With the economy improving, demand for cement is on the rise.
In order to meet new demand for the construction material, companies are increasingly turning to imports in the wake of environmental regulations that make it expensive to produce in Southern California.
Mitsubishi Cement Corp. is on the way to reopening and expanding a terminal at the Port of Long Beach that will allow for increased supplies of imported cement. The harbor commission, which oversees operations at the port, certified the company’s environmental impact report this week, a significant step in the process.
Executives at the Henderson, Nev.-based company believe the demand for cement will no longer be satisfied with domestic supplies.
“Our plant and the other plants in Southern California are sold out and demand keeps rising,” Mitsubishi Cement Corp. vice president Bud Biggs said in an interview.
The company produces nearly 1.7 million tons of cement annually at its plant near the community of Lucerne Valley in the San Bernardino County desert.
Southern California’s demand for the raw material used in construction may exceed available domestic supplies sometime in 2016, according to forecasts from the Portland Cement Association, a trade group. Southern California’s consumption of cement increased by 8 percent from 2013 to 2014, data from the group shows.
Perhaps more relevant to Mitsubishi Cement Corp.’s plans, the trade group also expects imports to rise sharply in 2017. The Portland Cement Association expects imported supplies to increase at a moderate 4 percent and 5 percent this year and the next before jumping to a rate of nearly 37 percent in 2017.
Biggs said California cement producers’ abilities to meet expected increases in demand for raw materials are constrained by a state law that created a cap-and-trade program designed to limit greenhouse gas emissions resulting fromindustrial processes that include cement production or refining. Essentially, the law imposes an emissions “cap” on firms that can “trade” for credits that must be paid for in order to produce emissions that exceed the state’s allowances.
The California Air Resources Board has said the law is intended to create a financial incentive for firms to seek cleaner technologies.
Biggs, however, said it has effectively made it too expensive for cement companies to build new production facilities.
“It won’t get cheaper, let’s put it that way,” he said.
Mitsubishi Cement Corp. has not imported supplies at its Long Beach terminal since 2010, when shipments stopped as a result of the past economic downturn, according to port documents.
The approved environmental impact report lays out the company’s construction plans as well as the measures it must commit to in order to limit pollution locally.
As outlined in the report, Mitsubishi Cement Corp.’s plans call for upgrading its facilities to be able to load and unload ships and add capacity, enabling the company to build four new storage silos on dockside property that was previously the site of a banana warehousing operation.
If the company’s construction plans are completed as designed, Mitsubishi Cement Corp.’s footprint at the port would grow from a little more than 4 acres to nearly 6 acres. The company would also be able to unload shipments during construction, which may begin during the latter part of this year.
REMAINING ISSUES
Air-quality issues remain a concern. Mitsubishi’s plans call for dockside ships to limit their emissions by plugging in to shore-based power systems instead of burning their own generators, a process known as “cold ironing” in shipping industry jargon. Otherwise, Mitsubishi would install emissions-control equipment designed to reduce emissions.
During last week’s meeting, Angelo Logan of East Yard Communities for Environmental Justice spoke against the project, saying emissions levels contemplated in the environmental report would be greater than what people living in neighborhoods near the port should accept. He said in an interview the report should have paid particular attention to environmental justice issues, or how emissions may affect disadvantaged communities living near the ports.
Mitsubishi Cement Corp. may still have more work to do before construction can begin. The firm has to receive permission from the Southern California Air Quality Management District for its plans.
Harbor Commissioner Rich Dines also won the panel’s approval for a follow-up measure requiring that lease negotiations include a discussion of whether Mitsubishi can use better emissions control technology than what they have planned.
Port officials are planning to review the technology after five years.
If approvals are obtained, construction of the expanded terminal may begin in the late part of this year or early 2016.
