VINEYARD, Utah County -- Geneva Steel, which filed for bankruptcy in February, now wants to add a $1 billion ironmaking facility that its brass hats and federal government officials envision will redefine clean air standards for burning coal.
"What it will ensure is long-term viability," Reginald Wintrell, a chief engineer for Geneva, said Thursday."We're excited about it. Once we get this in place, (Geneva's) going to be here at least 30 years and be competitive with anybody."
Wintrell's comments came at a public informational meeting hosted by the U.S. Department of Energy, which intends to donate almost $150 million toward Geneva's high-tech facility if it is built.
The Department of Energy has formed numerous other partnerships with the private sector as part of its vigorous $5.7 billion search for ways to encourage coal as an energy source while significantly minimizing hazardous emissions associated with the commodity. That dirty reputation has hurt coal consumption; for although there are an estimated 300 years worth of coal reserves in the United States, the black mineral accounts for a relatively modest 25 percent of fossil fuel energy use nationwide, far behind oil and gas.
Utah is a microcosm of that grim reality. The Beehive State, according to Wintrell, is flooded with more than 400 billion tons of coal. There's just one problem: Geneva Steel uses none of it.
Why not? What's wrong with Utah's coal? As Wintrell explained it, Utah's coal, like almost all West Coast coal, is low-quality, considered an inefficient energy source for making iron and steel.
So Geneva, like many domestic steel companies, is forced to buy higher quality coals from the East Coast. Similarly, Wintrell said Geneva and other American steel companies had to turn to China last year for more than 5 million tons of coke -- a heat source produced from coal that is an essential step in the steelmaking process.
But with their recent plans for a 17-acre, state-of-the-art ironmaking plant, Geneva is confident -- $850 million confident -- that its new energy-efficient equipment will essentially allow low-quality coals to perform like high-quality coals.
Under that scenario, Geneva would save big money on transportation costs by turning to Utah's massive coal supply. That profitable prognosis prompted Wintrell to speak of the future as if it were the present.
"This is good for Utah," Wintrell said. "This puts more people to work."
Construction of the facility at Geneva, however, is not a forgone conclusion.
The project must still endure an independent environmental impact study by the Oak Ridge National Laboratory.
According to Robert Miller, Oak Ridge's chief analyst for the project, a number of factors could derail Geneva's proposal from becoming a reality.
Is the facility, as Geneva and Department of Energy officials assumed Thursday, really environmentally friendly? How much noise pollution, if any, will the facility produce? If the facility is everything many scientists believe it is, then Geneva "should be the cleanest (steelmaking operation) in the country," Miller said.
Geneva's planned set-up would be only the second of its kind in the world.
Australia hosts the only comparable facility in the world and the Aussies are compiling data that will likely provide the basis for the final environmental impact study constructed by Miller's group for Geneva.
A slumping domestic steel industry, slowed mainly by an influx of cheaper foreign steel products, had forced Geneva to lay off more than 400 workers during the past year, and the Utah County company filed for Chapter 11 bankruptcy protection in February. Yet, amid its struggles, Geneva has never lacked ambition.
They have spent approximately $400 million over the past decade to curb emissions and improve their blast furnace. They and 10 other U.S. steel companies filed a lawsuit that earlier this week led to dramatic limitations on the volume of steel that Russia can import into the United States over the next five years.
Wintrell predicted that sophisticated plants like the one Geneva is planning "will eliminate (U.S.) dependency on foreign coals."
Geneva will split the $850 million price tag of the new facility with several other unnamed partners, and the structure would not be built until about 2003 and would then be subjected to a 30-month test period.
A public hearing will be held on Geneva's plan at still undetermined times in the future. Announcements must be publicized. Miller said his lab would produce the environmental impact study by October 2000 at the earliest. Those who want to express potential concerns about Geneva's proposal can call Joe Renk before Aug. 16 at 412-386-6406, or 1-800-276-9851.