WASHINGTON (AP) — In its biggest environmental settlement ever with a steel producer, the government has reached an accord with the Nucor Corp. requiring the company to spend $98 million for pollution control and civil penalties, federal officials said Tuesday.

The agreement will require Nucor, a Fortune 500 company and one of the country's largest steelmakers, to reduce air, water and ground pollution from its plants in seven states. The company, which has annual sales exceeding $4 billion, will have to make the improvements at 14 plants in Alabama, Arkansas, Indiana, Nebraska, South Carolina, Texas and Utah.

Federal officials expressed hope that the pact will set an example for other steel manufacturers whose emissions the Environmental Protection Agency and Justice Department also are studying.

"This settlement means a cleaner environment and better public health protection for communities that are Nucor's neighbors," Carol Browner, administrator of the Environmental Protection Agency, told reporters.

Nucor executives said in a written statement that after cooperating with federal officials for 18 months to strike the deal, they were surprised by the "tone, timing and lack of information" in the government's announcement of the agreement.

They said that the Clinton administration "had turned this into a parting political shot" by not mentioning the extent of the company's cooperation, its belief that it has violated no environmental laws, and steps it has already taken to reduce pollution.

"In one word, the EPA statement was misleading," Daniel DiMicco, president and chief executive officer, said in an interview from corporate headquarters in Charlotte, N.C.

Nucor produces steel in so-called minimills from more than 10 million tons of scrap steel annually, making it the nation's biggest steel recycler.

In a complaint filed with the agreement, the government accused Nucor of illegally releasing thousands of tons of nitrogen oxide into the air each year, along with other pollutants that cause smog.

Nitrogen oxide is a component of acid rain and can damage lakes and crops while reducing visibility. It and the other pollutants can aggravate respiratory problems and even cause premature death.

The government also alleged the company polluted groundwater and soil by improperly disposing of K061 dust, including discharging it illegally through wastewater and storm water. The dust, a hazardous waste produced by steel furnaces, contains cadmium and lead, which the EPA considers likely causes of cancer.

Under the agreement, Nucor will spend $85 million for new air pollution control equipment and to reduce dust emissions. It will also spend $4 million to take other steps to monitor and reduce pollution in communities near its plants, plus pay a $9 million civil fine.

Browner said it would probably take the company two to three years to fully install the new equipment, much of which is ground-breaking technology. But DiMicco said the company has eight years to test whether the equipment works and install it — if it works.

"If it doesn't work, it won't be implemented," DiMicco said.

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Overall, the settlement could cut emissions of 6,400 tons of nitrogen oxide and 3,000 tons of other smog-causing pollutants over the next eight years, officials said.

In recent years, the government has entered even larger environmental settlements with other industries.

In October 1998, it entered a $1 billion settlement with the five major manufacturers of diesel engines. It also has reached agreements this year with a pair of electric power producers, the Tampa Electric Co. and Virginia Power, worth more than $1 billion each, said Sylvia Lowrance, EPA's deputy assistant administrator for enforcement.

The Nucor settlement was filed in U.S. District Court in Florence, S.C.

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