As our prime minister was telling us earlier this month, Algoma Steel Inc.'s proposed transition to electricity-based steelmaking is intended to slash the plant's greenhouse gas emissions by more than three million metric tonnes a year by 2030.
But if the Sault steelmaker approves and moves ahead with the massive plan, it will initially consume more natural gas than usual, not less.
"The plans are to construct two electric arc furnaces that feed into our existing steelmaking and hot-rolling and finishing operations," explains Fred Post, Algoma's environmental control manager.
The dual furnaces would be built adjacent to the current steel shop, with construction time estimated at 30 months from obtaining permits to commissioning.
"There is a transition where we would be required to continue to operate our existing facilities – blast furnace and coke oven batteries – because the grid power supply is not available to run both electric arc furnaces simultaneously," Post told this month's meeting of Sault Ste. Marie's environmental sustainability committee.
"We will be providing some upgrades and replacement in kind through some of our power generating facilities in order to allow this to run that interim stage, one electric arc furnace at a time," Post said.
"We would run hot metal from our blast furnace through the electric arc furnaces to supplement that limitation of grid power. Until such time that grid power does become available, we would run at reduced capacity and probably we would end up shutting down one of our coke oven batteries in that interim stage, running at a reduced output from our blast furnace, maybe 50 per cent or so."
"And then once grid power became available, the idea would be that we would shut down the blast furnace/coke oven battery and transition to running both electric arc furnaces at full capacity," Post said.
"So there's a number of stages in that process whereby with upgrading our natural gas-powered power plant, we would end up increasing our need for natural gas for making that power from that part of the process."
"We don't want to do that, but that's the necessity for an enabling step in the transformation of our facility," Post said.
"From a strictly natural gas perspective . . . there would be an initial increase in natural gas usage, in the order of about about 100,000 tonnes of carbon dioxide."
But that would soon be offset by 650,000-tonne reductions in greenhouse gases in each of the project's first and second years.
Algoma's construction budget for the project includes $30 million for electrical infrastructure and internal cogeneration upgrade.
On July 5, Prime Minister Trudeau came to Algoma Steel to announce $420 million in federal support aimed at weaning the steelmaker from integrated coke oven/blast furnace production to electric arc furnace operation.
But Post emphasizes that no decision has been finalized to do that in Sault Ste. Marie.
"It's still a proposal," he said. "The funding that's been announced is conditional based on the combination of greenhouse gas reductions achieved through the project."
The proposal still requires formal approval from Algoma Steel's board, something that Post expects will probably happen in September.
"We have some complications associated with acquiring new board appointees, and then the new board members voting on the project," he said.
Responding to a question from committee member Dr. Pedro Antunes about scrubbers and other technology used to reduce particulate matter, Post said: "Just because we intend on shutting down our facility, that doesn't absolve us from our ongoing compliance obligations and requirements for controlling emissions coming from our facility."
"We will continue to abide by the Ministry of the Environment's rules and requirements and regulations related to air quality in that transition phase while our existing facilities continue to operate."
As for the new electric arc technology, Post added: "This is a brand-new facility that would be constructed and the expectation for any new construction in Ontario is that it must meet best available control technologies."
"As we transition away from coke oven/ blast furnace-type operations, we will change many of the contaminants that are emitted from our facility."
"The benzene and BaP [benzo(a)pyrene] kind of contaminants will be eliminated as a point source of emission," he said
"There will be a set of new contaminants that will have to be managed and mitigated.
"The most concerning are dioxins and furans . . . the federal and provincial governments both have rules, existing and under development, related to those," Post said.
"The intended facility is going to be designed with the best available controls in the world.
"The processes are going to have two large baghouses with both primary and secondary hood collection systems."
"They'll be the largest baghouses in Canada and there'll be two of them," Post said.
"Much work continues and in addition to the federal government financing commitments, commitments from the Province of Ontario and the City of Sault Ste. Marie are also being developed before a final investment decision will be made," added Michael McQuade, Algoma's chief executive officer, in an internal memorandum sent to employees on July 8.
"This potential transformation of Algoma is the first step to securing high-paying sustainable jobs for the next 50 years as we position ourselves in the highly competitive North American market as a reliable, competitive and responsible steel producer focused on adding value for all stakeholders including our employees."
The prime minister's July 5 announcement at Algoma Steel was boycotted by Mike Da Prat, president of United Steelworkers Local 2251, who accused the company of refusing to consult with the union on the electric-arc transformation.
McQuade disputed that, suggesting:
- We introduced our investigation of electric arc steelmaking to our employees and our union leaderships through the management cascade sessions from as early as September, 2020, and again in February, 2021. We have formally introduced the EAF [electric arc furnace transformation at the joint steering committee as mandated for major technological change under the collective agreements, and productive discussions are continuing.
- These sessions are required with the company, Local 2251, Local 2724, and USW District 6. Local 2251 attended the first session but declined attending any further joint steering committee meetings on the EAF transformation.
- In accordance with an arbitration decision of Arbitrator Stout dated May 20, 2021, the company submitted a template under the contracting-out provisions of the collective agreements and have engaged the unions in that process.
- Despite the company’s assertion that the proper forum for major technological change is the joint steering commitee process, the company has offered a number of dates for specific and continued engagement of Local 2251 under Subsection 7 of the general article, as was requested by Local 2251 and encouraged in accordance with the arbitration decision. However, Local 2251 has yet to engage with the company in a discussion of the EAF transformation under this process.
"This is not a trade-off between climate action and good jobs," McQuade said. "Good jobs grow from responsible environmental stewardship and we at Algoma Steel are proud to lead that future."