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For steel mill, stay on permit lifted, so building can begin

By Jack Weatherly

This article was published January 25, 2014 at 5:14 a.m.

The Arkansas Pollution Control and Ecology Commission on Friday approved lifting a stay on an air permit, allowing construction to commence on the $1.1 billion Big River Steel plant near Osceola in Mississippi County.

The stay was imposed when rival steel-maker Nucor Corp. objected to the issuance of an air permit last year by the state Department of Environmental Quality. The action taken Friday does not ensure that the plant will be completed and produce steel.

Big River attorney John Perkins said on Friday that the delay of construction, which was to have started in December, has caused concern among the plant’s investors and posed a threat to the company’s ability to meet deadlines set under the provisions of Amendment 82 to the state constitution by which the Legislature approved the issuance of $125 million in bonds.

Nucor said the permit issued Sept. 18 by the Department of Environmental Quality was incomplete and improperly processed. The permit effectively had meant that Big River Steel LLC could build and operate the plant, which is to employ 525 at an average salary of $75,000 a year.

The challenge filed by Nucor on Oct. 17 meant an automatic stay. A hearing was held Friday on whether the stay should be lifted.

A trial on the air permit is set for Feb. 18 before Charles Moulton, administrative law judge for the Pollution Control and Ecology Commission, who will make a recommendation to the commission. Moulton said he expects the trial to last four days.

Perkins said that lifting the stay would enable Big River to proceed with construction and that the investors understand the risk to do so, given that the commission could reject the permit or alter it.

Dan Taggart, attorney for Nucor, argued that Big River Steel LLC could have moved forward with preparations, including engineering plans, but has not.

Later in the hearing Friday, which lasted about one hour and 15 minutes, David Stickler, a member of the Big River Steel LLC board, said that construction contracts worth $700 million have already been awarded.

John Correnti, managing director of the Big River board, said in a telephone interview after the hearing that “this is just delay tactics by Nucor, hoping to chase our equity away.”

Nucor Corp., which is based in Charlotte, N.C., operates two steel plants in Mississippi County - Nucor Steel Arkansas and, in partnership with Yamato Kogyo Corp. of Japan, Nucor-Yamato.

During the legislative session of 2013, Nucor lobbied heavily against the state’s financial backing of the Big River Steel project, saying that a third steel plant in the county might mean that Nucor would have to eliminate jobs.

It also ran an ad campaign along those lines.

Taggart said that “this is not … competition between Nucor and Big River Steel” and contended that the challenge to the lifting of the stay is “not meritless.”

He said the Department of Environmental Quality did not require Big River to use Mississippi County as the locale to build a pollution model, which, he argued, would not meet federal clean-air standards.

Instead, Big River used the Dyersburg, Tenn., area as the air-quality model, which barely met the standard of 12 micrograms of pollutants per cubic meter when the new steel plant’s particulate figures were added, Taggart said.

Perkins responded that the hearing Friday was not to argue the legal merits of the permit but to ask for the stay to be lifted.

“Where’s the harm in starting construction,” he asked. Earlier, he said there would be “zero” environmental harm done by the construction.

But by December 2015, Big River would have to start paying Entergy $2 million a month for electricity, whether it was using any or not, Perkins said. Meeting that deadline already looks “dubious,” he added.

Teresa Marks, director of the Department of Environmental Quality, said that state law prevents very little work when an air permit is under appeal.

Dr. Joseph Bates, a commission member and deputy state health officer, said that Mississippi County is already one of the “unhealthiest” communities in Arkansas.

At that point, Moulton cautioned that the hearing was veering toward matters that should be taken up during the trial.

Commissioner Randy Young made a motion to lift the stay. Commissioner Lawrence Bengal seconded, and the voice vote was all affirmative except for Bates, who abstained. Commissioner Stan Jorgensen was absent, having recused himself because he had talked with Big River about possibly doing consulting for the company.There are 13 members on the commission.

During a public comment session, a contingent from Mississippi County spoke on behalf of the steel-mill project.

Osceola Mayor Dickie Kennemore said that every month of a delay in the start-up of the mill would mean loss of $3.5 million in pay.

“We need those investors to stay in the saddle,” Kennemore said.

State Sen. David Burnett of Osceola said he sponsored the legislation for Amendment 82 in 2013 and that Nucor was in his district. He called Nucor “a wonderful employer” but that rejection of the permit for Big River would “send a message to other big investors.”

Mississippi County Judge Randy Carney said the county has invested $14.5 million in the project, with expectations of a $40 million annual payroll.

Front Section, Pages 1 on 01/25/2014

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