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RE: [hreg] Coal, Wyatt and Texas power

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  • 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 1 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 2 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 3 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 4 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 5 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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