Manufacturers concerned over new bulk materials regulations in Chicago

By December 19, 2013Economy

We are watching with great interest the news from Chicago Mayor Rahm Emanuel today that he plans new regulations for the storage of bulk materials in Chicago. The Mayor has called particular attention to the bulk material of petroleum coke, or petcoke, an inert, solid carbon product made from crude oil, much like gasoline, diesel fuel and jet fuel. Petcoke is a valuable and essential commercial product that is used directly in a wide range of applications including aluminum manufacturing, fuels, and numerous other products including steel, glass, paint, and fertilizers.

The NAM is concerned by today’s announcement for its impact on manufacturers, who rely on petcoke for fuel and as a component of the manufacturing process, which in many cases a replacement does not exist. We are also concerned about what today’s announcement means for other bulk materials exported from terminals in Chicago, which include not only petcoke but also iron, coal, salt, sulfur, aggregate and clay.  Chicago is the largest inland general cargo port in the United States, and any regulation that makes it more expensive to ship bulk materials from that port could impact manufacturers.

The Congressional Research Service performed a detailed report to Congress on petcoke just two months ago on its uses and environmental impacts. CRS found petcoke to be highly stable and non-reactive at ambient environmental conditions.  Citing the Environmental Protection Agency, CRS further wrote:

If released to the environment, petcoke would not be expected to undergo many of the environmental fate pathways which could lead to environmental risks. Depending on the particle size and density of the material, terrestrial releases of petcoke become incorporated into the soil or transported via wind or surface water flow. If released to the aquatic environment, petcoke incorporates into sediment or floats on the surface, depending on the particle size and density in relation to water. Chemically, petcoke is essentially inert. That is, petcoke does not vaporize into the atmosphere, does not react chemically in the presence of water, and does not react chemically in the presence of light. Furthermore, it is not biodegradable, nor does it bio-accumulate substances—such as toxic chemicals—into its structure.

Petcoke is absolutely essential to the aluminum industry. It is the only product that can be used to make anodes for smelting, and the use of anodes is the only commercially viable method to produce aluminum.  Aluminum is used for everything from beverage cans, airplane and automobile components, packaging, window/door frames, baseball bats, and ladders to kitchen pots.

Petcoke is used in a wide range of other manufacturing sectors, such as:

  • Fuel: Utilities, cement, lime, brick, glass, steel and fertilizer consume approximately 75%-80% of all petcoke for fuel.
  • Paint and Colorings: Calcined petcoke is used in the production of titanium dioxide (TiO2), a mineral that is used as a substitute for lead in paint. TiO2 is also used as a pigment in sunscreen, plastic and food coloring and whitening of paper.
  • Iron and Ferro Alloys Production:  Petcoke is a partial replacement for coal as a feedstock for coke oven batteries in the production of foundry coke.  Calcined petcoke can be a partial substitute for pulverized coal which is directly injected into blast furnaces to produce steel. Petcoke is used in electric arc furnaces (EAF) for production of specialty metals such as ferrosilicon which is used for corrosion resistant and high temperature resistant steel alloys.  Petcoke is also used to produce silicon carbide which is used for refractory and the manufacture of silicon wafers.
  • Brick and Glass:  Petcoke is used by brick and glass manufacturers because of its special properties necessary for production.
  • Fertilizer: Petcoke can be gasified to produce ammonia and urea ammonium nitrate, which is then used in fertilizer production.

All of this comes back to today’s regulations and what they could mean for manufacturing.  To the extent that these new regulations make petcoke substantially more expensive or limit its supply in the U.S., manufacturers will feel that pain. This is a product that we need and that in many cases can’t be easily replaced.  Environmental regulation should be done in a balanced, reasonable way that protects manufacturers and the economy. We hope whatever solution is agreed on in Chicago achieves these goals.

Ross Eisenberg is the Vice President of Energy and Resources Policy at the National Association of Manufacturers.

Ross Eisenberg

Ross Eisenberg

Ross Eisenberg is vice president of energy and resources policy at the National Association of Manufacturers (NAM). Mr. Eisenberg oversees the NAM’s energy and environmental policy work and has expertise on issues ranging from energy production and use to air and water quality, climate change, energy efficiency and environmental regulation. He is a key voice for manufacturing on Capitol Hill, at federal agencies and across all forms of media.
Ross Eisenberg

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