On the approaches to Alcoa's sprawling plant here, a visitor already can see why the aluminum industry is at the center of a bitter debate over the Northwest's energy future.
A dense thicket of electrical lines overhead signals that this is aluminum country.
The transmission towers with their spindly arms march over the tops of the parched brown hills, twist down the Columbia River Valley and finally converge at Alcoa's smelting factory.
For aluminum, electrical power is as crudial a resource as the bauxite from which the metal is made.
The plant and nine others in Washington. Oregon and Montana turn out one-third of the nation's aluminum and use about one-fifth of all the power generated in the region.
That is about as much power as the output of Grand Coulee Dam, the installation upstream that is the world's single largest producer of electricity.
A single aluminum plant, Intalco's in Ferndale, Wash., uses as much electricity as the city of Tacoma.
The companies are spending millions of dollars researching ways to use less power. But it still takes an average of 16,232 kilowatt hours to turn out a ton of aluminum, compares with 77 for a ton of steel.
If it were not for the aluminum industry, the Northwest would still have electricity to spare. Instead, the Bonneville Power Administration, which markets the energy from the federal dam system, has advised its customers that it will not be able to supply all their needs after 1983. The squeeze is taking the region into the age of nuclear power, with all that implies for higher utility rates and environmental confrontations.
The aluminum industry has always clustered around cheap power. When it developed 40 years ago, the infant industry gravitated toward the big federal power projects of the Bonneville Power Authority here and the Tennessee Valley Authority. Today, nearly half the industry's power comes from those two federal sources.
In this sense, it can be said that the aluminum industry had been heavily subsidized. It has been supplied with cheap power from the dams built in the 1930s and 1940s with taxpayers' money.
The limits on this power have embroiled the industry in the current energy debate.
Its interest in an adequate pool of power for the region has led the industry to quietly side with the forces promoting a rapid expansion of the area's nuclear power plants.
And its access to cheap power has raised questions of equity. Thousands of residential and rural homeowners want to know why Kaiser, Reynolds and Alcoa pay less for electricity than they do.
Yet the special consideration that has been given to the companies' problems in the current dispute is an example of the kind ot tradeoffs that are becoming routine as the nation grapples with balancing accounts in a time of scarce resources.
Demand for aluminum has been rising faster than for any other major commodity, including petroleum, in part because the metal is an energy saver.
Its light weight, its properties as a conductor of electricity, and its applications in home insulation and storm windows have contributed to its popularity. It can be recycled with very little energy output.
The average passenger car contained about 30 pounds of it in 1955. Today that is 115 pounds and some say this will go to 300 pounds by 1985 as auto manufacturers replace steel with aluminum to reduce weight and save fuel. It is also widely used in irrigation equipment, and to the extent that it enables farmers to grow more food, it helps hold down food prices.
The National Geographic wrote in 1978 that "our era may be called the Aluminum Age."
This perception of aluminum's crucial role works for the industry as it defends its interest in the Northwest. Its strongest leverage is the implied threat that if rates go too high it might pull up stakes and move elsewhere. The possibility that the aluminum industry might go the way of steel or electronics in moving abroad bothers strategic planners.
Of the six companies operating in the Northwest, three -- Alcoa, Reynolds and Kaiser -- are among the handful of global companies that control 45 percent of world production. The fourth, Intalco, is partly owned by another member of this dominant group, Pechiney Ugine Kuhlmann (PUK). The other two, Anaconda and Martin Marietta, though not major forces in the world aluminum business are nonetheless large diversified international companies.
All of these companies constantly scour the planet for cheap power and other concessions. If Northwest power become too costly, none would go bankrupt if the plants, there closed. Others could be opened elsewhere.
Only one new aluminum plant has been built in the United States since the late 1960s, the imports are running at the rate of about 1 million tons a year, Alumax plans to open a new plant in South Carolina in 1980, and substantial capacity has been added at other existing plants. But the companies have concentrated their new investments abroad in the 1970s.
Kaiser moved into Ghana in the 1960's, to take advantage of cheap hydroelectric power from a World Bank project on the Volta River. Brazil has attracted aluminum plants for the same reason. And a number of companies now plan to build smelters in Australia, which has large reserves of bauxite, the basic raw material, and of coal for generating electricity. Alcoa has just committed itself to building a $400 million, 120,000 ton-a-year smelter in Australia.
Alcoa settled in Vancouver in 1940 and soo built other plants for the government's war effort. These were sold later to Kaiser and Reynolds. The cheap power from the Tennessee Valley Authority provided a similar lure, as naming a Tennessee town after Alcoa suggests.
In the 1960s, Bonneville Power Administration contracted to supply electricity to the companies in the Northwest. By the early 1970s, the U.S. aluminum industry was getting 31 percent of its power from BPA and another 15 percent from TVA.
But in 1976, with power shortages seen as inevitable, BPA notified the companies that it could not renew the 20-year contracts when they expire, between 1984 and 1988.
In 1977, with water running low in the Columbia River, BPA cut some power to the companies. In Vancouver, Alcoa temporarily shut down two of the five potlines where molten aluminum is produced in chemical baths through electrolysis.
Under the existing statutes, only public utility districts are guaranteed cheap hydroelectric power from BPA. Although they receive only 40 percent of the electricity generated annually by the federal dam system, their share is increasing. More important, the public utilities have first call on BPA's electricity when water is low and there is little generating thrust left over for other customers such as the aluminum plants.
The companies' chief concern, therefore, has been to line up assurances of access to power in the 1980s.
"Since 1976, they have been playing a major role in shaping legislation dealing with the Northwest's power problems.
Without new congressional authority, BPA will not be able to renew the auminum contracts in the 1980s, since public utilities have first call on the power under the law.
Without a bill, power in the region eill have to be distributed according to an allocation in the courts. This could create years of uncertainly for the aluminum companies about their future power supply.
Since 1977, the companies have tried to head off criticism of their own enormous use of electricity with a half-million-dollar television and media advertising campaign stressing jobs and -- for consumers -- the importance of aluminum in cars, air planes and farm irrigation equipment.
To prepare for the legislative batties they saw were coming, the companies hired Eric Redman, a Seattle lawyer who used to work for Sen. Warren G. Magnuson (D-Wash.). Redman is an expert of how Congress works. He wrote a book about it, "The Dance of Legislation," a lively account of his experiences on Capitol Hill.
The first bill, introduced by Sen. Henry M. Jackson (D-Wash.) in 1977, was written mainly by the Pacific Northwest Utilities Conference Committee, an umbrella group for public and private utilities and BPA's aluminum and other corporate customers.
According to Redman, that initial bill was very favorable to public utilities. "The publics were grabbing everything they could," he recalls. But environmental groups charged that the bill bore the imprint of the aluminum companies and of the private utilities.
Refinements were contained in a new Senate bill in 1978 and in a third bill presented by Jackson this year and endorsed by other Northwest senators. It was passed by the Senate in August, and is now before the House. The bill would cut the private utilities in on a share of cheap BPA power and authorize BPA to sign 20-year contracts with the aluminum firms. The companies would have to turn in their old contracts and agree to a rate increase that could increase their annual power bills by $400 million a year by 1985.
Environmental organizations charge that the bill's highly complex language must be read as a blueprint for an expansion of the region's nuclear power capacity. They cite the authority in the bill for BPA to acquire the output of new nuclear plants.
Aluminum company officials will not say they favor expansion of nuclear capacity in the region. But environmentalists say it is unquestionably in the companies' interest that their principal supplier, BPA, he authorized to acquire as much new thermal electricity as possible. The room for expanding hydroelectric power is extremely limited.
Sierra Club's Doug Scott insists that the aluminum companies have a "cushy deal."
Redman hotly denies this.
"The impetus for the bill isn't to add to the region's power supply or build nuclear plants but to stop a regional holy war over the allocation of electricity," he says.
"Eventually the Pacific Northwest is going to have this problem with or without the aluminum companies," says James M. Vann, Northwest area manager for Alcoa. "There has been no regional planning. You can make book on the fact that we'll be short of power as we get out to 1986 and 1987. I'm totally convinced we're going to have blackouts and brownouts and penalties for excess use of energy."
Redman says the aluminum companies really have been subsidizing the region, not the other way around.
Under their contracts, the companies accept power interruptions for part of their requirements, thereby providing the region with a power reserve in periods of low water. And under the proposed bill, the companies would pay more for electricity than other industries that get their power from public utility districts instead of from BPA.
However, BPA has credited the companies with more than $30 million in the last three years because of power interruptions. And the companies' current contracts are among the best electricity deals in the country. The wholesale price of BPA's electricity is a third of a cent a kilowatt hour. This rises to two-thirds of a cent in December. But that still compares favorably with the 2 cents charged by TVA.
Few experts see BPA's rates going much above 2 cents for the early part of the 1980s, even if the aluminum companies sign new contracts.
Nevertheless, the threat of a pullout remains one corporate weapon in the regional war of nerves.
There have been rumors that Reynolds might move. And Martin Martietta is reported to have serious doubts about swapping its old contract for a new one in accordance with the bill.
All of Martin Marietta's production is in the Northwest, compared with only 19 percent of Alcoa's, so the impact of a rate increase would hit Martin Marietta harder than its rivals. And Martin Marietta's contract with BPA runs the longest, until 1988, so the company has less to gain than ts competitors in trading it in now for a new 20-year contract at substantially higher rates.
If Martin Marietta or other companies decide not to go along, support for the Jackson-backed bill could unravel quickly, since the aluminum companies are needed to pay some of the costs.
A General Accounting Office report acknowledged that the companies have the "option of locating elsewhere in the U.S. or overseas." Union officials, with 12,000 jobs in the Northwest aluminum industry at stake, have been supportive of the companies' position in the power fight.
But GAO's report concluded that even if BPA's wholesale rates went to 2 1/2 cents a kilowatt hour, only twoplants out of 10 might close and the others would "likely be modernized, take on more workers and produce more aluminum without increasing their consumptions of energy.'
One who plans to stay is Robert Ferrie, president of Intalco.
"You just don't pull up stakes and move out," he says. "Where are you going to move? We need power. Australia is the last place left with political stability."