Economist: Northwest's era as major aluminum producer likely over

AP ^ | May 24, 2003 | JOHN K. WILEY

[sarcasm]

The Pacific Northwest's time as a major source of the world's aluminum is likely past, an economist told a regional conference.

The high cost of electricity needed to produce aluminum and the low prices that aluminum brings make it too expensive to operate the region's smelters, Terry H. Morlan said Friday in a presentation at the Pacific Northwest Regional Economic Conference.

[snopercod]

Alcoa...Boeing...sigh.

Thank you so much Greyout Davis!

[NoControllingLegalAuthority]

The production of aluminum is strategically important to the U.S. Once again, we'll be buying a strategic resource from China, a self-declared nuclear enemy of the U.S. Is China going to be our source of aluminum to build our military aircraft? What if they decide not to sell us any?

America is destroying its own strategic manufacturing. Why?

[eno_]

Strategic? It hasn't been strategic in any meaningful way for a long time now.

[libertylover]

I'd suspect the environmental wackos need to be part of the blame as well.

[Iscool]

Strategic? It hasn't been strategic in any meaningful way for a long time now.

Who cares if it's strategic??? It's part of the American manufacturing base...It's more American jobs gone to China...

Some Reps in Congress are now realizing the destruction this maneuvre is having on our country and are trying to get us out of the WTO...

[FreedomPoster]

They're a large part of the reason power costs have gone up in the West Coast states. When was the last time a serious base-load power plant went on-line in CA?

[Eric in the Ozarks]

Not for many, many years. The last big 650 mw base load plant in the US was built in 1981.

[Hermann the Cherusker]

How can the BPA LOSE money on hydro power? Its not like they have to pay for the water.

[CT]

This group (DSIs) have a poor record of honoring their contracts. In fact, as a ploy to help Clinton's 1996 campaign, then-energy secretary, Hazel O'Leary, forced BPA to let these smelters break a large part of their contracts.

Back in 1996, BPA's power was around $20. But the spot market price was a bit less. And allowing the DSIs off the system forced BPA to scramble to sell the lost contract power elsewhere.

One outcome of the midnight order from Clinton to let the DSIs walk, was that BPA was forced to give the DSIs an inducement to keep the remaining sales in force (remember, now, they were breaking a contract). That inducement gave the DSIs so-called remarketing rights. And in 2000-2001, during the height of the power crisis, the aluminum smelters used these rights to sell BPA power. In doing so, the DSIs made over $1 billion.

By 2003, after making all that money, 2 are bankrupt, one is headed there, and the remaining smelters are likely to shut down for the next few years, if not permamently.

Since Clinton has left office, the DSIs have not been able to exert their political power on BPA. But some of this is a direct result of the fallout from what these smelters did to BPA's finances.

There isn't anything left to "give."

[CT]

How can the BPA LOSE money on hydro power? Its not like they have to pay for the water.

Dams are capital-intensive assets. Lots of money to build and maintain.

[Ernest_at_the_Beach]

Thanks for that info, was not aware of another one of Clinton's follies!

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[waterstraat]

What is left for america to produce?

[waterstraat]

America is destroying its own strategic manufacturing. Why?

3 words: New World Order. It is intentional, it is purposeful, it is no accident. It takes a lot of effort to replace all american workers with foreigners, it takes a lot of effort to make all american companies shut down operations here in the States where they have been for a hundred years. A lot of policies had to be implemented to shut down american manufacturing and replace them with foreign operations, taxes, regulations, incentives, elimination of tarrifs, etc.

[gaelwolf]

Seems to me that everyone is forgetting something important here...

The Bonneville Power Administration and its dams were set up in large part specifically to supply power to the aluminum industry. When did their mission statement change?

One aluminum smelter had to shut down to ensure enough electricity would be available for California during its "crisis". Remember that one? You know the one where the rest of the northwest was being told that we had to curtail our use of Christmas lights...while California didn't tell Californians that they shouldn't use theirs?

[Hermann the Cherusker]

Coal plants and nuke plants are much more capital intensive (heat is more destructive than water) for maintenance plus they must pay for fuel. Hydro power has alwasy been cheaper because of this, which is why the Aluminum industry located in the Pacific NW to begin with (and why the Pennsylvania Railroad had Safe Harbor Dam constructed to power its electrification).

[CT]

You are right, Arminius. Coal and other generation is more expensive. But to build the dams takes a lot of cement, and labor. And that and more are usually borrowed over the leife of the facility.

But even more, with the BPA, they pay hundreds of millions to restore and protect salmon and other wildlife. Orders of courts.

[bert]

You don't understand the culprit....Alcoa, not china.

Alcoa gobbles up everything to control the market and prices.

[BurbankKarl]

I was just reading last night, about the Spokane, Portland and Seattle railroad servicing a new "ALCOA" plant around the beginning of WW2. Lots of stuff went from the ports of Portland and Vancouver to the USSR.

[Porterville]

War, good God, what is it good for?? Answer: the Pacific Northwest