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## Re: [hreg] Media Meeting Monday Night

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• There was an error in the thinking of my first model. I substracted Total world energy consumption from fossil fuel reserves, but I should have only
Message 1 of 25 , Jun 30, 2003
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There was an error in the thinking of my first model.  I substracted Total world energy consumption from fossil fuel reserves, but I should have only subtracted fossil fuel energy consumption.   Attached is a new model that looks at just petroleum consumption and reserves.  The model is used to describe bacteria growth in a limited nutrient pool.  The bacteria grow exponentially until they have to compete with each other for nutrients and then they start dying off.  One could imagine an analogy.  The model used fits pretty good and there are no "adjusted" parameters, only two parameters fit to historical trends.  The results show we will have consumed half of our oil supply by the year 2025 and our peak consumption will occur at year 2040.  Wow, this IS serious.

Michael is right.  Only about half of the oil listed as a reserve is "good" oil.  The other half requires a lot of work to make it into a usable, clean fuel.  Same with coal; only about half of the reserves listed are of good quality.

I'll dive into the BP site next...

Regards,
Chris Boyer
----- Original Message -----
Sent: Sunday, June 29, 2003 4:51 PM
Subject: Re: [hreg] Media Meeting Monday Night

Mike,
You are right, I calculated those numbers the same time I was doing the ethanol calculations awhile back and I must have gotten billion and trillion mixed up.  Do these numbers look better?....
World known recoverable reserves were:
Oil - 1x10^12 barrels or 5,880 Quadrillion BTU (Quad)
Gas - 5.2x10^15 SCF or 5,200 Quads
Coal - 1.0x10^12 short ton or 22,200 Quads
Using these numbers and a growth consumption rate = A*E(t)*exp(k*t) where A and k are constants, E is the total energy reserves and t is the time (yr), then peak consumption would occur at about 2025.  If you say that we have only discovered half of the possible reserves, then the peak would occur at about 2060.  Ouch!  That changes my philosophy - add shortage of fossil fuels to the list of reasons we need renewable energy!  Of course, someone better check my numbers.
I attached an Excell file with calculations and graphs showing the 2025 and 2060 cases to this e-mail.

The Annual Energy Outlook only has US data.  In the EIA web site, there is a section "international" that has world data.
I'm still pouring over the data myself, so, more info to follow...

-Chris

----- Original Message -----
Sent: Saturday, June 28, 2003 3:14 PM
Subject: RE: [hreg] Media Meeting Monday Night

Chris,

Can you check your reference please.  The numbers you gave would say we have 15000 years of oil left at current consumption rates.  I found another source that was a factor of 1000 less, after some math.  So that would be 15 years of oil left (at current consumption; not counting undiscovered resources).

The 2003 reference you gave had US data.
-----Original Message-----
From: Roxanne Boyer [mailto:rox1@...]
Sent: Friday, June 27, 2003 10:56 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

Mike and all others interested,
The DOE has a division called the Energy Information Agency (EIA) that publishes available information on the energy sector.
By trending world consumption (modified for population growth) and available fossil fuel reserves, one can predict how long we can depend on fossil fuel as an energy resource.

From the EIA home page, you can access all kinds of information, however, you really have to know for what you are looking, and you have to understand how the data was obtained and what it means.   There used to be a publication called the "Annual Energy Review", the last copy I have was published in August of 2001 and was current through 2000.  That document reported annual world energy consumption was ~400 Quadrillion BTU.  Crude Oil reserves were 5,880,000 Quadrillion BTU, Natural Gas reserves were 5,200,000 quadrillion BTU (I think they included gas hydrates), and coal reserves were 22,200 Quadrillion BTU.
(For comparison, 450,000 Quadrillion BTU of solar energy strikes the earth's surface.)

I think EIA changed the content and name of the report to the "Annual Energy Outlook".  The most recent, 2003 (data through 2002) can be found at:
I just found this document, and have not read it yet.  I will say more on fossil fuel reserves later if I find a difference between the 2001 publication and the 2003 publication.
Sincerely,
Chris

----- Original Message -----
Sent: Thursday, June 26, 2003 10:04 PM
Subject: RE: [hreg] Media Meeting Monday Night

Chris, can you point us to the EIA data?  I knew there was a lot of coal, but I didn't know there was that much.

Charlie, thank you for the report and the explanation.  This peak in production was discussed at the American Solar Energy Society meeting that some of us just returned from in Austin.  I think they said the projections on world peak production were from 2005 to about 2015, with the point made that we should do something about it rather than argue exactly when.

The conference was great! We will have a report on it by those who went at our meeting in July.
-----Original Message-----
From: Roxanne Boyer [mailto:rox1@...]
Sent: Monday, June 23, 2003 10:09 PM
To: hreg@yahoogroups.com
Subject: [hreg] Media Meeting Monday Night

Did anyone go to the media meeting with Richard Heinberg Monday night, please give us a report on it.  I wanted to go and was unable, so if someone would please let me have the experience thorugh their eyes, I would appreciate it.

I know his book states a case that the earth is about to run out of petroleum.  The DOE-EIA published that there is enough fossil fuel to supply world demand as it increases 5% per year until the year 2300.  Thus, my case for renewable energy before 2300 has been to prevent pollution and increase freedom/peace.  I would like to add to my argument for RE that there is a shortage of fossil fuel if someone can put forth a convincing, scientific proof of it.  Does anyone have a copy of his book?

Sincerely,
Chris

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• Chris, Mike, Another thing to keep in mind when making projections of this kind is that the estimates of total energy reserves are not even really estimates.
Message 2 of 25 , Jul 1, 2003
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Chris, Mike,

Another thing to keep in mind when making projections of this kind is that the estimates of total energy reserves are not even really estimates. "Guesstimates" are a better term. So, there has to be a fairly wide margin of error in any predictions. Your model is as good as any, and will yield a general idea of when we start to run over "trip wires". The big event to watch out for is when world demand begins to exceed world supply (remember, supply has less to do with total reserves than with recovery rate).

Some variables that can cause serious changes in the prediction would be a general war in the mid-east (especially nuclear war), or massive market dislocations caused by unrest/war from the Orient, Eurasia, or Europe as a result of the exceedingly high US consumption rate. When demand finally exceeds supply, the price of energy will increase, and world-wide social disruptions will be inevitable. Unless, of course, alternate energy and wise conservation practices (not likely, unless price driven) are able to capture enough of the market to avert these problems. But, as Chris so capably points out, time is not on our side.

Someone in the railroad industry once told me that 100 rail cars of coal came into Houston every day. Does anyone know if this is true?

Michael
-----Original Message-----
From: Roxanne Boyer [mailto:rox1@...]
Sent: Monday, June 30, 2003 10:00 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

There was an error in the thinking of my first model.  I substracted Total world energy consumption from fossil fuel reserves, but I should have only subtracted fossil fuel energy consumption.   Attached is a new model that looks at just petroleum consumption and reserves.  The model is used to describe bacteria growth in a limited nutrient pool.  The bacteria grow exponentially until they have to compete with each other for nutrients and then they start dying off.  One could imagine an analogy.  The model used fits pretty good and there are no "adjusted" parameters, only two parameters fit to historical trends.  The results show we will have consumed half of our oil supply by the year 2025 and our peak consumption will occur at year 2040.  Wow, this IS serious.

Michael is right.  Only about half of the oil listed as a reserve is "good" oil.  The other half requires a lot of work to make it into a usable, clean fuel.  Same with coal; only about half of the reserves listed are of good quality.

I'll dive into the BP site next...

Regards,
Chris Boyer
----- Original Message -----
Sent: Sunday, June 29, 2003 4:51 PM
Subject: Re: [hreg] Media Meeting Monday Night

Mike,
You are right, I calculated those numbers the same time I was doing the ethanol calculations awhile back and I must have gotten billion and trillion mixed up.  Do these numbers look better?....
World known recoverable reserves were:
Oil - 1x10^12 barrels or 5,880 Quadrillion BTU (Quad)
Gas - 5.2x10^15 SCF or 5,200 Quads
Coal - 1.0x10^12 short ton or 22,200 Quads
Using these numbers and a growth consumption rate = A*E(t)*exp(k*t) where A and k are constants, E is the total energy reserves and t is the time (yr), then peak consumption would occur at about 2025.  If you say that we have only discovered half of the possible reserves, then the peak would occur at about 2060.  Ouch!  That changes my philosophy - add shortage of fossil fuels to the list of reasons we need renewable energy!  Of course, someone better check my numbers.
I attached an Excell file with calculations and graphs showing the 2025 and 2060 cases to this e-mail.

The Annual Energy Outlook only has US data.  In the EIA web site, there is a section "international" that has world data.
I'm still pouring over the data myself, so, more info to follow...

-Chris

----- Original Message -----
Sent: Saturday, June 28, 2003 3:14 PM
Subject: RE: [hreg] Media Meeting Monday Night

Chris,

Can you check your reference please.  The numbers you gave would say we have 15000 years of oil left at current consumption rates.  I found another source that was a factor of 1000 less, after some math.  So that would be 15 years of oil left (at current consumption; not counting undiscovered resources).

The 2003 reference you gave had US data.
-----Original Message-----
From: Roxanne Boyer [mailto:rox1@...]
Sent: Friday, June 27, 2003 10:56 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

Mike and all others interested,
The DOE has a division called the Energy Information Agency (EIA) that publishes available information on the energy sector.
By trending world consumption (modified for population growth) and available fossil fuel reserves, one can predict how long we can depend on fossil fuel as an energy resource.

From the EIA home page, you can access all kinds of information, however, you really have to know for what you are looking, and you have to understand how the data was obtained and what it means.   There used to be a publication called the "Annual Energy Review", the last copy I have was published in August of 2001 and was current through 2000.  That document reported annual world energy consumption was ~400 Quadrillion BTU.  Crude Oil reserves were 5,880,000 Quadrillion BTU, Natural Gas reserves were 5,200,000 quadrillion BTU (I think they included gas hydrates), and coal reserves were 22,200 Quadrillion BTU.
(For comparison, 450,000 Quadrillion BTU of solar energy strikes the earth's surface.)

I think EIA changed the content and name of the report to the "Annual Energy Outlook".  The most recent, 2003 (data through 2002) can be found at:
I just found this document, and have not read it yet.  I will say more on fossil fuel reserves later if I find a difference between the 2001 publication and the 2003 publication.
Sincerely,
Chris

----- Original Message -----
Sent: Thursday, June 26, 2003 10:04 PM
Subject: RE: [hreg] Media Meeting Monday Night

Chris, can you point us to the EIA data?  I knew there was a lot of coal, but I didn't know there was that much.

Charlie, thank you for the report and the explanation.  This peak in production was discussed at the American Solar Energy Society meeting that some of us just returned from in Austin.  I think they said the projections on world peak production were from 2005 to about 2015, with the point made that we should do something about it rather than argue exactly when.

The conference was great! We will have a report on it by those who went at our meeting in July.
-----Original Message-----
From: Roxanne Boyer [mailto:rox1@...]
Sent: Monday, June 23, 2003 10:09 PM
To: hreg@yahoogroups.com
Subject: [hreg] Media Meeting Monday Night

Did anyone go to the media meeting with Richard Heinberg Monday night, please give us a report on it.  I wanted to go and was unable, so if someone would please let me have the experience thorugh their eyes, I would appreciate it.

I know his book states a case that the earth is about to run out of petroleum.  The DOE-EIA published that there is enough fossil fuel to supply world demand as it increases 5% per year until the year 2300.  Thus, my case for renewable energy before 2300 has been to prevent pollution and increase freedom/peace.  I would like to add to my argument for RE that there is a shortage of fossil fuel if someone can put forth a convincing, scientific proof of it.  Does anyone have a copy of his book?

Sincerely,
Chris

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• Another way to keep supply ahead of demand (for a while, anyway) is to drill more wells in the producing fields. Saudi Arabia and Iraq have huge reserves that
Message 3 of 25 , Jul 1, 2003
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Another way to keep supply ahead of demand (for a while, anyway) is to drill more wells in the producing fields. Saudi Arabia and Iraq have huge reserves that will last for many years, at a steadily declining rate. But if you drill a lot more wells - go from say 80 acre spacing to 40 acre spacing - you can really increase the production rate (and of course deplete the reserves twice as fast). The fields would only last half as long, but with the short-term orientation of our corporations (and our politicians) that is not a consideration. They don't worry much about anything past the next election or the next quarterly earnings report, so that would be a fine solution so far as they are concerned.

Another major variable that could affect all this is the definite possibility that we could have a major worldwide recession or even a depression, which would - needless to say - greatly reduce consumption (among many other unpleasant effects).

As for the coal shipments into Houston, I have never seen long lines of coal cars coming into town, but I think San Antonio and several other south Texas towns use a lot of coal. This is a carryover effect of Oscar Wyatt's operations years ago, an early day Enron type scam that should have resulted in the bankruptcy of Coastal States, but due to his effective wheeling and dealing and his sharp lawyers, he was able to wiggle out of it. Older folks will remember the details but anyway SA and some other south Texas towns switched over from gas to coal and have been using it ever since. In fact, unless I am mistaken, Texas is a net importer of energy, mostly coal from Wyoming or somewhere in that area.

But whatever the details, it's a lead pipe cinch that you can't keep on forever increasing consumption of a finite wasting resource. Sooner or later the fiddler must be paid or the fat lady will sing or whatever, and the sounds of their warming up just offstage are getting louder every day. Unfortunately, it's the nature of the system that we don't react until there is a full-blown crisis, and when it hits, there will be hell to pay. We can all work and hope for an outbreak of sanity but it's a long shot. If history is any guide, we will probably have to do it the hard way. Damn.

Charlie
• Well said, Charlie. Something that we as a group can do is to become more politically active, demanding considerations for conservation and alternate energy
Message 4 of 25 , Jul 1, 2003
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Well said, Charlie.

Something that we as a group can do is to become more politically active, demanding considerations for conservation and alternate energy legislation from our congress people. Believe it or not, these people DO listen, especially when groups with multiple voices are speaking, and can voice their opinions in a constructive way. We seem to be taking a big step forward with this discussion on energy. We need to keep on in this vein, defining the problem, and educating others about it. Also, striving to implement conservation and alternate energy into our own lives. "Walk the walk" as they say.

Michael
-----Original Message-----
From: chasmauch@... [mailto:chasmauch@...]
Sent: Tuesday, July 01, 2003 12:26 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

Another way to keep supply ahead of demand (for a while, anyway) is to drill more wells in the producing fields. Saudi Arabia and Iraq have huge reserves that will last for many years, at a steadily declining rate. But if you drill a lot more wells - go from say 80 acre spacing to 40 acre spacing - you can really increase the production rate (and of course deplete the reserves twice as fast). The fields would only last half as long, but with the short-term orientation of our corporations (and our politicians) that is not a consideration. They don't worry much about anything past the next election or the next quarterly earnings report, so that would be a fine solution so far as they are concerned.

Another major variable that could affect all this is the definite possibility that we could have a major worldwide recession or even a depression, which would - needless to say - greatly reduce consumption (among many other unpleasant effects).

As for the coal shipments into Houston, I have never seen long lines of coal cars coming into town, but I think San Antonio and several other south Texas towns use a lot of coal. This is a carryover effect of Oscar Wyatt's operations years ago, an early day Enron type scam that should have resulted in the bankruptcy of Coastal States, but due to his effective wheeling and dealing and his sharp lawyers, he was able to wiggle out of it. Older folks will remember the details but anyway SA and some other south Texas towns switched over from gas to coal and have been using it ever since. In fact, unless I am mistaken, Texas is a net importer of energy, mostly coal from Wyoming or somewhere in that area.

But whatever the details, it's a lead pipe cinch that you can't keep on forever increasing consumption of a finite wasting resource. Sooner or later the fiddler must be paid or the fat lady will sing or whatever, and the sounds of their warming up just offstage are getting louder every day. Unfortunately, it's the nature of the system that we don't react until there is a full-blown crisis, and when it hits, there will be hell to pay. We can all work and hope for an outbreak of sanity but it's a long shot. If history is any guide, we will probably have to do it the hard way. Damn.

Charlie

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• Speaking of coal fired plants and San Antonio.... http://www.citizen.org/pressroom/release.cfm?ID=1474 Michael ... From: chasmauch@aol.com
Message 5 of 25 , Jul 1, 2003
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Speaking of coal fired plants and San Antonio....

Michael
-----Original Message-----
From: chasmauch@... [mailto:chasmauch@...]
Sent: Tuesday, July 01, 2003 12:26 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

Another way to keep supply ahead of demand (for a while, anyway) is to drill more wells in the producing fields. Saudi Arabia and Iraq have huge reserves that will last for many years, at a steadily declining rate. But if you drill a lot more wells - go from say 80 acre spacing to 40 acre spacing - you can really increase the production rate (and of course deplete the reserves twice as fast). The fields would only last half as long, but with the short-term orientation of our corporations (and our politicians) that is not a consideration. They don't worry much about anything past the next election or the next quarterly earnings report, so that would be a fine solution so far as they are concerned.

Another major variable that could affect all this is the definite possibility that we could have a major worldwide recession or even a depression, which would - needless to say - greatly reduce consumption (among many other unpleasant effects).

As for the coal shipments into Houston, I have never seen long lines of coal cars coming into town, but I think San Antonio and several other south Texas towns use a lot of coal. This is a carryover effect of Oscar Wyatt's operations years ago, an early day Enron type scam that should have resulted in the bankruptcy of Coastal States, but due to his effective wheeling and dealing and his sharp lawyers, he was able to wiggle out of it. Older folks will remember the details but anyway SA and some other south Texas towns switched over from gas to coal and have been using it ever since. In fact, unless I am mistaken, Texas is a net importer of energy, mostly coal from Wyoming or somewhere in that area.

But whatever the details, it's a lead pipe cinch that you can't keep on forever increasing consumption of a finite wasting resource. Sooner or later the fiddler must be paid or the fat lady will sing or whatever, and the sounds of their warming up just offstage are getting louder every day. Unfortunately, it's the nature of the system that we don't react until there is a full-blown crisis, and when it hits, there will be hell to pay. We can all work and hope for an outbreak of sanity but it's a long shot. If history is any guide, we will probably have to do it the hard way. Damn.

Charlie

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• Hi, I m Renee Tolin, and I ve been a sleeper I guess on this group. I joined a long time ago, and have been following silently. I am a teacher (Chemistry
Message 6 of 25 , Jul 2, 2003
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Hi, I'm Renee Tolin, and I've been a "sleeper" I guess on this group.  I joined a long time ago, and have been following silently.  I am a teacher (Chemistry and, until this year, environmental science).  I think it is a good idea to become more politically active.  I also have a suggestion.  In class, I try until I'm blue in the face, to teach my students about conservation and alternative energy.  The general opinion (at least in my classes) is that before it gets too bad, someone (the government, business, research) will step in and make this problem go away i.e., new energy that will replace fossil fuels without having to change lifestyle at all.  Even in my own home!  I told my husband about the PowerPoint I read on postcarbon.org and the summary of Heinberg's book, and he thought it was all doom and gloom, that it wasn't as bad as they are saying.

It would be helpful to launch a campaign to target this generation into action.  Maybe volunteering to speak with classes about this subject, and offering a sample letter or phone call that they could make to their representative.  This would be cross-curriculum (social studies and science), and would be welcome by any teacher, I'm sure.  In teaching, like in parenting, kids are more willing to believe it from a "professional" than from their teacher.

Just my two cents.  Thanks for reading.

Renee Tolin
-----Original Message-----
From: Michael Christie [mailto:mchristi@...]
Sent: Tuesday, July 01, 2003 2:47 PM
To: hreg@yahoogroups.com
Subject: RE: [hreg] Media Meeting Monday Night

Well said, Charlie.

Something that we as a group can do is to become more politically active, demanding considerations for conservation and alternate energy legislation from our congress people. Believe it or not, these people DO listen, especially when groups with multiple voices are speaking, and can voice their opinions in a constructive way. We seem to be taking a big step forward with this discussion on energy. We need to keep on in this vein, defining the problem, and educating others about it. Also, striving to implement conservation and alternate energy into our own lives. "Walk the walk" as they say.

Michael
-----Original Message-----
From: chasmauch@... [mailto:chasmauch@...]
Sent: Tuesday, July 01, 2003 12:26 PM
To: hreg@yahoogroups.com
Subject: Re: [hreg] Media Meeting Monday Night

Another way to keep supply ahead of demand (for a while, anyway) is to drill more wells in the producing fields. Saudi Arabia and Iraq have huge reserves that will last for many years, at a steadily declining rate. But if you drill a lot more wells - go from say 80 acre spacing to 40 acre spacing - you can really increase the production rate (and of course deplete the reserves twice as fast). The fields would only last half as long, but with the short-term orientation of our corporations (and our politicians) that is not a consideration. They don't worry much about anything past the next election or the next quarterly earnings report, so that would be a fine solution so far as they are concerned.

Another major variable that could affect all this is the definite possibility that we could have a major worldwide recession or even a depression, which would - needless to say - greatly reduce consumption (among many other unpleasant effects).

As for the coal shipments into Houston, I have never seen long lines of coal cars coming into town, but I think San Antonio and several other south Texas towns use a lot of coal. This is a carryover effect of Oscar Wyatt's operations years ago, an early day Enron type scam that should have resulted in the bankruptcy of Coastal States, but due to his effective wheeling and dealing and his sharp lawyers, he was able to wiggle out of it. Older folks will remember the details but anyway SA and some other south Texas towns switched over from gas to coal and have been using it ever since. In fact, unless I am mistaken, Texas is a net importer of energy, mostly coal from Wyoming or somewhere in that area.

But whatever the details, it's a lead pipe cinch that you can't keep on forever increasing consumption of a finite wasting resource. Sooner or later the fiddler must be paid or the fat lady will sing or whatever, and the sounds of their warming up just offstage are getting louder every day. Unfortunately, it's the nature of the system that we don't react until there is a full-blown crisis, and when it hits, there will be hell to pay. We can all work and hope for an outbreak of sanity but it's a long shot. If history is any guide, we will probably have to do it the hard way. Damn.

Charlie

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• ... coal ... Let me try to shed a little light on the few areas where I have some good knowledge. The Houston region has exactly ONE coal burning plant, the
Message 7 of 25 , Jul 3, 2003
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--- In hreg@yahoogroups.com, "Michael Christie" <mchristi@f...> wrote:
> ...
> Someone in the railroad industry once told me that 100 rail cars of
coal
> came into Houston every day.

Let me try to shed a little light on the few areas where I have some
good knowledge. The Houston region has exactly ONE coal burning plant,
the W.A. Parish unit located I think in Wharton. It is fed by low
sulfur Wyoming coal transported by rail. Literally speaking, there is
absolutely no need for coal rail cars to pass into or through Houston,
they will go to Fort Bend County instead.

It is a sizable portion of the old HL&P's generating capacity, larger
in fact than the nuclear portion. But it was designed and built in the
old regulated era where they sought coal and nuclear fuel to reduce
dependence on natural gas. For a time there were laws on the books
prohibiting the building of power plants which used natural gas, that
is the main reason we are saddled with not-so-well conceived coal and
nuclear plants. HL&P for many years was 100% natural gas fueled, left
to their own devices they might not have ever wanted to diversify into
nuclear and coal.

One weak point of the Parish coal plant concept, was a limited number
of rail lines coming into the plant. After some railroad mergers,
there was *one* remaining company serving Parish, and as you might
guess they had a rather harsh idea of shipping rates. After a couple
years of this, HL&P built another short rail line so they could have
at least a competitive market shipping them their needed fuel.

Utilities in Central Texas and North Texas make relatively extensive
use of lignite, an indigenous type of coal which is cheap, not low
sulfur, low in energy content per pound, and therefore not worth
transporting. The only really good way to burn lignite is to build a
power plant very close to the lignite mining, ideally at the mouth of
the mine. Economics of lignite depend on the quantity and quality of
fuel available -- electricity from such can be relatively very cheap
if you have a good lignite source (and don't invest too heavily in
anti-pollution equipment).

The old HL&P also built one lignite plant in Central Texas near Waco.
What I have heard is their fuel source is mediocre, a thin vein which
is not expected to last but about 25-30 years. This plant's economics
would be much improved except for the lousy fuel source. It is my
understanding that many other lignite plants in Texas are more
economical.

With a slow trend toward competition in the energy industry, we should
watch to see whether the coal or the lignite plant might be shut down
for cost reasons.

I used to work for HL&P and so learned of many of these things through
office communication and publications which are not widely
distributed. FWIW my opinion is that coal is inherently a loathsome
fuel to burn vs. natural gas, because of coal's pollution aspects.
Natural gas is inherently a pretty clean fuel as the great majority of
the non-fuel parts are removed at the wellhead. To me the trade-off
between burning coal which is nearly always cheap but dirty, vs.
natural gas, is a devilish temptation. One might realistically say the
worst natural gas plant is cleaner than the best coal plant.

I am interested in all forms of energy including renewables, but I
will always be able to
articulate the virtues of certain non-renewable fuels.

Hope this helps -- Mark Johnson
• ... operations ... the ... dealing and ... I have generally heard of Oscar Wyatt being a crooked businessman, and I am willing to believe the worst about him.
Message 8 of 25 , Jul 3, 2003
• 0 Attachment
--- In hreg@yahoogroups.com, chasmauch@a... wrote:
> ...I think San Antonio and several other south Texas
> towns use a lot of coal. This is a carryover effect of Oscar Wyatt's
operations
> years ago, an early day Enron type scam that should have resulted in
the
> bankruptcy of Coastal States, but due to his effective wheeling and
dealing and
> his sharp lawyers, he was able to wiggle out of it.

I have generally heard of Oscar Wyatt being a crooked businessman, and
I am willing to believe the worst about him. But I have not heard this
story and would certainly like to see a reference to educate me about it.

One thing I would request, is to not lump all scams in the same
category -- I think it is important to *understand* scams so honest
people can better protect themselves. My understanding is Enron was a
particular type of criminal business behavior; I would not want to say
another criminal businessman is "like Enron" unless it is absolutely true.

> Older folks will remember
> the details but anyway SA and some other south Texas towns switched
over from
> gas to coal and have been using it ever since.

I guess by now I am one of the older folks, and this is specialized
knowledge that we *don't* all remember. Actually, I want to express
real skepticism that Wyatt was that influential in the building of
lignite/coal plants in Texas. One cannot "convert" a natural gas plant
to coal, as coal requires some elaborate and expensive machinery to
handle it. I try to stay aware of electric generating technology and
have never heard of a gas plant being converted to coal. If I am wrong
then please have mercy and point me to some education.

Lignite is a traditional fuel and in ample cheap supply in certain
areas of Texas. Furthermore, the utilities in question cannot simply
make a fuel choice arbitrarily, many are municipals (e.g. Austin and
San Antonio) and so the city government is the body to give approval
for any spending plan. Others such as Dallas' TXU must go to the PUC
for approval of new plants -- granted TXU knows how to manipulate the
PUC fairly well but it's not the style of Oscar Wyatt to have the
patience to participate in PUC dockets (not unless somebody else does
the huge amounts of routine work). It's easy to *imagine* a person
like Oscar Wyatt setting energy policy for Texas, but believe me the
real process is slow, painstaking, and includes many checks and
balances which inhibit one person from having much influence.

Please forgive the rather contentious tone of my post, I don't mean to
denigrate you but am more interested in getting to the facts in as
simple and direct a manner as possible.

Best wishes -- Mark Johnson
• Mark, I vote to give you the title of HREG Coal Guru . You certainly brought a lot of interesting and relevant information to the group. And, you answered my
Message 9 of 25 , Jul 3, 2003
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Mark,

I vote to give you the title of "HREG Coal Guru". You certainly brought a
lot of interesting and relevant information to the group. And, you answered
my question. It may very well have been this plant that my source of
information was referring to. Many people, myself included, are rather loose
in our definition of "Houston". And as you can see, we are not all well
informed.

Thank you
Michael Christie

-----Original Message-----
From: mark r. johnson [mailto:mrj53@...]
Sent: Thursday, July 03, 2003 7:47 AM
To: hreg@yahoogroups.com
Subject: [hreg] Coal and Houston

--- In hreg@yahoogroups.com, "Michael Christie" <mchristi@f...> wrote:
> ...
> Someone in the railroad industry once told me that 100 rail cars of
coal
> came into Houston every day.

Let me try to shed a little light on the few areas where I have some
good knowledge. The Houston region has exactly ONE coal burning plant,
the W.A. Parish unit located I think in Wharton. It is fed by low
sulfur Wyoming coal transported by rail. Literally speaking, there is
absolutely no need for coal rail cars to pass into or through Houston,
they will go to Fort Bend County instead.

It is a sizable portion of the old HL&P's generating capacity, larger
in fact than the nuclear portion. But it was designed and built in the
old regulated era where they sought coal and nuclear fuel to reduce
dependence on natural gas. For a time there were laws on the books
prohibiting the building of power plants which used natural gas, that
is the main reason we are saddled with not-so-well conceived coal and
nuclear plants. HL&P for many years was 100% natural gas fueled, left
to their own devices they might not have ever wanted to diversify into
nuclear and coal.

One weak point of the Parish coal plant concept, was a limited number
of rail lines coming into the plant. After some railroad mergers,
there was *one* remaining company serving Parish, and as you might
guess they had a rather harsh idea of shipping rates. After a couple
years of this, HL&P built another short rail line so they could have
at least a competitive market shipping them their needed fuel.

Utilities in Central Texas and North Texas make relatively extensive
use of lignite, an indigenous type of coal which is cheap, not low
sulfur, low in energy content per pound, and therefore not worth
transporting. The only really good way to burn lignite is to build a
power plant very close to the lignite mining, ideally at the mouth of
the mine. Economics of lignite depend on the quantity and quality of
fuel available -- electricity from such can be relatively very cheap
if you have a good lignite source (and don't invest too heavily in
anti-pollution equipment).

The old HL&P also built one lignite plant in Central Texas near Waco.
What I have heard is their fuel source is mediocre, a thin vein which
is not expected to last but about 25-30 years. This plant's economics
would be much improved except for the lousy fuel source. It is my
understanding that many other lignite plants in Texas are more
economical.

With a slow trend toward competition in the energy industry, we should
watch to see whether the coal or the lignite plant might be shut down
for cost reasons.

I used to work for HL&P and so learned of many of these things through
office communication and publications which are not widely
distributed. FWIW my opinion is that coal is inherently a loathsome
fuel to burn vs. natural gas, because of coal's pollution aspects.
Natural gas is inherently a pretty clean fuel as the great majority of
the non-fuel parts are removed at the wellhead. To me the trade-off
between burning coal which is nearly always cheap but dirty, vs.
natural gas, is a devilish temptation. One might realistically say the
worst natural gas plant is cleaner than the best coal plant.

I am interested in all forms of energy including renewables, but I
will always be able to
articulate the virtues of certain non-renewable fuels.

Hope this helps -- Mark Johnson

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
• Michael, I once heard a knowledgable estimate that it would take a coal train one mile long arriving every hour in Houston to furnish all our regional
Message 10 of 25 , Jul 3, 2003
• 0 Attachment
Michael,
I once heard a knowledgable estimate that it would take a coal train one
mile long arriving every hour in Houston to furnish all our regional
electricity generation. That was in the day when we were trying to save all
the natural gas for direct residential use, assuming that industry could buy
and process other forms of energy.
Leonard Bachman

----- Original Message -----
From: "Michael Christie" <mchristi@...>
To: <hreg@yahoogroups.com>
Sent: Thursday, July 03, 2003 10:45 AM
Subject: RE: [hreg] Coal and Houston

> Mark,
>
> I vote to give you the title of "HREG Coal Guru". You certainly brought a
> lot of interesting and relevant information to the group. And, you
answered
> my question. It may very well have been this plant that my source of
> information was referring to. Many people, myself included, are rather
loose
> in our definition of "Houston". And as you can see, we are not all well
> informed.
>
> Thank you
> Michael Christie
>
> -----Original Message-----
> From: mark r. johnson [mailto:mrj53@...]
> Sent: Thursday, July 03, 2003 7:47 AM
> To: hreg@yahoogroups.com
> Subject: [hreg] Coal and Houston
>
>
> --- In hreg@yahoogroups.com, "Michael Christie" <mchristi@f...> wrote:
> > ...
> > Someone in the railroad industry once told me that 100 rail cars of
> coal
> > came into Houston every day.
>
> Let me try to shed a little light on the few areas where I have some
> good knowledge. The Houston region has exactly ONE coal burning plant,
> the W.A. Parish unit located I think in Wharton. It is fed by low
> sulfur Wyoming coal transported by rail. Literally speaking, there is
> absolutely no need for coal rail cars to pass into or through Houston,
> they will go to Fort Bend County instead.
>
> It is a sizable portion of the old HL&P's generating capacity, larger
> in fact than the nuclear portion. But it was designed and built in the
> old regulated era where they sought coal and nuclear fuel to reduce
> dependence on natural gas. For a time there were laws on the books
> prohibiting the building of power plants which used natural gas, that
> is the main reason we are saddled with not-so-well conceived coal and
> nuclear plants. HL&P for many years was 100% natural gas fueled, left
> to their own devices they might not have ever wanted to diversify into
> nuclear and coal.
>
> One weak point of the Parish coal plant concept, was a limited number
> of rail lines coming into the plant. After some railroad mergers,
> there was *one* remaining company serving Parish, and as you might
> guess they had a rather harsh idea of shipping rates. After a couple
> years of this, HL&P built another short rail line so they could have
> at least a competitive market shipping them their needed fuel.
>
> Utilities in Central Texas and North Texas make relatively extensive
> use of lignite, an indigenous type of coal which is cheap, not low
> sulfur, low in energy content per pound, and therefore not worth
> transporting. The only really good way to burn lignite is to build a
> power plant very close to the lignite mining, ideally at the mouth of
> the mine. Economics of lignite depend on the quantity and quality of
> fuel available -- electricity from such can be relatively very cheap
> if you have a good lignite source (and don't invest too heavily in
> anti-pollution equipment).
>
> The old HL&P also built one lignite plant in Central Texas near Waco.
> What I have heard is their fuel source is mediocre, a thin vein which
> is not expected to last but about 25-30 years. This plant's economics
> would be much improved except for the lousy fuel source. It is my
> understanding that many other lignite plants in Texas are more
> economical.
>
> With a slow trend toward competition in the energy industry, we should
> watch to see whether the coal or the lignite plant might be shut down
> for cost reasons.
>
> I used to work for HL&P and so learned of many of these things through
> office communication and publications which are not widely
> distributed. FWIW my opinion is that coal is inherently a loathsome
> fuel to burn vs. natural gas, because of coal's pollution aspects.
> Natural gas is inherently a pretty clean fuel as the great majority of
> the non-fuel parts are removed at the wellhead. To me the trade-off
> between burning coal which is nearly always cheap but dirty, vs.
> natural gas, is a devilish temptation. One might realistically say the
> worst natural gas plant is cleaner than the best coal plant.
>
> I am interested in all forms of energy including renewables, but I
> will always be able to
> articulate the virtues of certain non-renewable fuels.
>
> Hope this helps -- Mark Johnson
>
>
>
>
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
>
>
>
>
>
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
>
• In a message dated 7/3/03 8:09:34 AM Central Daylight Time, ... This happened a long time ago - in the 1960s as I recall. It was a continuing story in most
Message 11 of 25 , Jul 3, 2003
• 0 Attachment
In a message dated 7/3/03 8:09:34 AM Central Daylight Time, mrj53@... writes:

I have generally heard of Oscar Wyatt being a crooked businessman, and
I am willing to believe the worst about him. But I have not heard this
story and would certainly like to see a reference to educate me about it.

This happened a long time ago - in the 1960s as I recall. It was a continuing story in most newspapers in south Texas for several years about the problems between SA, Corpus Christi, and other south Texas towns vs Coastal. Texas Monthly did a detailed, feature-length article that gave the best blow-by-blow description I know of. Don't know if their archives go back that far but you might find it in a library. Don't remember the exact date.

One thing I would request, is to not lump all scams in the same
category -- I think it is important to *understand* scams so honest
people can better protect themselves. My understanding is Enron was a
particular type of criminal business behavior; I would not want to say
another criminal businessman is "like Enron" unless it is absolutely true.

There can be a fine line between sharp business practices and outright deliberate criminal behaviour. Wyatt always had a reputation of walking that line and kept a bevy of sharp lawyers on the payroll to make sure he remained about an hour ahead of the posse. I will try to explain very generally below what he did, and you can decide if it was a scam or sharp business.

I guess by now I am one of the older folks, and this is specialized
knowledge that we *don't* all remember. Actually, I want to express
real skepticism that Wyatt was that influential in the building of
lignite/coal plants in Texas. One cannot "convert" a natural gas plant
to coal, as coal requires some elaborate and expensive machinery to
handle it. I try to stay aware of electric generating technology and
have never heard of a gas plant being converted to coal. If I am wrong
then please have mercy and point me to some education.

Wyatt was a legendary figure around Corpus where he started out, and I was working as an independent petroleum engineer in Corpus at the time. Everyone claimed to know him but of course most did not. He was able to sell gas quick at the best price available so lots of folks wanted to do business with him, but it was a kind of scary thing because he also had the reputation of screwing his partners and just about everyone else around. I never had any direct dealing with him but knew a lot of folks who did, and as one used to say, you had to be very careful - he said it was OK to dance with a bear but be sure to keep an eye on your partner.

Most people who read the papers were following the whole scam (business transaction?) closely, and those in the "oil bizness" were following it even closer, so guess we just assumed that everyone else was too. And no, you can't just convert from gas to coal - that was bad wording on my part. But the city did start to change over - I assume by building new plants - and eventually did pretty much make the conversion.

Lignite is a traditional fuel and in ample cheap supply in certain
areas of Texas. Furthermore, the utilities in question cannot simply
make a fuel choice arbitrarily, many are municipals (e.g. Austin and
San Antonio) and so the city government is the body to give approval
for any spending plan. Others such as Dallas' TXU must go to the PUC
for approval of new plants -- granted TXU knows how to manipulate the
PUC fairly well but it's not the style of Oscar Wyatt to have the
patience to participate in PUC dockets (not unless somebody else does
the huge amounts of routine work). It's easy to *imagine* a person
like Oscar Wyatt setting energy policy for Texas, but believe me the
real process is slow, painstaking, and includes many checks and
balances which inhibit one person from having much influence.

After I failed to become a rich independent oilman, I got married and had to find honest employment so went to work for a major company (Sun Oil) for the next 30 years as a natural gas engineer and eventually in the natural gas marketing department as a gas sales rep. The marketing situation was wild in those days since interstate sales were regulated by the Federal Energy Regulatory Commission (FERC) and intrastate sales were not. The price of the regulated gas was held ridiculously low while the unregulated intrastate market was much higher (not to mention all the heavy-handed regs pertaining to interstate sales) so naturally everyone avoided the interstate market if they possibly could.

At one time there were as I recall about 15 different prices for gas, depending on a varitey of strange factors. The Natural Gas Act outlined the marketing rules very generally and relied on the FERC and the courts to interpret what the various provisions of the law meant. Often various portions of the regs were tied up in court on apeal for years during which time no one was sure what the rules were, so clearly it was a lawyer's dream and a nightmare for everyone else. In this situation, clever lawyers find all kinds of loopholes, and Coastal was one of the best in this regard.

What they did was sign a long-term contract to supply gas to SA, Corpus, and the other cities at a fixed price of about 25 cents per thousand cubic feet. They convinced the various city councils that they had vast reserves to back up this commitment but in fact these reverves were tremendously overstated and they did not have anywhere near what they claimed to have. Then very soon the price of gas shot up above a dollar, leaving Coastal in a very bad positon. They did not have their own gas reserves under contract so would have to buy it on the open market for over a dollar and sell it for 25 cents - a situation guaranteed to result in bankruptcy in short order for anyone. Everyone thought Wyatt's goose was finally cooked but incredibly he managed to escape from the contracts. I am not sure how he pulled it off but it was a feat that would have done Houdini proud.

Sorry to be so longwinded so will stop. Oceans of ink have been used writing about these transactions and a number of questions remain unanswered to this day. That's about all I know about it. If it was not a scam it was pretty close, and IMO the public got ripped off big time. I do not "imagine" that Wyatt "set the energy policy for Texas" but there in no question that he was pretty directly responsible for a lot coal coming in from out of state to replace natural gas. I guess it's all ancient history now. Oscar is a respectable billionaire businessman and we are still trying to figure out how to meet our energy needs when the oil and gas supply drops below demand, which won't be much longer. Gonna be some big changes made.

Charlie

• The comments about Oscar Wyatt and San Antonio caught my interest (I didn t live in Texas in those days, so it was all news to me) so I did some surfing on the
Message 12 of 25 , Jul 3, 2003
• 0 Attachment
The comments about Oscar Wyatt and San Antonio caught my interest (I didn't
live in Texas in those days, so it was all news to me) so I did some surfing
on the web. There is a lot of stuff on Oscar, so if you want to find out
information on him, just go surfing. Here's a little tidbit:
http://www.la.utexas.edu/course-materials/government/chenry/mena/roles/oil/s
p1994/0020.html

All in all, he sounds like a rather despicable man. I may be wrong. Anyhow,
while surfing, I happened on another site that may be of interest to
everyone. It comes from our dear friends the French, and has more energy
news than most people want to know about. Check the menu along the side: it
has a link to world renewable energy news (complements of "The World News
Network":
http://www.frenchdictionary.com/s/oilprices/

Michael Christie

-----Original Message-----
From: mark r. johnson [mailto:mrj53@...]
Sent: Thursday, July 03, 2003 8:05 AM
To: hreg@yahoogroups.com
Subject: [hreg] Coal, Wyatt and Texas power

--- In hreg@yahoogroups.com, chasmauch@a... wrote:
> ...I think San Antonio and several other south Texas
> towns use a lot of coal. This is a carryover effect of Oscar Wyatt's
operations
> years ago, an early day Enron type scam that should have resulted in
the
> bankruptcy of Coastal States, but due to his effective wheeling and
dealing and
> his sharp lawyers, he was able to wiggle out of it.

I have generally heard of Oscar Wyatt being a crooked businessman, and
I am willing to believe the worst about him. But I have not heard this
story and would certainly like to see a reference to educate me about it.

One thing I would request, is to not lump all scams in the same
category -- I think it is important to *understand* scams so honest
people can better protect themselves. My understanding is Enron was a
particular type of criminal business behavior; I would not want to say
another criminal businessman is "like Enron" unless it is absolutely true.

> Older folks will remember
> the details but anyway SA and some other south Texas towns switched
over from
> gas to coal and have been using it ever since.

I guess by now I am one of the older folks, and this is specialized
knowledge that we *don't* all remember. Actually, I want to express
real skepticism that Wyatt was that influential in the building of
lignite/coal plants in Texas. One cannot "convert" a natural gas plant
to coal, as coal requires some elaborate and expensive machinery to
handle it. I try to stay aware of electric generating technology and
have never heard of a gas plant being converted to coal. If I am wrong
then please have mercy and point me to some education.

Lignite is a traditional fuel and in ample cheap supply in certain
areas of Texas. Furthermore, the utilities in question cannot simply
make a fuel choice arbitrarily, many are municipals (e.g. Austin and
San Antonio) and so the city government is the body to give approval
for any spending plan. Others such as Dallas' TXU must go to the PUC
for approval of new plants -- granted TXU knows how to manipulate the
PUC fairly well but it's not the style of Oscar Wyatt to have the
patience to participate in PUC dockets (not unless somebody else does
the huge amounts of routine work). It's easy to *imagine* a person
like Oscar Wyatt setting energy policy for Texas, but believe me the
real process is slow, painstaking, and includes many checks and
balances which inhibit one person from having much influence.

Please forgive the rather contentious tone of my post, I don't mean to
denigrate you but am more interested in getting to the facts in as
simple and direct a manner as possible.

Best wishes -- Mark Johnson

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
• ... That s ironic, on a board devoted to clean and renewable energy, very much wanting to look toward the future, I earn the guru title for the most
Message 13 of 25 , Jul 5, 2003
• 0 Attachment
--- In hreg@yahoogroups.com, "Michael Christie" <mchristi@f...> wrote:
> Mark,
>
> I vote to give you the title of "HREG Coal Guru".

That's ironic, on a board devoted to clean and renewable energy, very
much wanting to look toward the future, I earn the guru title for the
most traditional, dirtiest fuel in widespread use! But I am flattered
anyway. In several ways it fits me. Like I have said, I am interested
in all forms of energy, including the dirty ones because "we" the
world have an obligation to find a way to clean things up.

Being centered in South Texas, it is one of the few areas in the USA
where it is easy to imagine *not* burning coal for energy. Wonder if I
would feel better about coal burning if I lived in say, Ohio <g>.
Probably not.

Thank you -- Mark J.
• ... continuing ... problems ... Texas ... blow-by-blow ... but you ... Thanks Charlie for summarizing it for me. I am sincerely interested in studying what
Message 14 of 25 , Jul 5, 2003
• 0 Attachment
--- In hreg@yahoogroups.com, chasmauch@a... wrote:

> This happened a long time ago - in the 1960s as I recall. It was a
continuing
> story in most newspapers in south Texas for several years about the
problems
> between SA, Corpus Christi, and other south Texas towns vs Coastal.
Texas
> Monthly did a detailed, feature-length article that gave the best
blow-by-blow
> description I know of. Don't know if their archives go back that far
but you
> might find it in a library.

Thanks Charlie for summarizing it for me. I am sincerely interested in
studying what Wyatt did wrong -- already I have learned that the Fort
Bend County library has no books written about Oscar Wyatt or Coastal.
Texas Monthly sounds like just the iconoclastic source to learn from,
since nobody has written a book (have they?).

Your summary sounds like it centers around natural gas (NG)
shenanigans, and that coal and lignite use plays a role mainly as a
way to avoid NG purchases. That is less far-out than my original
impression, in fact easy to believe for a couple of reasons.

Could the whole episode have been situated in the 1970's? Because the
whole issue of NG not being in good supply, arose along with the
energy crisis sparked by the 1973 Arab oil embargo (according to what
I think I know). Along with the economic mis-allocation caused by
Nixon's price controls, the world truly failed to understand the basic
truth of energy supply and demand.

Oil spiked in price and then fell to low levels. There were great
worries about NG supply, and they created that multi-tiered system of
price controls, "old" gas and "new" gas. In fact the world found it
easy to believe we were running out of all sorts of resources, and
lots of us believed the world was at a turning point. At the time I
tended to believe it too, from 2003 I see a lot of the 1970's
attitudes as the height of folly.

One semi-unintended consequence of the NG rules was to spur
construction of a number of new nuclear plants to provide replacement
energy, including our own local STNP nuke. What you probably don't
know is there were about SIX MORE nuke plants on HL&P's drawing
boards, and I figure we got off lucky they weren't built. It was
around the same era the root decisions were made to build the Parish
coal plant and the Central Texas lignite plant which I accuse of being
mediocre projects (keep in mind I could be wrong there). From that era
we have Jimmy Carter's energy policies which have not worked out well
in practice at all, including some expensive synfuel research and
production projects.

About nuclear projects: many were conceived and built in the 1960's
and those had their problems with safety and reliability but their
cost was reasonably low. During the 1970's construction costs zoomed
for all sorts of construction projects including nuclear plants, so
cost over-runs became legendarily huge. Our STNP was born in a year
when damn near all the "good" nuclear engineers were already assigned
to existing projects, so HL&P had the devil's choice between going
with a second-string team of engineers from an experienced company, or
with Brown and Root which had never done such a project before. They
went with Brown and Root which in hindsight was a decision which cost
them dearly.

One thing to know about those years is the Houston area was growing
very rapidly and there was genuinely a problem of having enough future
generating capacity. They had to build something or else have their
service territory reduced by the regulators (don't know if the PUC
existed yet, but prior to the PUC there was a similar regulatory
function centered around the cities). The choices were basically Texas
lignite, non-Texas coal, and nuclear energy -- each would be one plant
built, and each the first on a nontrivial learning curve for HL&P.

The company's argument is like this: they had no choice but to design
enough non-NG plants to replace 100% of their generating capacity, so
the actual decision to go nuclear was sound. But they had no choice
better than to use Brown and Root -- a decision which has been
defended successfully in a number of legal challenges. I don't
actually say HL&P made the wrong decision there, but suggest they
might have needed a way to kill the project rather than persist until
it cost about 10X its original cost estimate. To be balanced you
cannot single out HL&P for poor decisions, since other companies
building plants at the same time had similar cost overruns.

Those awkward decisions of the 1970's came to a head during the
1980's, when plants nationwide came to be finished at great cost, and
utilities went to their regulators for enough income to pay the
mortgages. In some cases the plants were *not* finished, ever, and
still the companies needed to ask for rate hikes because they still
had that mortgage on a huge project. They needed the cash flow badly,
and a number of utilities had to endure cutbacks and dividend cuts
after an unsympathetic public did the Monday Morning Quarterback
analysis of the decisions of the 1970's.

So to recap, what really happened after the panicky decisions of the
Carter years? Rather than becoming nearly extinct as planned, NG only
became cheaper and more plentiful -- throughout the construction of
STNP, HL&P relied on forecasts of much higher NG prices just around
the corner. While utilities could not legally build NG plants,
non-utility generators had a huge legal advantage because they could
burn it and force the utility to buy much of their electricity at
prices representing HL&P's "next" plant on the drawing board (which
NEVER WAS BUILT). So much non-utility supply became available, all of
it burning cheap NG, that HL&P really didn't need STNP for electricity
supply. But it was started, it was huge, and if they didn't finish it
then HL&P would never get paid back its investment.

All SORTS of important things happened which were completely contrary
to forecasts made during the 1970's.

Generally the Midwest utilities which wound up burning coal, ended up
financially in great shape because they simply didn't get on the
nuclear bandwagon. Those with non-growing population in their service
territories, also ended up pretty well off because they were not
forced to make hard choices where every choice was in hindsight, not
the right one. But utilities building nuclear plants, had to endure
many changes from the original design after Three Mile Island -- the
regulators were paralyzed with uncertainty and indecision, and no
amount of change orders seemed too much to ask. HL&P claimed that
about 75% of STNP's cost overruns were to comply with mandated design
changes while the plant was still under construction.

Oh well, I seem to be going for a second crown as guru of nuclear
energy on this board <g>. I really do enjoy reading accounts of the
Oscar Wyatt follies, and hope you enjoy these too.

Regards -- Mark J.

P.S. Regarding conservation, I see the best way to effectively
motivate that is to have the energy price go up, something which is
clearly happening this year. If gas and oil worldwide are getting hard
to find, then this will be more of a step change than a roller-coaster
cycle. Higher prices will tip a number of renewable energy projects
into feasibility. I don't see renewables growing into the majority,
but we can share some pleasure at seeing them grow a lot from the
present level.

P.P.S. I am cheering at the technology of LNG imports. That is what we
already know how to use, just price has been a limiting factor until
the recent price rise. If NG prices stay where they are now, then LNG
can emerge as an important source of supply -- from what I have read
maybe 10-15% of the nation's NG needs, not 50-75%. At least NG in any
form is cleaner than the majority of other fuels.
• For more information, I m sure there are many books and resources. Good idea. I can recommend the video tape, GIANT with James Dean - a wonderful synopsis of
Message 15 of 25 , Jul 6, 2003
• 0 Attachment
For more information, I'm sure there are many books and resources. Good
idea. I can recommend the video tape, GIANT with James Dean - a wonderful
synopsis of TX oil. It is excellent. Also, read Blood & Money for more history of
the Wyatt's. James Michener's TEXAS is also good. I'm sure many of these seem
outdated for some of y'all but this is a start for you. Follow-up w/ the TX.
Railroad Commission.

I could use more suggestions too. ~ Diane Clemens
• ... switched ... plant ... wrong ... no problem! mercy is granted! It s called pulverized coal firing and can be adapted to natural gas boilers with
Message 16 of 25 , Jul 7, 2003
• 0 Attachment
--- In hreg@yahoogroups.com, "mark r. johnson" <mrj53@m...> wrote:
> > Older folks will remember
> > the details but anyway SA and some other south Texas towns
switched
> over from
> > gas to coal and have been using it ever since.
>
> I guess by now I am one of the older folks, and this is specialized
> knowledge that we *don't* all remember. Actually, I want to express
> real skepticism that Wyatt was that influential in the building of
> lignite/coal plants in Texas. One cannot "convert" a natural gas
plant
> to coal, as coal requires some elaborate and expensive machinery to
> handle it. I try to stay aware of electric generating technology and
> have never heard of a gas plant being converted to coal. If I am
wrong
> then please have mercy and point me to some education.
>

<GRIN> no problem! mercy is granted!

It's called "pulverized coal firing" and can be adapted to natural
gas boilers with 'minimal' modifications to the boiler itself.

However, there is extensive, elaborate and expensive machinery
required to stock pile the coal, move it to the pulverizer, then
inject the very fine, finer than talcum powder, powdered coal, almost
like an atomized mist, into the burner. Advantages are complete
combustion, minimal to no ash. Sulfur in the flue gases can be
treated by passing the flue gases through limestone creating gypsum
and carbon dioxide. We know gypsum as sheetrock.

David, CEO
The GREAT Grand Funk Northern
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