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Cementing a Deal

A giant quarry and the world's largest cement kiln are being welcomed by Ste. Genevieve County. But the operation may leave St. Louis gasping for air.


Jack Geiler can still pinpoint the place where he bagged his first buck, back in 1946. He's hunted turkey for years in these parts, too. After a snowfall, the land sloping down to the Mississippi River looks like a rumpled towel, each ravine folding into the next, from Isle du Bois Creek south to Wolf Hollow and beyond. Not a flat spot to be found.

"It's some beautiful country down here," says Geiler, who turns 76 this month. "I just hate to see it tore up." As he drives his white Dodge pickup down Brickeys Road past Needmore, he recalls when electricity was belatedly introduced to the tiny ridgetop burg in 1951. Before then, Geiler's uncle hung kerosene lanterns along a nearby stretch of the river to help guide passing towboats and packets. With the exception of a few small quarry operations, things have remained pretty much the same in northern Ste. Genevieve County. Roads are rare and the woods deep. But there are signs of change in the offing.

Out on Highway 61, the Beacon Café has expanded in anticipation of a business boom. There's talk of a new quarry and cement kiln. Down a ways, a new asphalt road is being cut up into the hills by a local excavating company. Geiler's grandson hired on with the firm as a diesel mechanic. "One of these days you won't see them hills over there," Geiler says. "They'll all be leveled out."

At the White Grill in downtown Festus and Laddy Boy's diner out on I-55, Geiler picks up the latest scuttlebutt. Word has it that the locals are resigned to the project. Indeed, most of them see it as a good thing for the area's economy. "I get around a lot, talk to a lot of people," says Geiler. "I really can't say that anybody is concerned about any harm that it's going to do to the population of the county. Most of the people who owned that land weren't using it, and they were kind of wanting to get rid of it. They offered such a big price, people just couldn't turn it down. Everybody is satisfied, and nobody is concerned. What they're looking at is the jobs that it's going to make available and the benefit that the county is going to get off it."

Sixteen miles to the south, at the courthouse in the town of Ste. Genevieve, the county's elected officials are huddled for their biweekly meeting. The 504-square-mile county is governed by two district commissioners and a presiding commissioner, who is elected at large. The three serve about 17,000 residents on a voluntary, part-time basis. The topic of the morning's discussion is Holnam Inc.'s plan to build a massive cement plant in the northern tip of the county. The commissioners support the project and are quick to note that their constituents feel the same way.

"We've had very little negative reaction," says Dennis "Toupie" Huck, the presiding commissioner. "Everybody you talk to in the street or the coffee shop says, 'Don't let this get away.'" Barry Lower, Holnam's project manager, lauds the community for convincing Holnam's board of directors to approve the project. Late last month, Lower told the Ste. Genevieve Herald: "I have to give a lot of credit and recognition to the Ste. Genevieve residents and community leaders. Their support for the project was received enthusiastically by our board and by our parent company, Holderbank. It added a lot to the project's favorable review by management." Directors of Holderbank Financière Glaris Ltd. of Switzerland formally approved the project on Dec. 21.

Holnam's warm reception in the county may be attributed to the company's own advance work, including the formation of a citizens' advisory group. Unbeknown to the commission, Holnam, a leading cement producer, had been scouting the county since 1997. Over the next two years, Holnam -- with the help of a Perryville, Mo., survey company -- quietly acquired nearly 4,000 acres of rugged timberland bordering the river. "When they came in and talked to us initially, they had already secured a couple thousand acres," says Commissioner Jeffrey L. Roth. "We had heard there were some transactions going on, and we thought something was up, but we didn't know what."

After they had the property in hand, Holnam struck a deal with the county commissioners to use industrial-development bonds to pay for construction of the $600 million facility. By having the county finance construction, the cement giant gets a ready source of low-interest financing while reducing its future property-tax obligations to the county for the first 20 years of operation.

Although the county has never backed an industrial-development project of this scale before, the commissioners are confident that Holnam's ambitious plan represents an unprecedented opportunity for economic growth. "I see it as a windfall," says Huck. Commissioner Linda L. Hermann adds: "I feel fortunate that they want to come here and be a part of our community."

In lieu of taxes, the county would receive an annual stipend of $2 million from Holnam for each of the first three years of the plant's operation, with incremental increases thereafter totaling more than $49 million over the next two decades. The county also expects to benefit from the 200-plus jobs that would be created, as well as additional revenue brought in as a result of the plant's $10 million annual payroll.

The deal is even sweeter for Holnam, providing the company access to an estimated 2 billion tons of high-grade limestone at the site, enough rock to mine for well over a century. The facility will include a harbor, barge-fleeting terminal and railroad spur. Talks are under way with the Missouri Department of Transportation with regard to building a highway interchange on nearby I-55 that would serve the plant. The adjacent cement kiln, which is tentatively scheduled to be fired up in late 2003 or early 2004, would have the capacity to manufacture 10,000 tons of cement daily, or approximately 3 million tons a year, making it the largest cement facility in North America.

"We're talking about one kiln that's almost double the size of any existing kiln (in the U.S)," says William Toal, a spokesman for the Portland Cement Association in Chicago, an industry group. "There are only three plants in the world that are that big. Two of them are in Korea, and one is in Thailand." By comparison, Holnam's cement plant in Clarksville, Mo., has an annual output of 1.2 million tons.

That Holnam takes its directions from corporate headquarters in Switzerland is not unusual. Cement is a global commodity; approximately 80 percent of the industry in this country is controlled by foreign interests, including a few huge European firms. Currently, domestic production, which is operating at full throttle, is still exceeded by demand. Foreign suppliers unloaded 28 million tons of imported cement this year. That amount represents more than a third of the nation's annual cement consumption. "A few years ago, it was running at 7 million tons," Toal says. "So we're bringing in lots of cement. That was the short-term solution, because the construction markets in the U.S. economy have been very, very strong. It's really been hitting on all cylinders."

With residential housing starts leveling off because of recent interest-rate increases, however, the cement industry is counting more on the public-works sector to keep it busy in the future, Toal says. "Public works" is, for the most part, another way of referring to highway construction. Much of the domestic cement-production increases taking place are tied to the passage by Congress in 1998 of the Transportation Equity Act for the 21st Century, otherwise known as TEA-21. The legislation allocates $218 billion for federal highway construction over a six-year period.

To meet this need, the industry anticipates adding an additional 30 million tons of new capacity, with the Show-Me State targeted for massive expansion in production levels. "It's sort of scary when you look at the possible additional capacity for Missouri," says Toal. "As of 1999, the capacity was 4,497,000 tons. If all these projects came about, capacity (in Missouri) would increase to 11,663,000 tons." In addition to the Holnam facility, Continental Cement has announced plans to build a 1.3 million-ton plant in southern Ste. Genevieve County. As it stands, Missouri already ranks fourth among cement-producing states on the basis of clinker volume. Clinkers are the gray pellets produced when limestone is baked in a cement kiln at 2,800 degrees Fahrenheit.

But there are critical consequences to Holnam's proposal, and key agencies are objecting to it. The U.S. Environmental Protection Agency and U.S. Fish and Wildlife Service are both on record as opposing the project. And the Missouri Department of Resources is leaning against it, citing concerns about air quality.

In a Nov. 9 letter to Holnam's project manager, DNR warned that the proposed cement plant could cause ozone levels to jump, thereby jeopardizing the agency's elusive goal of bringing the St. Louis area into compliance with federal Clean Air Act standards. Nitrogen oxide (NOx) is a major component of ozone. According to Holnam's own calculations, its cement kiln would spew forth more than 7,000 tons of the pollutant annually.

Ozone damages lung tissue, aggravates respiratory illnesses and fosters respiratory infections. Long-term exposure causes irreversible changes to the lungs, leading to premature aging and chronic respiratory diseases, according to the EPA, which delegates responsibility for enforcing the Clean Air Act to state regulatory agencies -- in this case, the Missouri DNR. Missouri has failed to comply with the statute for more than a decade. This has resulted in a federal lawsuit filed by the Missouri Coalition for the Environment because EPA has failed to downgrade the St. Louis area's status to "serious" nonattainment. Automobile exhaust and industrial emissions are the primary causes of ozone pollution.

DNR has been making attempts to clean up the air through various initiatives, including the enhanced automobile-inspection program. Though some improvements in air quality have been made lately, a single pollution source -- in this case, Holnam's proposed cement kiln -- could prevent the state from reaching its goal. Ultimately, hundreds of millions of dollars in federal highway funds could be withheld from Missouri if the EPA decides to penalize the state. Business groups, including the Regional Chamber and Growth Association and Associated Industries of Missouri, have been lobbying against such sanctions for years. In addition, if the St. Louis area were to be categorized as a "serious" nonattainment zone, it would result in the imposition of stricter and more expensive industrial-pollution controls that could discourage new businesses from starting up in the region.

The proposed Holnam facility in Ste. Genevieve County lies just outside the designated attainment zone, which incorporates seven counties in the bistate area and the city of St. Louis. If it were inside the zone, Holnam would automatically be compelled to adhere to stricter standards. But as it now stands, the DNR still considers the proposed plant a potential polluter of the first order. By the company's own admission, the plant would emit more than 20 hazardous airborne pollutants. But NOx levels are the major concern. DNR rates any facility that emits more than 250 tons of NOx annually a serious risk. Holnam's plant would pump out more than 7,000 tons.

"The Air Pollution Control Program (APCP) is concerned about the impact the proposed plant would have on the St. Louis non-attainment area," wrote Roger D. Randolph, director of the DNR program. "The Gateway Clean Air Program, the introduction of reformulated gasoline and the statewide NOx regulation are programs that have consumed a lot of time, energy and financial resources aimed at lowering the ozone level in the St. Louis area. Therefore, the APCP is concerned about the potential detrimental effect on this area, particularly NOx sources such as the proposed cement kiln."

When the DNR factored in Holnam's emission estimates, it showed that the proposed facility would throw the region into serious nonattainment of federally mandated air-quality standards. Randoph's letter notes that Holnam's application omits any reference to the installation of available pollution-control devices that would limit the plant's NOx emissions -- the kind of devices used at some facilities in Europe. Randolph concludes: "Your application is seriously deficient by failing to (have) included add-on controls in your analysis. Please be advised that ... until these specific issues are dealt with in a satisfactory manner, the application is unacceptable and technically incomplete."

Despite being informed in writing that the company's air-quality permit was in jeopardy, Holnam went ahead and announced that it would pursue the project without further delay. In its Dec. 21 press release, the company mentioned nothing about the problems it had encountered with the state.

"It's kind of splitting hairs as to whether they're in the nonattainment zone or not," says Randolph. "The real issue is that they have a significant impact on ozone in the St. Louis area. We've told them that they've got problems, and we continue to work with them. The ball is in their court. So that's where it stands -- it's a negotiating process. We're trying to get them to offer up a better plan."

Lower, the company's project manager, argues that Holnam is caught between conflicting regulations: Pollution devices used in Europe aren't necessarily appropriate in the United States, he says, because they don't comply with opacity rules, which regulate the visible smoke being emitted from a stack. Lower refers to the European method as "selective catalytic reduction," or SNCR. "Our supplier has proposed a different technology for this project, which is also a very good remover of NOx," says Lower. "It's called "multistage combustion.' It controls the combustion process differently than in Europe. They believe and are prepared to guarantee that multistage combustion will be as effective as SNCR."

But a state official warns that Lower's explanation is misleading. "It's not a matter of either/or -- we're talking about additional control," says Refaat Mefrakis, a DNR environmental engineer. "In a cement kiln, multistage combustion is really a process modification, which basically minimizes the emission of NOx at the combustion zone. (But) it does not completely eliminate NOx. Holnam would still produce large amounts of NOx, whereas selective noncatalytic oxidation is an add-on control. From the literature that we're gathering, it seems to be effective in reducing NOx in the stacks -- after the multistage combustion."

Holnam operates 14 cement plants in the United States. All of them emit vast quantities of airborne pollutants from their smokestacks. In addition to manufacturing cement, some plants serve as hazardous-waste incinerators. Holnam's plant north of St. Louis in Clarksville, for instance, has burned tens of thousands of tons of hazardous waste as fuel since 1986. If the Ste. Genevieve plant becomes a reality, nothing would prohibit the company from burning hazardous waste there. That would cause the plant to emit more dioxins, furans and other toxic substances, adding to the pollution that the plant would inevitably cause. Missouri already holds the dubious distinction of having more hazardous-waste-fueled cement kilns than any other state. In addition to Holnam's plant in Clarksville, the waste burners include Continental Cement in Hannibal, Lone Star Industries in Cape Girardeau and River Cement in Festus.

Cement kilns started using hazardous waste as fuel in 1984, after Congress last amended the Resources Conservation and Recovery Act. The loophole grants cement producers the privilege of accepting hazardous waste without having to go through the same regulatory process as a hazardous-waste incinerator. This is doubly profitable for cement manufacturers, because they receive payment from hazardous-waste producers for accepting the waste and then turn around and use it as an alternative fuel.

Holnam's environmental record leaves a trail of toxic smoke from one end of North America to the other. In September, Colorado officials discovered that a smokestack at Holnam's LaPorte plant was emitting two times the permissible amount of pollution, according to press reports. In this case, state regulators limited the testing to just one of the plant's 100 smokestacks. At Holnam's headquarters in Dundee, Mich., and other plants, the company burns tires as fuel. Studies by the Michigan Department of Environmental Quality have shown that levels of heavy metals such as mercury increase when tires are used to stoke a cement kiln. In 1993, the Texas Air Control Board fined Holnam's facility in Midlothian $135,000 for excessive sulfur dioxide emissions. A year earlier, Canada's Ministry of the Environment ordered Holnam's parent company, Holderbank, to stop burning chlorinated waste at its plant in Mississauga, Ontario, after residents complained about high emissions of heavy metals, dioxins, PCBs and hydrochloric acid.

Holnam sales grew by a respectable 6 percent in the first six months of last year. Holderbank, the parent company, did even better worldwide, raking in hundreds of millions in profits from its operations in more than 60 countries in Europe, North America, South America and Asia. Most of the Holderbank billions are still under the control of the Schmidheiny family of Zurich. The company's CEO is Thomas Schmidheiny. His junior brother Stephan Schmidheiny, also an heir to the cement dynasty, has branched out in other enterprises, such as Swatch watches. In the last decade, Stephan has found an avocation in seeking to raise environmental consciousness among global industrialists. The younger Schmidheiny led the business delegation at the United Nations-sponsored Earth Summit held in Rio de Janeiro in 1992. This led him to form what became the World Business Council for Sustainable Development, a group that includes such major polluters as Dow, DuPont and Shell Oil. The purpose of the organization is to promote "eco-efficiency," a melding of capitalistic and environmental goals.

Judging by the scale of Holnam's proposed cement plant in Ste. Genevieve County, it doesn't appear that "eco-efficiency" was ever taken into consideration. Holnam has taken great strides, though, to coordinate its efforts closely with the U.S. Army Corps of Engineers, which is responsible for protecting inland waterways. Those efforts have already paid off. Last fall, the Corps granted Holnam permission to begin building its access road over two streambeds at the site, even though the agency has not yet consented to the construction of the facility itself. The latter application, which is now under review, includes a study of the site's natural characteristics and the potential environmental impact that the project would have on the area.

Two federal agencies, as well as environmentalists, have used the Corps' public-comment process to register their criticism of the plan. Opposition is being spearheaded by attorney Yvonne Homeyer of the Webster Groves Nature Study Society and Maxine I. Lipeles, a lawyer and director of Washington University's Interdisciplinary Environmental Clinic. The Missouri Coalition for the Environment and the Sierra Club are lending their support to the cause.

"The big picture is, there are 4,000 acres of basically undisturbed property," Lipeles says. "I think it's the largest undisturbed piece of property on the Mississippi River between St. Louis and Cape Girardeau. It's rich habitat, and it's spectacular. People with scientific training that we've been able to speak with who have actually seen the property become poetic when they describe it. They start talking, and they're overwhelmed. What we've got is a very unique unfragmented forest. I do not know of any other unfragmented tract in eastern Missouri, outside of the Ozarks. That, in and of itself, makes it unique habitat."

John Karel, the director of Tower Grove Park, conducted scientific research on the area as part of a survey of seven counties in southeast Missouri during his postgraduate studies at the University of Missouri School of Forestry in the mid-1970s. In his public comment to the Corps, submitted last month, Karel praises the endangered site for its exceptional natural qualities. "Wolf Hollow, consisting of roughly 600 acres, is located entirely within the area that would be affected by the proposed development," writes Karel. "... During the entire study of these seven counties, including two counties fronting on the Mississippi River, we did not find any tract of privately owned land that was more impressive than Wolf Hollow, especially in its context of wild undeveloped forest land extending all the way from Isle Du Bois Creek downstream to at least Brickeys Hollow. This area of several thousand acres is remote and unspoiled, with little evidence of disturbance other than some long ago logging, and a few unimproved trails along some ridgetops. The overall integrity of the forest cover is remarkable, combined with a fascinating diversity of vegetation related to exposure, slope, soil, and geologic substrate. Wolf Hollow itself is only the choicest valley in a series of wild and scenic riverbrakes that all feed into the Mississippi River Valley. In 25 years since this study was conducted, I have had the opportunity to see and evaluate priority natural areas and features all over the state of Missouri, including during a tour of duty with the Missouri State Park system. In all those years, I have not found an area of our state that exceeds this tract in its inherent quality or natural history value." That the area has remained relatively unspoiled into the 21st century is miraculous, says Karel.

Lower, Holnam's project manager, disagrees with Karel's assessment. "The plant site is in an old quarry site," says Lower. "Much of the rest of the property has been logged over the years. It has roads on almost every ridge. I know that it's good (wildlife) habitat, but it's not the pristine area that somebody has told you it is down there. Some of it's been farmed. It's been grazed. The previous landowners used the logging for income, I presume. It's pretty country down there, but it's not undisturbed."

Holnam's permit application lists five endangered species within the range of the site, including the pallid sturgeon and bald eagle. The company's permit application says it will begin restoring the land after 10 years. But it doesn't mention how the destruction of aquatic habitat would be mitigated. Critics note that the project would destroy more than 16 acres of wetlands, most of which would be taken to build a harbor in a nearby lowland known as Lee Island. Moreover, they believe the 2,000-acre quarry will have a negative impact on eight seeps and 25 springs at the site, plus a variety of threatened flora and fauna, including neotropical migrating songbirds, such as the cerulean warbler, which are known to be on the decline. Foes of the project contend that upsetting the habitat of one species can have a domino effect on the entire ecosystem. For these reasons, among others, opponents of Holnam's plan, including the EPA, are asking the Corps to take a closer look at the proposed site and prepare a formal environmental-impact statement, or EIS.

On Dec. 21 -- the same day Holnam publicly announced its plans to move forward with the project -- EPA informed the Corps "that an EIS should be prepared for a project of this magnitude. EPA believes that existing environmental analysis is not sufficient for a project of this scale.... We believe the project should be systematically analyzed through the procedural framework afforded by the National Environmental Policy Act."

"An EIS is supposed to look at all the environmental impacts, whether they're federally listed or state-listed or not listed at all, because the whole idea is that you understand the totality of the consequences of your decision before you make the decision," Lipeles says.

"Once you've got a gap in the ecosystem, once these species are gone, we don't know what kind of consequences are going to flow from that," adds Homeyer. "What's going to happen to us in industrialized countries when we start losing birds? Birds eat insects. Insects feed on trees. If you lose the birds, there isn't anything to stop those insects. The forests are gone."

In its public comments to the Corps, dated Jan. 5, the U.S. Fish and Wildlife Service summed up its opposition this way: "The proposed site consists of a large contiguous tract, with wetlands, caves, large river, streams, hollows, ravines and glades. The proposed project would convert these relatively undisturbed areas into heavy industry. The proposed project will have irreversible impacts on these habitats and the plant and animal species that utilize them. We believe that the proposed mitigation is inadequate, especially for the aquatic and upland habitat. Therefore, we recommend that the Corps deny the project as proposed."

Homeyer compares Missouri's circumstances in this situation to that of a Third World country: "I used to live in Nicaragua, and I've seen how these companies come in and use up resources -- they don't pension out their workers, they just get up and leave. You're talking about a foreign company that's going to take the profits out of the U.S. back to Switzerland. That's all Holnam is here for. It's a U.S. subsidiary to ship the profits back to Switzerland. They're going to create, at most, 200 full-time jobs, and for that we're going to have dirty air, ruined habitat and loss of wildlife. I don't see how anybody can get excited about this except Holnam. Who else serves to gain except Holnam? Where is the benefit to Missouri? I don't even see it on paper."

On the high end of Brickeys Hollow, where the scree begins to peter out, four turkeys dart across the road into a stand of scrub oaks. Geiler slows his pickup to take a gander at the birds, his gnarled hands gripping the steering wheel. He stares in silence for a moment and then drives slowly away, the muffled sound of gravel churning under the snow as his truck's tires roll along the rutted path.

Geiler was born in Ste. Genevieve County and moved up to Jefferson County about 30 years ago. After he retired from Pittsburgh Plate Glass in Crystal City, he went into selling real estate. He held onto his license up until last year. So he knows something about land dealing, speculating. He's seen plenty of tracts parceled out and subdivided, the timber cut down to the nub. But it never pleased him much to see a big tree felled; he did his best to keep it standing if he could. Geiler is widowed now, and sometimes when he's out there driving on Highway 61, he gets to thinking about old times, about the roadhouses and the dance halls and the general store that used to keep a couple of black bears penned up out back to attract the tourist trade, places that aren't around anymore. And then his thoughts turn to the kind of world his grandkids will know, when they get grown and he's no longer here. He thinks of the future and the past and the thin line that splits the two like the stripe in the middle of the road.

"I've been a hunter all my life," says Geiler. "I've hunted all this ground where the plant's going to be. I've been over it all. I know what it is. It's beautiful land. Most of it's still virgin timber, never been harvested. That's what I hate worst, seeing virgin timber and hills tore up. I think anybody who likes the outdoors and hunts and fishes, they all feel the same way. A lot of these big oaks, they're 150 years old. You bulldoze them out, and there's no generation going to grow up to see a tree that big.

"Still, you've got to have that stuff. I don't know what this cement plant is going to do for the area around here. I'm sure you're going to have a lot of local people go to work there, but you're still going to have a certain amount of outsiders come in. It will probably build up. It'll make a big change in the area, I'm pretty sure. Like I say, it's just something in modern times -- changing. I guess we got to live with it."

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