies, the impact to the Steel Mill just on the Madison County side alone is upwards of $2 billion per year. Now you add that impact to what will be generated by the construction of the $570 million project, which requires 900 construction workers over a year and a half and you start to get a better picture of how important this project is both to Granite City and the entire St. Louis Metropolitan area."
Hagnauer realizes more bonuses. "Part of the additional tax revenues generated into the TIF District will be used to upgrade roads, overpasses and other infrastructure in the city. The total amount being set aside for this and other city purposes within the project area is $14 million. That is equal to almost 70 percent of our annual operating budget, and could not otherwise be afforded aside from state or federal funding," says the mayor.
This is a winner-take-all project. Only thing is, all the partners are winners, whether they be U.S. Steel, the City of Granite City, and the State of Illinois, SunCoke Energy Inc. or the United States Steel Corporation. Small wonder so many high level officials took time to come to that important groundbreaking ceremony.
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