AM/NS Calvert to plead guilty to violating Clean Air Act, pay $750k fine

AM/NS Calvert, a massive steel processing plant about 35 miles north of Mobile, will plead guilty to violating a provision within the Clean Air Act, court filings show, after a 2017 inspection revealed the company had failed to report that it had not taken proper measures to reduce chlorine emissions from its acid regeneration facility.

“AM/NS Calvert, LLC failed to notify [the Alabama Department of Environmental Management] of information that would have shown non-compliance under the facility’s permit, as required under the Clean Air Act,” the plea agreement between the U.S. Attorney’s Office in the Southern District of Alabama and AM/NS Calvert states.

The U.S. charged AM/NS Calvert with one count of knowingly failing to report violations under the Clean Air Act, a comprehensive federal law that regulates air pollution and sets air quality standards.

Earlier this week, AM/NS Calvert agreed to plead guilty to the charge. The company will be put on probation for three years and pay a penalty of $750,000. Arraignment is set for September in the U.S. District Court for the Southern District of Alabama.

“A federal court has found AM/NS Calvert failed to notify the proper authorities about an exceedance in emissions from its acid regeneration plant in 2017, a violation of the Clean Air Act,” Kristen Mosley, a spokesperson for AM/NS Calvert, said in an emailed statement. “As a result, AM/NS Calvert will pay a $750,000 fine, be placed on probation for 3 years and will enter into an Administrative Agreement with the government which may include further monitoring, adjustments to our management systems and additional reporting to ensure compliance.”

Federal prosecutors say that, in 2017, inspectors from the Alabama Department of Environmental Management and the EPA visited AM/NS Calvert’s hydrochloric acid regeneration facility.

There, they learned that the plant had not been using a caustic—corrosive—solution to scrub air emissions from the acid reclamation facility, even though it was required under their Clean Air Act permit. The plant instead was running on water and had been for several months.

AM/NS knew that a caustic solution was needed to purify air emissions, prosecutors allege. In 2015, the plant informed ADEM that, though the plant had originally been intended to run on water, caustic injections would be needed to meet the emissions requirements set out by their permit. Expensive repairs were needed in order to run a caustic solution, the complaint says.

“From the time that facility informed ADEM that it would be using a caustic injection system pursuant to the air permit until after ADEM and EPA performed a facility inspection in August 2017, AM/NS Calvert failed to notify the State of its deviation to using water in its acid reclamation process at the facility rather than a caustic solution pursuant to the permit,” the United States’ complaint said.

“The investigation began in 2017 following actions taken by a third-party contractor with respect to emissions from this unit and the related failure by the company to report emissions violations to regulators,” Mosley said. “This is a regrettable incident, which was remediated quickly and included a transition from the contractor to having company employees operate this unit.”

Hydrochloric acid is used to “pickle” steel—a process to remove surface impurities like rust, stains and contaminants. The hydrochloric acid can then be regenerated and reused, but HCL regeneration facilities like the one at AM/NS Calvert emit chlorine, considered a hazardous air pollutant under the Clean Air Act, according to the EPA.

Chlorine emissions can be very dangerous. Exposure to high levels of chlorine can result in chest pain, vomiting, pulmonary edema, toxic pneumonitis, and death, the EPA says. At lower levels, chlorine emissions can irritate the eyes, upper respiratory tract, and lungs.

As part of its probation, AM/NS Calvert will not be allowed to violate any other federal, state, or local environmental laws. It will also have to comply with a settlement agreement set out by the U.S. Environmental Protection Agency’s office of Debarment and Suspension.

The terms of the settlement agreement were not immediately available.

AM/NS Calvert reached a civil settlement with ADEM in early 2018 and the company has been in compliance “in all material respects since then,” Mosley said.

“AM/NS Calvert is not only committed to full compliance with all our environmental permits, we are committed to a culture of transparency and continuous improvement in environmental sustainability,” Mosley said.

AM/NS Calvert is a 50/50 joint venture between ArcelorMittal and Nippon Steel Corporation. The two companies purchased the plant from Thyssenkrupp in 2014. The plant cost roughly $5 billion to build, according to prior reporting from AL.com.

The plant employs around 1,700 people and sits on 2,400 acres, according to the ArcelorMittal website. In addition, around 1,000 people are employed at Outokumpu Stainless, a stainless-steel mill that lies in the AM/NS complex, according to court filings from a separate case.

In April, ArcelorMittal announced that it will receive a $280.5 million incentive from the U.S. Internal Revenue Service to build a facility that will produce non-grain-oriented electrical steel, a type of steel used in electric vehicles. That facility will be built on the campus of AM/NS Calvert, and ArcelorMittal is expected to invest a little more than $1 billion in the new plant, Bradley Byrne, CEO of the Mobile Chamber, previously told AL.com.

A representative from the U.S. Attorney’s office did not respond to a request for comment.