Generating Buzz

Issue 11 and Volume 110.

No Taste for Texas Tea?

“Coal’s importance in Texas will be realized even before FutureGen is completed. The state’s electricity demands are growing at a rate that cannot be met by the limited contributions of other fuels. The expected 34 percent increase in demand by 2015 will be met by coal. And it will be done so cleanly.”

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Michael L. Williams, Texas Railroad Commissioner

Plenty of Energy on the Shelf

John Hofmeister, Shell USA President and CEO, gave a keynote address at the Gasification Technologies Conference in Washington, D.C. in early October. He said in part, “In terms of crude oil and natural gas, we have plenty of supplies in this country. We have 112 billion barrels of known oil and gas reserves that are off-limits to the energy companies because of public policy. Thus, we’ve only developed about 6 percent of the outer continental shelf and federal lands of oil and natural gas reserves. Please don’t be misled. The current relaxation in gasoline price levels is due in large measure to excess inventory built up in anticipation of the hurricane season, which is nearly past us and we did not have the effects we had a year ago.

The actual supply and demand relationship when it comes to crude oil is very tight. The world today will produce about 85 million barrels of oil and gas equivalent. The world will use something more than 84 million barrels of oil and gas equivalent, leaving very little space for any disruption or setback anywhere in the world – geopolitical or natural. But with the development of 112 billion barrels on the outer continental shelves and federal lands, we could ease our supply issue in great measure. And that’s just the conventional world.”

Air Force Says Synfuel Could Fly

The U.S. Air Force recently flew a B-52 fueled with a mixture of synthetic and JP-8 fuel. The Secretary of the Air Force wants to acquire 100 million gallons of synthetic fuel by 2008, part of an Air Force push to source half its aviation fuel from alternative sources by 2016. The Air Force is the Department of Defense’s largest aviation fuel consumer, using 58 percent of all aviation fuels in the armed services. Additional tests will involve more modern engines, including those used by the Boeing 737.

In the recent Air Force test, the B-52’s eight engines were powered with a 50-50 mixture of jet fuel and a colorless synthetic fuel produced from natural gas by Syntroleum, based in Tulsa. Reports said the fuel cost $23 a gallon, a pricetag that could drop with mass production.

California’s Greenhouse Gas Bill

… “The wider importance of this initiative lies in its chance to become a catalyst for national action on climate change. Those who hope it does so…must now focus on California’s next steps. The real challenge lies in building a workable regulatory infrastructure to realize the goals in the new law.

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“In our view, the stakes are huge-extending well beyond California and its future. A successful system will point the way for others to follow; bad missteps will serve as an admonition to others considering similar attempts. It is essential that we get it right.”

—Peter Darbee, chairman, CEO and president of PG&E Corp., et al., writing in the Financial Times newspaper

Coal State Cooperation

Wyoming and West Virginia are the only two states that can meet the nation’s growing appetite for coal, the chairman of one of the nation’s largest coal companies has said. Steve Leer, chairman of Arch Coal, spoke to reporters along with Wyoming Gov. Dave Freudenthal and West Virginia Gov. Joe Manchin. Freudenthal invited Manchin to tour Wyoming’s coal country in an effort to have the states work more closely together on coal issues.

Leer said the United States now uses about 1 billion tons a day of coal in coal-fired generation plants. He said that will likely increase to about 1.7 billion tons a day by 2030.

Freudenthal said that eastern and western coal-producing states worked together in the 1970s and 1980s on common issues. They drifted apart over environmental issues and trash talk about eastern versus western coal.