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major industrial installation boilers to coal firing. However, we

call your attention to the fact that definitional section 105(f) and

(g) do not appear to be limited to boilers, resulting in some ambiguity as to the intended scope of the bill. As the bill now reads, it may admit of a construction which would sweep more broadly than the perceived purpose of the bill conversion of boilers to coal firing.

Therefore,

we suggest that these definitional sections be clarified so as to conform to the substantive sections of the bill. If, however, the scope of the bill is intended to be expanded by these definitions, then the bill would apply to any unit capable of being fired at a heat rate of 50 million Btu's per hour or greater. This would include metallurgical furnaces, such as reheat furnaces, soaking pits, open-hearth furnaces and annealing furnaces. To date there is no technology that permits the direct firing of these units with a solid fuel. The metallic charge would be contaminated by the contained ash in a solid fuel and it would be impossible to control the flame dimensions to provide even heating. Therefore, localized overheating and underheating would occur that would make downstream processing impossible. At present, these units are fired by natural gas, coke-oven gas or oil products (clean-burning fuels that lend themselves to flame control), and the total energy requirement is approximately 20 percent of the energy required to produce steel. Since steel represents 5 percent of the total domestic energy consumption, these furnaces are less than one percent of the nation's

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fuel requirement. It is believed that the extreme difficulty and technological advancement required to convert these units to a solid fuel is unjustified in light of the relatively small impact it would have on the national fuel economy. Therefore, we would suggest that the definitions of the Act be rewritten to clearly exclude these types of units for which technology is not readily available for conversion to a solid fuel.

Summary

Our recommendations relating to the National Petroleum and Natural Gas Conservation and Coal Substitution Act of 1975 may be summarized in the following nine points:

1) Price controls should be removed from natural gas and petroleum products so that the workings of the free market can determine how such products are used, in what quantities, at what prices, and by whom.

2) Doubling the coal-mine capacity in the next ten years cannot be achieved short of establishing an overriding national priority.

3) Compensating financial incentives, such as very rapid capital recovery provisions, should be provided to expedite coal

conversions.

4) MESA regulations and inspection procedures and practices should be re-examined and changed to encourage increased mine production while still preserving mine safety.

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5)

A program of new energy production should be instituted

to expand all domestic energy production.

6) Present SO2 source emission standards should be eliminated

in favor of ambient air standards for all SO2 emissions.

7) The requirement for coal conversion of boilers should be raised from boilers consuming 50 million Btu's per hour to boilers consuming 250 million Btu's per hour or more.

8)

Manufacturing capabilities by boiler manufacturers are inadequate to supply the necessary new boilers and boiler conversion equipment in the five-year time proposed in the Act.

9) The definitions in Section 105 (f) and (g) should be

rewritten to clearly exclude furnaces other than boilers that cannot be readily converted to a coal-firing practice.

June 19, 1975

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I am enclosing two copies of the NERC report just released, "Estimated Fossil Fuel Requirements, Projected Generating Capacity, and Electric Energy Production for the Electric Utility Industry (Contiguous U.S.) 1975-1984," dated July 1975.

This is the third such NERC survey and the data are based on the conditions as the electric utility systems developed as of about May 1.

Additional copies are available if you have any

need for them.

Sincerely,

Matter BBrown

Walter D. Brown

Administrative Manager

WDB: 1r
Enclosures

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