STATEMENT OF THE CITY OF MONROE CONCERNING

THE PROPOSED SUNCOKE ENERGY COKE PLANT

About the Coke Plant:  In 2008, SunCoke Energy proposed to build a metallurgical coke plant on property next to the City of Monroe.   The SunCoke facility will manufacture coke, a refined form of coal used by steel mills, by heating coal to very high temperatures in 100 coke ovens.   The proposed coke plant would also include large outdoor coal piles and coal and coke handling operations.

Environmental and Health Impacts of the Coke Plant:  The coke plant has obtained an EPA permit that allows it to release thousands of tons of harmful pollutants into the air of Butler County each year.  For example, the coke plant is allowed to emit as much as 2,400 tons per year of various pollutants, including 400 tons per year of particulate matter and over 1,600 tons per year of other pollutants that form fine particles in the air.  

Butler County currently is not in compliance with the national air quality standard for fine particulate matter.  Breathing air containing particulate matter at levels above the national ambient air standard can increase the occurrence of cancer, respiratory disease, and lung damage.  The elderly, children, and people with chronic lung disease tend to be especially sensitive to the effects of particulate matter.  Given the impacts of these and other emissions from the coke plant, Monroe is concerned that the coke plant will adversely affect the health, operations, facilities, and general well-being of Monroe and its residents and employees.

Monroe also recognizes that the coke plant may bring economic benefits to the Middletown area, including new jobs and support to the AK Steel Middletown Works.  But simply put, no business is above the law.  If SunCoke would site its project responsibly and comply with applicable air pollution laws for the protection of the public, the City of Monroe would have no objection to the Coke plant.

SunCoke and AK Steel Fought to Avoid Necessary Pollution Controls for the Coke Plant:  The amount of annual emissions from the coke plant makes it a “major stationary source” that is subject to tough pollution control requirements under the federal Clean Air Act.  Yet in the initial EPA permitting of the coke plant in 2008, SunCoke, with the assistance of AK Steel, sought to evade those pollution control requirements.  They argued that the new coke plant emissions should be offset, or reduced, by certain emission reductions at the AK Steel Middletown Works.  However, most of the claimed emission reductions occurred more than 5 years before the SunCoke permit was issued, and they were unrelated to the coke plant.  Furthermore, AK Steel and SunCoke overstated the amount of those emission reductions and failed to take into account other increases in AK Steel emissions that occurred during the same period of time. 

In November of 2008, Ohio EPA issued the first of two Permits to Install requested by SunCoke.  That permit did not require compliance with the stringent Clean Air Act requirements known as “New Source Review,” or “NSR.”  As a result, Ohio EPA allowed the coke plant to use air pollution controls that are inferior to those at other coke plants recently built in Ohio and elsewhere in the U.S.  

As a Result of Monroe’s Legal Actions, Pollution From the Coke Plant Has Been Reduced by Nearly Twenty Percent:  Monroe filed an appeal of the November 2008 Permit to Install.  Then in January of 2009, Monroe also filed a federal lawsuit to halt construction of the coke plant until SunCoke complied with New Source Review.  

Shortly after the federal lawsuit was filed, SunCoke ceased construction of the coke plant in early 2009 and applied for an air pollution permit under the federal New Source Review program.  The New Source Review permit, which was issued in February of 2010, reduced the coke plant’s annual emissions by approximately 20%.  The permit reduced sulfur dioxide emissions by 492 tons/year, a 30% reduction.  Sulfur dioxide forms fine particles in the atmosphere that cause lung and heart disease and deaths.  This is a critical accomplishment, because U.S. EPA has designated Butler County a nonattainment area for fine particulate matter.  This accomplishment will be a major benefit to Monroe’s nearby residential neighborhoods and an elementary school located only 1,200 feet away from the coke plant’s facilities.

When the Ohio Supreme Court Directed the Ohio Power Siting Board to Review Environmental Impacts of the Coke Plant, SunCoke Reduced Its Plans for Electricity Generation to Avoid Further Scrutiny:  In September of 2008, Monroe also intervened in a hearing before the Ohio Power Siting Board (OPSB) for approval of an electric cogeneration facility associated with the coke plant.  Under Ohio law, a major utility that produces electricity must obtain an OPSB certificate to ensure that the plant’s operations do not harm the public.  Middletown Coke sought to evade these public protections by applying for a certificate covering only the cogeneration equipment that converts heat to steam -- the least harmful equipment in the plant.  Most of the coke plant’s damage to public health will come from its coke oven pollution, which Middletown Coke’s application and OPSB’s certificate completely ignored. 

Monroe argued that the OPSB must consider the harmful effects of the entire coke plant—not just the electrical generating equipment—and therefore must evaluate the environmental impact of more than 2,000 tons of pollution that the coke plant would emit each year.  The OPSB disagreed and considered only the cogeneration equipment, which it claimed was a “zero-emission facility.”  The OPSB refused to consider the environmental impacts of the coke-making processes that would generate the steam necessary to produce electricity. 

Monroe appealed the OPSB’s certificate directly to the Ohio Supreme Court.  The Supreme Court reversed the OPSB, invalidating the certificate for Middletown Coke.  The Supreme Court found that the OPSB relied on a false distinction between “coke plant” and “electrical generating equipment.”  As a result of that error, the OPSB did not fulfill its legal duty to consider the impacts of the entire electrical generating plant.  The Supreme Court sent the matter back to the OPSB to reconsider the certificate after properly considering the environmental effects of the coke plant’s other processes related to electrical generation.  

Yet before OPSB could start its review of the coke plant’s environmental effects, SunCoke sent a letter to the OPSB announcing that it had decided to limit electricity from the cogeneration plant to less than 50 megawatts per year.  Since the OPSB does not have authority over generating facilities with a capacity of less than 50 MW, Middletown Coke cleverly sidestepped the environmental review required by the Supreme Court. 

Since that time, AK Steel has complained publicly that Monroe forced SunCoke to scale back its electrical generation.  But SunCoke was free to reapply to the OPSB to generate as much electricity as it wanted, merely by going through the necessary environmental review required by the Supreme Court.  Instead, the company chose to waste some of its power capacity simply to dodge this scrutiny.  Monroe can’t be blamed for that decision, or for the Supreme Court ruling that MCC had improperly avoided review of its coke oven emissions.  The responsibility for that result lies squarely on the shoulders of AK Steel’s business partner, SunCoke.

Despite Monroe’s Successes, the Coke Plant Still Does Not Meet Legal Requirements Designed to Minimize Air Pollution:  Unfortunately, despite Ohio EPA’s and SunCoke’s claims that the second PTI complies with the federal New Source Review laws, that permit fails to meet the requirements of New Source Review in many important respects: 

• Although the NSR PTI requires SunCoke to “offset” its new emissions by arranging for equivalent pollution reductions elsewhere in the region, those emission reductions occurred six or more years earlier and have no connection to the coke plant.  They are merely “paper offsets” that will provide no air quality benefit to Butler County.  SunCoke is legally required to find actual offsets of at least 114 tons/year of fine particulates emissions, 394 tons of nitrogen oxide emissions, and 1,210 tons of sulfur dioxide emissions.
• MCC was required to certify that it, and other large Sunoco and SunCoke plants in Ohio, are in full compliance with all air pollution requirements.  SunCoke’s own records show that the Haverhill North Coke Company plant in Scioto County had long been in violation of its air pollution permit during the period leading up to the issuance of the NSR PTI, including on the very day MCC filed its compliance certification.
• The most recent PTI does not require the application of the stringent pollution controls required by NSR.  In fact, the NSR PTI is not even as stringent as pollution controls being used at some of SunCoke’s other facilities.  To offer only a few examples:

1. SunCoke’s Jewell Coal and Coke facility is restricted to using coal with a sulfur content of less than 0.88%, but Middletown Coke can use coal with up to 1.3% sulfur without the need for additional pollution control.  Holding Middletown Coke to the sulfur restrictions of its sister facility could result in sulfur dioxide reductions of as much as 350 tons/year.
2. The Haverhill North Coke Company is required to store some of its raw coal in an enclosed dome to minimize the blowing of coal dust.  Middletown Coke has no such requirement.  It is allowed to store its coal in two outdoor piles, each of which will be greater than 1 acre in size.  Covered coal storage is a feasible pollution control measure that is being used at many facilities throughout the U.S.  Requiring Middletown Coke to cover its coal piles will minimize the amount of coal dust that will blow on neighboring properties and that will be breathed by those living, working, and attending school in the vicinity of the coke plant.  Reductions of ground-level particulate emissions for coal would result in noticeable benefits to air quality in the immediate vicinity of the MCC plant. 
3. Based on the current design of the MCC facility, it will be necessary to bypass its pollution control equipment in the event of a malfunction or maintenance of the pollution controls.  During such a bypass, coke oven gas would be vented to the atmosphere without any pollution control.  Bypasses have been a significant problem at Haverhill North Coke Company due to frequent equipment malfunctions at that plant.  SunCoke’s Indiana Harbor Coke Company facility has minimized the need for bypasses by installing redundant control equipment.  This allows Indiana Harbor to divert coke oven gas to the redundant control equipment rather than bypassing pollution controls entirely. 

In light of these and many other deficiencies in the NSR permit, Monroe appealed that permit to the Environmental Review Appeals Commission in February of 2010.  That appeal is currently pending.  According to the current case management schedule, the evidentiary hearing in that case will begin in January of 2012. 

Monroe’s legal actions have been expensive.  SunCoke, AK Steel, and the Machinist’s Union have opposed Monroe’s three lawyers with a combined team of 20 lawyers from six major law firms.  Nonetheless, Monroe’s efforts have resulted in very significant pollution reductions for the benefit of the City and its citizens.  In the most cost-effective manner possible, Monroe will continue to press for the additional pollution controls required by law.  In addition, Monroe is actively pursuing efforts to recover the attorney fees and court costs to which it is legally entitled.