Oklahoma Primary Aluminum, or OPA, recently published an economic impact report on an aluminum smelter proposed for Inola, a town just 30 miles from Tulsa. However, one Tulsa economics professor finds the report to be missing important data to paint a more comprehensive picture.
“The report is very shiny,” said University of Tulsa professor of economics Clara Mattei. The report details what a proposed $4 billion aluminum smelter in Inola will bring to Oklahoma.
The analysis, conducted by Regional Economic Model, Inc., or REMI, includes estimated thousands of new jobs and billions of dollars in gross domestic product growth for the state. Mattei notes these are two main criteria economists look at in a report. However, she says, Oklahomans should look at who is producing the report.
“I want to point out that, as for any report, we should look at who produces the report, and that tells you a lot about what numbers are being utilized and their objectivity,” said Mattei.
In this case, the study was paid for by Emirates Global Aluminum and Century Aluminum Company, two major investors in the smelter.
Mattei also says she has questions about what is not included. She points to a particular end note that state and local tax along with fiscal impacts were not included in this initial study.
Mattei thinks they should have been.
At the state level, Oklahoma lawmakers approved $255 million for the smelter to be given over 15 years based on projected jobs and investments the smelter will bring. And the City of Inola created a tax-increment-financing district, or TIF, funding the smelter construction and infrastructure without immediate tax hikes. However, once built, the smelter is expected to raise property values and taxes significantly, which will then pay off the TIF. The TIF has not been officially approved due to an increase in public pushback causing the Inola Board of Trustees to pause the process.
When asked why the data wasn’t included, a representative from OPA said the recent report is an initial look and meant to establish a baseline to build a clear picture of the region's economy with a particular focus on jobs, income and overall economic impact. They also said a more detailed report is in the works that will share a full, comprehensive picture – and will include tax and fascial impacts.
Mattei says high electricity bills are another concern not touched on in the final report. The proposed Inola smelter is projected to require 1,000 megawatts, or about 1.2 gigawatts, of continuous power to operate.
“The estimate is that there's going to be at least $25 extra in your electricity bill just to finance the huge amount of electricity that these smelters consume,” said Mattei.
Mattei said this is simply a rough estimate. She bases this on an announcement from the Public Service Company of Oklahoma, or PSO, in January of this year. PSO asked for an increase of $25 to the average ratepayer bill to pay a $1.2 billion investment in grid upgrades.
OPA is currently in negotiations on a power agreement with PSO. An OPA representative says the agreement is not yet final, so it was not included in this analysis. Once finalized, the agreement will be reviewed by the independent Oklahoma Corporation Commission.
Mattei said with the published report estimating a total of 4,000 temporary construction workers across a 42-month construction period, there are still important questions not being asked.
‘Will rents skyrocket because of this enormous amount of temporary workers?" said Mattei. "And the other question really to ask is what about the boom and the bust? There's no consideration about the fact that investors' expectations might not be always so positive to continue investing in this aluminum plant.’
Mattei refers to Century Aluminum Company's past, one of the main investors' in the Inola project.
For example, Century's Kentucky smelter went idle in 2022 and eventually closed due to a spike in electricity costs. It was once the United States' largest producer of military grade aluminum. The closure caused 600 people to lose their jobs.
Another smelter owned by Century in South Carolina also idled half of its distribution in 2015 due to a major dispute with a state-owned electricity company over electricity rates – which resulted in a layoff of 300 of their employees. The smelter is now back to full working capacity thanks in large part to the 50% tariff increase on aluminum by President Donald Trump last year.
Mattei said this is important information to paint the whole picture, but, in a capitalist society, companies will generally work toward what will net them the most profit. So, to Mattei, it is up to Oklahomans to look toward their public officials and ask for more.
“People should expect public officials to take into account primarily their concerns and their needs and their vulnerabilities," said Mattei."What we see here is instead is a very tight partnering of private business and profit with public people that clearly make us very suspicious.”
Most notably, the smelter has been backed by President Donald Trump along with Oklahoma Governor Kevin Stitt and Republican Candidate for Governor Mike Mazzei.
But, due to public outcry and unanswered questions about the possible environmental impact, the City of Inola has instilled a moratorium and its residents will be voting next year on whether to ban smelting in the city altogether.
Mattei said Oklahomans should see how much they can accomplish by working together.
“We have a lot of voice that we can give in this conversation," said Mattei. "The votes count; also, the vote for governor will count, and participation and awareness. And awareness cannot come just from a report that comes exactly from those investors who are going to be benefitting from this infrastructure. We need to be asking larger questions that, unfortunately, the narrow economic logic cannot see.”
Questions, she said, should be asked and answered by public officials on behalf of the people they serve.
