American Iron and Steel Institute Says Climate Bill as Passed by House Puts Steel...

American Iron and Steel Institute Says Climate Bill as Passed by House Puts
Steel Industry at Competitive Disadvantage; Bill Must Have Important
Modifications as it Heads to the Senate

WASHINGTON, June 29 /PRNewswire-USNewswire/ -- The American Iron and Steel
Institute (AISI) expressed its disappointment today over the House passage of
the American Clean Energy and Security Act of 2009.

"We believe this bill has moved at a rushed pace that has not allowed for full
debate of provisions that are critical to the steel industry, which was
clearly underscored by the fact that the bill passed in the House by only
seven votes," said Thomas J. Gibson, AISI president and CEO. "The bill, as
passed, will need important modifications as it moves through the Senate.

"We appreciate the hard work of Congressmen Doyle and Inslee and we look
forward to continuing our work with them as this legislation moves through the
process," said Gibson. "However, we can say - with certainty - that if this
bill is enacted as it presently stands, U.S. steelmakers and our workers will
be at a significant competitive disadvantage in the global marketplace.
Several modifications must be made to achieve the bill's stated purpose of
avoiding job loss and emission migration to overseas markets."

One area of the bill that needs to be modified, Gibson said, relates to
recognizing the challenges of energy intensive industries.

"With this bill, all forms of energy - coal, natural gas, biomass and
electricity - have the potential to suffer a dramatic cost increase due to
fuel switching, deployment of waste gas capture/regeneration technology,
carbon capture and sequestration technology, and wind, solar and other clean
energy technologies. Energy intensive industries should be rebated allowances
to recover consequential cost increases resulting from this legislation, and
not just emissions costs," he said.

"Currently, the bill does not contain a meaningful border adjustment mechanism
and has a significant lag before any assessment of comparable action by our
trading partners is made," Gibson said. "The legislation would clearly be
inadequate to ensure that the new costs placed on steel and other
trade-sensitive manufacturers would also be borne by imports," he said. "As
currently written, the border mechanism would be wholly ineffective and would
simply lead to the substitution of imported products (from countries with no
or far lesser environmental standards) for domestic production - undermining
both the environmental objective of the bill and the competitiveness of U.S.
products."

Another area of concern in the House bill, Gibson said, is the arbitrary
formula used to lower the emissions allowance schedule to energy-intensive
manufacturers below 15 percent after beginning in 2015. This deprives
energy-intensive manufacturers of nearly one billion allowances over the life
of the program, he said. Energy-intensive manufacturers should receive the
same emissions allowance schedule that is applied to every other recipient of
emission allowances, he noted.

AISI serves as the voice of the North American steel industry in the public
policy arena and advances the case for steel in the marketplace as the
material of choice. AISI plays a lead role in the development and application
of new steels and steelmaking technology. AISI is comprised of 24 member
companies, including integrated and electric furnace steelmakers, and 138
associate and affiliate members who are suppliers to or customers of the steel
industry. AISI's member companies represent over 75 percent of both U.S. and
North American steel capacity. For more news about steel and its
applications, view AISI's Web site at www.steel.org.

SOURCE American Iron and Steel Institute

Nancy Gravatt of AISI, +1-202-452-7115, ngravatt@steel.org