The GCC Dacotah cement plant in Rapid City raised prices 5 percent last week to cover costs associated with new Environmental Protection Agency emissions regulations.
The surcharge likely will be passed on to consumers of cement-based products, such as ready-mix concrete, and could ultimately mean less work for builders and contractors.
"The regulations are killer to jobs," said Neal Schlottman, president of Rapid City's SECO Construction.
He said business owners looking to expand their facilities may put projects on hold because of rising construction costs. And even small projects, such as a new floor in a homeowner's garage, will cost more.
"And, of course, if you don't build the building, there's no jobs for the construction workers," Schlottman said.
Hills Materials buys cement from GCC and uses it to create ready-mix. Tim Foerster, the company's plants manager, said his company has been quoting the higher price to contractors for a few months now.
Asked how contractors responded to the increase, he said, "You take it to the market as best you can," passing as much of the cost along as possible.
Every business in the construction industry has suffered during the recession, he said.
"We're starting to come out of it, and a price increase like this doesn't really help," Foerster said.
Rapid City cement plant manager Steve Post said cement manufacturers throughout the country are making similar pricing moves to pay for the cost of new and updated emissions-control technology.
The regulations were passed by the EPA under the Clean Air Act. New rules for the portland cement industry were signed into law Sept. 9, 2010, and went into effect Nov. 8.
The intent is to limit emissions considered harmful to human health and the environment. The new regulations establish emissions standards for mercury, total hydrocarbons, hydrochloric acid, particulate matter, sulfur dioxide and nitrous oxides, according to GCC.
Most were not previously regulated in cement plants. The new standards were not set based on a level of safety to health, but rather according to the lowest demonstrated levels achieved by the "best performing" cement plants, GCC said.
The company said the cost of capital improvements industry-wide will be $3.2 billion and will also shut down some plants. No jobs are expected to be lost at the 92-employee Rapid City plant.
GCC let customers know in October that the increase was coming to help them in building quotes for future work.
Post said cement plants have to be in compliance by Sept. 9, 2013, and GCC Dacotah will have to spend about $3 million this year alone to prepare for the changes.
GCC America, which has three cement plants, including Rapid City's, will spend a total of about $40 million to make the improvements by 2013, Post said.
But rising costs of cement is just one increase builders and contractors face. City public works director Robert Ellis said when it comes to street construction in Rapid City, the rising cost of fuel is an even bigger factor than a 5 percent increase in cement costs.
"We see more volatility in gas prices," Ellis said. "Daily they change by 5 to 15 percent."
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