It is reported that US Steel Corporation is expanding its Lorain steel tube plant to make pipes for natural gas companies and expanding a Leipsic plant to make steel for automakers.
The company said in 2010 that it was considering the two projects but declined to commit to them at the time. In December 2010, it confirmed the Leipsic project and on February 7th 2011, the state announced USD 200,000 in grants to help fund the Lorain project.
Ms Erin DePietro spokeswoman at US Steel declined to say how big the Lorain project would be.
The state grant listed it as a USD 94 million project that would create 80 jobs and retain another 508. But that is only for one potential phase of the project. Last year, then Governor Mr Ted Strickland said the Lorain project could hit USD 250 million in investments.
The need for the expansion came from two factors, the ongoing development of the massive Marcellus Shale natural gas find and a series of import tariffs place on Chinese steel pipelines in 2009. Last year, Mr DePietro said the tariffs gave US Steel more confidence in its ability to profitably produce pipes for the Macellus find.
The Marcellus Shale deposit is a massive natural gas find stretching from West Virginia to New York. Most of the geological formation is in eastern Ohio and western Pennsylvania. Pennsylvania State University geosciences professor Dr Terry Engelder has estimated that the field could hold more than 500 trillion cubic feet of natural gas. In 2009, the country used 23 billion cubic feet of gas.
A drilling boom has been going on in the Marcellus region since 2008.
US Steel Corporation's Ohio investment plans
1. Lorain Tubular Operations:
Current jobs: 500
Products: Seamless steel pipes ranging from 1.9 inches to 4.5 inches in diameter or 10.75 inches to 26 inches in diameter.
Capacity: 780,000 tons of steel pipe per year.
Expansion: New heat treatment and finishing facilities will expand the plant's capacity.
2. Pro Tec Coating Co. (A 50:50 JV with Japan's Kobe Steel):
Current jobs: 230
Products: Hot dipped galvanized steel sheet, primarily for use in exterior automotive parts and appliances.
Capacity: 1.2 million tons of steel sheet per year.
Expansion: Addition of a continuous annealing line, a system for heating and treating sheet steel.
Environmentalists have criticized the development of the shale because drillers use a process called fracking, injecting fluid into underground structures to fracture rock formations, releasing gas trapped there. The Sierra Club and other groups have said the process has polluted ground water in some gas producing regions. The drilling industry says the process is safe.
Mr DePietro said that the drilling boom has created demand for more specialty steel tubing in the region, and the new investments in Lorain will make that plant better suited to meeting that demand.
The Leipsic project, south of Toledo, is an expansion of US Steel's Pro Tec JV with Japan's Kobe Steel. In December 2010, the companies said that project would cost USD 400 million and add 80 full time jobs upon completion in 2012.
Pro Tec makes specialized, high strength steel for automakers. With federal fuel economy regulations getting more stringent over the next few years, most automakers have said they'll do whatever they can to shed weight in vehicles. Using small amounts of high strength steel can mean using less traditional steel.
(Sourced from www.cleveland.com)
