BRUCE SCHREINER
Mon, March 25, 2024
Kentucky Gov. Andy Beshear responds to a question during an interview, Dec. 19, 2023, in Frankfort, Ky. An aluminum company has singled out northeastern Kentucky as its preferred site for a new aluminum smelter that would bring about 1,000 permanent jobs to an Appalachian region hard hit by the loss of coal and steel production, Gov. Beshear said Monday, March 25, 2024.
(AP Photo/Timothy D. Easley, File)More
FRANKFORT, Ky. (AP) — An aluminum company has singled out northeastern Kentucky as its preferred site for a new aluminum smelter that would bring about 1,000 permanent jobs to an Appalachian region hard hit by the loss of coal and steel production, Gov. Andy Beshear said Monday.
Plans by Century Aluminum Co. to build a smelter that produces dramatically lower emissions will be supported by $500 million from the U.S. Department of Energy. The project has the potential to become the largest investment on record in eastern Kentucky, Beshear said.
“There’s still a lot of steps that we need to take to make this a reality," the governor said at a news conference. "But this is the first important step.”
The governor is hoping that a state incentives package will help close the deal. He predicted that state lawmakers will provide “the tools that we need” in the closing days of their legislative session.
The company's president and CEO, Jesse Gary, did not attend the news conference but said in a statement that a “myriad of steps" must still be resolved and that multiple locations are still being evaluated, but he pointed to northeastern Kentucky as the preferred location. Issues still pending include development costs for sites under consideration, utility costs, workforce and incentives, he said.
Century Aluminum, headquartered in Chicago, already has a significant presence in the Bluegrass State with two aluminum smelters in western Kentucky.
Gary referred to the announcement Monday as "another step in our continued long-standing relationship with the state, and we look forward to the opportunity to help be a part of growing commerce in eastern Kentucky, an outcome that is very attractive to Century Aluminum.”
Century says it is the largest producer of primary aluminum in the United States and also operates production facilities in Iceland, the Netherlands and Jamaica.
Northeastern Kentucky was hit hard several years ago when a steel mill that had been an economic bedrock for generations shut down. The broader eastern Kentucky region has struggled from the sharp drop in coal jobs over the last decade amid shrinking demand for coal.
The region had its hopes of landing a massive aluminum plant dashed a few years ago. Another aluminum company planned to build a mill near Ashland in northeastern Kentucky but the project — which was pushed by Beshear's predecessor, former Republican Gov. Matt Bevin — never came to fruition as the company struggled to line up sufficient financing.
Now Beshear, who unseated Bevin in 2019, is trying to deliver on what he says would be a game-changing project for the region and continue the state's record-setting pace of economic development growth during the Democrat's tenure. Beshear, seen as a rising star in his party, won reelection to a second term last year in what otherwise has become a Republican-dominated state.
The region's renewed prospect of becoming home to an aluminum smelter offers an “incredible opportunity” for an area that's “been through the ringer,” said Boyd County Judge-Executive Eric Chaney, who was among several area leaders who attended the news conference with Beshear.
“We're going to work hard to help get this over the finish line,” Chaney said later in a phone interview. “This is a great opportunity for northeast Kentucky and the entire state.”
The project would create about 5,500 construction jobs and then about 1,000 permanent union jobs, the governor said. The new smelter would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter due to its state-of-the-art, energy efficient design and use of carbon-free energy, he said.
The Department of Energy, in a separate news release, said the new plant would be the cleanest and most efficient aluminum smelter in the world.
Aluminum produced by the new plant will support national defense, electric vehicles, semiconductors, building and construction and green energy applications, Beshear said.
While many decisions remain, Beshear pointed to the importance of $500 million in federal support for the project. The funding is provided by DOE’s Industrial Demonstrations Program, and the governor thanked President Joe Biden, Energy Secretary Jennifer Granholm and others.
“While we all recognize that it’s not a done deal and there is more work to come, a $500 million grant, if it is built in this region, is a pretty good place to start,” Beshear said.
Last week, Beshear announced plans by Rye Development to build a $1.3 billion pumped storage hydropower facility on a former coal mine site in Bell County in southeastern Kentucky. The project — also backed by a federal grant — will create about 1,500 construction jobs, 30 operations jobs and enough energy to power nearly 67,000 homes each year
Biden’s Big Bet on Aluminum
Matthew Zeitlin
Mon, March 25, 2024
Famously energy intensive and dominated by Chinese smelters, aluminum sits at a curious nexus of climate and industrial policy.
The famously lightweight metal is something like the base metal of green industry. It’s used in the frames for solar panels, the control equipment for wind turbines, and in the hardware of electricity distribution. It’s lighter than steel, which makes it appealing to electric car manufacturers, like Tesla, who want to expand the range of their vehicles. Aluminum is often found in the batteries themselves, as well, specifically their enclosures. Overall, aluminum demand is projected to rise by some 40% by the end of the decade.
Like other industrial metals (namely steel), the U.S. aluminum industry has been a poster child of deindustrialization. Employment in the aluminum production industry has fallen from around 100,000 in 2000 to around 60,000 in 2022, with much of the fall happening in the few years after the United States established permanent normal trade relations with China. Earlier this year, the second largest smelter in the country said it would lay off most of its employees.
So, can the Biden administration bring aluminum smelting back to the United States?
The Department of Energy today announced $6 billion of funding for 33 industrial decarbonization projects, including four for aluminum, worth almost $670 million total. That includes up to $500 million for Century Aluminum to build a new primary smelter, which would make it the first new smelter in the United States since the late 1970s.
“Aluminum is a metal that is of incredible strategic importance to the U.S. and the world,” Jane Flegal, the former White House Senior Director for Industrial Emissions, told me. “We used to do a lot of aluminum production. That has declined precipitously.”
Obama, Trump and Biden have tried some combination of tariffs and negotiations to bring order to the global aluminum market — some of the Trump-era tariffs remain in place — but none of them had much success. Traditional climate policy, meanwhile, has focused more on the greenhouse gas emissions that come from transportation and electricity generation.
Heavy industry is a massive source of emissions, comprising about a fifth of the global total. The aluminum industry on its own makes up about 2% of global emissions, of which the smelting is responsible for about 80%, with the lion’s share going to the electricity being used to power the process. This makes smelting especially sensitive to both the price and availability of power. It’s no coincidence that Iceland, with its plentiful and always available hydropower and geothermal resources, is a major aluminum producer.
Many industrial processes themselves also produce emissions, which makes industrial decarbonization not just an adjunct of decarbonizing the electricity sector but rather an area that requires its own technological breakthroughs. For example, to make aluminum out of alumina, a powder that is refined from bauxite, requires consuming a carbon anode, which itself is made from an oil refining byproduct. These are businesses that operate on small margins and require huge capital investments to expand or change production, Flegal told me.
And the new technology necessary to decarbonize them wasn't being developed because “there wasn’t the level of investment in new technological pathways,” Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, told me. “These demonstration projects are the first step of showing viability of new production methods.”
The Department of Energy said the smelter “would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter.” The DOE noted the preferred site for the smelter would be “Kentucky or Ohio/Mississippi River Basins.” Kentucky’s Governor Andy Beshear said Monday that Century had indicated an interest in the Bluegrass State, and that his office was working to put together a bundle of incentives to make the state more attractive.
Wherever it’s located, the facility is expected to create more than 1,000 permanent jobs, Century and the Department of Energy said, which would go to members of the United Steelworkers union. The USW has recently endorsed President Biden and applauded the DOE program.
The decades of job losses in the aluminum sector have “been devastating for our members and communities we work at,” Emil Ramirez, the USW’s vice president for administration, told me. “We have to give the Biden administration credit for recognizing the need to revitalize this important industry.”
FRANKFORT, Ky. (AP) — An aluminum company has singled out northeastern Kentucky as its preferred site for a new aluminum smelter that would bring about 1,000 permanent jobs to an Appalachian region hard hit by the loss of coal and steel production, Gov. Andy Beshear said Monday.
Plans by Century Aluminum Co. to build a smelter that produces dramatically lower emissions will be supported by $500 million from the U.S. Department of Energy. The project has the potential to become the largest investment on record in eastern Kentucky, Beshear said.
“There’s still a lot of steps that we need to take to make this a reality," the governor said at a news conference. "But this is the first important step.”
The governor is hoping that a state incentives package will help close the deal. He predicted that state lawmakers will provide “the tools that we need” in the closing days of their legislative session.
The company's president and CEO, Jesse Gary, did not attend the news conference but said in a statement that a “myriad of steps" must still be resolved and that multiple locations are still being evaluated, but he pointed to northeastern Kentucky as the preferred location. Issues still pending include development costs for sites under consideration, utility costs, workforce and incentives, he said.
Century Aluminum, headquartered in Chicago, already has a significant presence in the Bluegrass State with two aluminum smelters in western Kentucky.
Gary referred to the announcement Monday as "another step in our continued long-standing relationship with the state, and we look forward to the opportunity to help be a part of growing commerce in eastern Kentucky, an outcome that is very attractive to Century Aluminum.”
Century says it is the largest producer of primary aluminum in the United States and also operates production facilities in Iceland, the Netherlands and Jamaica.
Northeastern Kentucky was hit hard several years ago when a steel mill that had been an economic bedrock for generations shut down. The broader eastern Kentucky region has struggled from the sharp drop in coal jobs over the last decade amid shrinking demand for coal.
The region had its hopes of landing a massive aluminum plant dashed a few years ago. Another aluminum company planned to build a mill near Ashland in northeastern Kentucky but the project — which was pushed by Beshear's predecessor, former Republican Gov. Matt Bevin — never came to fruition as the company struggled to line up sufficient financing.
Now Beshear, who unseated Bevin in 2019, is trying to deliver on what he says would be a game-changing project for the region and continue the state's record-setting pace of economic development growth during the Democrat's tenure. Beshear, seen as a rising star in his party, won reelection to a second term last year in what otherwise has become a Republican-dominated state.
The region's renewed prospect of becoming home to an aluminum smelter offers an “incredible opportunity” for an area that's “been through the ringer,” said Boyd County Judge-Executive Eric Chaney, who was among several area leaders who attended the news conference with Beshear.
“We're going to work hard to help get this over the finish line,” Chaney said later in a phone interview. “This is a great opportunity for northeast Kentucky and the entire state.”
The project would create about 5,500 construction jobs and then about 1,000 permanent union jobs, the governor said. The new smelter would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter due to its state-of-the-art, energy efficient design and use of carbon-free energy, he said.
The Department of Energy, in a separate news release, said the new plant would be the cleanest and most efficient aluminum smelter in the world.
Aluminum produced by the new plant will support national defense, electric vehicles, semiconductors, building and construction and green energy applications, Beshear said.
While many decisions remain, Beshear pointed to the importance of $500 million in federal support for the project. The funding is provided by DOE’s Industrial Demonstrations Program, and the governor thanked President Joe Biden, Energy Secretary Jennifer Granholm and others.
“While we all recognize that it’s not a done deal and there is more work to come, a $500 million grant, if it is built in this region, is a pretty good place to start,” Beshear said.
Last week, Beshear announced plans by Rye Development to build a $1.3 billion pumped storage hydropower facility on a former coal mine site in Bell County in southeastern Kentucky. The project — also backed by a federal grant — will create about 1,500 construction jobs, 30 operations jobs and enough energy to power nearly 67,000 homes each year
Biden’s Big Bet on Aluminum
Matthew Zeitlin
Mon, March 25, 2024
Famously energy intensive and dominated by Chinese smelters, aluminum sits at a curious nexus of climate and industrial policy.
The famously lightweight metal is something like the base metal of green industry. It’s used in the frames for solar panels, the control equipment for wind turbines, and in the hardware of electricity distribution. It’s lighter than steel, which makes it appealing to electric car manufacturers, like Tesla, who want to expand the range of their vehicles. Aluminum is often found in the batteries themselves, as well, specifically their enclosures. Overall, aluminum demand is projected to rise by some 40% by the end of the decade.
Like other industrial metals (namely steel), the U.S. aluminum industry has been a poster child of deindustrialization. Employment in the aluminum production industry has fallen from around 100,000 in 2000 to around 60,000 in 2022, with much of the fall happening in the few years after the United States established permanent normal trade relations with China. Earlier this year, the second largest smelter in the country said it would lay off most of its employees.
So, can the Biden administration bring aluminum smelting back to the United States?
The Department of Energy today announced $6 billion of funding for 33 industrial decarbonization projects, including four for aluminum, worth almost $670 million total. That includes up to $500 million for Century Aluminum to build a new primary smelter, which would make it the first new smelter in the United States since the late 1970s.
“Aluminum is a metal that is of incredible strategic importance to the U.S. and the world,” Jane Flegal, the former White House Senior Director for Industrial Emissions, told me. “We used to do a lot of aluminum production. That has declined precipitously.”
Obama, Trump and Biden have tried some combination of tariffs and negotiations to bring order to the global aluminum market — some of the Trump-era tariffs remain in place — but none of them had much success. Traditional climate policy, meanwhile, has focused more on the greenhouse gas emissions that come from transportation and electricity generation.
Heavy industry is a massive source of emissions, comprising about a fifth of the global total. The aluminum industry on its own makes up about 2% of global emissions, of which the smelting is responsible for about 80%, with the lion’s share going to the electricity being used to power the process. This makes smelting especially sensitive to both the price and availability of power. It’s no coincidence that Iceland, with its plentiful and always available hydropower and geothermal resources, is a major aluminum producer.
Many industrial processes themselves also produce emissions, which makes industrial decarbonization not just an adjunct of decarbonizing the electricity sector but rather an area that requires its own technological breakthroughs. For example, to make aluminum out of alumina, a powder that is refined from bauxite, requires consuming a carbon anode, which itself is made from an oil refining byproduct. These are businesses that operate on small margins and require huge capital investments to expand or change production, Flegal told me.
And the new technology necessary to decarbonize them wasn't being developed because “there wasn’t the level of investment in new technological pathways,” Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, told me. “These demonstration projects are the first step of showing viability of new production methods.”
The Department of Energy said the smelter “would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter.” The DOE noted the preferred site for the smelter would be “Kentucky or Ohio/Mississippi River Basins.” Kentucky’s Governor Andy Beshear said Monday that Century had indicated an interest in the Bluegrass State, and that his office was working to put together a bundle of incentives to make the state more attractive.
Wherever it’s located, the facility is expected to create more than 1,000 permanent jobs, Century and the Department of Energy said, which would go to members of the United Steelworkers union. The USW has recently endorsed President Biden and applauded the DOE program.
The decades of job losses in the aluminum sector have “been devastating for our members and communities we work at,” Emil Ramirez, the USW’s vice president for administration, told me. “We have to give the Biden administration credit for recognizing the need to revitalize this important industry.”
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