BROWNSVILLE, Texas — The air
tastes like pennies at this gritty port at the southern tip of Texas, where ships'
final voyages end and steel is reborn.
Recycling here is big business, on a scale that
counts in thousands of tons, not pounds. It's where torch-wielding workers
strip ships' decks and cut their hulls for the metal to form new steel that
could end up in washing machines or even new ships.
For years the federal government paid the
shipbreakers at the Port of Brownsville — the center of the U.S.
shipbreaking industry — to dispose of its rusted frigates and tankers.
But soaring scrap metal prices have led these
companies to begin paying the federal government for the chance to get ahold of
all that valuable steel.
International Shipbreaking Ltd. recently began
recycling Adonis, an 18,000-ton tanker built in 1966. The company paid the U.S.
Maritime Administration an unprecedented $1.1 million for the privilege, on top
of the cost of towing it from the reserve fleet's home in Beaumont,
Texas, nearly 700 miles up the Gulf Coast.
"That was directly influenced by the price of
scrap," said ISL's chief operating officer, Bob Berry.
The Navy, which also contracts with shipbreakers to
dispose of warships, isn't allowed to take money from the companies, but was
able to give Esco Marine Inc. a symbolic 1 cent to take the USS Puget Sound off
its hands this year.
That means the Puget Sound's metal is expected to
more than cover the cost of towing it from Philadelphia and the work of removing
hazardous materials, including asbestos and toxic PCBs.
"We're at numbers we've never seen before for
iron and steel scrap," said Bob Garino, director of commodities with the Institute of Scrap Recycling Industries. Looking over
the last 25 years of prices for the benchmark "No. 1 heavy melt,"
which in April hit $502.50 per gross ton, Garino said, "there's not even a
close second."
Just last year, the average price for the No. 1
heavy melt steel was $254 per gross ton, Garino said. In 2001, when the
Maritime Administration was struggling to clear its inventory of ships, the
same steel averaged $75 per gross ton.
Sky-high prices for scrap metal are allowing the
Maritime Administration to stretch its funding further and recycle more of its
ships.
In 2001, the average recycling cost per ton for the
Maritime Administration was $253. Last year it fell to $60.
Demand for scrap metal has been a major factor both
in dictating what shipbreakers are willing to pay and in drawing more of them
into the business domestically. The Maritime Administration has seven certified
companies, two of which the Navy shares. When the Maritime Administration
started the current program in 2001, there were three.
Four companies' yards are spread around the end of
the Brownsville port's 17-mile man-made channel
to the Gulf of Mexico. A fifth, Virginia-based
company is waiting for its permit to be approved by the U.S. Army Corps of
Engineers.
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| Port of Brownsville, Texas, USA |
The Navy had about 200 ships to dispose of in 1997
and now has 15 designated for scrapping. Some others were sunk for training and
others to form reefs.
The domestic industry depends heavily on government
contracts because commercial owners can dispose of ships more cheaply overseas,
where there is little or no regulation. Brownsville's
shipbreakers also hope that the Maritime Administration will resume sending its
West Coast ships to their port. Environmental concerns about the ships carrying
species on their hulls that can wreak havoc on local ecosystems as well as
concerns over the lead paint released by attempts to clean them have frozen the
ships' movement since early last year.
For years, the Maritime Administration made money
for the government selling old ships to be scrapped overseas. But in the 1990s
the Environmental Protection Agency decided that doing that violated a ban on
the government exporting PCBs, said Maritime Administration spokeswoman Shannon
Russell.
That, combined with low prices for steel at the
time, led ships to begin piling up, Russell said.
Six ships — two Navy, four Maritime Administration
— were in various stages of dismantling recently at Esco Marine. Those farthest
along were beached in earthen slips, where winches pulled the remaining hulls
into the reach of cutters' torches.
Acrid smoke and sparks blew from the cutting pads.
Heavy haulers and cranes rumbled around dirt tracks and a constant jingling
emanated from a glistening mountain of metal, where a new shredder reduced
smashed cars into fist-sized pieces of metal in 45 seconds.
Esco sells most of its ferrous scrap to steel mills
in the United States.
It is loaded onto barges and sent to mills in Beaumont,
New Orleans, and Mobile, Ala.,
said company President Richard Jaross.
The high scrap prices have allowed Esco to expand,
adding the monstrous shredder last year.
Driving the price higher are a variety of factors
including tight supply, a weak dollar, high energy prices and rising raw
material costs as well as fierce international competition among countries such
as China and Turkey, Garino
said. Last year, the United
States exported 13.7 million metric tons of
ferrous scrap, up 27 percent from the previous year.
Climbing over the Adonis last week, Berry saw value in
nearly everything. With a glance at the massive propellor and a quick
calculation, he put the prop's estimated scrap value at $125,000.
Jason Glasscock, ISL's environmental and safety
program manager, said, "it's hard calling it scrap when it's worth that
much money."
Source: The Monitor. By Christopher Sherman. 11 May 2008
http://dieselduck.blogspot.com/2008/05/brownsvilles-shipbreakers.html
