INDUSTRIAL CONCERNS

Industrial power demands drive the need for Lower Snake River Dams.  The four lower snake dams (Lower Granite, Little Goose, Lower Monument, and Ice Harbor) are run of river structures, a design which limits the number of functions that they can realistically perform.  The lack of actual storage at each facility limits the dams from providing any significant flood storage, limiting the actual benefits to navigation and hydropower.  Cheap power, however, is the largest industrial benefit.  The dams each have an electrical capacity of 810 mega-Watts (MW), except for Ice Harbor, which has a capacity of 603 MW.  Altogether, the lower snake has a capacity of 3,033 MW – enough to power 3,033,000 homes.  The dams rarely run at capacity, though, depending heavily on the quantity of flow to run the turbines. 

Industrial impacts

  There are ten regional aluminum smelters that depend upon the cheap electricity for the refinement of bauxite.  In all, the region can smelt nearly 1,700 thousand tons of aluminum per year: the gross annual income could feasibly approach $200 million.    In order to produce the total capacity the plants require approximately 3,145 MW of electricity.  A recent analysis of the aluminum industry (February 2001) estimated that the Bonneville Power Administration (BPA) would provide approximately 1,400 MW of the necessary energy to run all ten plants at capacity, with the rest being acquired elsewhere.  Since the lower Snake dams rarely run at capacity, their average power production typically equals that of Aluminum’s allotment. 

  Thus, aluminum industry is the largest industrial stakeholder for cheap hydropower in the region.  In all, there are 10,370 high-paying industrial jobs associated with the industry, which support an estimated 39,550 jobs in the region.  (“Supported jobs” are jobs that depend upon the steady employment of the aluminum industry: for instance, the transport companies who serve only the bauxite demand of the aluminum industry are ‘support jobs.’)  The total regional employment by Big Aluminum, therefore, is 0.65%.  Were the aluminum industry to vanish overnight, that would be the regional increase in unemployment.

The aluminum industry is highly reliant upon BPA for rates low enough to remain internationally competitive.  Many of the smelters use antiquated equipment and relatively inefficient processes, which could make it difficult for them to maintain their stance in the global aluminum market.  Several other global producers, who use the latest technologies, are restrained by their debt in building the facilities – keeping the older debt free plants competitive.  The low price for power is the largest factor in keeping the smelters competitive.

Regional Dependence on Industry

The aluminum industry employment is not a significant factor in the region as a whole.  Klickitat County, however, relies upon the Goldendale smelter for nearly 8% of its employment.  Wasco County, Oregon receives nearly 4% of its employment from the Dalles smelter.  Other rural smelters only provide 1 or 2 percent of the regional employment, urban smelters provide for even less relative employment.

The present situation of the aluminum market looks bad for the Pacific Northwest.  Several other international traders are driving the prices for wholesale aluminum down with lower labor costs, more efficient plants, and a more open global market and transportation structures.  Thus, many of the reasons for developing smelters in the region are fading as the regional business begins to fight on an international level.   For instance, cheap aluminum convinced the airplane industry (Boeing) to choose the region for production, saving large amounts on transportation and base costs.  Currently, however, aluminum and parts manufacturers in Japan are now competitive enough to bid against the internal production of wings at Boeing, Redmond – and Boeing is moving on.

Arguing for the Status Quo

Change is bad, and complacency and tradition play large parts in the argument for keeping the dams, and the industry provides much of this rhetoric.  The removal of the dams may only affect the aluminum industry though, and even that may fade into the general noise of a healthy economy.   As discussed before, nearly all of the energy provided by the Lower Snake dams goes to the aluminum smelters (remember that the dams produce energy proportionally with the capacity of flow in the Snake River, and that is much lower than full capacity).  Thus, easy linkages have been tied between fates of the lower Snake and the aluminum industry – were one to go, aluminum would be slated to suffer.

Economic forecasts for the aluminum industry are not entirely absolute.  Were BPA to stop providing contracts to the aluminum industry, several smelters have the financial wherewithal to remain in operation indefinitely.  The older plants, which are more sensitive to power prices, may be forced to close in the near future: unfortunately, many of these are situated in counties where much of the economy relies upon the smelters for employment.  The loss of the smelters would require significant change in these counties, but the economy at large could easily provide for the lost jobs.