Alcoa agrees to cut Rockdale emissions

By Ralph K.M. Haurwitz AND Jeff Nesmith
AMERICAN-STATESMAN STAFF
Thursday, April 10, 2003

The air in Central Texas is about to get cleaner.

Alcoa Inc. has reached a settlement with the federal government and three environmental groups to sharply reduce emissions from its aluminum smelting operation in Rockdale, about 50 miles northeast of Austin. The company also agreed to pay $4 million for a civil penalty and environmental improvements.

The plant has been one of the largest sources of air pollution in Texas for years, releasing more than 100,000 tons of sulfur dioxide, nitrogen oxides and other pollutants annually from coal-fired generators that supply the power-hungry smelter.

Alcoa, based in Pittsburgh, is the world's largest aluminum producer with 127,000 employees and $20 billion in annual revenue.

The company might not have found itself signing off on a consent decree filed Wednesday in federal court in Austin but for the persistence of Neighbors for Neighbors, a nonprofit group operating out of the back of an art studio in Elgin, with no paid staff and a membership roster of 500 families.

The group was formed to fight Alcoa's plan to open a new lignite strip mine straddling the Bastrop-Lee county line. The company says the plan is not affected by the agreement announced Wednesday.

The Neighbors group combed through state and federal regulators' files for evidence that Alcoa had failed in the 1980s to obtain the necessary permits and install the required controls to trim its emissions -- an allegation the company denies. When regulators balked at suing Alcoa, the Neighbors group joined with two national groups, Environmental Defense and Public Citizen, to file suit under the federal Clean Air Act. The federal government eventually joined in the litigation.

Christie Whitman, the administrator of the U.S. Environmental Protection Agency, offered only indirect praise Wednesday when asked at a news conference in Washington whether the case illustrates the importance of citizen suits.

"We agree there's a role for everyone in protecting the environment," Whitman said.

But she was direct in acknowledging that the case is an example of how a provision in the Clean Air Act can bring about cleanup. That provision, known as "new source review," requires permits and pollution controls for plant modifications that increase emissions more than a minimal amount.

The Bush administration wants to change that provision, arguing that more flexibility for the industry would speed up improvements.

"This is one case where new source review has worked, and it has worked pretty well," Whitman said.

She and Thomas Sansonetti, an assistant attorney general, said the Alcoa case shows that the administration is continuing to enforce current law even while it seeks changes in it.

But Eric Schaeffer, a former EPA enforcement chief, said the Alcoa case and a similar settlement involving Archer Daniels Midland Co. of Decatur, Ill., the nation's biggest ethanol producer, undermine the administration's proposal. Jim Marston, director of the Texas office of Environmental Defense, agreed.

"If the Bush administration's proposal had been in place, this lawsuit would not have been possible," Marston said. "They would have allowed the company piecemeal to replace the plant but not bring pollution control equipment up to modern standards.

"Here is hard proof in President Bush's home state that new source review works and will work better than their proposed alternative."

ADM agreed to a $350.9 million settlement.

For its part, Alcoa agreed to pay a $1.5 million civil penalty to the federal government and $2.5 million for environmental projects: setting aside land for the endangered Houston toad and reducing emissions from diesel-powered school buses in Rockdale, Lexington, Elgin and nearby districts.

Alcoa has a year to choose one of three options for reducing its emissions: installing pollution controls on its three generating units, replacing those units with cleaner-burning technology or shutting down the units.

The agreement is subject to a 30-day public comment period and court approval.

The company has warned that it might cease operations altogether in Rockdale, putting hundreds of people out of work, if faced with excessive expenditures. Company officials said Wednesday that no decisions have been made.

Even if the company decides to shut down the three power units, it might continue operating using other sources, including a fourth unit owned by the electric utility TXU Energy and power purchased from other utilities, Alcoa spokesman Kevin Lowery said. The company has no idea what its various options would cost, he added.

State and federal regulators think the company is likely to install two new power units. It has applied for a state permit to do so, although that is not a binding commitment. Federal officials estimate such a project would cost $330 million.

In any event, Alcoa must reduce emissions of sulfur dioxide by at least 52,000 tons per year and of nitrogen oxides by at least 17,000 tons, according to the company's calculations. The company said it has already achieved substantial reductions under a voluntary state program that had been promoted by Bush when he was governor.

The pollutants can contribute to acid rain and respiratory problems, including childhood asthma.

Alcoa's Lowery said the settlement does not alter the company's plan to open the new surface mine for lignite, a soft brown coal it uses to generate electricity for smelting. Alcoa has obtained a mining permit from the Texas Railroad Commission but it still needs water, wastewater and road-relocation approvals.

It was the mining plan, along with a related plan to pipe mine water to San Antonio, that prompted the formation of the Neighbors group.

"We want Alcoa to remain open so they don't have to lay people off," said Billie Woods, a piano teacher and the group's president. "All we want them to do is switch to another fuel source so they don't destroy our land and take our water."

rhaurwitz@statesman.com; 445-3604