A U.S. Steel-Nippon Deal Would Make Pittsburgh a Sustainable Steel Leader

A U.S. Steel (USS) and Nippon Steel (NSC) merger isn’t just an economic boost and counter to Chinese steel dominance. It’s also a climate solution.

A Pittsburgh resident would rather deal with the Japanese than Cleveland

After Japan’s NSC announced its intent to acquire USS in December, President Biden, Former President Trump, and the United Steelworkers union came out in opposition, citing concerns for domestic jobs and national security. They instead support an acquisition by Cleveland-Cliffs, keeping USS domestically owned. Many have disputed their stance, arguing Japan poses no security threat, and NSC is far more likely to create jobs and restore Pittsburgh’s steel leadership.

But there’s another winner in this merger going under the radar: the climate. While Cleveland-Cliffs has a shaky climate record and a history of violating environmental laws, NSC appears committed to pursuing sustainable steel. By merging with NSC, USS can adopt NSC’s cleaner technologies, enjoy deeper pockets for innovation, and revitalize Pittsburgh’s steel industry — this time, as the sustainable steel capital of the world.

As a lifelong Steelers fan with family from the Steel City, I have always been inspired by Pittsburgh’s adaptability. Once famous for steel and electronics, Pittsburgh is now a hub for high tech, robotics, medical research, education, and — most importantly — beating the Browns.

Nippon looking at cleaner ways to make steel

An acquisition by Cleveland-Cliffs would flout Pittsburgh’s evolved identity. In addition to the pain we Steelers fans would feel if U.S. Steel were owned by Cleveland, Cleveland-Cliffs’ environmental record casts doubt on their interest in sustainable steelmaking. They were the only American steelmaker to publicly oppose the Paris Climate Accords, their 2019 discharge of toxic wastewater into an Indiana river killed fish and closed beaches, and just last year, they were sued by the U.S. Environmental Protection Agency after breaking Michigan air quality laws, paying over $100 million in damages.

NSC, on the other hand, presents intriguing synergies.

Today, 70% of global steel is made with coal. In hot furnaces, coke (purified, carbon-rich coal) is burned with iron ore (rocks containing iron and oxygen) in a process called smelting. The carbon from the coke reacts with the oxygen molecules from the iron ore producing carbon dioxide, leaving a product called pig iron. Steelmakers then melt the pig iron and blow oxygen through it to remove carbon impurities, leaving pure steel. Between the energy to power furnaces and the coal for smelting, the steel industry contributes 11% of global carbon dioxide emissions.

NSC researchers aim to replace that coal with hydrogen. By burning iron ore with hydrogen, the oxygen and hydrogen could react to form water, rather than carbon dioxide.

Pittsburgh can provide the raw materials

If successful, this technology would find no better home than Pittsburgh. Pittsburgh sits atop the largest natural gas formation in the nation, and pure hydrogen can be extracted from natural gas. Unfortunately, this process does emit carbon dioxide, and requires fracking which often leaks methane. But theoretically, this hydrogen’s carbon footprint could be far lower than coal’s, and the hydrogen could be obtained and produced en masse in Western Pennsylvania.

Last October, President Biden announced two new hydrogen hubs in Pennsylvania. With Pennsylvania ranking last in the nation for growth in total solar, wind and geothermal generation over the past decade, hydrogen could be an opportunity for the Keystone State to create new jobs and make its clean energy mark — especially with a now deep-pocketed USS as a customer.

In a tech city like Pittsburgh, USS may even explore deeper emissions cuts than hydrogen. USS/NSC could call American startups like Electra or Boston Metal, who each have systems that separate iron ore into iron and oxygen through electrolysis, cutting out coal and hydrogen altogether. Or they could contact a third ally, Israel, where a startup called Helios has replaced coal with sodium — a process which results in a closed loop reaction, produces some of its own heat, and works with existing steelmaking infrastructure. When powered by clean electricity, electrolysis and sodium generate zero carbon emissions. As Pittsburgh expands its high tech, it makes sense to merge that innovative spirit with the city’s bread and butter industry.

Summary

A USS/NSC merger wouldn’t just accelerate steel’s decarbonization; it would ripple across all of clean energy. For example, Cleveland-Cliffs is the only domestic producer of high-grade electrical steel. If USS/NSC can produce electric steel sustainably, they would receive immediate interest from American electric vehicle makers with their own environmental goals. That market competition with Cleveland-Cliffs would reduce steel prices, and consequently, EV prices — allowing more Americans to purchase EVs and turbocharging clean transportation.

While it sounds nice to have U.S. Steel be U.S.-owned, NSC has no intent to rebrand and seemingly every intent to join Pittsburgh in forging a sustainable future. This merger will improve the climate, create jobs, and allow Pittsburgh to do what it does best: make steel, innovate new technologies, and beat Cleveland.

This article was originally published by RealClearEnergy and made available via RealClearWire.