38. A. operates two such plants in Louisiana. One is in New Orleans and one is in Baton Rouge. In both instances, the added effect of particulates and sulfur In your judgement, what research and development programs would expedite attainment of the objectives of a national policy to promote greater coal utilization and the National Petroleum & Natural Gas Conservation and Coal Substitution Act of 1975? What should be the relative priorities among these programs? As was pointed out earlier, one of the most significant problems of potential industrial coal consumers is the high capital cost of facilities which are now in place to consume petroleum and natural gas. Unfortunately, most of these facilities cannot be converted to coal. If they are to burn coal directly, they must be replaced at a very high capital cost. This will put a severe financial strain on individual companies and the overall U. S. economy. The fact that these significant imbedded costs exist may indicate that coal gasification or liquifaction is more economic than it would appear on the surface. This Corporation therefore urges heavy government research involvement in improving the technology, efficiency and cost of coal gasification, liquifaction and solvent refining. In addition, the Corporation would urge a liberal policy of government cost sharing with energy consuming industries in projects which will devebp the technology for efficiently consuming coal in different industrial 40. A. - 11 processes without product or environmental damage. Examples of these processes in the businesses Kaiser Aluminum is involved with are: direct melting of aluminum alloys direct firing of tunnel and ring kilns direct firing of calciners for a variety of products It is this Corporation's. belief that the major coal problem needing R&D effort is with the coal consumers and not the coal producers. Government R&D priorities should be so directed. What are the anticipated efforts of a national policy to foster greater coal utilization on consumer costs for electricity as well as other goods and services? The imposition of Senate Bill 1777 as it currently reads on Kaiser Aluminum would require about a ten percent increase in product prices just to cover the capital cost of the conversions. Costs incurred because of the loss of present fuel contracts and high coal transportation costs would more than double that penalty. The result would be a dramatic increase in cost in a broad cross section of industrial products. These would immediately be felt in a variety of consumer products including: a. b. c. d. Food (impact of increased fertilizer & aluminum packaging costs) Building materials (impact of increased aluminum costs and Transportation (impact of increased aluminum cost) Hard goods (impact of increased aluminum and chemical costs) It is this Corporation's belief that the consumer impact of the costs imposed - 12 on all basic industry by this bill would be so severe that major disruptions to the U. S. economy would occur. The root problem lies in the high imbedded cost of basic energy-consuming facilities which now exist in industry and the high imposed replacement cost of these facilities by this bill. It is understood that hearings on this Bill have been concluded and that the Committee is now in the marking up process. Since our members own and/or operate American flag Great Lakes bulk cargo vessels, we did not appear at the hearings because it seemed readily apparent that the proposed legislation was intended to have application only to stationary major industrial installations. It does not seem conceivable in light of modern day marine technology that the Congress would require marine craft to utilize coal. In fact, there are not sufficient coal stations throughout the world that could service the merchant marine. To avoid subsequent misinterpretation of the Act, we would suggest that the definition of "major industrial installations" contained in Paragraph (g) of Section 105 be modified by either inserting the word "stationary" before the phrase "installation other than a power plant" or adding at the end thereof the phrase "but does not include vessels operating upon the navigable waters of the United States." We believe such a modification would be in keeping with the purposes of the Bill and with a proper explanation in the Report of the Committee, future misinterpretation can be avoided. Sincerely yours, Rank & Trimble aul E. Trimble Vice Admiral USCG (Ret.) MISSISSIPPI POWER & LIGHT COMPANY P. O. BOX 1640, JACKSON, MISSISSIPPI 39205 In response to the invitation published in the May 20, 1975 Congressional Record, we respectfully submit the following statement in regard to S1777, the National Petroleum and Natural Gas Conservation and Coal Substitution Act, 1975. Mississippi Power & Light Company is an investor-owned electric utility serving 275,000 customers in Western Mississippi at retail, and in addition, we supply the bulk power requirements of seven electric power associations and four municipalities. Of We have a total generating capability of 2, 752, 000 KW. the total, 2,002,000 KW was designed to utilize natural gas as a primary fuel. Our newest unit, with a station capability of 750,000 KW is designed to burn No. 6 residual oil as a primary fuel. The management decisions to utilize the low-cost, abundant natural gas in these boilers was imminently sound. It provided a useful market for a product that was at that time being wasted in the oil fields by flaring; and it saved the economically deprived people in our service area millions of dollars in lower electric bills made possible by the lower capital requirements for gas-fired boilers; and the attractive fuel costs. The gas pipeline customers also benefited from our decision to provide a reliable bulk market for off-season off-peak natural gas production. This had the salutary effect of enhancing the financing and construction of major natural gas pipelines to markets outside the production areas. MORE Member Middle South Utilities System |