COAL & SLURRY TECHNOLOGY ASSOCIATION

Transcription

1 COAL & SLURRY TECHNOLOGY ASSOCIATION 1156 Fifteenth Street, N.W., Suite 505 Washington, B.C / Stuart D. Serkin Executive Director The Honorable John Heinz U.S. Senate 277 Russell Senate Office Building Washington, D.C Dear Senator Heinz: I appreciated the opportunity to meet with Patty Powers and Mat Maloney of your staff on November 24, Both raised a number of important questions concerning the impact of coal pipeline technology on Pennsylvania coal, to which I would like to more completely respond. A principal issue today concerning the marketability of domestic coal is coal quality. Under rising standards of quality for the end-product, but a growing need to resort to low and moderate quality deposits of coal, it is becoming increasingly clear that any comparative advantage of U.S. coal in relation to other fuels or in international markets will depend upon the adoption of affordable clean-coal technologies and advanced processing techniques. Research at the Pittsburgh Energy Technology Center (PETC) indicates that it is highly unlikely that any one technology can address universally the question of coal quality. Due to the hetergeneity of coal and the diversity of boilers, a variety of precombustion, combustion and post-combustion clean coal options will be necessary to meet changing coal standards [Dr. Sun W. Chun, Director, PETC, "Emerging Technologies for the Control of SO2 Emissions", remarks, Washington Coal Club, January 14, 1987]. Coal slurry technology is among the leading precombustion and retrofit coal use and transportation technologies that could offer states a significant clean coal choice over the limited options in common use today for transporting and utilizing our nation's coal resources. In particular, based on selected Pennsylvania coal and market characteristics (attached Tables 1-7), this technology is an attractive option for Pennsylvania coal and steel to consider among it clean coal and industrial choices. Coal slurry technology is a unified system technology of pipeline transport and coal-processing.

2 Page Two These systems transform bulk, unclean coal products into uniform, coal-rich mixtures or fuels at the mine site to end-user specification for pipeline delivery to the user. The coal used in these unified systems is principally bituminous coal, the principal coal produced in Pennsylvania (Tables 1 & 2). Moreover, the technology is well suited for the principal end-users in Pennsylvania, the electric utility industry, the largest consumers of coal in Pennsylvania (Table 3). While coal pipeline systems are by no means limited to serving the electric utility industry as discussed later, existing and past proposed pipeline systems in the United States have primarily been designed to carry mixtures of pulverized steam coal to domestic power plants. The clean coal attributes of the two principal types of coal pipeline systems conventional indirect-fired and emerging direct-fired fuel systems also make coal slurry technology attractive for consideration in Pennsylvania. Coal from the Main Bituminous Field located in western Pennsylvania now the mainstay of production, with the decline in eastern anthracite production is 60 percent high sulfur, 30 percent medium-sulfur and 10 percent low sulfur [Table 4]. A conventional coal slurry pipeline system prepares coal mixtures consisting of about 50 percent coal and 50 percent water. The processes used in preparing the coal wet-grinding the coal to about the particle size of sugar results in a coal-rich product. After being transported by an underground pipeline located below the freeze line, the coal product is dewatered, pulverized, then fired into a boiler. Reguiringr almost 60 percent less water usage than conventional mixtures, coal fuel pipeline designs propose to transport direct-fired mixtures of 70 percent finely- to micronized-ground coal, 29 percent water and 1 percent chemicals, mixed to the consistency of latex paint. Requiring no dewatering and no further pulverization, coal fuels are direct-fired into a boiler like residual fuel oil. Both indirect- and direct-fired coal slurry mixtures and fuels are physically clean coals. The clean coal choice between preparing and transporting a conventional and a direct-fired fuel is based on the quality of coal entering the system. Advanced slurry preparation associated with coal-water fuels can grind low-quality coal to the grain size of the pyritic sulfur, resulting in fine, ultrafine, and micronized particle sizes, reducing S02 emissions by more than 60 percent and by 90

3 Page Three percent when combined with bio-logic processes [DOE, Clean Coal C pmmit me n t, DOE/FE-0083, February 1987]. Coals of higher-quality, consisting of less pyritic sulfur content, are enriched by grinding the coal to a larger particle size and removing more than 30 percent of the pyritic sulfur in coal, using conventional pipeline preparation techniques. The fuel preparation processes of both conventional coal-water mixtures and advanced coal-water fuels are particularly suited for blending different qualities of coal into homogenous mixtures. The processes allow high-sulfur and low-sulfur coals or low- and high-volatile coals, another important blend to be cleaned and mixed in any combination within the environmental and product quality parameters specified by different md-users and then batched by pipeline accordingly. Pennsylvania, which has already produced successful dry blends could benefit by upgrading to homogeneous blends, utilizing more efficiently a range of coal qualities, as well as increasing plant efficiency of end-users and creating new domestic and export markets for coal. Research laboratories in Pennsylvania of course have recognized this market importance of slurry technology for well over 30 years, playing a major role in slurry application and research over this period of time. The first long-distance coal slurry pipeline built in the United States (and the world) was built by Consolidation Coal Company in 1957 in Cadiz, Ohio. Since then major mineral pipelines have been built around the world with this U.S. technology to carry a variety of mineral slurry products to end-users, including the presently operating Black Mesa coal pipeline in Arizona, built in These engineering demonstrations, spurred by two energy crises and the problem of acid rain, have led other laboratories located in Pennsylvania to devote considerable resources to improve slurry mixtures and clean coal processes associated with pumpable coals. Based largely on the extensive and important research conducted by the Pittsburgh Energy Technology Center for example, direct-fired coal-water fuels have recently been adjudged by the Department of Energy to rank among the top clean coal technologies [DOE, America" s C 1..ea n Co a I C omm jl t_m e n t_, DOE/FE-0083, February 1987, pp. A-14 and A-15]. The research in Pennsylvania has by no means, however, been directed only toward national solutions. Recognizing the importance these fuels could have on the industrial (non-coke),

4 Page Four residential and commercial sectors in Pennsylvania sectors which show potential for growth within the state, particularly when compared to the U.S. market as a whole (Table 3) the Fuels and Combustion Laboratory at Pennsylvania State University has one of the leading industrial coal-water fuel development laboratories in the nation attempting to solve local and regional problems. Particularly interested in displacing oil presently being burned in Pennsylvania boilers orginally designed for coal, the university division has concluded: "By using Pennsylvania coals, this technology [coal-water fuels] could have major economic benefits for many communities in the state, particularly in coal regions." [Centre Daily, limes, April 7, 1987] Pennsylvania coal development is not only dependent upon the domestic market. Exports of coal play a substantially larger role in the Pennsylvania coal market than in the national coal market (Tables 5 and 6), requiring close attention to demands by foreign buyers, increasingly concerned about high inland rail rates, as well as opportunities for clean coal and clean coal technologies. Pipeline transportation and clean coal processing associated with pipeline preparation can make Pennsylvania coal more attractive in foreign markets because the technology provides affordable transportation of clean coal mixtures and fuels. Italy, our largest importer of steam coal, has long recognized the benefits of coal pipeline legislation and coal slurry technology on the international market. So concerned about high rail rates in 1983, the Ambassador of Italy to the United States wrote U.S. Congressmen to express his interest in coal pipeline legislation, which he felt would introduce competition for coal transportation to the ports. And just recently, Italy has signed a joint agreement with the United States for the development of a coal-water slurry fuel demonstration plant, a laudatory example of aggressively using technology to develop our comparative advantage in foreign coal markets. Conceivably, advanced clean coal fuel preparation plants could be located at an end-user's site or export terminal supplied by rail with bulk coal for processing, as is presently the only option. Coal-fired power and industrial plants and export terminals could utimately evolve into integrated "resource refineries," as has been suggested by some farsighted utility analysts. Such facilities in this case, electric utilities would "produce a mixture of electricity, heat, fuels and

5 Page Five marketable products for the local economy." ["Coal-Fired Power Plants for the Future," $c_ient_if_ic_ American, September, 1987.] Unquestionably, this may well be the optimal choice for large coal-fired plants that are located near their source of supply. Utilities, industries, and foreign buyers, separated by longer distances from their supply sources, however, may find the escalating costs for transporting and handling bulk coal too high, just as they have made clear they do today. Optimal processing and use of lower-quality coals cannot be achieved if these users, in addition to the costs of on-site processing, are required to incur a ElL^iM. for transporting, handling, and managing the associated wastes. The introduction of pipeline transport and clean coal mixture and fuel preparation at mine-sites not only reduces transportation costs associated with bulk or partially processed coal, it stimulates economic development in mining regions by bringing materials and product development to the region, which could substantially benefit western Pennsylvania coal fields. Moreover, by creating a demand for coal and new construction, coal pipeline systems create jobs in other important sectors of the U.S. economy that also suffer high unemployment rates today heavy construction, chemical and steel. On a national basis, had the major past proposed pipelines been constructed, demand for steel pipe would have required the production of 2.9 million tons of mainline pipe for example, more than twice the average annual production of mainline pipe in the 1970's, and created a large enough demand for the production of valves, pumps JC steel and heavy equipment to keep 350,000 jobs on line. These production and job impacts would have reverberated back to Pittsburgh, regardless of whether Pennsylvania was a partner in a mid-atlantic pipeline development. Weighed against the high unemployment rates that have occurred during periods when many of these lines would have been constructed, these job benefits were an expensive price to pay to keep railroads market dominent at some 66 percent of the coal market instead of some 63 percent or so. In the future, the price to some in the coal mining sector could be very much higher. Coal switching from high- to low-sulfur coals, fuel switching and import penetration in our domestic utility market

6 Page Six could impact as much as 283 rnil_ll: i.cin tons of coal, as estimated by the Pittsburg Energy Technology Center, unless affordable clean coal options are available. To assure that the full range of transportation and coal processing technologies will be available for application in the 1990's, coal pipeline enabling legislation needs to be enacted this Congress. Failure to enact such legislation will not only deny a cheaper mode of transportation, but will seriously limit our technological response to the challenges we face. Jobs in our basic industries, construction and capital goods sectors need to be created. Our energy independence needs to be secured. The nation's coal resource base needs to become a clean fuel of choice. Coal pipeline system technology can contribute to meeting these challenges we face. I hope these responses address some of your questions concerning the potential impact of coal pipeline technology on Pennsylvania. I would be happy to provide any futher information you may need or answer any additional questions you may have. Sincerely,