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Hazelwood coke plan breathes its last

Dawida, Murphy say Sun will build elsewhere

Thursday, May 06, 1999

By Jim McKay, Post-Gazette Staff Writer

The Sun Co.'s controversial plan to build a modern $350 million coke plant and electricity co-generation station on the site of the old LTV coke plant in Hazelwood has died.

Mayor Murphy and Allegheny County Commissioner Mike Dawida announced the project's demise yesterday, saying it was "unfortunate that some other region in the country will reap the benefits of hundreds of millions of dollars of investment by private industry."

LTV spokesman Mark Tomasch, whose company was to use the plant's coke, said, "In spite of the best efforts of everybody and a great deal of time, the economic realities of making such an investment in Pittsburgh proved insurmountable."

Sun's plan to build the coke plant was opposed by neighborhood and environmental groups concerned about air quality and championed by the United Steelworkers union for its jobs.

The reaction yesterday was predictable.

Environmentalists expressed relief while union officials decried the loss of a major industrial investment and the manufacturing employment it would create.

"It's just tragic," said Vince Mackewich, president of the USW 1843 local at the now-closed Hazelwood plant.

"I'm certainly glad that it's not coming here," said Walter Goldburg of Squirrel Hill, a board member of GASP, the Group Against Smog and Pollution. "I'm sorry about the jobs lost but I was worried that a lot more jobs wouldn't come here" if the plant had been built.

Murphy and Dawida, in a joint statement, expressed disappointment over the lost opportunity. They said they had been confident that environmental and other concerns would have been addressed to everyone's satisfaction.

Many steel industry officials viewed Sun's proposal with skepticism from the start, given environmental issues and the economics of making coke -- baked coal used as blast furnace fuel and a refining agent in iron making.

Making coke is the dirtiest part of steelmaking. Increasingly stringent environmental regulations controlling the process led LTV to shut down its own coke facility in Hazelwood last year, putting 750 employees out of work.

LTV, considered the plant's primary potential customer, acknowledged that Pittsburgh was no longer in the running for the facility, which was to have been built and operated by a subsidiary of Philadelphia-based Sun.

Despite what LTV and local officials were saying, Sun spokesman Gerald Davis, however, would not say whether Pittsburgh was out of the running for the plant.

"The key is no commitment has been made," Davis said. "When we have something to announce, we will announce it."

Sun has filed permit applications with local health officials in Ohio's Scioto County south of Portsmouth and is seeking financial assistance for the project there, according to the Southern Ohio Port Authority.

Sun is also looking at another, unnamed site in Pennsylvania.

Public financial assistance was one of the reasons that the project failed in Pittsburgh. The city school board rejected a request to designate the 140-acre LTV site in Hazelwood as a tax-free Keystone Opportunity Zone.

Tomasch, the LTV spokesman, said the KOZ decision was one of several factors that forced Sun to look for alternatives.

"The KOZs were significant but there were other issues," he said, declining to elaborate. "We just couldn't get to where we could economically justify the plant."

LTV had said it preferred Pittsburgh for the new plant because it was asked to do so by the United Steelworkers.

Hopes of improving labor relations apparently played a role in LTV's efforts to rebuild at Hazelwood. The steelmaker had angered the USW by investing in a nonunion steel mill in Alabama.

Saving union jobs in Hazelwood would have helped mend those wounds with the USW, which must negotiate a new labor agreement with LTV this summer.

After it closed the Hazelwood plant, LTV contracted to buy coke from U.S. Steel's Clairton Works. It also operates two of its own coke plants in Warren, Ohio, and Chicago.

Although LTV's blast furnaces consume more coke than the steelmaker can produce, the company said it currently has all the coke it needs. "At this point we've got a good supply of coke," Tomasch said.

Although LTV was presumed to be the primary customer for the Sun plant, it has not signed any kind of supply agreement with Sun.

Murphy and Dawida said local government would work with LTV to find alternative uses for the site.

One option is for the city to acquire the site, which the two officials called an "important piece of riverfront property."

Tomasch said LTV would continue demolition of the remaining buildings and equipment on the site and cooperate with the city, as it did in redeveloping property that is now the Pittsburgh Technology Center.

"We're going to start another chapter," Tomasch said.

Plans for another coke plant in the region are moving forward. Last month, the Allegheny Health Department gave preliminary approval to build a $100 million plant on Neville Island. The facility would produce 500,000 tons of coke annually. It would be owned by Shenango Inc., which already has a 360,000-ton coke plant there, and Antaeus Energy. The two companies plan to merge in the near future.

Final approval for the project could come next month.

Post-Gazette staff writer Len Boselovic contributed to this story.

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