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80–808 2014

OUR NATION OF BUILDERS: THE STRENGTH OF 

STEEL 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MARCH 21, 2013 

Serial No. 113–23 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

LEE TERRY, Nebraska 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVE B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

G.K. BUTTERFIELD, North Carolina 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

BOBBY L. RUSH, Illinois 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

DONNA M. CHRISTENSEN, Virgin Islands 

HENRY A. WAXMAN, California, ex officio 

(V) 

C O N T E N T S 

Page 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 2 

Hon. Leonard Lance, a Representative in Congress from the State of New 

Jersey, opening statement ................................................................................... 3 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 4 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 6 

WITNESSES

Joe Carrabba, President and CEO, Cliffs Natural Resources .............................. 8 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 116 

John Ferriola, President and CEO, Nucor Corporation ....................................... 17 

Prepared statement .......................................................................................... 19 

Answers to submitted questions ...................................................................... 122 

Edward T. Kurasz, Executive Vice President, Allied Tube and Conduit ............ 29 

Prepared statement .......................................................................................... 31 

Answers to submitted questions ...................................................................... 129 

Richard J. Harshman, Chairman, President and CEO, Allegheny Technologies, Inc. ......................................................................................................... 46 

Prepared statement .......................................................................................... 49 

Answers to submitted questions ...................................................................... 131 

Mike Rehwinkel, President and CEO, EVRAZ North America ........................... 59 

Prepared statement .......................................................................................... 61 

Answers to submitted questions ...................................................................... 133 

John Surma, Chairman and CEO, United States Steel Corporation .................. 65 

Prepared statement .......................................................................................... 68 

Answers to submitted questions ...................................................................... 136 

Michael G. Rippey, President and CEO, ArcelorMittal USA ............................... 75 

Prepared statement .......................................................................................... 77 

Answers to submitted questions ...................................................................... 138 

Yvette Pena Lopes, Deputy Director, Bluegreen Alliance .................................... 84 

Prepared statement .......................................................................................... 86 

Answers to submitted questions ...................................................................... 141 

(1) 

OUR NATION OF BUILDERS: THE STRENGTH 

OF STEEL 

THURSDAY, MARCH 21, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:32 a.m., in room 

2123, Rayburn House Office Building, Hon. Lee Terry (chairman of 

the subcommittee) presiding. 

Present: Representatives Terry, Lance, Blackburn, Harper, 

McKinley, Bilirakis, Schakowsky, Butterfield, Welch, Barrow, 

Christensen, and Waxman (ex officio). 

Staff Present: Charlotte Baker, Press Secretary; Kirby Howard, 

Legislative Clerk; Nick Magallenes, Policy Coordinator, CMT; Gib 

Mullen, Chief Counsel, CMT; Andrew Powaleny, Deputy Press Secretary; Shannon Weinberg Taylor, Counsel, CMT; Michelle Ash, 

Minority Chief Counsel; and Will Wallace, Democratic Policy Analyst. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. Thank you all for being here. I am going to give my 

opening statement. Thank you, Janice. And I want to thank all for 

coming here to the second in a series of hearings of the Commerce, 

Manufacturing, Trade Subcommittee, Promoting Our Nation of 

Builders. 

The focus of today’s hearing is the health of our steel industry 

and how we can work together to overcome the challenges that face 

us. According to the American Iron and Steel Institute, steel manufacturing employs 161,900 individuals over 100 facilities nationwide, and the steel industry is indirectly responsible for over 1.1 

million jobs in industries like transportation, construction, auto 

and national security. 

The productivity of the steel industry is outstanding. Since the 

late 1880s, U.S. steel plants have seen a five-fold increase in productivity, producing 1 ton of finished steel in 10.2 man hours in the 

early 1980s to an average of just over 2 man hours in 2011. Today 

the U.S. is the third largest producer of steel, producing over 86 

million metric tons. And U.S. steel manufacturers do this while 

maintaining a strong commitment to workplace safety. And that is 

a testament to a very highly skilled workforce. 

2 

But today’s hearing is about finding pathways to policies that 

will cut down regulatory and other barriers standing in the way of 

our U.S. steel manufacturers. Two things I would like to know are, 

first, what can we do to make sure our U.S. steel producers can 

compete on a level playing field, not handicapped by outdated trade 

laws and not pitted against foreign companies that are unfairly 

subsidized; and, second, what can we do to match workers with 

these good paying jobs. If U.S. steel manufacturers cannot find the 

skilled workers they need, that is a double tragedy. 

Surplus steel from countries such as China and South Korea is 

flooding our markets with cheap products. This low cost and sometimes low quality steel being imported to the U.S. is being heavily 

subsidized by exporting nations through state sponsorship, export 

rebates, currency manipulation and other schemes. 

This subcommittee’s jurisdiction covers nontariff trade policies, of 

course, and this is of great interest to us, but the main reason we 

are here today is to identify the obstacles facing the industry so we 

can improve the competitive environment of this vital industry. 

At this time I would like to yield to Marsha Blackburn. 

[The prepared statement of Mr. Terry follows:] 

PREPARED STATEMENT OF HON. LEE TERRY

Thank you for all for coming to the second in a series of hearings of the Commerce, Manufacturing and Trade Subcommittee promoting our nation of builders. 

The focus of today’s hearing is the health of our steel industry and how we can 

work together to overcome the challenges it faces. 

According to the American Iron and Steel Institute, steel manufacturing employs 

161,900 individuals at over 100 facilities nationwide. And, the steel industry is indirectly responsible for over 1.1 million jobs in industries like transportation, construction, auto, and national security. 

The productivity of the steel industry is astounding. 

Since the late 1980s, U.S. steel plants have seen a five-fold increase in productivity, producing one ton of finished steel in 10.2 man-hours in the early 1980s to 

an average of just over two man-hours in 2011. Today, the U.S. is the third largest 

producer of steel, producing over 86 million metric tons. 

And U.S. steel manufacturers do this while maintaining a strong commitment to 

workplace safety. That’s a testament to a very highly skilled workforce. 

But today’s hearing is about finding pathways to policies that will cut down regulatory and other barriers standing in the way of steel manufacturers. Two things 

I’d like to know are: first, what can we do to make sure our U.S. steel producers 

can compete on a level playing field, not handicapped by outdated trade laws and 

not pitted against foreign companies that are unfairly subsidized? And, second, what 

can we do to match workers with these good-paying jobs? If U.S. steel manufacturers cannot find the skilled workers they need, that is a double tragedy. 

Surplus steel from countries such as China and Korea is flooding our markets 

with cheap products. This low cost and sometimes low quality steel being imported 

into the U.S. is being heavily subsidized by exporting nations through state sponsorship, export rebates, currency manipulation and other schemes. 

This subcommittee’s jurisdiction covers non-tariff trade polices, of course, and this 

is of great interest to us. But the main reason we are here today is to identify the 

obstacles facing the industry so we can improve the competitive environment for 

this vital industry. We want to make sure our steel manufacturers have the opportunity to compete on equal terms. If we can help facilitate that and make sure the 

U.S. government is not thwarting progress, then I am confident they will flourish 

in a competitive market. 

# # # 

Mrs. BLACKBURN. I thank the gentleman for yielding. And I 

thank our chairman for calling this hearing today. We all know the 

3 

vital nature of the steel industry to our economy. Here in the country, we have got 161,000 workers who are working in the steel 

economy. Some of those we find in Tennessee. Mr. Ferriola, who is 

the CEO of Nucor Steel has two plants in Tennessee, one down in 

Memphis, where I have visited and had the opportunity to see firsthand the work they are doing; the other is up in Portland. So we 

welcome you and we thank you for the work you are doing. 

I will add that in the 11 steel industry facilities that are located 

in Tennessee, in the past couple of years, we have seen 2,813 new 

jobs created, so we are pleased with that and that type growth in 

this sector. So welcome. We appreciate that. I yield back my time. 

Mr. TERRY. And at this time, I will recognize the vice chairman 

of the committee, Mr. Lance. 

OPENING STATEMENT OF HON. LEONARD LANCE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. LANCE. Thank you, Mr. Chairman. And my thanks to both 

panels and to Congressman Murphy as well as our distinguished 

guests from the steel industry. 

New Jersey has approximately 7,000 steel-supported jobs, and 

many of these are value added, and one plant is affiliated with 

Nucor Corporation, which is testifying today. Even though the 

State is not a primary producer of steel, it is obviously a critical 

industry for every corner of the country. 

As we examine the vitality of manufacturing in the United 

States, we are looking in part at the way government at the Federal level can help or hurt the industry. In past subcommittee 

hearings, we have been told that the current Tax Code is a driver 

of inefficiency and frequently uncertainty. Extending the R&D tax 

credit, simplifying the Tax Code and lowering the Federal tax rates 

are suggestions that come to mind. A high tax rate makes it all the 

more difficult for our domestic steel industry to compete in an already difficult playing field where competitors are frequently subsidized in various ways by their home countries. 

Beside the tax issue, I welcome your testimony on a range of 

issues faced by our domestic steel industry, and I hope that you 

will find our subcommittee a willing partner in ways to encourage 

and support the manufacturing community and the steel industry. 

Thank you very much, Mr. Chairman. 

Mr. TERRY. Well done, Mr. Vice-Chairman. At this time recognize 

the ranking member of the subcommittee, Ms. Schakowsky. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. As you said, this 

is the second hearing of the year and the second in a series on our 

series of manufacturing, a critical sector of our economy. At the 

last hearing a small steel company from my district, Black Steel, 

Joe Black was here to talk about the industry and some of the 

challenges. 

I want to welcome those from the Chicago area, Ed Kurasz from 

Allied Tube and Conduit Corporation, Mike Rehwinkel from air— 

4 

I probably am destroying these names; I am sorry if I am—EVRAZ, 

Inc., North America, and Mike Rippey, president and CEO of 

Arcelor Mittal USA. 

And so I grew up in Chicago and, of course, I know a lot about 

old steel on the southeast side of Chicago and northwestern Indiana. I am sorry that Pete Visclosky wasn’t able. He is managing 

a bill on the floor today, but I am anxious to hear about new steel 

and what is going on right now. 

I am focused very much on having an educated workforce that 

can well serve your industry. Our universities and community colleges and high schools are beginning to really have collaborations 

with businesses to prepare students for long success in manufacturing and a commitment to the national infrastructure. Without 

that, the American steel industry will suffer. 

The American Society of Civil Engineers reported this week that 

our national infrastructure is rated as a D plus. I know that 

sounds bad. It is up from a D 4 years ago. While investments in 

our Nation’s infrastructure, including the American Recovery and 

Reinvestment Act and a 27-month transportation bill have improved our transportation infrastructure, but a lot of work remains. 

And as times have changed, steel production has been able to become more energy efficient while simultaneously meeting the shifting demands of our consumers. Today the effort to develop cleaner 

energy sources is heavily reliant on steel. Wind turbines are composed of almost 90 percent steel. Wind is one of the fastest growing 

energy sources in America, representing 35 percent of all newly installed capacity over the past 5 months. 

I know my colleagues have talked about the need for an equal 

playing field, so our steel can compete competitively in the world, 

and I hope we will talk about that as well. 

And in the interest of time, because I know we are going to have 

a vote before too very long and getting to our witnesses is a top 

priority, let me yield back my time. 

Mr. TERRY. The chair recognizes Mr. Waxman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. I appreciate 

your holding this hearing on steel manufacturing. And I want to 

thank all the witnesses, including our colleague, Mr. Murphy, for 

being here today. 

The steel industry’s important. In 2012, steelmakers in the U.S. 

Produced 96 million tons of steel, the third most in the world. The 

steel industry employs 160,000 workers directly, and it supports 

many more jobs in related industries, like construction, automotive 

assembly and the production of machinery and equipment. 

The success of the domestic steel industry is closely tied to the 

health of the broad economy. When the country’s economy is growing, we need steel to build new structures, new cars and new machines, but when the economy contracts, as it did after the collapse 

of Wall Street in 2008, demand for steel plunges and the U.S. steel 

industry suffers significant turmoil. 

5 

Today the steel industry’s total output and capacity utilization 

are approaching levels historically consistent with stable industrywide growth. After an unsteady 2012, some industry observers believe that gains in residential construction and the auto industry 

will make 2013 a good year for steel. 

To maximize growth in the long-term, however, we must take 

several steps to support the U.S. steel industry and ensure it remains globally competitive. First, we must seize the opportunity to 

improve our Nation’s infrastructure. Targeted investments in 

transportation, water supply, public facilities and our electric grid 

are needed, and in some cases, long overdue. 

According to the American Society of Civil Engineers, 12 percent 

of the bridges in my home State of California are considered structurally deficient. These must be repaired, and now is the perfect 

time, given how low interest rates are. Improved road, rail and port 

infrastructure would lead to efficiencies throughout the steel supply chain and demand for steel would surge as projects got underway. 

Second, we must prepare for an innovative future. This means 

providing incentives for research and development so that the U.S. 

steel industry can outcompete other nations. It also means ensuring that workers have the education and technical training they 

need to work in the highly automated steel mills of the future. 

Third, we must remain vigilant in the area of trade enforcement. 

Countries whose steel producers seek to access the U.S. market 

must keep their commitments under international trade law not to 

distort the market in their favor. And we must impose anti-dumping sanctions and countervailing duties when warranted. 

I understand that steel production is an energy intensive process, 

and that some witnesses today may speak against energy-related 

regulations, but we must remember that innovations that make our 

factories less polluting and our air and water cleaner are good for 

the environment, our communities and the steel manufacturers. 

Through the hard work of improving energy efficiency and using 

cleaner energy, the U.S. steel industry has become more competitive, allowing it to continue to grow and thrive. We could have 

both: a clean environment and a vibrant steel industry. 

I look forward to the testimony today to learn more about how 

we can accomplish these goals. And I thank you Mr. Chairman. 

Yield back. 

Mr. TERRY. Thank you, Mr. Waxman. At this time it is my pleasure to introduce our first panel, the chairs, chair and co-chair of 

the steel caucus in the House. Before introducing Mr. Murphy, I 

will also—his co-chair is on the floor. Mr. Visclosky is running time 

on the CR, so he is not able to make it today, but I am sure, Mr. 

Murphy, you can share his views. And you will not get his 5 minutes, though. 

We recognize the gentleman from Pennsylvania, a passionate 

supporter of the steel industry, Mr. Murphy. You are recognized for 

your 5 minutes. 

6 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. MURPHY. Thank you, Mr. Chairman. And I want to thank 

also my good friend Pete Visclosky for his hard work and dedication for this. 

Together we lead the steel caucus, which is over 100 lawmakers 

from 30 States who work to keep steel strong. Usually we do the 

steel caucus hearings with just our members alone, but I appreciate the opportunity to speak to your subcommittee. American steel supports 1.2 million jobs and adds $350 billion to 

our Nation’s economy and serves as a backbone, both literally and 

figuratively, of America’s built environment, our national defense 

and our economic strength. American steelmaking stands ready for 

resurgence powered by plentiful fuel resources, new technologies 

and the most efficient plants in the world. 

American steelmakers have tremendous advantages over their 

foreign competitors, but they need clarity and certainty here at 

home. New restrictions in the mining of coal and iron ore will make 

it costly for integrated steelmakers to operate the blast furnaces 

that produce coke and iron. 

Now, if someone has not paid attention during high school 

science, they may have missed this point: you cannot make steel 

without coal and other raw materials, and you cannot make steel 

in the United States without competitively-priced coal, electricity 

and shipping and rail, trucks, barges, and a competitive and welltrained workforce. And most importantly, we cannot keep our mills 

open while other countries undermine fair trade. 

Meanwhile, our Nation’s crumbling infrastructure makes it increasingly difficult for steelmakers to transport goods across the 

United States. But there is a solution. I have introduced the Infrastructure, Jobs and Energy Independence Act, H.R. 787, to put us 

on the path to energy independence while creating jobs and fixing 

our aging roads, bridges, locks and dams without raising taxes, importing OPEC oil or borrowing from China. 

This legislation expedites development of our offshore resources, bringing an estimated $2.2 to $3.7 trillion in new Federal revenue 

dedicated—and dedicating some of those new funds to slashing our 

deficit and rebuilding America’s transportation infrastructure. It 

will launch a massive building boom that will mean big things for 

the steel industry. 

In its 2013 report card for America’s infrastructure, the American Society of Civil Engineers estimated that 25 percent of the Nation’s bridges are deficient. That is more than 151,000 structures 

in need of new steel. 

Now, steelmakers also face challenges beyond our shores from 

nations that consistently violate their obligations under international trade agreements. Our steelmakers can win this fight, but 

only if there are clear standards in place giving them and the 

working men and women of this country a fair shot at competing 

and succeeding. 

In the March 12th issue of The Wall Street Journal, it reported 

that Chinese officials are increasingly worried that state-owned 

steelmakers are expanding capacity while losing money. Faced with 

7 

*This document was unavailable at the time of printing. 

these contradictory conditions and sluggish economy, Chinese 

steelmakers are dumping their excess product into our markets in 

clear violation of our international trade agreements. 

In the last year, imports from China have grown 34 percent. 

Across the industry, imports now account for a quarter of steel consumption. And the brightest segment of the steel market, oil country tubular goods, we are finding significant quantities of Chinesemade steel that has been purposefully mislabeled in order to avoid 

duties and detection by Customs officials. 

American manufacturers like U.S. Steel’s National Tube plant in 

McKeesport, Pennsylvania, has been expanding to provide drill and 

transmission pipe for gas and oil deposits found in places like the 

Marcellus shale in my congressional district, but now these facilities are scaling back because of the massive influx of cheap government-subsidized foreign steel. 

Furthermore, steel from China, Japan, Korea, and several other 

countries is coming in at a significant price discount because their 

governments are engaged in illegal currency manipulation. 

Yesterday I introduced the Currency Reform for Fair Trade Act, 

H.R. 1276, along with a group of bipartisan lawmakers, to stop this 

practice. Foreign governments are illegally controlling currency 

markets in order to prop up their steel exporters, while our manufacturers suffer slowly and painfully. 

And now that China knows they can get away with manipulating 

currency, other nations like Japan and Korea are doing the same. 

It is a growing list, and it will continue to grow as long as other 

countries see a loophole big enough to sail a cargo ship through. 

This legislation will give the Department of Commerce and 

Treasury the necessary tools to build honest and fair trade regulations. America wouldn’t tolerate this kind of behavior by domestic 

companies, so why do we tolerate it by foreign powers? Free trade 

doesn’t have to be free for all where only the naive abide by the 

rules. We want China and other countries to be honest trading 

partners and we want them to know we are a welcome source, but 

not a welcome mat. 

Moving forward, our caucus will continue to pursue these issues 

to ensure American steel remains strong and vibrant for decades 

to come. And I thank you for this opportunity to appear before you 

today. And I will welcome any questions. 

Mr. TERRY. Your testimony is appreciated. 

We don’t have time to ask you questions, though, because we 

want to talk to the people behind you. 

Mr. MURPHY. I thank the——— 

Mr. TERRY. I will just catch you on the floor. 

Mr. MURPHY. Thank you very much, Mr. Chairman. 

Ms. SCHAKOWSKY. Yes. I——— 

Mr. TERRY. Ms. Schakowsky. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I have a unanimous consent request to put the testimony of Congressman Pete 

Visclosky into the record. *

Mr. TERRY. Absolutely. So without objection, so ordered. So 

thank you, Mr. Murphy. Well done. 

8 

Mr. MURPHY. Thank you all. 

Mr. TERRY. Your timing was great. 

Mr. MURPHY. Thank you. 

Mr. TERRY. At this time I would like to invite our panel up. And, 

boy, I will tell you, this is probably one of the most distinguished 

panels we can have, so this is impressive. 

So I am just going to invite all of you up now. Joseph Carrabba, 

chairman, president and CEO of the Cliffs Natural Resources, currently chair of the American Iron and Steel Institute; John 

Ferriola, CEO and president, Nucor Corporation, currently chair of 

the Steel Manufacturers Association, and had the extremely positive, once-in-a-lifetime experience of spending 4 years in Norfolk, 

Nebraska, running the Nucor facility there; Richard Harshman, 

chairman, president and CEO of Allegheny Technologies, Inc., also 

represents the specialty steel industry of North America; Edward 

Kurasz—Kurasz, I am sorry—executive vice president, Allied Tube 

and Conduit, currently chair of the Committee on Pipe and Tube 

Imports; Mr. Mike Rehwinkel, president and CEO of EVRAZ North 

America; Mike Rippey, president and CEO of Arcelor—I probably 

have that wrong—ArcelorMittal USA; and John Surma, president 

and CEO of United States Steel; and then Ms. Yvette Pena Lopes, 

deputy director of the BlueGreen Alliance. 

As you know, the rules, 5 minutes. There is a little machine 

someplace that will let you know your time. Just because we are 

going to have votes early in the day here, I would appreciate it if 

you could stick to the 5 minutes as much as you can. And Mr. 

Carrabba, I would appreciate it if you would start us. 

STATEMENTS OF JOE CARRABBA, PRESIDENT AND CEO, 

CLIFFS NATURAL RESOURCES; JOHN FERRIOLA, PRESIDENT 

AND CEO, NUCOR CORPORATION; RICHARD J. HARSHMAN, 

CHAIRMAN, PRESIDENT AND CEO, ALLEGHENY TECHNOLOGIES, INC.; EDWARD T. KURASZ, EXECUTIVE VICE 

PRESIDENT, ALLIED TUBE AND CONDUIT; MIKE 

REHWINKEL, PRESIDENT AND CEO, EVRAZ NORTH AMERICA; 

MIKE RIPPEY, PRESIDENT AND CEO, ARCELORMITTAL USA; 

JOHN SURMA, CHAIRMAN AND CEO, UNITED STATES STEEL 

CORPORATION; AND YVETTE PENA LOPES, DEPUTY DIRECTOR, BLUEGREEN ALLIANCE 

STATEMENT OF JOE CARRABBA 

Mr. CARRABBA. Thank you, sir. Chairman——— 

Mr. TERRY. And just turn on your mike and pull it up to you. 

Mr. CARRABBA. There we go. Chairman Terry and Ranking Member Schakowsky and distinguished members of the subcommittee, 

good morning, and thank you for the opportunity to testify today. 

My name is Joe Carrabba and I am the chairman, president and 

CEO of Cliffs Natural Resources. 

As the current chairman of the American Iron and Steel Institute, I wish to express sincere appreciation of your interest in the 

state of our domestic steel industry. 

In many respects, our industry is at a crossroads. We are an extremely efficient sector with a talented workforce, state-of-the-art 

technologies, and the ability to furnish products critical to the 

9 

broader U.S. manufacturing economy; however, we also face significant challenges arising from a persistently sluggish economic recovery, the surge of unfairly traded steel imports, and an investment 

climate plagued by overly restrictive regulatory requirements and 

constant uncertainty in the areas of U.S. tax and fiscal policy. 

In a moment, I will speak further to specific policy challenges 

and opportunities, but first I would like to briefly highlight the economic contributions of this industry. 

The company that I lead, Cliffs Natural Resources, is the largest 

producer of iron ore in North America, and a significant producer 

of metallurgical coal for steelmaking. As a supplier to the domestic 

steel industry, Cliffs is a prime example of how steel production in 

the United States provides economic benefits well beyond those 

generated by steel manufacturing alone. 

In a study commissioned by the American Iron and Steel Institute last year, Professor Timothy Considine of the University of 

Wyoming found that each job in America’s steel industry supports 

seven jobs in the U.S. Economy. The aggregate national impacts of 

steelmaking, however, does not come close to capturing the importance of our industry to specific communities and regions across 

the United States. 

A study recently released by the University of Minnesota Duluth 

found that iron ore mining contributes to more than $1.9 billion to 

Minnesota’s economy and mining represents 30 percent of the gross 

regional product of northeastern Minnesota. 

Many of you have communities in your districts that share such 

a profound reliance on the steel industry, its suppliers and the family-sustaining jobs supported by these businesses. Given the acute 

demand for more of these quality jobs, we are grateful for your 

focus on our industry and we appreciate the opportunity to share 

our perspective on public policy matters that will help define the 

future of steelmaking in the United States. 

I would first like to address the importance of sensible energy 

and environmental regulatory policy. While the CEOs before you 

today represent different elements of a most diverse industry, we 

all share reliance on cost-effective sources of energy. Many believe 

that newly discovered shale gas developments are the most remarkable source of economic growth and prosperity that any of us 

are likely to encounter in our lifetimes. 

However, despite the tremendous promise of this new domestic 

energy source, persistent permitting delays and an arcane environmental regulatory environment threaten to further degrade the status of the U.S. as the location of choice for all large capital and energy-intensive industries. 

Our permitting process is far too protracted, and we increasingly 

find that Federal agencies are usurping the role of States that 

States should play in working with industry to innovate sciencebased solutions, working efficiently to reduce environmental impacts. 

In order for our industry to thrive, we need to responsibly develop our American resources while ensuring that U.S. regulatory 

requirements are as predictable and workable as they are protective and stringent. 

10 

In addition to energy, our industry is also concerned with the 

need for adequate Federal Government investment in infrastructure. Just as iron ore mines and steel mills rely on efficient rail, 

road and port infrastructure in our supply chains, so too is prosperity of the U.S. economy linked to the adequacy of our national 

infrastructure. Developing nations, such as China, are recognizing 

the importance of infrastructure, with massive investments in their 

transportation networks. The United States can ill afford to fall 

further behind in this space. 

In 2013, Congress should begin developing options to ensure a 

long-term funding mechanism for the Highway Trust Fund as well 

as pursue reauthorization of the Water Resource Development Act 

in order to rehabilitate or replace crumbling infrastructure and enhance global competitiveness in manufacturing. 

Lastly, I would like to speak about the stake we all have in our 

outcome of corporate tax reform. As a capital-intensive industry 

facing intense competition in global markets, the American steel industry supports tax policies that will make U.S. firms more competitive globally. 

In order for tax reform to produce real economic growth and job 

creation, the Tax Code should not simply be changed to favor less 

capital intensive sectors of the economy. Rather, the framework for 

rate reduction must be determined based on what it requires to ensure that all U.S. industries are more globally competitive. 

In short, achieving the lower overall statutory tax rate should 

not come at the expense of a higher effective tax rate for businesses 

and industries that most support capital investment, job growth 

and value-added manufacturing. 

As industry leaders, we stand ready and willing to work with you 

on these and other priorities. Today’s hearing is an important and 

encouraging step forward in the realization of the public policy environment that can allow our industry and the economy as a whole 

to thrive. Once again, I thank you for your time and the invitation 

to appear before you today. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Mr. Carrabba follows:] 

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Mr. TERRY. Mr. Ferriola. 

STATEMENT OF JOHN FERRIOLA 

Mr. FERRIOLA. Good morning. On behalf of our 22,000 teammates, I would like to thank you for this opportunity to appear before you today. My name is John Ferriola. I am president and CEO 

of Nucor Corporation. I am also chairman of the Steel Manufacturing Association, and I serve on the board of the American Iron 

and Steel Institute. Nucor is the largest steel producer in the 

United States and also the largest recycler. 

Chairman Terry and members of the committee, I commend you 

for convening these hearings on America’s manufacturing sector. 

Like you, we at Nucor believe a strong manufacturing base is essential to sustainable economic growth. For years, our company has 

emphasized the need for America to once again be a Nation that 

makes, builds and innovates. 

Despite the difficult economic conditions of the past 4 years, 

Nucor has continued to invest in our U.S.-based facilities. Our capital investments since the industry’s last peak in 2008, through the 

end of 2012, totaled almost $7 billion. We are doing this in a down 

cycle to position ourselves to be stronger and more profitable when 

the economy recovers. This investment philosophy has driven tremendous returns for our investments and contributes to our position of strength. 

Our largest project currently is the construction of a $750 million 

direct-reduced iron plant in Louisiana. Direct-reduced iron is a key 

ore material we use in the steelmaking process, along with scrap 

steel. The project is employing over 600 construction workers, and 

will create 150 full-time permanent manufacturing jobs with the 

average annual wage of $70,000. 

Bringing this technology back to the United States would not 

have been possible without an abundant and affordable supply of 

natural gas. That is why we at Nucor are urging decision-makers 

to proceed with caution on the issue of LNG exports. We feel 

strongly that we should not export away a significant domestic 

competitive advantage. 

We have also made investments that will allow us to make products for higher end markets, including automotive, heavy equipment and energy. For example, we are investing $290 million to expand our capacity to make special bar quality steel at our mills in 

Norfolk, Nebraska; Darlington, South Carolina, and Memphis, Tennessee. 

We are investing another $115 million to expand production of 

hot rolled sheet piling at our Nucor-Yamato mill in Arkansas, and 

we recently completed a $110 million heat treating facility at our 

Hertford, North Carolina, plate mill that enables us to produce armored plate for military applications and high end plate steel for 

the heavy machinery sector. 

I am particularly proud that we did not lay off a single teammate 

during the great recession. Nucor has a long tradition of growing 

stronger during downturns by investing in our teammates and 

mills and collaborating with our customers; however, a surge of 

steel imports that defies market fundamentals puts our ability to 

reap the benefits of these investments at risk. 

18 

Last year steel imports increased 17 percent from 2011 and a 

whopping 38 percent from 2010, a 38 percent increase in imports 

in 24 months, meanwhile, U.S. steel capacity utilization was only 

72 percent. Imports were up in every major product area and for 

most major steel-producing nations. 

These import levels make no sense whatsoever when you consider the sluggish domestic economic recovery and the fact that 

American producers are among the lowest cost steel producers in 

the world. The U.S. enjoys marked advantages in practically every 

aspect of steelmaking, including access to capital, technology and 

raw materials, relatively low energy costs, high labor productivity—we will put the American worker up against any worker in 

the world—and proximity to the U.S. market. 

The reason we are seeing this import surge is that, while America is a free market, many major steel-producing countries are not. 

Foreign governments interfere in the market through state-owned 

enterprises, import barriers, currency manipulation, raw material 

export restrictions, and subsidies that are in direct violation of 

international rules. 

India recently imposed new tariffs on hot rolled coil and steel 

plate. Egypt has import restrictions on rebar. Brazil not only doubled its steel tariff, but is proposing export tax increases on scrap 

metal in order to discourage its export. And China, by far, is the 

worst offender. Its highly subsidized steel industry is governmentowned and government-controlled, and its market remains heavily 

distorted and closed to outside competition. 

As a result of these trade barriers, the open U.S. market becomes 

a dumping ground for steel products from all over the world. This 

is where public policy becomes important. Global trade is governed 

by a set of rules. If our system of trade is going to work and be 

fair for all participants, we must use every tool at our disposal to 

enforce these rules. 

Mr. TERRY. Mr. Ferriola, if you can just go to the conclusion at 

this point. 

Mr. FERRIOLA. We have a tremendous opportunity to revitalize 

the American manufacturing sector and strengthen our economy. If 

we have strong trade enforcement coupled with other policy areas 

discussed here today, infrastructure investment, regulatory certainty, domestic energy development, America can once again become a Nation that makes, builds and innovates. Thank you for 

your time this morning. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Mr. Ferriola follows:] 

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Mr. TERRY. Mr. Kurasz. 

Before you start, we just got notice that the floor was moving 

faster than we thought, and we probably are not going to get all 

through, but we will come back, but we are going to keep going 

until we absolutely have to go to the floor. Mr. Kurasz. 

STATEMENT OF EDWARD T. KURASZ 

Mr. KURASZ. Good morning, Chairman Terry, Ranking Member 

Schakowsky and——— 

Mr. TERRY. Could you pull that a little closer? 

Mr. KURASZ [continuing]. And distinguished members of the Energy and Commerce Subcommittee on Commerce, Manufacture and 

Trade. My name is Ed Kurasz. I am the executive vice president 

of sales at Allied Tube and Conduit and the chairman on the committee on pipe tube imports. 

Allied Tube as five production facilities in the United States and 

we employ nearly 1,000 workers at our headquarter facility in Harvey, Illinois. We permanently closed a facility in Morrisville, Pennsylvania, early last year, which I will discuss shortly. The CPTI 

that I represent has 42 member companies located in 30 States, 

with approximately 35,000 workers. 

Like other segments of the industry, but probably worse, the U.S. 

pipe and tube industry has a major import problem. In 2012, we 

had a record 8.75 million tons of imports. In fact, imports increased 

by 1.7 million tons over 2011 and captures virtually the entire increase in U.S. consumption of pipe and tube in 2012. OCTG imports took more than half the market and line pipe imports took 

more than two-thirds of the U.S. market. Korea alone shipped 2 

million tons, and numerous other countries, including Vietnam, 

Turkey, India, Taiwan and many middle eastern countries accounted for massive surges of imports into the U.S. markets. 

While seven successful sets of trade cases caused direct imports 

of pipe and tube from China to fall from a record 3 million tons 

in 2008 to less than 200,000 tons last year, there has been significant evasion of these orders through transshipment and 

misclassification. For these reasons, we support the efforts of Congressman Billy Long and others in the House and Senate to pass 

the ENFORCE Act, which would provide U.S. Customs and Border 

Protection with necessary tools to end Customs fraud and duty evasion. 

While direct imports from China have been curtailed, we believe 

that as much as half of pipe tube imports entering the United 

States are made with Chinese steel. According to the OECD, China 

had approximately 970 million tons of steel capacity and approximately 717 million tons of steel production in 2012. China exported 

60 million tons, to make it far and away the world leader in steel 

exports. 

The Chinese government subsidizes its steel industry for policy 

reasons and makes Chinese steel available to our foreign pipe and 

tube competitors at ridiculously low dumped and subsidized prices. 

We urge this committee to engage the administration in discussions to use World Trade Organization rules to address Chinese 

government subsidization of its steel industry. 

30 

In 2012, both the galvanized steel wire industry and our circular 

welded pipe industry lost cases at the ITC, which found that despite significant market share losses, modest improvements in the 

industry as a result of increases in demand after the depth of the 

recession was cause for negative injury determinations. 

We believe the Commission failed to take in account the prescribed statutory obligation to analyze injury in the context of the 

business cycle. In particular, despite the fact that dumped and subsidized imports from India, Oman, UAE and Vietnam doubled from 

100,000 tons to 200,000 tons between 2009 and 2011, grabbing five 

additional points of market share in the U.S. market, the ITC 

found operating profit margins of 2 percent with net losses of 2 percent to be a sign of a healthy U.S. pipe industry. 

I was quite mystified that commissioners at the hearing and in 

their written decision did not understand the need for a manufacturing industry to earn its cost of capital. In addition, I was extremely troubled by the Commission’s finding that our permanent 

closure of a mill in Morrisville, Pennsylvania, was not a sign of injury due to imports because our mill equipment was purchased for 

spare parts. 

There is something fundamentally wrong with our trade law system when ITC commissioners do not understand the need for an 

industry to earn a decent profit margin and don’t understand the 

devastating impact of mill closures on industries, their workers and 

the surrounding communities. 

As the two charts displayed demonstrate, the massive pipe and 

tube import surge of 2012, which has continued in 2013, has 

caused devastating reductions in U.S. production in 2013. We, 

therefore, urge Congress to persuade President Obama to appoint 

ITC commissioners that will vigorously enforce trade laws in accordance with U.S. statutes. We also urge you to hold oversight 

committee hearings to determine why the Commission is not properly enforcing the injury laws, and to explore legislative changes 

that will make the intent of these laws even more explicit. 

There is no doubt in my mind that without action against massive subsidized Chinese overcapacity and without strong trade law 

enforcement that our extremely competitive U.S. pipe and tube industry will largely disappear within the next decade. Since we are 

the second largest consumer of steel in the United States, that will 

also have a major negative impact on the American steel industry. 

Thank you for the opportunity to appear here today. We urge the 

committee to take all the necessary steps to ensure that our industry can compete in a fair and free trade environment. Thank you. 

Mr. TERRY. Thank you, Mr. Kurasz. 

[The prepared statement of Mr. Kurasz follows:] 

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Mr. TERRY. Mr. Harshman. 

STATEMENT OF RICHARD J. HARSHMAN 

Mr. HARSHMAN. Good morning. I am the chairman, president 

and——— 

Mr. TERRY. Is your mic on? 

Mr. HARSHMAN [continuing]. Chairman, president and chief executive officer of Allegheny Technologies, Incorporated. Thank you for 

inviting me to participate in this hearing. I am appearing on behalf 

of the specialty steel industry of North America, or SSINA, and my 

company. SSINA’s member companies produce stainless steels, 

super alloys, high-nickel materials, electrical steel, tool steels, and 

other high technology materials for critical application. 

ATI is one of the largest and most diversified specialty metals 

producers in the world, with 2012 sales of over $5 billion. We have 

over 11,000 full-time employees, 85 percent of whom are located in 

the United States. 

At ATI, we use innovative technologies to offer growing global 

markets a wide range of specialty metal solutions. Our products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium and niobium, advance powder alloys, 

stainless steel and specialty alloys, grain-oriented electrical steel, 

and highly engineered forgings and castings. 

Sales to many of our domestic customers allow them to produce 

critical products, such as commercial and military airplanes and jet 

engines, gas turbines, power transformers, oil and gas drilling and 

completions equipment, products used by global chemical processing industry, and advanced medical equipment. We are one of 

the few companies in the world which can produce a full lineup of 

specialty metals in such a wide variety of critical applications. 

We understand and believe that the ability to manufacture critical specialty metals for our key growth markets must remain a 

core competency of the United States both from a national security 

and a sustainable economic growth perspective. 

First I would like to comment on the current state of the specialty metals industry. As the U.S. economy slowly improved, so did 

demand for our products. The outlook for 2013 is for modest improvement; however, low priced imports continue to take a substantial share of stainless steel market, and were up 12 percent in 

2012, with China and Mexico leading the way. 

I would also like to mention this is a significant year for our industry, which is celebrating the 100th anniversary of the creation 

of stainless steel. And we hope you can attend a reception on April 

15th, with an exhibit showing the history of stainless steel. 

The U.S. specialty metals industry is technologically advanced 

and competitive in the global economy. ATI, for example, exports 

about 26 percent of its U.S. production and sells U.S.-made products all over the world. In recent years, ATI has invested more 

than $3.7 billion in capital expenditures and strategic acquisitions, 

nearly all in our facilities located in the United States. 

Our most recent strategic investment is the construction of a 

state-of-the-art $1.2 billion ATI-funded hot rolling and processing 

47 

facility in Brackenridge, Pennsylvania, which is currently scheduled for completion by the end of 2013. 

Why has ATI chosen to make these investments in the United 

States rather than in a foreign country? First, we are a proud U.S. 

company; second, we believe that to ensure that we remain a technology leader in specialty metals, we need to co-locate our technology development resources with our core manufacturing capabilities. 

We believe the best way to achieve the vision is to have the majority of our manufacturing capabilities in the U.S. so that we can 

be an innovative, high quality, reliable and cost-competitive supplier to our customers. However, as a primarily U.S.-based manufacturer, we must be able to compete on a level playing field with 

our foreign competitors, several of which are state-owned enterprises. 

A level playing field combined with our industry-leading innovation and advanced technology capabilities, our unsurpassed manufacturing capabilities, and the productivity and knowledge of our 

employees will ensure ATI remains a key contributor to the national security and the economic growth of the United States. 

We are optimistic about our ability to continue to grow and invest here in the U.S., however, I would like to raise several policy 

concerns which may affect our long-term competitiveness. ATI remains supportive of the Department of Energy’s preliminary ruling 

regarding more stringent efficiency standards for distribution 

transformers. The proposed standards issued after a lengthy negotiated rule-making process established a well-balanced update to 

the existing standards. The proposal will result in a significant and 

additional energy savings, it is environmentally responsible and it 

maintains the domestic manufacturing base for core materials. We 

urge the Department of Energy to finalize the preliminary ruling 

expeditiously and without further change. 

It is critical that the U.S. retain strong trade laws to allow us 

to fight pervasive unfair trade practices of our foreign competitors: 

dumping, government subsidies, protected markets, state-owned 

enterprises. U.S. companies struggle to compete with governmentowned and supported foreign companies, which have easy or low 

access to capital or may not be required to make the same returns 

on investment required of the publicly-traded U.S. company. 

Of particular concern, the government of China continues to subsidize its specialty metals producers by keeping currency valuations low. 

Here at home, we are concerned about a new targeted dumping 

methodology proposed by Commerce and USTR, which will severely 

weaken our anti-dumping laws. Additionally, we are concerned 

about the potential use of foreign trade zones to subvert existing 

tariffs. 

ATI is proud to produce materials critical to the national defense. 

No weapon, naval or aerospace program could function without specialty metals. Congress recognized this more than 40 years ago 

with the specialty metals amendment, and we encourage Congress 

to continue to support that. Thank you again for the opportunity 

to testify, and I would be happy to answer any questions. 

Mr. TERRY. Thank you. 

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[The prepared statement of Mr. Harshman follows:] 

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Mr. TERRY. We have 6 minutes before we have to go to the floor 

and make our votes, so we are going to have one last witness. Mr. 

Surma, Mr. Rippey and Ms. Pena Lopes, we will wait till we get 

back. We will probably gavel and go. You are invited to our anteroom, which actually has coffee. 

Mr. Rehwinkel. 

STATEMENT OF MIKE REHWINKEL 

Mr. REHWINKEL. Mr. Chairman and members of the committee, 

I am Mike Rehwinkel, president and CEO of EVRAZ North America. My company makes flat, long and tubular steel for a variety 

of industries, including the energy sector, infrastructure like rail, 

bridges and roads, building construction, and we are very proud of 

the armor plate we developed for the U.S. military. We employ 

4,500 people in the United States and Canada. Roughly half of the 

employees work in our Pueblo, Colorado, Portland, Oregon, and 

Claymont, Delaware, operations. In the last 56 years, we have 

made more than 20,000 miles of pipe. 

Thank you for the opportunity to discuss the future of steel manufacturing in this country. Today I want to join my colleagues in 

painting a picture of what our industry needs to support the nearly 

154,000 well-paying jobs we currently provide for American steel 

workers and to create new jobs for the future. 

Modern steel mills are highly technical operations, they require 

bills of dollars in capital investments, demand a highly skilled 

labor force. After touring the EVRAZ Colorado mill, U.S. Senator 

Michael Bennett said, ‘‘I have got it. These are the middle class 

jobs we are talking about in Washington and this is a place that 

creates them.’’ 

Steel companies in America are very responsible corporate citizens, strong stewards of the environment. In fact, EVRAZ is a largest recycler in Colorado and Delaware. We make new steel products from scrap metal. 

Mr. Chairman, to be competitive in today’s market, we need a 

reasonable and streamlined regulatory approval process for the 

construction and permitting of new facilities or modernization of 

existing ones. If we are going to create and maintain the jobs this 

country needs right now, the process should meet the letter and 

spirit of the law. The process should be timely and provide a high 

degree of certainty that once the requirements are met, the project 

will be able to proceed. It should be a proceeding that recognizes 

the scope of the project being considered. 

Currently, navigating the bureaucratic permitting process is extremely frustrating in terms of the time, scope and uncertainty. It 

has become controlled by special interests that raise issues outside 

the purview of the process simply to delay an approval. 

To continue to have a healthy industry, regulations should be 

well defined and we need to have a good working relationship with 

regulators to obtain the most efficient results. A case in point: the 

proposed Keystone XL Pipeline. This project includes 550 miles of 

my pipe. It will provide a competitively priced, reliable North 

American supply option for Gulf Coast refinery. Its completion is 

important for several compelling public policy reasons. Pipelines 

60 

are safe, efficient form of transportation for liquids and gases. The 

required regulations regarding Keystone construction, operation 

and safety have been met, yet ongoing delays, reviews and questions, alternative routing have delayed this particular project. 

These delays are undermining the goal of secure, stable energy 

supplies in our country. 

Permitting reviews should continue to be fact-based and focused 

on individual projects. Additional studies with secondary implication of production activities like refineries or supplementary pipeline should be evaluated independently of the appropriate government agencies. 

Approval time frames must be reasonable. Keystone was approved by the Department of State and 11 cooperating agencies. It 

has been exceptionally comprehensive. There was rigorous environmental review and ample opportunity for public input and participation. 

In summary, the needs of the Nation and special interests were 

both considered, the Keystone Pipeline met all regulatory hurdles, 

and it should be allowed to proceed without further delay. 

Finally, I would like to point out that it is North American products that meet the high quality standards for steel products in general and this pipeline in particular. The economic boost the energy 

renaissance will provide in terms of the increased production and 

jobs should be benefits enjoyed by north Americans, not foreign 

countries flooding us with subsidized and unfairly traded imports 

that may be of inferior quality. 

We in the steel industry will gladly meet or exceed all regulatory 

requirements, but we need our government’s support to ensure that 

once these requirements are met, we can get our U.S. steelworkers 

back to making the products we need to rebuild and repair our Nation’s infrastructure and get our natural resources to market. 

Thank you for your time. 

Mr. TERRY. Perfectly done. I appreciate that. 

[The prepared statement of Mr. Rehwinkel follows:] 

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Mr. TERRY. Members, we have a minute three, but 288 of us 

have yet to vote. We will see you in a little bit. 

[Recess.] 

Mr. TERRY. We have gotten word that Jan is on her way, but we 

can go ahead and start. 

So, Mr. Surma, you are up. 

STATEMENT OF JOHN SURMA 

Mr. SURMA. Thank you very much, Chairman Terry and members of the subcommittee. 

I would like to start by thanking you for devoting an entire hearing to the state of our steel industry. We have long recognized that 

our industry has a true champion in your distinguished colleague, 

Steel Caucus Chairman Murphy, who was just with us, and we appreciate the efforts he puts forth on the policy and political front 

to advance our steel industry’s interests. Your willingness to hold 

today’s hearing speaks volumes about Mr. Murphy’s enthusiasm 

and persistence in promoting an industry that is important to the 

country, especially to his district, where I live, and his State, where 

we are headquartered, and we employ nearly 6,000 people. 

Steel is a globalized industry that competes fiercely on costs and 

quality to win and keep markets. Too often some of our biggest 

challenges come from counterproductive and costly government policy and regulation. The Energy and Commerce Committee knows 

these problems well, and we appreciate your efforts to conduct vigorous oversight of U.S. EPA regulations and guidance, and to attempt to achieve a better cost-benefit analysis of individual 

rulemakings, as well as a cumulative cost of regulatory compliance. 

I will spend my brief time this morning talking about America’s 

natural gas success story and how it is affecting the steel industry 

and our company. 

Just a few short years ago, few could grasp the economic, social, 

and environmental potential that would be unleashed by the discovery and technological mastery of bringing America’s shale resources to market in the form of oil and natural gas. Today, however, we read U.S. Government reports projecting that the United 

States will be the largest energy producer in the world by 2020. 

As a result of this new supply source and our ability to extract 

it safely and economically, there is a renaissance under way in the 

manufacturing sector. It is propelled by the availability and competitive pricing of natural gas. Electric utilities; industrial users, 

including refiners, chemicals, steel, and the transportation sector; 

and households are all turning to natural gas as a clean and costeffective energy source. 

United States Steel Corporation has been manufacturing highquality steel products for more than 100 years. Since 1901, our 

products have included pipes and tubes for energy industry customers, and today we are the largest supplier of these products in 

North America. 

As the energy industry has increased its domestic exploration 

and production efforts, new markets have emerged for steel tubular 

products and services. The energy sector has been a rare bright 

spot for us during a challenging period of economic recession and 

painfully slow growth in the rest of the economy. 

66 

We built and invested in a new joint venture in northern California to produce large-diameter spiral-welded pipe to serve pipeline and distribution customers. We are designing new grades of 

steel and new products, such as our PATRIOT and USS LIBERTY 

premium connections to serve the exacting requirements of shale 

drilling and production. We are adding new capabilities at our operating facilities to serve our customers’ growing and changing 

needs, including a new $100 million finishing facility in Lorain, 

Ohio, began operations in late 2011, created 100 new full-time jobs, 

and the refurbishment and reopening of McKeesport Tubular operations just south of Pittsburgh. 

U.S. Steel is also one of the country’s largest natural gas consumers. In fact, we consume all forms of energy, including natural 

gas, coal, coke, electricity, and biomass. To give you an idea of our 

natural gas use, in 2012, U.S. Steel used more than 130 million 

MMBTUs of natural gas across our North American facilities. So 

ever $1 change on the NYMEX is over $100 million impact on our 

bottom line on an annual basis. 

The current competitive price situation has been very positive for 

our steel-producing activities, where we use 6 MMBTUs per ton of 

steel shipped. Here in the U.S. Those 6 MMBTUs cost us around 

$25. In Europe, where we also operate, those same 6 MMBTUs cost 

us close to $75. Twenty-five dollars here, 75 in Europe. That is 

called being competitive, and that is reality. 

We are as concerned as anybody about prices and volatility, but 

we also have great confidence in the ability of our domestic share 

reserves and the energy industry to meet America’s natural gas requirements if they are permitted to do so. 

Competitively priced natural gas has enabled us to enhance our 

industrial processes and technologies, while improving our environmental performance along the way. As you know, natural gas emissions contain about half the greenhouse gases present in coal emissions. So every ton of coal we can replace with natural gas helps 

us to reduce our total emissions. 

One example is increased injection of natural gas to our blast 

furnaces in order to reduce our usage rates for coke, which we derive from coal, an important material in our iron-making process. 

We now have the ability to the optimize the blend of fuels to attain 

the lowest carbon cost for each particular furnace as well as to 

make adjustments to maintain that cost based on the changing relationship between coke, injection coal, and natural gas. 

Let me close my remarks with a couple of comments concerning 

the recent surge in imported steel products generally, which my 

distinguished colleagues have discussed, but specifically on pipe 

and tube imports. 

In 2010, the U.S. Imported almost 2.3 million tons of oil country 

casing and tubular goods used in exploration in developments of oil 

and natural gas. Last year the U.S. Imported over 3.4 million net 

tons of these high-tech, high-value-added products, an increase of 

more than 51 percent over a 2-year period. 

Some foreign production have been even more aggressive. Since 

2010, casing and tubing imports from South Korea are up more 

than 58 percent, imports from Taiwan are up more than 88 perVerDate Nov 24 2008 11:53 Aug 14, 2014 Jkt 037690 PO 00000 Frm 00072 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-23 CHRIS
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cent, and imports from Saudi Arabia are up more than 420 percent. 

Same story is true for many other pipe products. 

Even though the last year featured a relatively strong market for 

OCTG, public pricing sources estimate that U.S. Prices of casing 

and tubing fell by as much as $200 per net ton. Very disconcerting 

following large capital investments to serve the sector by our company and others. 

Let me just conclude by saying that the shale gas revolution 

holds great promise for American industry and workers. We believe 

the import surge problem calls for strong responses from all who 

believe that true market-based competition is the best pathway to 

prosperity. The time has come for a strong global consensus that 

winners and losers in the steel business should be determined by 

hard work, innovation, costs and competition, not by market-distorting government programs. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Mr. Surma follows:] 

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Mr. TERRY. Mr. Murphy wanted you to have more time to say 

nice things about him, but he wasn’t here to hear your beginning, 

so I am going to have to deny that request. 

Mr. Rippey. 

STATEMENT OF MICHAEL G. RIPPEY 

Mr. RIPPEY. Mr. Chairman and members of the subcommittee, I 

am Mike Rippey, president and CEO of ArcelorMittal USA. On behalf of my company and its 20,000 U.S. Employees, I want to thank 

you for holding these hearings on the future of American manufacturing. 

If I can leave you with only one thought today, it is this: The 

American steel industry represented by those at this table is simply not your grandfather’s or even your father’s steel industry. The 

industry represented here operates at the cutting edge of material 

science. It produces high-technology solutions for its customers. It 

does so with increasingly advanced and, I might add, expensive 

equipment operated by a highly skilled and tech-savvy workforce. 

Its employees are better paid than almost any industrial workers 

in the world. In short, it provides great jobs for American workers 

and for our country. 

You have my full testimony, so I won’t address all the issues 

raised in it, but there are two that I would like to highlight now, 

and I am happy to answer questions on the others. 

First, let me address how we are supporting our auto customers. 

ArcelorMittal is the number one worldwide supplier of automotive 

steels. One out of every five cars in the world is made of 

ArcelorMittal steel. So you can understand that we work hard 

every day to meet the ever-changing needs of our auto customers. 

Since the early 1900s, steel has been the standard material for 

car body construction. It is strong, moldable, and low cost. But customer expectations and government regulations such as CAFE 

have challenged automakers to increase safety, improve fuel economy, and reduce CO2 emissions all at the same time. A huge challenge. I am here today to tell you that the steel is meeting the challenge. 

When the Transportation Department and EPA first announced 

the goal of bringing the fleet to a Corporate Average Fuel Economy 

of 54 1⁄2 miles per gallon by 2025, there were those who proclaimed 

that this was simply game over for steel. We knew otherwise. So 

to demonstrate this, we obtained from EPA and NHTSA the very 

computer models used to assess fuel technology and set standards. 

These models show that weight reduction we can achieve with advanced steels combined with power train improvements can indeed 

get 54 1⁄2 miles per gallon. The models also show that steel gets the 

fleet 54 1⁄2 miles per gallon at a lower cost than other materials. 

We understand that part of the objective of this standard is to 

reduce greenhouse gas emissions. We urge the subcommittee to 

make sure that CAFE regulations measure the full impact of materials on the environment, from cradle to grave, or over the life 

cycle. Models show that steel gets the fleet 54 1⁄2 miles per gallon 

with a lower total life cycle carbon footprint than other materials 

that are significantly more energy and emissions intensive. 

76 

We can achieve these incredible technological advances in automotive and many of our other product applications because of the 

innovation of our workforce, the hard-fought relative prosperity of 

the domestic steel industry, and our R&D initiatives. But that 

prosperity is threatened every day. That is why we need your help 

to transform America’s vital manufacturing base and to ensure a 

secure job future for our workers. 

One of our highest priorities must be to identify, encourage, and 

train manufacturing workers in the future. In the next few years, 

because of retirements, we face having hundreds of job openings 

left unfilled either because of today’s young people have forgotten 

about manufacturing, or because they lack the skills and work values we need. 

To address this shortage ArcelorMittal initiated Steelworker for 

the Future in 2008, an associate degree program in partnership 

with great community colleges located near our plants. We work 

with local high schools to attract science- and math-savvy students 

to this program, where they get classroom training at a reasonable 

cost. Then we offer them paid internships at our plants. Qualified 

graduates are offered full-time jobs when they finish this program. 

If they don’t want to work for us, they still end up with a set of 

skills for a lifetime, these skills that will allow them to be valued 

by other manufacturing companies. 

I would urge the committee to look closely at private programs 

like Steelworker for the Future as a possible template for a national campaign to educate young people about the incredible possibilities that today’s manufacturing industries offer. With thousands 

of great jobs going begging every year in manufacturing, it is time 

we made a national priority to value and train people who make 

things. 

Mr. Chairman, once again, thank you for the opportunity to testify, and I look forward to your questions. 

Mr. TERRY. Thank you. 

[The prepared statement of Mr. Rippey follows:] 

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Mr. TERRY. Now Ms. Pena Lopes. Appreciate your being here. 

STATEMENT OF YVETTE PENA LOPES 

Ms. PENA LOPES. Thank you. Good morning. 

Chairman Terry, Ranking Member Schakowsky, and members of 

the subcommittee, I am Yvette Pena Lopes, deputy director of the 

BlueGreen Alliance. On behalf of my organization, our 14 national 

labor and environmental partners, and the estimated 15 million 

members and supporters they represent, I want to thank you for 

holding this hearing today. We appreciate the invitation to testify 

and are honored to join the other panelists from the Congressional 

Steel Caucus and the steel industry; in particular, the CEOs of 

ArcelorMittal, Allegheny Technologies, and EVRAZ, who are each 

valued members of the BlueGreen Alliance’s Corporate Advisory 

Council. 

United Steelworkers and the Sierra Club founded the BlueGreen 

Alliance in 2006 and have since grown to incorporate 12 other labor 

and environmental organizations to create an alliance built with a 

wide variety of priorities and backgrounds. Our partners have come 

together to move America towards a 21st century clean economy, 

and manufacturing has consistently been a major focus of the alliance. 

The economic downturn and years of shifting manufacturing production took a significant toll on U.S. Manufacturing and their 

workers. America has begun to change this, but much more needs 

to be done to bring these jobs back and ensure that American manufacturing, and the steel industry in particular, are drivers of 

America’s 21st century clean economy. 

To achieve this rebirth, we must implement the following five 

drivers of American manufacturing. First, we must rebuild our Nation’s infrastructure. Investment in our infrastructure can yield tremendous benefits, including jobs and expanded demand in our domestic steel sector. One out of every four of the Nation’s bridges 

are structurally deficient or functionally obsolete. Nearly a quarter 

of the Nation’s bus and rail infrastructure is in marginal or poor 

condition. Across the country 700,000 tons of steel plate is used annually in bridge and building construction projects. If a properly 

structured infrastructure program is implemented, job creation for 

the manufacturing sector could clear more than 250,000 new jobs. 

Second, we must deploy more industrial energy efficiency. Energy efficiency leverages productivity and power from resources 

that in many cases would otherwise literally vanish into thin air. 

When combined with smart policies aimed at minimizing the economic impact to power providers, efficiency gains can be a win for 

manufacturers, utilities, workers, consumers, and the environment. 

Third, you must integrate more advanced transportation and 

clean energy into our economy. Whether it is more efficient technology in advanced materials for automobiles, commercial scale 

wind turbines, or rail lines, steel is a necessary component for 

these industries that will drive the 21st century. 

Last year the Obama administration set forth the strongest clean 

car standards in a generation, making conventional technology significantly more efficient and using advanced materials to make our 

cars stronger yet lighter, which will make the biggest contributions 

85 

towards getting the American vehicle fleet to 54.5 miles per gallon 

over the next 12 years. 

Over the next decade, an estimated $2.3 trillion will be invested 

in clean technologies; however, according to Ernst & Young, the 

U.S. Renewable energy investment climate is losing attractiveness, 

while countries like China and Germany are gaining ground. Existing policy support for clean energy does not provide adequate longterm certainty for the industry to succeed. We must implement 

long-term policy certainty. 

Fourth, we must ensure products and components are made in 

America. Buy America policies reflect where the jobs are, not where 

the manufacturing companies are headquartered or incorporated. 

This approach ensures that taxpayer dollars are reinvested in jobs 

in communities here at home. 

Fifth, we must continue to support research and development. 

Manufacturing is responsible for 70 percent of all private-sector research and development spending and 90 percent of all American 

patents. 

The Department of Energy’s Advanced Manufacturing Office recently launched the Innovative Manufacturing Initiative. One of 

the projects selected was a partnership between DOE, 

ArcelorMittal, U.S. Steel, and others to produce flash ironmaking 

technology, which is a cleaner, coke-free way to produce iron from 

abundant domestic iron ore concentrates and natural gas with a 30 

to 50 percent improved energy productivity. We must continue to 

support R&D such as this as well as the work being done at the 

Department of Commerce. 

Mr. Chairman, Ranking Member Schakowsky, and fellow members of the subcommittee, we truly believe that these five measures 

will go a long way toward helping America and its workers reinvigorate the steel sector, U.S. Manufacturing, and the middle class, 

and move America to a clean economy while ensuring that we continue to address climate change. 

Once again, thank you for the opportunity to testify today. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Ms. Pena Lopes follows:] 

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Mr. TERRY. And thank you to all of our folks here on the panel. 

Very well done. 

This now starts our question period. We get to ask you questions, 

and you get to answer. And it is not under oath, but we still expect 

you to be honest and truthful with us. That is right. You had to 

agree to that and sign that. That is right. 

So most of the discussions really boil down to a few areas that 

there seems to be consensus among you, and that is the trade policies, energy policies. And then amongst the energy policy is being 

cleaner, more efficient. And then I should add workforce. So I am 

going to focus my first round of questions on energy, and probably 

to Mr. Surma and Mr. Ferriola. I’ll start with you, Mr. Ferriola. 

What is your current worry about energy—what is the one thing 

in that general field that worries you the most or concerns you the 

most? 

Mr. FERRIOLA. Well, we believe that the best way to get sustainable growth in the economy is through job creation. We need to create more jobs here at home. To do that, we need a reasonably lowpriced, affordable, and available energy source. Natural gas is a 

great answer to that need. 

Our concern is that we will export that competitive advantage 

away. We are not saying that you cannot export natural gas. We 

believe that you need to show concern about both the producer and 

the user of that natural gas, focus on restoring our manufacturing 

base here in America first, and at that time, if we have excess gas, 

then we should export it. 

Mr. TERRY. Mr. Surma. 

Mr. SURMA. As I mentioned in my remarks, Mr. Chairman, our 

company is very large user of natural gas, and we are also the largest pipe producer and providing pipe and other services to natural 

gas producers. So inside our company we have the same tension 

that may be felt across your committee. We believe that a middleof-the-road approach, cautious approach, to natural gas, LNG exports would be appropriate, as my distinguished colleague just 

mentioned. 

We have to keep a close eye on the supply side. I think it would 

be important, and we would very much be in favor of a policy, administration Federal policy, that encourages continued development of domestic energy sources, natural gas liquids, and oil, and 

with pipeline transportation, because it is safer and better, as my 

colleague said, but also uses a lot of steel. A policy which says no 

exports we think is really outside of what WTO would want anyway. A policy which says unbridled exports are fine I think causes 

us supply worries. So we think a process that is cautious, that allows the market to give us some information as these large projects 

would come on stream, and balances the supply/demand so that 

large users like us aren’t at risk. 

The supply side needs to be encouraged by Federal policy that 

should encourage very high environmental standards. We should 

make no compromise on that. But I think it can be done safely in 

an environmentally sustainable way while still providing enormous 

economic benefits, employment, balance of trade among other 

things, to domestic industry. So a favorable energy policy that encourages domestic development and a cautious approach to exports. 

104 

Mr. TERRY. Anyone want to add to that testimony? Anyone? 

All right. In regard to natural gas sustainability, availability, reliability, affordability, do any of you worry about EPA regulations 

or potential regulations? 

Mr. Surma. 

Mr. SURMA. I maybe was not as explicit as I should be. We think 

regulations that would be designed to impede the continued safe 

and economically sustainable development of domestic natural gas 

would be a terrible idea. We think the domestic natural gas production process has been demonstrated to be safe. They should be held 

to very high standards. 

But if one wonders why domestic natural gas is such a success 

story in the U.S., this is the only place that there are rocks with 

gas in them. OK? Argentina, Poland, Wales, China, everywhere. 

The reason it is successful here is because we have an entrepreneurial culture, capital markets that allow capital to flow to a good 

use like that, open access pipelines, and a market. And we think 

that that process of entrepreneurial spirit should be allowed to continue with very high standards. No problem with that, and I think 

the good companies know how to do that. 

But we think that the supply side of this is extremely critical if, 

in fact, the other benefits are intended to flow. We use 130 million 

MMBTUs of gas per year, and I don’t want to have to worry about 

where it is going to come from, and I would rather not see it at 

$10 an M, which is what it was not too long ago. 

Mr. TERRY. Yes. I remember that time. 

Anyone else want to add on to that? 

Mr. Ferriola. 

Mr. FERRIOLA. I think my colleague said it very well. 

Mr. TERRY. All right. Then I will recognize the gentlelady from 

Chicago, the ranking chairman, Ms. Schakowsky. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

I wanted to ask Ms. Pena Lopes, I wanted to begin with this. I 

feel that the greatest challenge facing humankind on Earth today 

is if we—is climate change, and that it can disrupt nations and 

their stability and create massive disruptions. Obviously your coalition has brought together what some see as disparate partners, and 

I am just wondering how those—how you have resolved those kinds 

of issues in your coalition. 

Ms. PENA LOPES. Thank you for your question, Ranking Member 

Schakowsky. 

So all of our partners are committed to addressing the issue of 

climate change. Everybody cares and wants a cleaner, more safer 

Earth, I guess you can call it. And also everybody embraces the potential opportunities that come from addressing climate change as 

well. 

From our perspective, whether in the past when we supported 

comprehensive climate change, or even now as we are working 

through the issues of the various EPA regulations on greenhouse 

gases that are potentially before us, we really just—we see this as, 

again, not just an opportunity to combat climate change, but a real 

opportunity to create jobs and make our industries and companies 

more efficient. 

105 

On the issues that we don’t—I am sorry. On the issues that we— 

there are differences, and there are quite a few, we really provide 

a safe table to understand each other’s perspectives, but then do 

not take a position on them in the end if that is where we land. 

Mr. SCHAKOWSKY. Your written testimony cited a 2009 McKinsey 

& Company study that stated that the U.S. Can reduce primary 

energy consumption by 21 percent by 2020, saving the U.S. $47 billion a year, just by unlocking potential for energy efficiency in the 

industrial sector. So I am wondering if you could elaborate a bit. 

Ms. PENA LOPES. Sure. 

Mr. SCHAKOWSKY. And then any of the others that would want 

to contribute to that. 

Ms. PENA LOPES. Great. Thank you for your question. 

We see a lot of opportunity in industrial efficiency. As you know, 

the Obama administration several months ago put forward an Executive Order with respect to industrial efficiency and to work towards that. There is also legislation that is about to be introduced. 

But we have seen great examples like with ArcelorMittal. There 

was a Department of Energy ARRA grant of—actually, it was a 

matching grant for $31 million that really led to great, great savings where they were actually able to generate and regenerate 

their energy. This, of course, means, again, cleaner, more efficient 

industry and also——— 

Mr. SCHAKOWSKY. If I could just—I wonder if Mr. Rippey would 

want to comment on that. 

Ms. PENA LOPES. Yes. 

Mr. RIPPEY. The project that Ms. Lopes refers to is our number 

7 blast furnace in East Chicago, Indiana. It is the largest blast furnace in North America. Prior to receiving applying for and receiving that grant, the total amount of the project was $63 million, we 

were simply flaring the waste gas from that furnace. We were able, 

in the presence of the grant and installing this equipment, to capture 100 percent of that waste gas and convert it to electricity, 

which, of course, can be used to supply homes and every industrial 

application for electricity that we can imagine. So it is a wonderful 

example of how industry can continue and should improve its use 

of energy resource in this country. 

I might add that since 1990, the domestic steel industry has reduced its use of CO2 by nearly 30 percent and its greenhouse gas 

emissions by 33 percent. So I think we have a track record in this 

area of success, and we should continue to challenge ourselves in 

this area. 

Mr. SCHAKOWSKY. And is it true that it saves your company 

nearly $20 million? 

Mr. RIPPEY. Yes, it did. 

Ms. SCHAKOWSKY. A year? 

Mr. RIPPEY. Per year, yes, that is correct. 

Ms. SCHAKOWSKY. Pretty impressive. 

Mr. RIPPEY. Win-win project all the way around, as people define 

win-win. 

Ms. SCHAKOWSKY. Excellent. 

Did you want to say something, Mr. Surma? I didn’t know if you 

wanted to add anything. 

106 

Mr. SURMA. Just briefly. In our company’s case, as I mentioned, 

we are using natural gas now to inject into our blast furnaces, 

thereby reducing the amount of coal-based coke that we have to 

use by significant amounts that financially probably save us on the 

order of $100 million a year. But the emissions reductions on that 

are also significant, and we are doing that because it is in our best 

business interests to do so, and it is entirely consistent with the 

kind of emissions reductions you would like to see. 

One of the reasons that our industry has the lowest per-unit carbon emissions per ton in the world is because we are also the most 

recycled material of all time. 

Ms. SCHAKOWSKY. Do you mean the U.S. Steel industry? 

Mr. SURMA. Yes. 

Ms. SCHAKOWSKY. You are comparing——— 

Mr. SURMA. Versus the rest of the world. 

In the U.S., if we have roughly 100 million tons of production, 

two-thirds of that is from recycled material, scrap metal. It is the 

highest recycling rate of all time, more than aluminum, glass, plastic times four. The best recycling system of all time because economics drives it. And that is one of the reasons we are reusing the 

energy and the labor and the materials over and over again. 

Almost all the steel that has ever been produced since the 1890s 

is still in use today. It doesn’t go to a landfill, it goes back in the 

system. So it is a wonderful system that allows us to enjoy economics and emissions levels which are far superior to most of the rest 

world. 

Ms. SCHAKOWSKY. Thank you so much. I am going to have to 

yield back. 

Mr. TERRY. Thank you. 

Mr. McKinley, you are—I am sorry, Mr. Lance is recognized for 

5 minutes. 

Mr. LANCE. Thank you, Mr. Chairman. I will be brief. 

To Mr. Harshman, in your testimony you state that your industry continues to see substantial evidence of unfair trade practices, 

such as dumping and foreign governmental subsidies to the specialty steel sector. Might you be able to describe with some specificity what these practices are, and who are the worst offenders, 

and what trade enforcement options do you believe are at your disposal? 

Mr. HARSHMAN. Sure. Thank you. 

First of all, across all of our alloy systems, we are very diversified starting with stainless steel and getting into the much higher, 

more technological, higher barrier to entry of titanium and nickel 

alloys. But that competition is coming, and it is coming from the 

same places. We see the more commoditized products——— 

Mr. LANCE. Coming from Asia? 

Mr. HARSHMAN. Coming from China, it is coming from Korea, it 

comes from Russia in terms of titanium. Eventually, longer term, 

10, 15 years down the road, it will come from places like India. 

Mr. LANCE. And the titanium is found where? 

Mr. HARSHMAN. Titanium as an element is the seventh most 

common element in the Earth’s crust. And it starts either with ore 

or rutile, and from that is produced titanium sponge, which is a 

107 

raw material that we then melt and alloy and produce into the 

kind of products that make rotating components in a jet engine. 

On the dumping side, really where we see it in our business 

today is more on the more commoditized business of stainless steel. 

And we can go back and where the U.S., in 2012—where the U.S. 

Economy began to weaken after a reasonable recovery in the first 

quarter from a very challenging 2011, we saw—at the same time 

as our demand started to decrease, we saw significant or some 

weakening in the Chinese market from a production standpoint. 

And we can track when the imports from China began in March 

and April, really the surge of imports into the U.S. Market in that 

same time period where the Chinese economy started to weaken, 

significant dumping of product in the U.S. at very low prices, so 

that today there isn’t—looking at just stainless steel, there isn’t a 

stainless company in the world that is profitable. And that has to 

do with capacity, a large part of the capacity——— 

Mr. LANCE. What should we do about that? 

Mr. HARSHMAN. Well, part of what—we are not going to control 

what happens in the Chinese market, but we can, as a Nation, 

make them live up to their commitments that they made when 

they were admitted to the WTO, and, in addition, look at the manipulation of currency, which has to be viewed as a significant market distorter. 

Mr. LANCE. We certainly urged the administration to do that. Is 

there anything we can do in our responsibilities as the legislative 

branch? 

Mr. HARSHMAN. Keep pushing it. I know there was a bill introduced yesterday that continues to focus on the Chinese as a currency manipulator; not just China, but other nations of the world 

as well. And we are at a trade war. We are in a trade war today. 

And it is represented by all of the companies sitting at this table, 

and longer term, as you get into the more advanced alloys and 

alloy systems, the capabilities and the technologies that this country has today the Chinese aspire to, the Indians aspire to, and 

longer term the Vietnamese aspire to. 

Mr. LANCE. Thank you. 

Do the other members of the panel agree with what Mr. 

Harshman has said? 

Unanimity, let the record show. So rare here in Congress. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Mr. TERRY. Thank you. 

At this time we recognize the kind gentleman from North Carolina Mr. Butterfield for his questions. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. I apologize for being late to you, but you know the routine that we keep 

around here. I left the floor a few minutes ago after we passed that 

continuing resolution. It is going to keep the government open now 

until September 30th. At least we have that behind us. Now I am 

preparing to get in my automobile and drive 4 hours to my district. 

So I apologize for being late. 

But, Mr. Chairman, I thank you for holding today’s hearing on 

the American steel industry. And I just want to say publicly that 

plate steel is a very important part of my congressional district, 

and Nucor has a very robust facility there in my district. And while 

108 

they are providing good steel for the world, they are also providing 

good jobs for the people that I represent. And so steel is so very 

important to me. 

It is clear from today’s testimony that we can do more to support 

domestic steel production. The U.S. Is the third largest producer of 

steel in the entire world, but we rank number 12 in exports. We 

must develop and support policies that disincentivize foreign steel 

producers from circumventing existing antidumping and countervailing duty orders. 

And so the gentleman from Nucor Mr. Ferriola, I appreciate you 

and all of our other witnesses for being here today. You are the 

president and CEO of Nucor. And, as I said in my opening statement, Nucor is a very large steel producer in my district. Nucor 

has a tremendous presence in the district and is a great success 

story for eastern North Carolina in domestic steel production. At 

their Hertford County facility alone, Nucor’s 458 employees 

produce an astounding 1.6 million tons of steel plates every year. 

And I have been there, and I have seen it on many occasions, and 

it is really something to behold. Nucor recently completed a $110 million heat-treating facility 

that now enables them to manufacture steel armor plates for the 

military, having a direct impact on the safety and security of our 

forces. 

As you may know, I have toured the facility and have gotten to 

know your team very well. They are hard working and dedicated. 

And on behalf of Hertford County and all of us in the district, we 

are happy to have them. 

And so, to the witnesses, I will direct this question to, I guess, Mr. Ferriola. I highlighted the $110 million capital development 

project in one of my counties. When so many businesses are 

downsizing, layingoff employees, or, even worse, closing entirely, 

what motivated you and your company to make such a large capital investment in a rural community? 

And I might also tell my friends that my district is the fourth 

poorest district in the United States of American. People don’t realize that, but we are right at the bottom. And what motivated you 

to make this investment? 

Mr. FERRIOLA. Fate and confidence in our team, our workers, 

and, frankly, in the American worker. We believe that if we are allowed to have a level playing field, American industry, the American worker, the Nucor teammate will compete very successfully on 

the world market. 

So we are not afraid to make these type of investments. We do 

ask for your help in making sure we get that level playing field so 

that we have the opportunity to earn the types of return on those 

investments that we need to continue to provide long-term, sustainable, high-paying jobs for Americans. 

Mr. BUTTERFIELD. And it makes you competitive with anyone in 

the world; is that right? 

Mr. FERRIOLA. We believe that we are more than competitive 

with anyone in the world. 

Mr. BUTTERFIELD. Thank you. Thank you so very much. 

I yield back, Mr. Chairman. 

Mr. TERRY. Thank you, Mr. Butterfield. 

109 

At this time, Mr. McKinley. 

Mr. MCKINLEY. Thank you, Mr. Chairman. I have got probably 

20 minutes of questions to try to get in to 5, so I don’t think we 

are going to be able to get through all. 

But I come from an area that has been markedly affected by the 

demise of the steel industry, the northern panhandle of West Virginia. We used to have 30,000 steelworkers in those communities. 

So you look at that as 90,000, maybe 90,000 citizens, that were affected, that have lost their jobs. So I am very frustrated with it. 

We are not Philadelphia or New York or Chicago or St. Louis. 

This is America, these little towns that are being affected with it. 

And we were told over the years—I am going back just in the 

1980s that we had 30,000. We were told that it was the dumping 

and currency manipulation was much of the fault of the demise of 

the steel in our valley. 

I applaud ArcelorMittal for holding on to the tin mill in Weirton, 

but you drive through that town, see the rest of it all boarded up, 

it just takes your breath away to think of all the hundreds of thousands of people that are hurting as a result of this loss. 

So my question in part is why—what are you hearing why they— 

the administration won’t cite China as a currency manipulator? 

Does anyone know why they won’t do that? If everyone keeps saying it is currency manipulation, but yet the administration won’t 

cite them. 

Mr. HARSHMAN. Yes, I—quite frankly, this has been going on for 

a long time. 

Mr. MCKINLEY. Could you speak up just a little bit, please? 

Mr. HARSHMAN. This has been going on for a long time. This is 

not just within the last 4 or 5 years. So from—this is a national 

problem, right? This isn’t a political issue. But I do think 

that——— 

Mr. MCKINLEY. What——— 

Mr. HARSHMAN. Well, the best answer, the only answer I keep 

hearing, is, well, they’re—we can’t get into a trade war with the 

Chinese. That will start a trade war. And in actuality——— 

Mr. MCKINLEY. So we can just expect to have more Weirtons, 

Martins Ferry, Bel Air just dry up? 

Mr. HARSHMAN. Well, sir, I can’t answer that from the standpoint of the administration or the Congress, but I can tell you from 

the standpoint of a CEO of a large manufacturing company that 

operates in 18 States in the United States, many of whom are represented on this panel, that this is a war. This is a trade war. And 

we can’t stand behind the view that we can’t—that we don’t want 

to upset——— 

Mr. MCKINLEY. Would we be adding to this trade war if we tried 

to level the playing field——— 

Mr. HARSHMAN. I don’t believe so. 

Mr. MCKINLEY. Let me finish. If we were to level the playing 

field by requiring as part of the determination for fair trade or fairness to have our competing nations have the same air and water 

qualities that we have here in America? 

Mr. HARSHMAN. I think that is part of the level of the playing 

field. 

110 

Mr. MCKINLEY. What would happen to American production if 

we caused that to happen, that nations would have to meet our 

standards so that it is a level playing field? 

I am a fellow of the American Society of Civil Engineers, so I am 

well aware of all the bridges and repairs that have to be done. I 

am very concerned that we are going to continue to lose our position. So I—what happens then? 

Mr. HARSHMAN. I think what happens is that you have a stronger U.S. Economy that is growing and providing jobs. That is what 

happens. 

Mr. MCKINLEY. How about, I assume the rest of you would agree 

with that, that that really would have a dramatic impact? I don’t 

know how realistic it is, but I sure think it ought to be a shot fired 

across someone’s bow. 

Yes, U.S. Steel? 

Mr. SURMA. If I could add, Mr. McKinley, last week—the American Iron and Steel Institute always releases our industry utilization statistics.Last week our industry ran at about 73 or -4 percent. 

Last week China set an all-time record production. So in our country, if we need 120 million tons of steel, we are only producing 

about 90-some million tons of that. The rest is coming from places 

that don’t live here. 

As a young auditor, Mr. McKinley, my first client was WheelingPittsburgh Steel. I have been to Benwood, Beach Bottom, 

Follansbee, Martins Ferry. I have been there. It is tragic. And if 

we were running at 85 or 90 percent, those folks would be at work 

today. 

Mr. MCKINLEY. Let me just close in the time frame I have. I 

don’t know whether any of you are aware that there is a potential 

trade barrier or conflict we are having with Canada right now that 

steel pipe—there is a—in the province of Ontario, the regional 

council appeal has banned the use of steel pipe in a $500 million 

water project. Are any of you aware of that, that they are banning 

steel pipe? They are replacing it with concrete. 

And what I want to make sure is that we stop this trade problem 

early before it becomes contagious and other people pick up on that 

issue. So any of you could look into that, I would love to hear back 

from you. 

Mr. TERRY. Thank you, Mr. McKinley. 

Now Mr. Guthrie from Kentucky. 

Mr. GUTHRIE. Thank you, Mr. Chairman. Appreciate you having 

this hearing because this is important. 

My family is in manufacturing. My dad worked for Ford in an 

aluminum-casting facility, and now have one that we run—after 

that plant closed, we had one of those—well, it is no longer there, 

but a place you drive and say, wow, there were a lot of good, hardworking people who made their living there. And it was just a 

tough, tough decision Ford had to make. And they had to make it 

to stay in business back in the early 1980s. 

My question really, well, first of all, gets to—we are talking 

about the environment on the green initiatives. We are supplier to 

the automotive business before I came here, so I have been in 

countless manufacturing facilities. And I am sure everybody up 

here, because I know the quality of your organizations, have your 

111 

environmental policy, your—how you deal with your community, 

how you deal with your neighbors. And maybe it is different than 

it was before I was going around, but everybody—you—even if you 

wanted to, which you don’t, you couldn’t get away with not being 

a good neighbor anymore. 

So the industries you are talking about—I think Al Gore said one 

time, ‘‘Pollution is really inefficiency.’’ But you can’t run everything 

100 percent efficient, but everything you get down to that is reasonable is just benefiting your business. Isn’t that what you guys 

are figuring out to do to be more profitable? And being good stewards of the environment. 

And to the point, you may see me sometime around here, if I see 

an aluminum can in a trash can, I will usually reach in and get 

it out, because if it goes into a landfill, it does nothing for us; if 

it goes back in the stream of commerce, it makes my product 

cheaper because we buy scrap to form into—so corporate America 

and manufacturing America are concerned about the environment 

and have done great strides. 

And I went to school on the Hudson River, so I know there are 

issues there that you can’t ignore that things have happened in the 

past, but we are moving forward and working together, and I appreciate that. 

But there is a concern, I think it was in Mr. Harshman’s testimony, written testimony, about the EPA mercury source control requirements. And I think you said that would effectively preclude 

the construction of any new facilities in the U.S. Could you clarify 

that? Because we are struggling with that in our area as well. 

Mr. HARSHMAN. Yes, well, from some of the regulations that are 

being discussed, as it pertains particularly to the specialty metals 

industry, and more specifically to nickel alloys, the EPA is discussing the—significantly lowering the standards for the measurement of mercury, which would be at a level that technology doesn’t 

even enable you to measure. And when you look at the amount of 

mercury that is a part of the process from a specialty metals industry standpoint, it is negligible. It is at levels that is not contributing to any environmental concern from a scientific fact data 

standpoint. 

And the introduction of levels of—that are below the ability of 

companies to measure is not, in our view and in the industry’s 

view, the responsible approach to how can we produce and have a 

viable economy with a safe and responsible environmental compliance. 

And I think that the businesses in this country—and you are 

right, we have learned the lesson over the past 40 and 50 years, 

and the amount of investments that have gone on in the metals 

and steel-related industries over the past 30 and 40 years, all of 

which have to be funded by profits and profitable growth, every investment in the $1.1 billion investment we are making today in our 

new hot rolling and processing facility in Brackenridge, Pennsylvania, is state-of-the-art control systems with state-of-the-art environmental systems, and advances the state beyond our 60-year-old 

mill. 

Mr. GUTHRIE. We have that in our area. We have a coal-fired 

plant that supports aluminum smelter. The aluminum smelter uses 

112 

as much electricity as the city of Louisville. And these maximal 

achievement standards—it is not measurable. This electric company has got to decide are we going to invest this kind of money 

to serve one client, and if—and so there is—these are United Steelworker jobs that pay the kind of wages you are talking about, and 

this is real. I mean, these are real jobs you can point to that are 

as risk. 

I am going to yield the rest of my time to Mr. McKinley. 

Mr. MCKINLEY. Thank you. 

I have one last question with that, and that has to do with the 

International Trade Commission. When they—when they make a 

determination that someone is guilty of dumping, it is my understanding that that money then, the duties collected, are transferred 

to the Treasury. 

Why don’t they go to the companies that are affected and convert—and by virtue of that extension to the men and women that 

have worked in the steel mills that have lost their jobs as a result 

of it? Do any of you—can any of you respond to that in 11 seconds 

that we have left? 

Mr. FERRIOLA. I can do it in just a few seconds. We agree. At 

least I agree. 

Mr. TERRY. Do everybody agree with Mr. Ferriola’s comment? 

All right. Mr. Murphy from Pennsylvania, you are recognized for 

your 5 minutes. 

Mr. MURPHY. Thank you. 

Ms. Lopes, quick question. Isn’t it true that the BlueGreen Alliance and your members have opposed the Keystone pipeline? Yes 

or no? 

Ms. PENA LOPES. We have some members——— 

Mr. MURPHY. Yes or no. I believe it is yes. 

And isn’t it a true——— 

Ms. PENA LOPES. We have a position. 

Mr. MURPHY. Is it true or not? 

Ms. PENA LOPES. We have no position on Keystone pipeline. We 

have some members who are in support of Keystone and others 

who are against it. 

Mr. MURPHY. And isn’t it true that some of your members have 

been opposed to coal use, coal mining, coal exports, and coal-fired 

power plants? 

Ms. PENA LOPES. Some of our environmental partners, yes. 

Mr. MURPHY. I will take that as a yes. 

Do you have a buy American policy for BlueGreen Alliance? 

Ms. PENA LOPES. Yes. 

Mr. MURPHY. OK. Are you going to be in support of our Currency 

Reform and Fair Trade Act, 1276, that is going to deal with Chinese and other countries’ currency manipulation? 

Ms. PENA LOPES. I will be happy to look at it. 

Mr. MURPHY. OK. Thank you. 

Mr. Surma, sorry I wasn’t here to hear your positive comments, 

but thank you. 

You have made a lot of investments in domestic tubular production in recent years. How did those investments relate to the import situation? 

113 

Mr. SURMA. As I mentioned in my comments, Congressman Murphy, we invested, among other things, $100 million in a new plant 

in Lorain, Ohio, just west of Cleveland, because our customers said 

they were concerned about the availability of certain types of casing for down-hole applications and some of the higher-end alloys 

and finishing that we could provide; $100 million, 100 new people. 

And we are working there today. 

That will stay invested for another 25 or 30 years, and that was 

on the assumption in good faith that there would be a level playing 

field for all of us. Since then, as I mentioned in my testimony, Korean exports up a huge percentage; Vietnam from zero to 240 percent; Saudi Arabia, 400 percent. That is taking away our markets, 

and we have had to lay a few crews off. Most of them are back now, 

fortunately. 

But when we make investments, we expect to get a return, we 

expect a level playing field. What we don’t expect is to have to have 

those 100 people compete with governments. And we think that is 

totally unfair, and we encourage you and you colleagues, and I 

know you do this, to be vigilant in maintaining our trade laws and 

strident in ensuring their strong enforcement. 

Mr. MURPHY. Thank you. 

Now, the Steel Caucus has also led efforts to convince the International Trade Commission of antidumping and countervailing duties and positions, et cetera. I wonder if you could say, are you convinced that the ITC is slow to respond or unconvinced there has 

been an injury to domestic steelmakers? 

Mr. SURMA. From our company’s standpoint, yes, we think the 

system is terribly organized and terribly slow to respond. We operate in other regions. Almost every other region in the world—EU, 

Brazil, Russia, Canada, anywhere else—they are mostly administrative actions that are taken realtime when injury takes place. In 

our case, we have to prove either injury or threat of injury, which 

the ITC has, to their convenience, largely defined as a near-death 

condition. 

And so several years ago when we had a trade case against Chinese OCTG imports, we had 10,000 people on layoff, and almost 

every plant in North America negligent was closed. They found 

that to be injury, and even that was a close call. My distinguished 

colleague here reports about a plant that was closed and was found 

not to be injury. That kind of logic escapes us. 

And we think the system is such that the injury has to be so severe and so prolonged that it almost makes it too late when relief 

is actually provided. We would like to see a more accelerated process where injury can be determined earlier so we don’t have to go 

to a near-death experience in order to receive relief. 

Mr. MURPHY. Or death. 

Mr. Harshman, I thank you also for being here. I want to ask 

a question about titanium, which is a critical element for jet 

planes, steel armor plate, et cetera, and that is why it is considered 

a specialty metal. 

My understanding is the Commerce Department is considering a 

change in the foreign trade zones which would undermine domestic 

titanium manufacturing. And one of the conditions of a trade zone 

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is you can’t unfairly import foreign goods to resell in America if 

there is an existing industry or provider here. 

Can you comment about what would happen if the Foreign Trade 

Zone Board reversed precedent and allowed foreign-made titanium 

to be sold into the American commerce? 

Mr. HARSHMAN. Well, currently the big non-U.S. Producers of titanium alloys, which are critical for not only commercial aerospace, 

but also for military applications, are VSMPO, which is a large 

Russian and essentially a state-owned enterprise in Russia; the 

Japanese; and emerging—an emerging competitive threat is in 

China. 

And if the—the nature of the titanium industry in the U.S. Is 

really dependent upon the diversification of the markets. It is not 

only—the military spending could not support and sustain a titanium industry in the U.S., even though it is critical to the defense 

of the United States. So you need a viable commercial base, commercial aerospace, an industrial market. Titanium is used extensively in desal plants throughout the world, for example, in chemical processing plants. And all of that works together to make a 

viable U.S. industry of which there is really only three producers 

today in the U.S. 

And what the—the change in some of the foreign trade zone laws 

that would permit the circumvention of the existing dumping duties that are on titanium being imported from those foreign locations into the U.S., if that were allowed to happen, we believe it 

would significantly weaken and dampen the profitability and the 

ability for the U.S. Titanium industry to grow. 

Mr. MURPHY. And, Mr. Chairman, thank you again for holding 

this hearing, and to the ranking member as well, on behalf of the 

million-plus people in this country who are affected by steel manufacturing jobs. It is critically important, and it is a wise choice on 

your part to hold this hearing, for you and Ms. Schakowsky. Thank 

you. 

Mr. TERRY. Thank you. Would you say that again? 

That does conclude our question part. And, boy, I will tell you 

just what an honor to have the high level of steel industry here in 

this room today and participating in this. You have been very helpful. And we understand that steel is a foundational piece to our 

manufacturing in the United States, and we want to be helpful. 

So with that, let us see. I have unanimous—well, I guess I will 

do the unanimous next. 

Thank you. Oh, yes. Also, we all have additional questions that 

we will not be able to give today, but we will submit those to you 

in writing. We will ask you to respond as promptly as you can. And 

remember the Members that are still left here, that they have 10 

working days to submit their questions. 

And I ask unanimous consent to include in the record a statement of C. Davis Nelson on behalf of the Cold Finished Steel Bar 

Institute. It has been reviewed by the minority staff as well. So I 

ask unanimous consent. Not hearing any objection, so ordered. It 

will be submitted and accepted. *

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Mr. TERRY. And at this point we are finished. So thank you very 

much. 

[Whereupon, at 11:54 a.m., the subcommittee was adjourned.] 

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