The GASP Guide to Understanding Cleveland Cliff’s Multi-Million Dollar Decarbonization Project & Why - and How - Community Input’s Crucial
It was huge news: The Department of Energy awarded about $6 billion to 33 applicants seeking to complete projects that would decrease their carbon footprints, and one of them was none other than Cleveland Cliffs in Butler County.
Those who live in or near the company’s 975-acre Butler County Works site along the Connoquenessing Creek already know exactly how big a deal the announcement was, but for those who might be out of the fold, here’s some relevant recent history:
For years, the Butler Works plant, under previous owner AK Steel, struggled with pollution concerns. The Environmental Protection Agency (EPA) documented major air and water quality violations, highlighting the need for significant upgrades and operational improvements.
This culminated in a high-profile settlement agreement that raised concerns about the plant's future and its impact on the communities surrounding it.
Then, earlier this year Cleveland Cliffs, the plant’s current owner, decried that a new federal rule regarding steelmaking would effectively shutter the plant, eliminating more than 1,100 union jobs at the Butler plant.
Cut to this spring, when the DOE made two announcements that would change the course of Cleveland Cliffs’ Butler County operations:
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That manufacturers of transformers, a key component of the nation's electrical grid, could continue to use grain-oriented electrical steel - something solely produced domestically at the Butler Works.
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That it had awarded Cleveland Cliffs a potentially life-saving grant – a potential $75 million to replace its old-school, gas-fired reheat furnace with electric arc furnaces (more on this later).
The project is expected to be a win for the company, the local workforce, and, thanks to what’s known as a Community Benefit Agreement, hopefully residents who live nearby.
And it’s all in the name of decarbonization.
What’s Up With Industrial Decarbonization & The New Funding?
Good question. Industrial decarbonization refers to the phasing out of greenhouse gas (GHG) emissions from the industrial sector - one considered a “difficult-to-decarbonize” in part because of the diversity of energy inputs and myriad industrial processes and operations.
The Industrial Demonstrations Program received a combined $6.3 billion in federal funds from the U.S. Department of Energy to support the advancement of what leaders are calling “transformational technologies” necessary to get that done.
Why is it important? The funding for the Industrial Demonstrations Program aims to accelerate the implementation of industrial decarbonization technologies critical for combatting the climate crisis, while also creating economic opportunities and reinforcing American global manufacturing leadership.
That’s not all: As we teased earlier, the projects are expected to create good-paying jobs and theoretically deliver public health benefits to communities around the country (and right here in Butler County). Projects in the Industrial Demonstrations Program will use industrial electrification, low-carbon fuels, clean energy sources like clean hydrogen, carbon capture utilization and storage, and others.
Seriously, the impact is expected to be major both environmentally and economically. Here’s a snapshot of the program’s potential impact overall:
The Butler Works Electrification Project Explained
Now that we understand the overall point of these projects, let’s dive into what Cleveland Cliffs intends to do with its DOE funding:
The company, which is the largest flat-rolled steel producer in North America, plans to replace two natural gas-powered furnaces at its Butler Works facility with electrified induction reheat technology. The price tag? A whopping $193 million - and the steelmaker received $19 million from DOE.
For the uninitiated: Induction heating is an energy efficient heating method that minimizes energy losses and enables precise control over furnace temperatures. DOE said the Butler Works project, “anchors a crucial component of the U.S.'s energy supply chain and is widely replicable among the many iron and steel facilities that use reheat furnaces across the U.S.”
Now it’s time to buckle up, because we need to get into some deep background about the type of steel the Butler Works produces and why it matters. We promise it won’t take long. Here goes:
The facility produces flat-rolled chrome stainless steels, specialty stainless sheet and strip steels, electrical steels and galvanized steels. The current operations throughout the facility require the use of a considerable amount of water. The facility draws most of its water from the Connoquenessing Creek. The water is used in a closed loop recirculating system for cooling.
Plans to electrify the Butler Works are significant in the steelmaking world because it’s the only facility in the United States that produces high-silicon grain oriented electrical steel (or GOES for short). If you’re not privy to the finer details regarding GOES, that’s OK, just know this: the stuff is critical for the production of things like transformers.
In addition to reducing greenhouse gas emissions at the plant, Cleveland Cliffs has said that electrifying its furnaces will also lead to more efficient heating of steel slabs and better-quality steel.
The facility upgrade is also promised to be a boon for local workers and job seekers. According to a company fact sheet, the project would secure the current 1,470 permanent jobs at the facility and create more than 200 temporary positions during peak construction. Cliffs has also said it may re-open a shuttered WV facility to finish the GOES produced at Butler Works.
However, to be awarded funding, projects like this also need to have a clear community benefit and include input from local stakeholders such as residents, nonprofit organizations, schools and municipalities.
*cue applause for DOE*
Cleveland Cliffs and other awardees need to present what is known as a Community Benefit Plan to nearby communities once their project gets the final go-ahead from DOE.
And to receive the whole enchilada - in this case, that $75 million - Cleveland Cliffs must negotiate what is known as Community Benefits Commitments with stakeholders who live and work near the Butler Works facility.
Understanding Community Benefits Agreements & Input Requirements
GASP is heartened to know DOE has pledged its commitment to ensuring the funded projects are designed, built, and operated safely and responsibly, and in a way that reflects the best science and responds to the needs and inputs of local communities.
How will they do that? Here’s the process:
Before projects are awarded, OCED will co-host a series of regional briefings with selected project teams and work to build relationships with local stakeholders like residents, nonprofit groups, and government agencies. And additional engagement opportunities will be planned on a project-by-project basis.
Let’s take a quick step back and explain some of the jargon before we dive into the details:
Community Benefits Agreements are utilized for energy-related projects to establish community development funds, promote training and/or hiring of local residents, establish percentage goals to use local suppliers, encourage the construction of new facilities, stimulate the use of green building techniques and establish job training and/or replacement centers.
A Community Benefit Group is a coalition of neighborhood associations, faith-based organizations, unions, environmental groups and others representing the interests of a community that will be impacted by the project.
Got it? Good. Back to the projects:
Those that are successfully negotiated and awarded are required to implement Community Benefits Commitments. These commitments are between Community Benefit Groups and the company. These commitments identify what investments that - in this case Cleveland Cliffs - would commit to in exchange for support for its facility upgrade.
While community benefits commitments are all unique, all must “pursue robust activities” in these five areas:
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engaging with community and labor groups
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investing in local jobs
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advancing diversity, equity, inclusion, and accessibility;
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supporting environmental justice; and
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creating the greatest benefit for the greatest number of people within the vicinity of a facility
So, what does “creating the greatest benefit for the greatest number of people” actually mean? In a large part, that’s for members of the community (possibly you!) to decide. And the more public input the better.
Because here’s the thing: These Community Benefit Agreements aren’t legally binding. So, more public engagement and interest can only help encourage the company to follow through with investments that would make it a good neighbor.
What Cleveland Cliff’s Has Committed to the Community
Cleveland-Cliffs has said it is committed to incorporating community input and concerns into decision making to “promote accountability and equitable distribution of benefits.”
Right now, they are in Phase 1. What does that mean? Glad you asked: Phase 1 includes gathering input on community interests, concerns and priorities for the project, job training, and local hiring.
To “support good jobs and community commitments,” Cleveland-Cliffs has also said it is committed to:
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Utilizing an existing Collective Bargaining Agreement with the United Auto Workers Local 3303, which covers hourly workers for this project at the Butler Works facility
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Engaging with local Building Trades Unions to support installation of the induction reheat furnaces
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Initiating discussions with stakeholders regarding a Community Benefits Agreement or alternative community investment plan.
How exactly will they do that and who has the company identified as stakeholders? Here’s what a DOE report on the project notes:
GASP also wanted to note this stated priority:
Develop a Justice40 implementation strategy by end of Phase 1, which seeks to maximize project benefits (including, but not limited to, reduced air emissions from the facility and increased use of suppliers from underrepresented businesses) to local and disadvantaged communities while proactively eliminating, minimizing, mitigating, and monitoring any potential negative impact.
Why & How to Get Involved
In the simplest terms: This is the chance for residents, religious institutions, nonprofit organizations, municipal bodies, school boards and other stakeholders to hold Cleveland Cliffs accountable and ensure the Butler Works project benefits your community, not just the company’s bottom line.
GASP encourages folks to get involved because public participation:
Encourages new job growth. The transition to cleaner energy can create new green jobs. The Community Benefit Agreement can ensure these jobs go to residents and provide training programs to equip them for the new economy.
Community investment & Economical Renewal. The agreement can compel Cleveland Cliffs to invest in your community – from parks and green spaces to healthcare and education initiatives.
Moves the needle. Robust community engagement and input can help lead to the strongest-possible Community Benefit Agreement and push Cleveland Cliffs to go beyond the minimum and invest in additional workforce development and and/or control measures and projects that improve public health and quality of life for those who live, work, and recreate near the Butler Works.
Advances community health. Industrial facilities often disproportionately impact low-income neighborhoods and communities of color already overburdened by air and water pollution. The Community Benefit Agreement is a tool to demand environmental justice and ensure Cleveland Cliffs funds projects that champion our most vulnerable neighbors.
You in? Here are some next steps:
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Contact your local elected officials. Let them know you support a strong Community Benefit Agreement for the Cleveland Cliffs project and encourage your local elected officials to champion community investments that improve public health and quality of life.
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Attend community meetings. Voice your concerns and priorities for the Community Benefit Agreement at your local council or school board meeting. If you belong to a community or nonprofit group, let your colleagues know about the opportunity to craft a robust agreement.
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Work with environmental groups like GASP and community organizations near and dear to you. We - and they - have the expertise to help you navigate this process. The team at GASP is following this issue closely and will keep folks informed on this process as it proceeds, so follow us on Facebook, Instagram, and X for the latest.
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Sign up to receive information and updates. It’s simple, just enter some basic information here.
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Take this survey from our friends at Sierra Club. It only takes a minute and will help identify community priorities.
Stay tuned! We will keep you posted!
Find more of our deep dives into important topics on our Resource page and blog. We offer all of this to our members and the public and just ask that if you use or adapt our materials, please share credit with our team. It takes a lot of work to compile and make sense of all the information out there.
Questions? Want to get involved or partner with us? Reach out to info@gasp-pgh.org.