US Iron Research Articles

Minnesota\u2014too late for a Sovereign Wealth Fund?

Ten states have created natural-resource-based Sovereign Wealth Funds (SWF) to allow a fraction of the wealth derived from the extraction of non-renewable resources to be available for future use. Minnesota does not have a SWF, even though companies have been mining in the state for over 100 years. Herein, we present backward and forward-looking scenarios to estimate the potential magnitude of a “what-if” extraction-based fund. A 1.5% of value tax is suggested as an SWF funding mechanism. Based on historical extraction, prices, and investment returns, a large SWF could already exist. In the forward-looking section, we begin by econometrically estimating the supply and demand of US iron ore production to better understand how an increase in mining taxes would likely effect mining output (i.e., the production effect). After accounting for an estimated 4% production loss, results suggest enough minerals could still be extracted to create a permanent fund with between $930 million (US) and $1.6 billion dollars (US) in direct contributions by 2050 (depending on price). Using reasonable assumptions of a 2% inflation rate and a 5% annual investment return, the fund size could range from $3 billion to $5 billion by 2050.

The Meritocratic Ascendance of Cast Iron: from Magic to Virtual Cast Iron

Unlike in a democracy where selection criteria serve the concept of political equality between the members of the category, meritocracy means equality of opportunity rather than outcome. The US economy was built on meritocratic principles. The world of sports is meritocratic, as building a winning culture is crucial, and so is the world of materials. Cast iron, a material with impressive longevity going back to at least the 5th century BC, survived in the materials competition based on merit. A review of these merits is one of the objectives of this lecture. However, as developing the material properties that kept cast iron competitive is rooted in knowledge, a short escapade in the history of knowledge pertinent to cast iron will also be attempted. The US iron casting production has continuously decreased since 1990. A discussion of the effect of generation and transfer of knowledge and of ill-advised and debatable environmental constrains is provided.

Effect of Vitamin E With Therapeutic Iron Supplementation on Iron Repletion and Gut Microbiome in US Iron Deficient Infants and Toddlers.

Iron therapy induces inflammation, which could decrease iron absorption. Increased exposure of iron in the gut could also alter microbiome file. Providing antioxidants such as vitamin E with iron therapy has been associated with reduced oxidative potential. The aim of the present study was to test the efficacy of adding vitamin E to therapeutic iron therapy on iron repletion, inflammation markers, and gut microbiome in iron-deficient infants and toddlers. This was a randomized, double-blind, control trial in which infants and toddlers (Denver, CO metro area) who were at risk of iron deficiency were screened. Eligible participants were randomized to receive iron therapy (6 mg · kg · day) plus placebo (n = 22) or iron (6 mg · kg · day) and vitamin E (18 mg/day, n = 14) for 8 weeks. Iron and inflammation status, and gut microbiome (16S sequencing) were analyzed in all participants before and after the treatment. After 8 weeks of treatment, average serum ferritin level returned to normal for both iron + placebo and iron + vitamin E groups at 33.3 ± 20.2 and 33.5 ± 21.5 μg/L, respectively. Serum vitamin E concentration increased in iron + vitamin E group. No change over time was observed regarding serum interleukin-4, tumor necrosis factor-α, or fecal calprotectin. The relative abundance of the genus Roseburia (phylum Firmicutes), a butyrate producer, increased in the Fe + E group (Δ1.3%, P < 0.01). Also at the genus level, the genus Escherichia decreased by 1.2% on average among all participants (effect of time P = 0.01). Using a therapeutic iron dose of 6 mg · kg · day is effective in treating iron deficiency during an 8-week period, without inducing persistent inflammatory response. Changes of the gut microbiome raised the possibility that antioxidant therapy in conjunction with therapeutic iron supplementation could potentially improve microbial community profiles in the intestinal tract.

Rise and Fall of the Contract System in the American Iron and Steel Industry

This paper investigates the historical accounts of the ineffectiveness of the contract system in the US iron and steel industry during the second half of the nineteenth-century. The high rate of technological innovation, along with the extensive bargaining power of the old industrial crafts, made output-related pay so costly as to be unsustainable in the long run. A sliding scale, together with piece-rate pay, did nothing but exacerbate the labour problem.

The Impact of Technological Change on Incentive Provision

- The simple trade-off between incentive and risk, which is crucial to the agency problem, is not a sufficient explanation for the ineffectiveness of a specific output-related pay such as the contract system adopted in the US iron and steel industry during the second half of the nineteenth-century. The high rate of technological innovation along with workers' extensive bargaining power made output-related pay a sub-optimal solution. This stylised fact unveils the conflicting nature of piece-rate pay compared to fixed pay as new technology is introduced and stimulates an analysis of the interaction between technological change, bargaining powers, and payment systems which can be conducive to a better understanding of the agency problem and the use of incentive pay. Key words: Incentive Contracts, Inside Contracting, Unions, Technological Change. JEL Classification: J33, J51, N31, O33

Vintage structure dynamics and climate change policies: the case of US iron and steel

The US iron and steel industry consists of two main sectors—integrated firms producing outputs predominantly from virgin materials and fossil fuels, and electric arc furnaces operating mainly on scrap and electricity. Capacity and market shares of the former have declined for more than three decades, leading to reductions in energy use and emissions as the existing capital stock is retired. In contrast, electric arc furnace production not only continues to expand along with its capacity expansions but is also able to adopt advanced technology and improve energy efficiencies and carbon intensities. This paper investigates implications of changes in the cost of carbon for output, energy use and carbon emission profiles of the two sectors of the industry, and compares the results for different climate change and technology policies. Special attention is given to the dynamics of the industry's capital vintage structure. The analysis indicates that for the case of the US iron and steel industry, an increase in cost of carbon would result in emission reductions by accelerating the shift to electric arc furnaces. The same emissions reductions as those from cost of carbon increases can be achieved by technology-led policies only under the assumption that very sizeable gaps exist between current and possible energy efficiencies for electric arc furnaces and that their existing capital stock can be rapidly turned-over in favor of less carbon intensive technologies.

Energy efficiency and carbon dioxide emissions reduction opportunities in the US iron and steel sector

This article presents an in-depth analysis of cost-effective energy efficiency and carbon dioxide emissions reduction opportunities in the US iron and steel industry. We show that physical energy intensity for iron and steelmaking (at the aggregate level, standard Industrial Classification 331, 332) dropped 27%, from 35.6 GJ/tonne to 25.9 GJ/tonne between 1958 and 1994, while carbon dioxide intensity (carbon dioxide emissions expressed in tonnes of carbon per tonne of steel) dropped 39%. We provide a baseline for 1994 energy use and carbon dioxide emissions from US blast furnaces and steel mills (SIC 3312) disaggregated by the processes used in steelmaking. Energy-efficient practices and technologies are identified and analyzed for each of these processes. Examination of 47 specific energy efficiency technologies and measures found a total cost-effective reduction potential of 3.8 GJ/t, having a payback period of three years or less. This is equivalent to a potential energy efficiency improvement of 18% of 1994 US iron and steel energy use and is roughly equivalent to 19% reduction of 1994 US iron and steel carbon dioxide emissions. The measures have been ranked in a bottom-up energy conservation supply-curve.

A dynamic, hierarchical approach to understanding and managing natural economic systems

The study of economic systems, and their guidance towards sustainability, can be enhanced by understanding how natural systems use materials and energy at various levels of system organization, how these levels interrelate, and how interrelationships change. Towards this end, the paper introduces natural economics as an approach to understanding the dynamics of hierarchical systems. We define the concepts of natural economics to facilitate the description and assessment of system change, and present dynamic modeling as a method for empirical research and as a tool for management decision making. We illustrate with empirical applications the use of dynamic modeling at various levels of system organization. Empirical illustrations range from dynamic models of simple physical systems of material transport, energy degradation and self-organized criticality to models of complex industrial systems, such as US iron ore mining and steel production. The insights derived from the natural economics approach are used to draw conclusions for the study and management of economy-environment interactions.

Technology change in US iron and steel production: Implications for material and energy use, and CO 2 emissions

Recent calls for sustainable practices in industry have highlighted the need to assess the interrelationships between changes in industrial material and energy use, availability and quality of material and energy sources, and emissions. This study provides such an assessment for the US iron and steel industry. It quantifies these relationships using econometric time series analysis of aggregate industry behaviour. The econometric estimates, together with engineering information on production technologies, are embedded in a dynamic computer model and used to simulate material and energy use and emissions profiles for the period 1987–2027. The results indicate that even modest increases in raw steel production rates require unrealistically high rates of iron and steel recycling to reduce energy use and emissions in the long run, even if the historically observed rates of technological substitution and efficiency improvements can be maintained.

The Restructuring of the US Steel Industry: Changes in the Location of Production and Employment

Recent reorganization of the US iron and steel industry provides a useful setting for an analysis of the relationship between industrial location and institutional forms. Regression analysis shows that institutional shifts in the organization of production dominated geographical shifts in employment and product value as integrated maxi-mills sought to raise productivity. The reorganization of production includes mill abandonment, increased subcontracting by maxi-mills in the initial stages of production, horizontal penetration by mini-mills in the sheet-steel market, and the growing integration of steel finishing and automobile assembly as firms that belong to Japanese corporate groups expand their operations in the USA. Maxi-mills are concentrating investment and production in the Midwest states as their joint ventures with Japanese steel firms specialize in the mass production of galvanized sheets for the automobile industry. Locational shifts also include the national spread of scrap-processing mini-mills and the rapid decline of raw-steel production in Pittsburgh as maxi-mills close furnaces and mills producing construction-grade bars and rods.

Technological change and energy consumption in US iron and steel manufacturing

This paper examines the extent to which the rising relative energy prices of the past decade have influenced managerial decisions in U.S. iron and steel manufacturing. Efforts at energy conservation, as well as opportunities for short-run substitutions among energy sources, were constrained mainly by existing process technology. The actual pattern of substitution can be explained to a large extent by changes in techniques. Decisions concerning such investments were guided by many factors, among which considerations of energy savings played only a minor role. This observation can be explained by the fact that, although the industry in the aggregate is a prodigious consumer of energy, energy costs at any one production stage are but a small fraction of total variable costs. Integrated greenfield plants embodying state-of-the-art technology would achieve much higher levels of energy efficiency than are currently realized, but such new plants are unlikely to be built in the United States, under the current conditions of global excess capacity.