PITTSBURGH Access to
affordable natural gas will help ensure that U.S. steelmakers
remain competitive in a global environment, with some domestic
companies having already capitalized on its benefits, according
to a number of industry executives.
"With natural gas in our
country, thats nothing short of what oil did 100 years
ago for the manufacturing environment," Mario Longhi, vice
president and chief operating officer of U.S. Steel Corp., told
attendees May 8 at the Association for Iron and Steel
Technologys AISTech 2013 conference in Pittsburgh.
"Were producing products
that are enabling new technologies to be put in place and to
extract and distribute natural gas throughout the nation.
Natural gas is ... a transformational event, not just for the
steel industry but for manufacturing in general," he added.
A number of U.S. steelmakers are
taking advantage of low-priced natural gas in the shale plays
by building direct-reduced iron (DRI) projects and finding new
ways to utilize the low-cost energy in their processes.
For example, Nucor Corp., which
already operates a DRI facility in Trinidad, is now
constructing a 2.5-million-ton DRI facility in Louisiana, with
the opportunity to expand further as it looks to capitalize on
the natural gas boom, according to Chad Utermark, vice
president and general manager of Nucor-Yamato Steel Co. and
Nucor Castrip Arkansas.
"Were excited about the
opportunity in Louisiana. The strategy at Nucor is that we want
to have some 6 to 7 million tons a year of high-quality scrap
substitutes, which will be fulfilled through our plant in
Trinidad and Louisiana," he said.
Nucor also entered into a
long-term agreement in November with Encana Oil & Gas (USA)
Inc. for an onshore natural gas drilling program that it
expects will provide the Charlotte, N.C.-based steelmaker with
a steady stream of abundant, affordable natural gas (
amm.com, Nov. 6).
Last week, U.S. Steel announced
that it was also mulling a potential DRI project. Its facility
would be a joint venture in Lorain, Ohio, with Republic Steel
amm.com, May 1).
"DRI is a typical example of
where manufacturing is benefiting from gas. As recently as 10
years ago, no one would consider investing in this type of
enterprise. Youll remember natural gas being $12. Now,
its $2 to $3," Longhi added.
But building new DRI plants
isnt the only way to capitalize on natural gas, with a
number of steelmakers also opting to inject natural gas
directly into their steelmaking processes to cut costs.
ArcelorMittal USA LLC, for example, has saved some $67 million
already in fuel costs since 2010 by offsetting natural gas with
more expensive fuels in its blast furnaces, according to Andrew
Harshaw, executive vice president of operations.
"Were moving towards 70
percent self-sufficiency through iron ore. So we use DRI where
it makes sense as a scrap substitute," he said. "We continue to
use natural gas as a flexible fuel alternative."
"The thing about natural gas is
that we hope its a catalyst in the re-emergence of
manufacturing in the U.S. I think its an exciting time
for the U.S. and North America," he added.