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RE: [hreg] Media Meeting Monday Night

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


      Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
    • Renee Tolin
      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 2 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


        Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.


        Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
      • mark r. johnson
        ... 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 3 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
        • mark r. 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 4 of 25 , Jul 3, 2003
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            --- 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
          • Michael Christie
            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 5 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/
            • Leonard Bachman
              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 6 of 25 , Jul 3, 2003
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                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/
                >
                >
                >
              • chasmauch@aol.com
                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 7 of 25 , Jul 3, 2003
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                  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

                • Michael Christie
                  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 8 of 25 , Jul 3, 2003
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                    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





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                  • mark r. johnson
                    ... 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 9 of 25 , Jul 5, 2003
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                      --- 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.
                    • mark r. johnson
                      ... continuing ... problems ... Texas ... blow-by-blow ... but you ... Thanks Charlie for summarizing it for me. I am sincerely interested in studying what
                      Message 10 of 25 , Jul 5, 2003
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                        --- 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.
                      • jclem412@aol.com
                        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 11 of 25 , Jul 6, 2003
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                          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
                        • David Funk
                          ... switched ... plant ... wrong ... no problem! mercy is granted! It s called pulverized coal firing and can be adapted to natural gas boilers with
                          Message 12 of 25 , Jul 7, 2003
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                            --- 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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