STATEMENT OF BRETT S. SMITH 

SR. DIRECTOR, GOVERNMENT RELATIONS 

AMERICAN IRON AND STEEL INSTITUTE 

ENVIRONMENTAL PROTECTION AGENCY 

CLEAN POWER PLAN PROPOSED RULE PUBLIC HEARING 

PITTSBURGH, PENNSYLVANIA- AUGUST 1, 2014 

Introduction 

Good afternoon and thank you to the Environmental Protection Agency (EPA) for 

holding these public hearings on the proposed Clean Power Plan (CPP). My name is 

Brett Smith, and I am Senior Director of Government Relations for the American Iron 

and Steel Institute (AISI). 

AISI serves as the voice of the North American steel industry in the public policy arena 

and advances the case for steel in the marketplace as the preferred material of choice. 

AISI is comprised of 22 member companies, including integrated and electric furnace 

steelmakers, and approximately 125 associate members who are suppliers to or 

customers of the steel industry. AISI's member companies represent over three quarters 

of both U.S. and North American steel capacity. 

Steel and other manufacturing industries are the backbone of the U.S. economy. A 

strong manufacturing sector creates significant benefits for society, including goodpaying jobs, investment in research and development, essential materials for our 

national defense, and high-value exports. A robust American steel industry is critical to 

leading the domestic economy. 

Steel Industnj is Energy-Intensive and Trade-Exposed 

A lSI members are doing everything they can to reduce their energy usage, as well as 

their environmental footprint, over the last two decades. The domestic steel industry 

has voluntarily reduced its energy intensity by 28 percent since 1990, while reducing its 

greenhouse gas (GHG) emissions by 33 percent over the same time period. In fact, data 

presented by the U.S. Department of Energy show that the steel industry in the U.S. has 

the lowest energy intensity and second-lowest C02 emissions intensity of any major 

steel producing country. 

Nevertheless, the production of steel is inherently energy intensive, as energy is 

typically 20 percent or more of the cost of making a ton of steel. The industry consumes 

substantial amounts of electricity, natural gas, and coal and coke to make our products. 

Maintaining affordable and reliable sources of these energy sources are critical to the 

international competitiveness of our industry. 
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Steel producers in America are currently under substantial challenges from 

international competitors. The American steel industry is once again facing a surge in 

unfairly traded imports from multiple countries. Countries like China and Turkey 

continue to disrupt world markets by subsidizing the production and exportation of 

steel by their producers. The overall surge in imports has led some steel producers to 

file trade cases on five different products, and a number of facilities have already been 

idled and workers have lost their jobs. In several recent cases, foreign steel producers 

were receiving below market rates for electricity, which constitutes a subsidy. 

These types of foreign government interventions are creating global overcapacity in 

steel and a surge of steel imports into the U.S., inhibiting the industry's ability to 

recover fully from the recent economic downturn. For the steel industry, operating in 

the U.S. under tight margins with substantial subsidized competition from overseas, 

policies that raise energy costs on domestic companies threaten our competitiveness. 

Primary Concerns with Proposed Clean Power Plan (CPP) 

The proposed Clean Power Plan will impose direct requirements on the electric utility 

sector, not on its customers, but it is the customers that will bear the costs associated 

with compliance and reliability risks. Our principal concern is that this may lead to 

higher costs of electricity to large industrial customers like steel, while potentially 

lessening the quality and reliability of the electric supply that is essential for our 

industry to operate and succeed. 

The economic impact will be particularly impactful for the steel industry, given the 

regional differences in current fuel mix for the industry. The CPP will have a 

disproportionate impact on coal-fired utilities, and there is a high correlation between 

the service areas of those utilities and the location of steel production facilities. The 

leading states in terms of iron and steel production in the U.S. are Indiana, Ohio, 

Pennsylvania, Kentucky, Michigan and Alabama. All of these states are heavily 

dependent on coal for electricity production, and in turn, so is our industry. Industrial 

customers, especially steel producers, will be charged to offset the cost of replacing coal 

capacity with other sources, including the cost of new transmission infrastructure. 

Additionally, the impact of other proposed or pending EPA regulations of the utility 

sector should be recognized as well. These regulations, including the Mercury and Air 

Toxics Standards (MATS), the Cross State Air Pollution Rule (CSAPR), coal combustion 

residuals, and Clean Water Act section 316(b) cooling water intake structures, will all 

have an impact on coal-fired utilities, and therefore threaten the availability and 

reliability of electricity to large industrial customers like steel. In addition to the 

economic impacts of these collective regulations of the electric sector, there will be 

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fundamental changes necessary to the production and distribution infrastructure to 

obtain compliance with the CPP. 

Another significant concern is that these proposed regulations do not reflect the fact 

that efforts to address climate change can only be effective when undertaken on a global 

basis. Limitations on C02 emissions instituted in the United States must apply at the 

same level of stringency to other major steel producing nations, such as China. 

Otherwise, the competitiveness of energy-intensive, trade-exposed domestic 

manufacturers, such as steel, in the global marketplace will be lessened. The end result 

will be that steel production and manufacturing jobs will shift to other nations with 

weaker, less costly regulations, and where steel production is less energy efficient and 

more environmentally harmful. 

Conclusion 

Again, thank you for the ability to speak about this proposed rule today. The domestic 

steel industry has substantial concerns that the Clean Power Plan proposed by the EPA 

may unilaterally raise the costs of electricity to large industrial customers like steel, 

while potentially lessening the reliability of our electricity supply. They will put steel 

producers in the U.S. at a disadvantage against competitors in other nations, which 

often subsidize electricity costs and generally have higher rates of GHG emissions. Such 

a result would not only be detrimental to the domestic industry and its employees, but 

to the larger global environment. 

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