Bastrop county Alcoa

Special Deals for
Alcoa Aluminum
Texas' Largest
Grandfathered Polluter

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Alcoa Aluminum This week the Texas Toxic Tour takes you to beautiful Central Texas, home to small towns, green fields, and to the massive Alcoa Rockdale aluminum smelter and strip mine, the largest grandfathered polluter in Texas. This is the story of political influence and special deals, and a community fighting to protect their land and water in the face of a powerful industry and an indifferent state government.

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The Largest Grandfathered
Polluter in Texas

Travis Brown, a resident of a neighboring county near the Alcoa aluminum smelter says, "When the winds are from the north, we get days when the smell of sulfur is extremely thick."(1)

Since the 1950s, Pennsylvania-based Alcoa Inc. has strip-mined lignite, a low-grade, brown coal, in southwestern Milam County--about 50 miles east of Austin. The lignite, considered so poor that it has been compared to burning dirt, is cheap fuel for Alcoa's aluminum smelter--the largest in North America. The plant sprawls over 7,000 acres adjoining the mine near the town of Rockdale. The smelter runs 24 hours a day, seven days a week, powered by four on-site power plants. It is a major contributor to air pollution in the Dallas - Ft. Worth and Austin areas and one of the dirtiest plants in Texas.

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Of the four lignite-fired power plants at the Alcoa smelter, three were built before passage of much stricter air-quality controls mandated by the 1971 Texas Clean Air Act. The Rockdale aluminum smelter discharges about 104,000 tons of air emissions per year, making it the largest grandfathered polluter in the state. That total includes over 60,000 tons of acid rain producing sulfur dioxide, a byproduct of burning lignite.

Alcoa's Rockdale Smelter - A History of Special Deals

Throughout the last thirty years, the Alcoa Rockdale smelter has a history of special deals allowing them to circumvent Texas pollution regulations.

When the Texas Legislature passed the Clean Air Act in 1971, it allowed existing plants such as Alcoa's Rockdale facility to be "grandfathered" from complying with current pollution control regulations as long as they made no major modifications in operations, facilities or fuels, or changes in the character of emissions.

In 1979, Alcoa discovered that the lignite being mined in a new area had a much higher sulfur content than their earlier reserves, causing the plant's sulfur dioxide emissions to increase significantly. Some argued that the new lignite constituted a change in fuel and that this should have triggered the Texas Clean Air Act requirements that the plant be brought into compliance with current regulations.

However, instead of bringing Alcoa into compliance, the Texas Air Control Board--the predecessor to Texas's current environmental regulatory agency, the Texas Natural Resource Conservation Commission (TNRCC), gave Alcoa a special deal which allowed Alcoa to discharge more sulfur dioxide than any other plant in the state. (2)

In 1992, the TNRCC reinforced Alcoa's previous special deal by changing state regulations to allow "fossil-fuel fired steam generators located in Milam County which began operation prior to 1955" to exceed sulfur dioxide emission standards. Only one industrial plant fit that description: Alcoa's Rockdale aluminum smelter. (3)

Gov. Bush's Voluntary Compliance Program

In 1999, Governor Bush and Texas industry passed the Clean Air Responsibility Enterprise (CARE) program--legislation that allowed non-utility grandfathered polluters to "volunteer" to reduce emissions without requiring full compliance with the Texas Clean Air Act.

Under the bill, all a grandfathered facility has to do to avoid penalties is have a voluntary compliance permit application pending with the TNRCC by the fall of 2001. The company's application does not have to agree to use state of the art pollution control technology nor does it have to significantly reduce emissions

Alcoa promised to apply for a permit under Bush's CARE voluntary emissions reduction program. But to date, Alcoa has still not submitted any voluntary compliance permit application for its sulfur dioxide emissions. According to Mark Bryson, Alcoa's environmental manager, the company has no intention of lowering the amount of sulfur dioxide discharged to obtain the voluntary permit.

Political Power - Legislative Loopholes

Under public pressure during the 1999 Legislative session, the Texas legislature passed a bill requiring grandfathered power plants to reduce nitrogen oxide emissions by 50% and sulfur dioxide emissions by 25%. However, Alcoa once again avoided compliance with pollution regulation due to successful efforts by their lobbyists from Vinson & Elkins, one of Gov. Bush's leading contributors.

The Latest Special Deal For Alcoa

Ignoring the problems of acid rain from the 60,000 tons plus of sulfur dioxide emitted by the Rockdale plant, Alcoa's environmental manager Mark Bryson maintains that Alcoa's priorities should be on reducing smog-producing contaminants--nitrogen oxide. Under a new deal between Alcoa and the TNRCC, Alcoa will reduce by the end of 2002 the amount of nitrogen oxide it emits at the Rockdale plant by about 6,000 tons per year. (4)   While important, the proposed nitrogen oxide reduction is only a small percent of the plant's total emissions of over 100,000 tons a year. Despite the large amount of sulfur dioxide emissions from the plant, the special NOx reduction deal struck between TNRCC and Alcoa explicitly states that "...the emissions of sulfur dioxide will not change." Neighbors For Neighbors, a citizen's organization representing over 400 families and 300 businesses from the surrounding counties, characterized the TNRCC special deal with Alcoa as just; "the latest in a series of events in which TNRCC and other state agencies have granted loopholes to and otherwise been manipulated by Alcoa…".

Alcoa Threatens To Close the Plant

Alcoa says that if it were forced to comply with state and national clean air laws, the alterations in equipment would be so expensive that the company would be forced to shut down the Rockdale plant putting over one thousand people out of work. But the company's financial posture doesn't support such claims.

"Each of the control options would require major capital expenditures and increases in normal operating costs. Given the economy and supply of the world-wide aluminum industry, and that the cost of power for the Rockdale operations is the highest in Alcoa's system, a mandate to use one of these options would threaten the economic viability of Rockdale operations." Source: 1995 State Implementation Plan.

Reportedly, Alcoa's huge increase in profits during the last year "dazzled Wall Street" by surpassing the $1 billion mark in profits for the first time in 1999.(5) According to Alcoa's CEO, whose personal compensation package totals $25 million a year, these profits "are the result of cost-cutting and high prices".(6) Alcoa's strong financial position also gave shareholders a 30-cent per share increase in stock price during last year while allowing the acquisition of Alumax, an international competitor, for $3.8 billion. Company officials maintain that keeping fuel costs low has allowed them to afford such expansion.

Central Texas Communities Oppose Alcoa Expansion

Now, looking for more cheap fuel and new markets, Alcoa has announced their intention to strip mine an additional 15,000 acres just south of the current mining site and pump the ground water from beneath several thousands acres to service their plant and the City of San Antonio. Threatened by air pollution, strip mining, and water depletion, the citizens, local businesses and elected officials from across the area have come together to oppose Alcoa's expansion.

Join Texas PEER soon for another stop on the Texas Toxic Tour.

Sources:

  1. Travis Brown interview.
  2. TAC Chapter 112 (Regulation II) " Control of Air Pollution from Sulfur Compounds," effective Oct. 23,1992
  3. TAC Chapter 112 (Regulation II) " Control of Air Pollution from Sulfur Compounds," effective Oct. 23,1992
  4. Agreed Order 2000-0032-SIP. p. 2, p.5. 10007-18666
  5. Matthews, Robert Guy, " Alcoa's Fourth Quarter earnings Surge to Outstrip Forecasts," Wall Street Journal, January 1, 2000
  6. Matthews, Robert Guy, " Alcoa's Net Rises 61% Amid Cost Cutting and Higher Prices in Aluminum Market," Wall Street Journal, April 7, 2000
 
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