Washington smelter slashes aluminum production in order to resell its BPA power

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Sunday, February 04, 2001, 12:00 a.m. Pacific

Goldendale smelter slashes aluminum production in order to resell its BPA power

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by Hal Bernton Seattle Times staff reporter Mike Siegel / The Seattle Times In his last week on the job, pit operator Rob Middleton stamps imprints on newly molded aluminum logs. circles In the background are the molds that have just been lifted off the logs. GOLDENDALE, Klickitat County - They call them "pots," giant steel chambers that produce not only fiery molten aluminum but jobs that prop up the economy of this southern Washington town of 3,375 people.

When times are good, vast amounts of electricity flow through the pots. The power helps fuel a heat up to 1,800 degrees Fahrenheit and creates a magnetic field strong enough to tug at the edge of a worker's steel-toe boot.

But Golden Northwest Aluminum - stung by the West's energy crunch - has cut production to 10 percent of capacity at the Goldendale plant. All but 230 employees of a 720-person work force are being laid off.

Most of the pots are cold and quiet. Only a trickle of ore is being smelted, at the tail end of a cavernous building that stretches the length of 12 football fields.

"It's been eerie," said Dan Duggan, a 23-year plant veteran. "That place felt almost like it has a life of its own. But when you walk out there right now it's so dead looking. You feel like you're walking in a graveyard."

Duggan made his last walk Thursday. He was laid off at day's end and will be paid not to work for the next eight months.

In the tumultuous economy of a power-strapped West, there's not much money to be made sending Northwest hydropower through an aluminum plant. But there are big profits to be made selling that juice elsewhere to the highest bidder.

This shifting equation marks the beginning of an unsettling era for the Washington and Oregon communities that have long depended on 10 aluminum plants to provide 9,000 of the region's best-paying blue-collar jobs.

Nowhere is that dependence stronger than in Goldendale, an isolated community atop a Central Washington plateau near the Columbia River Gorge.

The people here take pride in an enviable outdoor lifestyle, with plenty of hiking, fishing and camping in desert canyons and pine-forested mountains dominated by the eastern flanks of Mount Adams.

But the town's timber mills have closed. The alfalfa, hay, wheat and cattle farming is on the skids. And if the aluminum plant closes for good, Goldendale and surrounding Klickitat County could see an unemployment rate topping 30 percent, according to a study by the Mid-Columbia Economic Development District.

"That's all we have left," said the town's mayor, Mark Sigfrinius, a former Seattle police officer who moved to Goldendale after being wounded in the line of duty. "It's like the bottom of the ninth, and we have two strikes. This is big-time stuff."

Hope lies in power-plant plans

City, county, state and aluminum-company officials hope the plant can be saved by easing the reliance on federal hydropower in favor of a natural-gas turbine generator proposed by National Energy Systems on city property.

If all goes well, Golden Northwest will rehire some workers in October and gear up to full production as the 248-megawatt power plant is completed next year.

"We're going to fight until the end, and we're going to succeed," said Brett Wilcox, a 47-year-old Bellevue-born attorney who is chief executive officer of the plant.

But many aspects of the complex business deal have yet to be completed. Missing pieces include Legislative approval of state tax breaks tailored for the plant and a favorable purchase contract for natural gas. If the gas price is too high, the aluminum plant can't afford to buy the power.

There are also environmental concerns.

Officials designing the gas turbines say their plant will feature state-of-the-art technology to reduce pollution. But state park officials have asked for more studies of the effects of a gas plant on nighttime visibility at the Goldendale Observatory State Park. The Columbia Gorge chapter of the Audubon Society is not satisfied with the safeguards for fish, wildlife and farmland, and is challenging the plant's permitting process in court.

"We're not the Sierra Club. We're local people, and our members live in this community, and some work at the aluminum smelter," said Dennis White, an organic-fruit grower and Audubon Society member. "And we think these concerns should be addressed."

A final decision on the plant is expected within 45 days.

Selling power instead of metal

In the meantime, Golden Northwest is making most of its money off power sales, not aluminum. Under the terms of a contract with the Bonneville Power Administration, the company is allowed to resell the public power that otherwise would go to this plant and a second smelter it operates in The Dalles, Ore. Those revenues are expected to total $400 million through the end of September.

Golden Northwest is one of three regional aluminum producers with the right to resell their BPA power. The deals are coming under increasing scrutiny, and last week the BPA threatened to cut off power sold to Kaiser Aluminum's plants unless the company agreed to share the sales revenues.

Wilcox has opted for a more politically palatable approach to the sale. Under an agreement announced last month, Golden Northwest will funnel 25 percent of its power-sales revenue back to the BPA, the federal agency that markets hydropower from the Columbia Basin system.

The company will use from 25 percent to 50 percent of the revenue to help develop the gas turbine and other energy sources such as wind power, according to Wilcox. The BPA has told Golden Northwest its hydropower contract will not be renewed in 2006.

The power-resale deal has the backing of the United Steelworkers of America, by including provisions to pay laid-off workers the difference between unemployment benefits and a 40-hour paycheck. Those payments will continue through Sept. 30.

Good wages for hard work

The Goldendale plant was built in 1971 and is situated 20 miles southeast of town. It sits right above John Day Dam, one of the federal hydro plants that helped build up the Northwest aluminum industry. Even in the face of tough global competition, the Goldendale plant has been able to pay wages and benefits averaging more than $60,000 annually.

Earning these wages can be tough duty. In the summer, searing temperatures inside the plant are made even more suffocating by the need to wear respirators. But much of the work requires a high degree of craftsmanship, and workers say that helps keep things interesting.

The molten aluminum is transferred to furnaces where each batch is mixed with alloys that convey special properties. The aluminum flows out of furnaces like a heavy silvery cream, then is cast into squares known as sows or long, skinny cylinders known as logs.

These cast metals are heated one more time, then shipped out for final manufacturing.

This past week at the plant has been a strange one. While laid-off workers packed belongings, senior workers were shuffled to job openings created through the layoffs. Sometimes they were trained by those whose jobs they're taking.

Some of the laid-off workers plan to hang loose and hope to get called back.

"I am going to do a lot of snowmobiling and motorcycling," said Adrian Buize. "There are the home projects. I'm sure my wife will see to that. There will be lots of `honey-dos.' "

End of an industry?

But many of the laid-off workers don't see much opportunity left in the aluminum industry. They are taking advantage of federal retraining funds to return to school. One man wants to be a massage therapist. The 52-year-old Duggan has had a long passion for photography and volunteered for the layoff so he could apply to degree programs.

Still, Duggan said the last day on the job was hard, much harder than he expected. There were a few jokes and plenty of handshakes. Then he turned in his coveralls and hard hats, taking home only a worn pair of steel-toe boots.

After finishing school, Duggan hopes he can work as a photographer in Goldendale. But his fate may still be tied to the plant. If it closes, he figures there won't be much demand for his services.

"The trick will be finding a way to make a living, and staying here," Duggan said.

http://seattletimes.nwsource.com/cgi-bin/WebObjects/SeattleTimes.woa/wa/gotoArticle?zsection_id=268448406&text_only=0&slug=goldendale04m&document_id=134265208

-- Martin Thompson (mthom1927@aol.com), February 04, 2001


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