AK Steel to proceed with conversion of two more Butler Works pickle lines

AK Steel Corp. said it will proceed with a $20 million project to convert two more pickling lines to hydrogen peroxide from nitric acid at its Butler Works.

MIDDLETOWN, Ohio, April 26, 2001 — AK Steel Corporation said today it will proceed with a $20 million project to convert two additional stainless and electrical steel pickling lines to hydrogen peroxide from nitric acid at its Butler Works.

Until recently, the Butler Works operated five nitric acid pickling lines. One of those lines was converted to hydrogen peroxide in October of 2000 at a cost of more than $6 million. The company said it has made no decision on the conversion of the two remaining lines at Butler Works.

"We continue to evaluate the prudence of spending our limited capital resources to convert the two remaining lines," said Alan H. McCoy, vice president, public affairs. "We must weigh that alternative against less costly options available to us."

Those options would include routing material to other AK Steel processing facilities in Ohio and Indiana. Nitric acid pickling is the world standard for specialty steel pickling, which is a chemical and mechanical process that cleans dirt and oxides from the steel's surface.

The $20 million expenditure to convert the two additional pickle lines is necessary to help meet the terms of a consent order which the company entered into with the U.S. EPA, Region III, effective March 2, 2001. The alternative to converting the lines was shutting down the pickling operations at Butler Works. The consent order was the result of a highly unusual Emergency Order issued against AK Steel by U.S. EPA in June of 2000.

Even though AK Steel was in compliance with its wastewater discharge permits, EPA issued the emergency order requiring the company, among other things, to immediately prepare an alternative drinking water plan for the Borough of Zelienople and submit a plan for reducing nitrate discharges into the Connoquenessing Creek. The order carried with it the threat of fines of $15,000 per day for failure to comply.

The company has already committed several million dollars in engineering work and other costs in order to comply with the Zelienople water supply provisions of the consent order. AK Steel notes that nitrates are one of the most prevalent constituents of surface waters in the United States. According to reports, more than 80% of nitrates in surface waters are the result of the unregulated use of agricultural fertilizer.

The Borough of Zelienople, approximately 20 miles downstream from the Butler Works, utilizes the Connoquenessing Creek as a backup water supply during times of severe drought. The borough has not utilized the creek for drinking water since 1999. Zelienople is the only known municipality that draws drinking water from the low-flow Connoquenessing.

It is not clear to AK Steel what precipitated the issuance of the emergency order since the company was in compliance with a valid discharge permit and the company is unaware of a single report of adverse health affects as a result of its nitrate discharges. The company says that U.S. EPA has received AK Steel's monthly nitrate discharge reports by certified mail at least since 1995.

With headquarters in Middletown, Ohio, AK Steel produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as standard pipe and tubular steel products. The company has about 11,200 employees in steel plants and offices in Middletown, Coshocton, Mansfield, Warren and Zanesville, Ohio; Ashland, Ky.; Rockport, Ind.; and Butler, Sharon and Wheatland, Pa.

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