Stauffer Stauffer Chemical Company CHEMICALS. Westport, Connecticut 06880/ Telephone (203) 226-1511/ Cable "Staufchem" Your Aide, Mr. Richard Grunde, was kind enough to allow us to present our views on Senate Bill 1777, National Petroleum and Natural Gas Conservation and Coal Substitution Act of 1975. We Stauffer Chemical Company is a diversified chemical manufacturing company with 75 locations in the United States. are dedicated to conservation and have an active program. We are not against conversion of boilers to coal, but feel some impossible conditions would be set by S. 1777 as proposed. A preliminary estimate indicates the capital cost to Stauffer could be as high as $200,000,000. We have the following comments and recommendations: 1. The time allowed for conversion to coal, (by 2. (continued) A steam boiler may be a very minor part of fuel use at a location. The criteria for definition should be "fossil-fuel fired steam generating Boilers". 3. We recommend that the size of the steam generating unit, not the number of units at a location should be the criteria for requiring conversion, and suggest it apply to units not less than 100 million BTU/hour per boiler with not less than 300 million BTU per hour for one location. The American Boiler Manufacturers Association has presented data which indicates at 300 million BTU/hour per location the cost will be 11 billion dollars for an 8% decrease in oil use, equivalent to 1.4 billion dollars for each 1 percent, whereas at the 50 million BTU/hour per location the cost will be 68 billion dollars for an 11% decrease in oil use. The additional 3% improvement is at a cost of 19 billion dollars for each 1 percent. 4. We suggest that the increasing costs and threatened shortages of other fuels are incentives enough to convert facilities to coal in an orderly fashion. The constraints placed on the use of coal burning facilities by needlessly strict environmental controls are a very significant detriment. 5. Potential coal availability in adequate quantities is already highly questionable because of delays in obtaining approval for development of new mines. 6. We support the comments of the American Boiler Manufacturers Association regarding Major Industrial Installations starting on page 4 of their submission of June 30, 1975. In conclusion we wish to express our thanks to you and Mr. Grunde for allowing us to present our comments. Very truly yours, STAUFFER CHEMICAL COMPANY DMG/sw D. M. Greeno Director, Energy Management Energy Conservation has recently been given the high national priority that it has long deserved. United States Gypsum Company wholeheartedly supports this development as a matter of Company economics as well as of national independence from foreign petroleum suppliers. Various legislative proposals are being considered for inclusion as possible elements of a National Energy Program. Among these are proposals to legislate mandatory conversion of major fuel burning installations to coal as the only acceptable primary fuel. Depending on the specifics of any such proposals, enactment of legislation to this effect, if it applied to all process fuels rather than solely to boiler fuels, could have extremely serious consequences on this Company's ability to continue to operate at a majority of existing locations; and it is this matter that I would like to address in this letter. The reasons for the above mentioned ominous coal conversion consequences are many; but they lend themselves to being broken down into two major categories: technological limitations and economic constraints. Technological Limitations Technologically, the knowledge and equipment exist to allow conversion of U.S. Gypsum's major fuel burning processes to utilize coal, but an important distinction must be made. Converting U.S. Gypsum Co. plants to burn coal does not necessarily imply converting, i.e., making modifications to, already existing equipment. This is especially true in relation to the majority of Company kiln "conversions" most notably those used in the production of gypsum wallboard. It is not possible to enable a presently operating direct-fired kiln, for instance, to employ steam coils (which will be discussed shortly) for drying simply by modifying the existing kiln. To "convert" a direct-fired kiln to steam coil kiln would involve actually replacing that kiln with a completely redesigned, new wallboard kiln. Whenever the term "converting a kiln" is used or referred to in this letter, then, this distinction must be kept in mind. In addition to gypsum wallboard rock dryers, kettles, and kilns, U.S. Gypsum Co. operates rotary kilns for the production of lime, furnaces/kilns used to manufacture refractories and bricks, steam generators/boilers used in paper making, kilns and dryers used in the manufacture of wood fiber board products, slag-melting cupolas for making insulation products, and other smaller fossil fuel combustors. Each of these would present special, unique problems if a need arose to convert to coal. However, since the Company's major expenditure of fuel takes place in the wallboard kilns, it is these that will primarily be discussed in this letter. And it is the wallboard kilns that pose the biggest problem in any "conversion" to coal utilization. More than three-fourths of the fuel consumed in the production of prefabricated gypsum products gypsum lath, sheathing and wallboard being foremost among these takes place in the drying kiln where the pre-formed wet board has roughly 99.5 percent of its moisture removed before being sold. Because strict quality constraints preclude acceptance of combustion product depositions or discoloration of any sort on the finished board, the only proven practical method of utilizing coal as the drying heat source in these kilns is indirectly through employment of steam coil kilns. In the past steam kilns were common within the gypsum industry; but for a number of reasons, they have been abandoned in favor of directfired gas and/or oil kilns. The steam kilns required erection and operation of large industrial Steam kiln production rates were far below those able to be achieved Maintenance costs were able to be significantly reduced with the The development and refinement of sophisticated gas/oil firing The steam kilns were far less thermally efficient than their From a Company standpoint, and it appears from a standpoint of national well-being, the two most damaging considerations associated with these technological limitations of converting to steam coil kilns would be related to the overall increased energy consumption and serious production capacity losses that would result from the need to make such a conversion to coal. There can be little disagreement with the obvious facts that increased energy consumption is undesirable from a Company cost standpoint and is directly contradictory to the well-publicized national goal of conserving energy. The loss of productive plant capacity which would result from converting to steam kilns is also most undesirable. For U. S. Gypsum Company, it means reduced sales, increased unit costs and reduced Company profits. For the nation this reduced capacity poses serious and far-reaching problems, which were well summarized in a 1974 study by the Stanford Research Institute for the Federal Energy Administration, U.S. Department of Commerce and U.S. Bureau of Mines. Entitled Industrial Energy Study of the Concrete, Gypsum, and Plaster Products Industries, the report states: "There are no comparable products that might replace gypsum Economic Constraints The economic considerations which so severely constrain USG's capability to convert its major fuel burning equipment to coal center around the enormous capital requirements necessary to make such a conversion. The size, age, processes, and complexity of U. S. Gypsum Company's plants vary substantially; and, of course, the costs of completely converting any given plant to coal would vary depending on its respective "mix" of these variables. Nevertheless, "ballpark approximations" can be generated for representative plants, one new plant and a second older plant, to give some idea of the order of magnitude of capital expenditure that coal conversion would entail. A new USG board plant might be roughly ten years old with a |