Tom Temin: You represent clients in the metals sector and metals brings together many questions regarding energy, how smelting takes place, running on electricity or gas, etc. I guess there might still be coal, I don’t know, coking coal. And then there is mining and transportation of materials. Therefore, many problems arise in the production of metal. What does it look like now and how do you think it will change?

Martin Boher: Well, I can say that, you know, the American steel industry has long been undergoing a transition from traditional coking and basic oxygen furnaces, from blast furnaces to electric furnaces. And this technical innovation has allowed us to be very competitive on the global stage. But ultimately how is that going to change because an electric furnace is still a primary steel production facility and we still produce a lot of steel in this country and they have huge energy needs. So what they do and how they source their energy has a significant impact on all of the environmental issues we face today.

Tom Temin: RIGHT. Because an arc furnace uses energy on the scale of a Bitcoin mining center, right?

Martin Boher: Yeah. A large electric arc furnace, as you know, will consume almost 250 MW of rated power when both are operating at full capacity.

Tom Temin: RIGHT. So the trend within the current administration has been to move, as you see at the state level, toward renewable energy sources. And is it sustainable for heavy industrial production? And what do you hope or expect in terms of energy sources for this type of basic work that the country is doing?

Martin Boher: Well, look, the regulatory impetus for transitioning, let’s say, your energy supply, that we’ve seen over the last few years under the Biden administration and the Harris administration, is likely to disappear. RIGHT. I mean, I think the Trump administration told us that climate change initiatives were going to stop. And so anything related to carbon is probably not going to get a lot of progress and attention from the administration. And we know that the Trump administration is going to prioritize the extraction of natural gas, oil and other minerals, like coal. So some of the obstacles that we’ve seen in terms of issuing federal leases on federal lands to do this extraction are going to disappear very shortly after he takes office. But when it comes to, for example, the steel industry is a priority. They supply products to customers like, for example, large car manufacturers and the customers of these companies, we, consumers, want a more environmentally friendly product. And to obtain a more ecological product, you must have more ecological inputs, such as green steel. The industry has therefore focused heavily on greening, meaning it has focused heavily on sourcing electricity from renewable energy. And if you see some of the new or recently built steel mills or those that have been largely announced, they are advertised with a common solar installation attached and/or associated with them to provide energy as well as storage and battery backup.

Tom Temin: We speak with lawyer Martin Booker. He is a partner at Baker Hostetler. In other words, so you can operate with a hybrid mix and run your steel mill the way you want?

Martin Boher: Yeah. Technology is progressing, it’s true. And the sun doesn’t always shine and the wind doesn’t always blow. But advances in battery storage enable and provide operational flexibility, much like we’ve seen in electric vehicles and that sort of thing for factories. It’s not a perfect solution and technology continues. This must continue to progress. It’s still very expensive. And so those who are implementing or implementing with the aim of attacking the higher quality steel market, such as automobiles and electricity, etc. However, what we are seeing is this trend and we are seeing the local utilities that are responding and generating power also responding to those that are requesting it.

Tom Temin: (A few questions. The US steel industry still supplies the domestic auto industry with rolled steel used in cars?

Martin Boher: Yes.

Tom Temin: And do they usually smell or is it scrap metal that is being made into new steel?

Martin Boher: So it’s both. But I would say the growing trend in the United States is toward scrap metal. This involves loading scrap metal into an electric arc furnace to produce steel. The technology is so advanced that you can now produce almost any grade of steel that traditionally can only be made in integrated factories. Now you can do it in an electric oven.

Tom Temin: RIGHT. So it’s a sort of self-greening mechanism, the use of scrap metal rather than ore?

Martin Boher: RIGHT. I mean, basically, these are metal recycling facilities. They therefore eliminate the need for ore in mining. Although, many times, in order to obtain certain grades of steel, they will continue to play a role for integrated steel manufacturers in the United States and in the coking industry. Let me be clear, because some inputs they make, like pig iron, are often used in electric furnaces and to increase the iron content to make the steel you need. I leave that to the steel engineers.

Tom Temin: RIGHT. Of course. Yeah. We don’t want to get into a discussion about metallurgy here, but are there any specific regulations or proposed regulations, for example from the EPA, that the industry would like to see revised under a Trump administration?

Martin Boher: Yes, there are several regulations that primarily affect, I would say, integrated plants, so blast furnace basic acid in the ovens as well as coking operations, whether through commercial coking and/or operations coking that takes place in integrated plants. There are therefore two standards that have been adopted. Both are contested. I think the problems that they’re looking to solve are related to, what I would say, technological decisions made by the EPA that create vulnerabilities in regulation and policy decisions that were typical, as I would say, of the administration Biden. that we have yet to see, like fence monitoring, things that are not necessarily designed to reduce pollution, but monitoring of that pollution to facilitate law enforcement. So I would expect the Trump administration to take a hard look at these regulations and decide whether or not it wants to continue to defend them or fire them.

Tom Temin: ALL RIGHT. And when you deal with the EPA, do you find that the people there know the industry? I mean, they have the technical knowledge such that what they are proposing, even though it may not be desirable from an industry perspective, fits into the physics-based technical reality and that that we know about the industry.

Martin Boher: And so I don’t want to turn this into an EPA bashing session because I want to be clear that EPA professionals are very dedicated to their craft and they do it every day, they make a very good work. But from our perspective, there are a few at EPA that we deal with who really know the industry, but there’s a lot they don’t know about our industry and the practical aspects of it. And sometimes the focus is on a one-size-fits-all approach to regulation. So this facility can do it and anyone can do it. And as you can imagine, facilities are built at different times. There are different challenges associated with this. They’re built in different locations, different geographies, things like that. And the one-size-fits-all approach doesn’t work with this industry. And I think that’s part of our challenge here in trying to cross the EPA line into reasonable regulation.

Tom Temin: And by the way, what is the steel working population these days?

Martin Boher: It’s growing. What I will say, Tom, is that there was real focus. We’ve helped build four different metal/steel plants in the United States since 2016. And they’re big plants. These are not small mills. This is a large-scale production of several million tonnes per year. So it’s accelerating.

Tom Temin: All right. Well, I would advise anyone who hasn’t seen metal fabrication to go see it sometime and it’s a pretty majestic paper process.