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Energy follies (was: Coal, Wyatt and Texas power)

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  • 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 1 of 25 , Jul 5, 2003
      --- In hreg@yahoogroups.com, chasmauch@a... wrote:

      > This happened a long time ago - in the 1960s as I recall. It was a
      > story in most newspapers in south Texas for several years about the
      > between SA, Corpus Christi, and other south Texas towns vs Coastal.
      > Monthly did a detailed, feature-length article that gave the best
      > 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 2 of 25 , Jul 6, 2003
        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 3 of 25 , Jul 7, 2003
          --- 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
          > 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
          > 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
          > 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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