cAC
DOE
EPA
Integrated
Assessment of
Texas Lignite
Development
Volume IV.
Executive Summary
Interagency
Energy/Environment
R&D Program
Report
EPA-600/7-79-111d
May 1979
"DV
U.S.
K.J.
EPA/600/7-79/llld
-------
RESEARCH REPORTING SERIES
Research reports of the Office of Research and Development. US Environ-nenta-
Protection Agency, have been grouped into nine series Tnese nine broad cate-
gories were established to facilitate further development and application of e-i
vironmenta! technology Elimination of traditional grouping was conscious y
planned to foster technology transfer and a maximum interface in related fields
The nine series are
1 Environmental Health Effects Research
2 Environmental Protection Technology
3 Ecological Research
4 Environmental Monitoring
5 Socioeconomic Environmental Studies
6 Scientific and Technical Assessment Reports (STAR;
7 Interagency Energy-Environment Research and Development
8. 'Special" Reports
9. Miscellaneous Reports
This report has been assigned to the INTERAGENCY ENERGY-ENVIRONMENT
RESEARCH AND DEVELOPMENT series Reports in this series result from the
effort funded under the 17-agency Federal Energy/Environment Research ana
Development Program These studies relate to EPA's mission to protect the public
health and welfare from adverse effects of pollutants associated with energy sys
terns. The goal of the Program is to assure the rapid development of domestic
energy supplies in an environmentally-compatible manner by providing the nec-
essary environmental data and control technology. Investigations include anaiy-
ses of the transport of energy-related pollutants and their health and ecological
effects, assessments of. and development of, control technologies for energy
systems: and integrated assessments of a wide range of energy-related environ-
mental issues.
This document is available to the public through the National Technical informa-
tion Service. Springfield. Virginia 22161
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AN INTEGRATED ASSESSMENT OF TEXAS LIGNITE DEVELOPMENT
VOLUME IV - EXECUTIVE SUMMARY
J. C. Lacy - Project Director
R. J. Davis - Policy
F. H. Sheffield - Policy
R. L. Leonard - Scenario Development
J. R. Stewart - Air
A. P. Covar - Water
D. D. Harner - Socioeconomics
0. W. Hargrove - Engineering
M. L. Wilson - Program Manager
April, 1979
Prepared for:
TEXAS ENERGY ADVISORY COUNCIL
Energy Development Fund
Project R-4-7
Project Officer: David White
Office of Research and Development
U.S. ENVIRONMENTAL PROTECTION AGENCY
EPA Grant No: R806359-01
Project Officer: Paul Schwengels
Office of Environment
U.S. DEPARTMENT OF ENERGY
Interagency Agreement DOE EE-78-A-28-3286
Project Officer: F. Jerome Hinkle
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-------
-------
FOREWORD
Recent years have witnessed increasing awareness of the declining
availability of our most widely used energy sources - oil and natural gas -
accompanied by sharp increases in price. Both direct government policy
and the market price mechanism are now operating to stimulate a shift away
from oil and natural gas to other fuels wherever possible. One area in which
this shift is likely to be especially ^renounced is the Gulf Coast. There,
massive electric utility and industrial capacity is fueled by oil and nat-
ural gas which have historically been locally plentiful. Assuming this
shift continues, other fuels will be required to power both new and existing
sources. One promising candidate to fill much of the emerging energy gap
in the Gulf Coast region over the near and medium term is lignite which
exists in the same general region and appears to be very competitive econo-
mically. There are,•however, significantly different and more serious en-
vironmental consequences associated with extraction, transportation, and
utilization of large quantities of lignite than is the case for oil and
natural gas.
Thus, this study was conceived as a timely first attempt at defining
and analyzing the consequences and constraints associated with the potential
extensive use of lignite in Texas (which comprises a major portion of the
region in question), and the public policy options available for managing
this development. A notable feature of this research effort has been its
cooperative interagency character. It has been a valuable experience in
federal/state research cooperation between the Department of Energy (DOE)
and the Environmental Protection Agency (EPA), two federal agencies for
which cooperation is essential in this sensitive policy area, and the Texas
Energy Advisory Council, an agency of the State of Texas. In addition,
active involvement of the DOE and EPA regional offices was incorporated
into the design and management of the study. Efforts required to establish
this complex structure were amply compensated for by the range of viewpoints
and experience brought into the research design.
The study has been conducted under demanding constraints of both
funds and time. The time constraint has been an especially difficult one.
From the study's inception, it was agreed that major users to whom this
study would be directed were state and local policy makers (although appro-
priate elements of the federal government, including regional offices, are
considered to be major users as well). In that context it was considered
essential that the study results be available to the 1979 session of the
Texas State Legislature (which meets once every two years). Consequently,
only eight months were available to complete this research, limiting the
level of detail at which lignite development issues could be examined.
A significant decision made early in the study's planning was to
emphasize the aggregate, regional impacts rather than the specific impacts
associated with a single mine or power plant. This decision was based on
two primary factors. First, because of its geologic and geographic distri-
bution, lignite's development will occur over a broad region of Texas rather
than be concentrated in a few limited areas. As such, it was felt that an
analysis of the regional impacts of lignite development might yield valuable
-------
information not recognized at the level of an individual site. Second, the
attempt to hypothetically site future plants at a more detailed geographic
level was too complex a task to be completed in a credible manner within the
constraints of the study.
Given this perspective, the study team has done an excellent job of
analyzing a number of constraints to and consequences of lignite development
at the regional level and has pointed out many potential problems which
deserve examination at a finer level of detail. Many environmental problems
do not become apparent in an analysis at the regional level of aggregation
although their cumulative impacts may be substantial. This study should,
therefore, be viewed as a "first cut" overview of the issues associated with
Texas lignite development. A finer grained analysis is still required in
future research studies as well as through the permitting process.
The reader should also be sensitive to the effect of assumptions on
conclusions in a study such as this. It was necessary, of course, to make
assumptions about a wide range of future social and economic conditions in
order to assess the potential impacts of lignite development. Varying these
assumptions could substantially alter the study's conclusions. One clear
example relates to availability of water for lignite development. Assump-
tions were made concerning future municipal and agricultural water demand
and future development of dams and other measures to augment water supply.
Given these assumptions, water availability does not appear to pose a signif-
icant constraint to lignite development in most areas of the lignite belt.
Other assumptions, however, could have resulted in quite different conclu-
sions. It was not possible within the limits of the study to examine the
sensitivity of conclusions to variations in many such assumptions. The
reader should, therefore, be aware of the context of assumptions in which
these conclusions were drawn and the resulting limits on their predictive
validity.
The project team, put together by the Radian Corporation, is tc be con-
gratulated for producing a thcmgh^-provoking technical and policy analysis
report. In addition, special thanks are due to all mpmbers of the review
panel and to Bill Honker and Mike Gibson of EPA's Dallas Regional Office and
Lila Williams of DOE's Dallas Regional Office for unselfish commitments of
time and experience to the project.
Paul Schwengels, Project Officer Jerry Hinkle, Project Officer
Office of Environmental Engineering Division of Environment
and Technology Department of Energy
Environmental Protection Agency
David M. White, Project Officer
Texas Energy Advisory Council
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Lignite viewed as transition
fuel
Lignite is potentially
important to state's
energy-intensive industrial
base
During 1970's lignite
production increased ten-fold
Industry and electric utilities
find lignite an attractive
alternative to coal and
nuclear
Transition to lignite and
coal raises environmental
concerns and policy
questions
I.
INTRODUCTION
Texas lignite is widely perceived by policymakers
and che public alike as a "transition fuel" bridging the
gap between the depletion of the state's oil and gas re-
serves and the commercialization of the clean, renewable
energy sources of the 21st Century--fusion, solar, wind,
and geothermal.
Scarcely a decade ago, Texas lignite was a virtual
unknown--except to a handful of energy companies quietly
acquiring leases. Then in the wake of the 1973 Arab oil
embargo, the five-fold increase in world oil prices, and
natural gas shortages, Texas lignite was hailed -as a "new"
indigenous source of energy capable of sustaining both the
state's energy-intensive industrial base and its tradition-
al role as an exporter of oil and gas.
During the 1970's, Texas lignite production has
increased ten-fold as the state's electric utilities and
more recently, industry, began a shift from near total
reliance on oil and gas to lignite and imported western
coal.
This conversion has been prompted by economics and
by state and national policies which reduce the availability
of oil and gas for electric utility and industrial uses.
These two sectors account for more than two-thirds of all
energy consumed in Texas.
In the late 1970's, Texas lignite has emerged as a.
preferred alternative fuel for most of the state's utility
and some industrial fuel users as legal and regulatory de-
velopments tended to close off the nuclear option and reduce
the attractiveness of imported western coal.
The rapid shift to lignite and coal has raised en-
vironmental concerns and a variety of policy implications.
In an effort to determine the extent of these impacts and
to assess the relevant policy issues, the Texas Energy
Advisory Council (TEAC) together with the U.S. Environ-
mental Protection Agency (EPA) and the U.S. Department of
Energy (DoE) sponsored this integrated assessment of Texas
lignite development.
-------
This study was conducted
in four steps:
How much lignite
development?
What are siting constraints?
What are impacts of lignite
development?
What are the policy issues
and alternatives?
To estimate scale of develop*
ment, overall energy growth
and the roles of various
technologies were assessed
The assessment was conducted by Radian Corporation
of Austin, Texas, assisted by a review panel comprised of
some thirty representatives from government, industry, aca-
demic and public interest groups, and sponsoring agencies.
•i
This document summarizes the results of the study.
It is organized along the lines of the four major steps--
or tasks — involved in the assessment.
• The Development Scenario task (Section II) at-
tempts to determine how much lignite develop-
ment might occur and what factors influence
this development.
• The Siting Analysis task (Section III) seeks
to determine where lignite and coal use is
likely to occur and whether the projected
number of lignite and coal facilities can be
accommodated given several key siting limita-
tions .
• The Impact Analysis task (Section IV) identi-
fies probable environmental and socioeconomic
impactrs which are likely to occur based on the
magnitude of development and siting patterns
indicated in the first two tasks.
• The Policy Analysis task (Section V) identi-
fies the major policy issues which relate to
each of the three preceding tasks and assesses
alternative means of resolving the issues based
on various policy objectives.
II. LIGNITE DEVELOPMENT SCENARIO
Method of Analysis
To evaluate plausible scales of lignite development
during the remainder of the 20th Century, the study team
looked first at the probable future uses of lignite and then
attempted to estimate the demand for lignite in these sec-
tors. This required an assessment of the following factors:
• Overall energy growth rates,
• The role of conservation and alternative, re-
newable fuels,
• The role of nuclear power,
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Several sensitivity cases
were examined
Texas' overall energy growth
rate will probably continue to
exceed national rate
Texas electric utility fuel
use expected to increase from
1.8 Quads to 4.8 Quads in
2000
Texas industrial fuel use
expected to increase from 2.4
Quads to 5.2 Quads in 2000
• The availability and future use of oil and gas,
• The amount of solid fossil fuel demand which
will be"1 satisfied by lignite, and
• The extent and ownership of the lignite resource.
A variety of sensitivity or "what if?" cases were
examined to determine what factors might significantly al-
ter the future scale of lignite development. Finally, a
reasonable or "nominal" case was selected upon which to base
the siting and impact tasks.
Results and Conclusions
Growth in the state's overall energy demand, in
general, and electrical demand, in particular, is expected
to exceed national rates. However, both national and state
growth rates are expected to be below those of the pre-
embargo period. It is anticipated that lignite use will be
confined entirely to the utility and industrial sectors.
The development scenarios focus on these two sectors.
The noriinal case calls for Texas electric utility
generation to grow by 5.3 percent per year from 1978 to 1987
and by 4.3 percent from 1987 to 2000. These rates, which
represent the current projections of the state's utility in-
dustry, would increase energy consumption by the state's
electric utilities from 1.8 quadrillion Btu's (Quads) in
1978 to 4.8 Quads in 2000.
The nominal case for industrial energy consumption
is consistent with earlier forecasts by TEAC and DoE, based
on projections of economic activity. The rates used for
industrial energy consumption (primarily process heat,
process steam and on-site electrical power production) are
3.3 percent per year for the 1975-1990 period and 3.2 per-
cent annually for 1990-2000. This growth results in an in-
crease in industrial consumption from 2.4 Quads in 1978 to
5.2 Quads in 2000.
-------
Energy conservation and
renewable energy sources
could significantly reduce
future fossil fuel require-
ments
High ambient levels of ozone
could impede growth in refining
and petrochemical industries
Table 1. DERIVATION OF SOLID FOSSIL FUEL REQUIREMENTS
2000
1978 1985 High Nominal Low
(101S Btu's or Quads)
Tocal Conventional Energy
Requirement
Utilities 1.76
Industry 2.42
Exempted Oil and Gas Use
Utilities 1.26
Industry 2.37
Prospective Nuclear Supply
Utilities 0.0
Solid Fossil Fuel
Requirement
Utilities 0.50
Industry 0.05
2.6
3.1
1.3
2.9
0.3
1.0
0.2
5.4
6.5
1.3
4.6
0.4
3.7
1.9
4.8
5.2
1.3
4.0
0.4
3.1
1.2
3.3
3.3
1.3
3.0
0.4
1.6
0.3
The Cop two lines of figures in Table 1 show chis
increase in energy consumed, together with a "high" and
"low" case. Since the nominal case estimate is the basis
of this overall assessment, it is instructive to examine
the effects of scenarios which either continue current
growth rates into the 1990's (high case) or which assume a
rate of growth which is equal to the state's projected
population growth (1.7 percent per year) in the 1987-2000
time frame (low case).
The almost two-fold difference in year 2000 energy
consumption between these low and high cases illustrates
how conservation efforts and the substitution of renewable
(non-conventional) energy sources can reduce the scale of
future energy development.
Aside from voluntary conservation, a major factor
which could reduce overall industrial energy growth, par-
ticularly in the Gulf Coast petrochemical and refining in-
dustry, is the national policy which discourages new in-
dustrial growth in areas which do not meet air quality
standards. The principal air quality nonattainment problem
in Texas relates to the high levels of photochemical oxi-
dants or ozone. The nominal case assumes that the recent
relaxation of the ozone air quality standard coupled with
the state's control strategies will allow continued in-
dustrial expansion to occur.
-------
Regulatory constraints on
utility and industry oil and
gas use is an important variable
in future lignite development
Pressures to convert to coal and
lignite are a function of domestic
and foreign gas supplies and
the security and price of foreign
oil imports
Following Che determination of plausible utility and
industrial energy -requirements, the next step in deriving an
estimate of future lignite development was the estimation of
the utility and industrial energy requirements that would
likely be met by oil and gas, nuclear and solid fossil
fuels.
The second pair of lines in Table 1 indicate the
amount of oil and gas that would be consumed by utilities
and industry in 1985 and 2000 under the nominal case. The
figures show that che amount of oil and gas used by utili-
ties will remain level while industrial use of oil and gas
will increase by 70 percent from 1978 to 2000. This esti-
mate assumes that utilities and industry will respond to the
National Energy Act's mandatory boiler fuel conversion pro-
visions (Fuel Use Act) as follows:
• New utility power plants will rely primarily
on lignite, coal and nuclear fuels. Some use
of oil and gas will be allowed in new power
plants in order to maintain system reliabil-
ity.
• Some existing utility power plants will re-
ceive conversion exemptions based on environ-
mental or economic grounds, and some will
continue to use gas for peaking purposes.
None will convert directly to coal or lignite.
• New industrial boilers built after 1982 will
use coal, lignite or gaseous fuels derived
from coal or lignite.
• New industrial process heat demands will con-
tinue to be met by either oil or gas.
• Existing industrial boilers are currently ex-
empt by law from conversion requirements and
assumed to remain exempt.
The nominal case assumes a moderate approach to
implementation of the Fuel Use Act. Forces which may tend
to relax the mandatory boiler fuel conversion policy are:
• Prospects of large and secure supplies of
Canadian and Mexican gas,
• Surpluses of domestic gas,
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Nuclear power growth expected
to stagnate
The competition between Texas
lignite and imported coal is
influenced by policies related to:
• Air Quality
• Coal Transportation
• Concern over environmental impacts from rapid
conversion, and
• Concern,over Che economic impacts of forced
convers ion.
On the other hand, future disruptions of oil
imports and OPEC price increases may result .in strict
enforcement of the Fuel Use Act as a means of reducing
vulnerability to foreign oil producers. Such a scenario
would increase lignite and coal use in Texas.
The nominal case assumes a rather pessimistic
future for nuclear power with no new nuclear units
added beyond those already under construction or ex-
pected to be on line by the late 1980's. The 0.4
Quads contributed by nuclear in the year 2000 nominal
case amounts to about eight percent of the staters
electric utility generation.
The last two lines in Table 1 indicate the conven-
tional energy requirements of utilities and industry which
would be met by solid fossil fuels (coal or lignite) under
the high, nominal, and low cases.
These solid fossil fuel requirements can be met by
either lignite or imported coal. The proportion of demand
satisfied by either coal or lignite depends on several
economic and regulatory variables. These include:
• The universal scrubbing requirements proposed to
comply with the, Clean Air Aot Amendments of 19??,
which have removed the primary advantage of low-
sulfur western coal—the ability to meet emission
standards without the installation of costly
flue gas desulfurization units (scrubbers).
• Rising rail transportation rates, which have
more than offset the relatively low mine-oiouch
costs of western coal (vis-a-vis lignite). Rate
increases by rail carriers supplying coal-fired
utilities have far exceeded the general rate of
inflation. Transportation now accounts for al-
most three-quarters of the delivered price of
western coal to Central Texas. By contrast,
Texas lignite can be consumed ac the mine-mouth,
thus avoiding transportation costs.
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• Coal Leasing
• Surface Mining
These policies increase the
attractiveness of lignite
Current plans show that lignite will
satisfy about 60 percent of Texas
electric utilities' future solid fossil
fuel requirements
At projected rate of development, the
strippable lignite reserves may be
fully committed shortly after 2000
• Federal aoal leasing policies, which will affect
Che availability of western coal. More than
two-thirds of the coal from the Rocky Mountain
West .{currently the only major source of im-
ported coal to Texas) is owned by the federal
government. A restrictive leasing policy will
reduce the availability of western coal.
• Implementation of federal surface mining and
reclamation legislation, which can increase
the costs of surface mining. While the regula-
tions will apply uniformly across the nation, it
is believed that the per-ton reclamation and
compliance costs will be higher in arid and
mountainous regions of the West than in the
Texas lignite belt.
An analysis of current plans for the use of coal
and lignite by utilities in Texas indicates that, through
1987, approximately 60 percent of the solid fossil fuel de-
mand will be met by lignite. The factors listed above all
tend to increase the competitiveness of lignite over western
coal. Thus, it appears that in the time frame of this study,
lignite will continue to be the preferred fuel over imported
coal. However, in the post-2000 era, lignite use may be
surpassed by western coal as lignite reserves are depleted.
By 2000, coal may also be imported from the Midwest.
Table 2. POTENTIAL REQUIREMENTS FOR LIGNITE COMMITMENT
Total Energy Required
(10 l5 Btu's or Quads)
Solid Fuel Demand
(10 l5 Btu's or Quads,
Lignite Demand
(10 15 Btu's or Quads)
Lignite Reserve Commitment
Required (Billions of Tons
8 6500 Btu/lb
Utilities
Industry
Utilities
Industry
Utilities
Industry
• :ilities
^'adustry
Total
1978
1.8
2.4
0.50
0.05
0.30
0.05
0.70
0.10
0.80
1985
2.6
3.1
1.0
0.2
0.6
0.1
1.4
0.2
1.6
2000
4.8
5.2
3.1
1.2
1.9
0.7
4.4
1.6
6.0
Table 2 indicates how much lignite must be committed
to meet the solid fossil fuel demand by year 2000 for utili-
ties and industry in Texas. These data assume that the 60/40
proportional split between lignite and coal use will continue
for utilities and will also be reflected in industrial solid
-------
Lignite us* expected to increase
ten-fold to 200 million tons per
year by 2000
The split of solid fuel
supply between lignite
and western coal is
uncertain
Technology and continued
exploration could increase
recoverable lignite resource
fossil fuel use. It is significant to note that by year
2000, approximately six billion tons must be committed to
fuel the assumed 30-year lifetimes of the industrial and
utility boilers which are being constructed through the
year 2000. The Texas Bureau of Economic Geology estimates
the state's economically recoverable lignite reserves at
6.7 billion tons.
The nominal case implies a ten-fold increase in
lignite production from a. current level of about 20 million
tons annually to a maximum of about 200 millions tons per
year.
Table 3. SENSITIVITY OF LIGNITE COMMITMENT BY THE YEAR 2000 TO
ALTERNATIVE ASSUMPTIONS
Utilities Industry
(Billion Tons) (Btllton Tons)
Nominal Case
High Growth
Low Growth
High Nuclear; Moderate Growth
Constrained Gas & Oil;
Moderate Growth
Moderately Constrained Gas &
Oil; Moderate Growth
High Lignite Demand for
Utilities; Moderate Growth
3Z Annual Boiler Retirement
Rate
Estimated Strippable Reserves
to 150 feet (currently econom
Estimated Strippable Reserves
to 200 feet
4.4 1.6
5.2 2.6
2.2 0.4
2.8 1.6
6.1 2.5
6.1 1.6
5.1 1.6
5.1 2.5
leal)
Total
(Billion Tons)
6.0
7.8
2.6
4.4
8.6
7.7
6.7
7.6
. . . 6.7
. . . 8.9
There are two major uncertainties which could either
hasten or delay the depletion of the resource:
« The various policy and economic trends
which now appear to favor lignite over
western coal could easily increase the
currently projected 60/40 lignite-coal
ratio such that proportionately more
lignite is used and the resource com-
mitment exceeds six billion tons well
before 2000.
• On the other hand, the economically-re-
coverable resource estimate could increase
10
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Mandatory boiler fuel conversion
policies could increase lignite
requirements
_ FUEL MIXES FOR TEXAS: 4.8
Electric Utilities and Industry
CO
< 4
O
° 3
i 2
Ui
UTIL. IND.
1978
UTIL. IND.
1985
UTIL. IND.
2000
_ OIL& GAS
I I NUCLEAR
I COAL
I LIGNITE
FIGURE 1
significantly as prices rise and technologi-
cal advances permit recovery of lignite at
greater depths and in thinner seams. Ad-
ditional exploration may also increase
resource estimates.
It is likely that both of these trends will develop
concurrently. To the extent that the proportional increase
in lignite demand cancels out the increase in recoverable
lignite resources, the state may still faca the prospects
of committing most of its lignite .reserves by the turn of
the century.
It is useful to consider factors influencing the
overall demand for energy and solid fossil fuels. Table 3
shows the effect of alternative assumptions on the rate of
lignite commitment by 2000. Either a lower overall energy
growth rate or a higher reliance on nuclear would reduce
this resource commitment. By contrast, a strict interpreta-
tion of the Fuel Use Act (triggered by constrained oil and
gas supplies) or higher overall growth rates in energy de-
mand would increase the rate of lignite commitment. Figure 1
displays the nominal case estimates for utility and industrial
fuel mix patterns in 1985 and 2000. The continuing impor-
tance of oil and gas—particularly for industrial use—is
evident.
11
-------
Lignite and coal facilities were
distributed among five
subregions
Most industry use of coal and
lignite, expected in Gulf Coast
subregion
Lignite-fired power plants will site
along lignite belt
Coal used in western part of
the state will be imported
Electric utilities will continue to
use conventional combustion
technology through 2000
Lignite gasification may become
commercial before 2000
The final steps in the development scenario task
were Co geographically apportion the statewide levels of
lignite use through 2000 into the five subregions (see
Figure 2). Based qn utility plans through 1987. current
leasing patterns, and other data, lignite use under the
nominal case results in the equivalent of 21 lignite-
fired utility power plants and 13 coal-fired power plants--
each composed of three 500 Mw units--through the year
2000. This distribution, including industrial use, is
shown in Table 4 and indicates the following:
• The majority of the industrial coal and
lignite use will be in the Gulf Coast sub-
region, reflecting the state's current in-
dustrial energy use patterns.
• Lignite-fired utility facilities will tend
to locate on or near the lignite belt using
mine-mouth plants to take advantage of trans-
portation savings.
• Coal used in the western part of the state
will be imported, reflecting the increased
distance from the lignite belt and decreas-
ed distance from western coal supplies.
Utilities are expected to continue to use conventional com-
bustion systems throughout the study period. The commer-
cial use of atmospheric fluidized bed combustion units in
industry may occur beginning in the 1990's.
Lignite gasification may also become commercial.
This depends heavily on the interaction of policies re-
garding fuel use and environmental protection.
Table 4. 1985 AND 2000 DISTRIBUTION BY SUBREGION OF HYPOTHETICAL 500 MWe
EQUIVALENT COAL AND LIGNITE FACILITIES
West Northeast
North
Central
South Central
Gulf
Coast
State
Total
(Numbers in parentheses are nearest equivalent to a 1500-KWe generating station.)
12(4)
Coal Utilities
Lignite Utilities
Coal Industrial
1985
2000
2(1)
6(2)
2(1)
4(1)
2(1)
7(2)
4(1)
12(4)
14(5)
41(13)
1985
2000
1985
2000
Lignite Industrial 1985
2000
0
0
.2
1.4
0
2.1
10(3)
32(11)
.5
5.3
7(2)
20(7)
.2
1.3
2.
6.2
3(1)
6(2)
.2
.3
1(1)
3(1)
.4
0
1(1)
1.5
11.2
.5
8.7
21(7)
62(21)
2
15
3
23
12
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The siting task looked at constraints
on projected fuel use pattern
The study developed maps of six
physical constraining factors
STRIPPABLE LIGNITE RESERVES 3Y SUBREGION
| 700 [ Millions of tons of estimated strippable lignite reserves
|Gulf I
stjName of subregion
FIGURE 2
III. THE SITING ANALYSIS
Method of Analysis
Based on the development scenario described in
Section II, the siting task attempted to determine:
• If the projected hypothetical coal and lignite
facilities could be sited in the study region
and each of the five subregions, and
• What would be the most serious constraints in
the siting process.
To evaluate the relative difficulty of siting large
coal- or lignite-fired facilities, individual maps were de-
veloped to show geographic variations in the degree of con-
straint imposed by each factor. Then, the study region
was divided into a grid of squares measuring about 20 kilo-
meters on a side. Each square was assigned a value accord-
ing to the degree of constraint imposed by each of six
factors. The constraining factors were weighted according
to their effect on siting costs and permitting difficulties.
Based on this exercise, a computer-generated composite map
13
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Sufficient water can be developed
regionwide, but site-specific
shortages and water rights conflicts
could develop
PSD regulations impose spacing
requirements on coal and lignite
facilities
was produced co reflect the combined effect of all constrain-
ing factors on the costs and difficulty of siting (see
Figure 4). The six constraints are:
-T
• Water availability,
• Ambient air quality,
• Flood-prone areas,
• Urbanized areas,
• Geological foundation suitability, and
• Distance from lignite deposits.
Although aesthetic considerations and public atti-
tudes can ba significant siting barriers, these factors are
not readily quantified and are not formulated into regula-
tions that affect plant costs, site availability and permit-
ting.
Results
• Water Availability - According to Texas Depart-
ment, of Water Resource (TDWR) data, each of the
five subregions can be developed to accommodate
the water demands for lignite and coal develop-
ment expected between now and the year 2000.
Unless the projected schedule of water resource
development is met, however, water shortages are
likely to occur in several river and-coastal
basins by the year 2000 (Figure 5). Even with
the timely development of these projects, some
river basins may have difficulty supplying ade-
quate water to meet all projected in-basin de-
mands by the year 2000. Energy projects in some
parts of Texas may only be feasible if water
rights currently held by other users can be
acquired by the developer of the energy project.
The total water demand for coal and lignite de-
velopment in the study region is expected to
amount to 4.6 percent of year 2000 supply.
• Air Quality - The siting of coal and lignite
facilities is most directly affected by Preven-
tion of Significant Deterioration (PSD) regula-
tions established to maintain existing air
quality in clean air areas. In effect, these
PSD regulations tend to impose a minimum spac-
ing pattern for coal- or lignite-fired facilities
or other major sources of sulfur dioxide and
14
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particulates—Che two pollutants currently sub-
ject to PSD controls. For purposes of the siting
analysis, it was assumed that each of the pro-
jected 1500-4&? facilities (three units of 500 tor
each) installs pollution controls for sulfur dio-
xide and particulates which meet EPA's proposed
new source performance standards (NSPS). Using
a variety of simplifying assumptions, it was
estimated that in clean air areas, PSD would
require typical 1500-Mw power plants to be
separated by about 20 kilometers. However, air
quality varies over the study regipn, as shown
in Figure 3. This figure indicates the rela-
tive difficulty of siting coal- or lignite-fired
facilities because of increased costs of compli-
ance or difficulty in obtaining a permit.
AIR QUALITY SITING CONSTRAINTS
NORTH CENTRAL
NORTHEAST
GULF COAST
CONSTRAINTS
LEAST
LIGNITE BELT
MOST
FIGURE 3
15
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Current air regulations will not
prevent needed plants from being
sited
Air quality rules may reduce siting
flexibility and increase costs
Flood prom areas and wetlands
impose constraints on mining
lignite
Urbanized areas represent only a
minor siting constraint
The bast construction sites coincide
with the lignite belt
Considering the number of facilities required
under the lignite development scenario, it
was determined that, on a regional basis,
there is no shortage of usable sites, although
some may be more costly and difficult to permit.
Emphasizing again, PSD, like water availability,
will continue to act as a constraint on a site-
specific basis. Nevertheless, it is theoretical-
ly possible to demonstrate sufficient sites at
the regional and subregional level to accommo-
date the projected year 2000 scale of develop-
ment.
Flood-Prong Areas and Wetlands - Floodplain and
wetlands regulations represent a constraint
for both lignite mines and power plants. As
much as ten percent of the strippable lignite
resource may be affected by prohibitions on
mining or development in these areas. Although
under special conditions and at increased costs,
mining probably can be conducted in the flood-
plain, it is possible that under federal or
state law, some of these areas may be declared
unsuitable for mining. The floodplain and wet-
land constraints are greatest in the more humid
eastern portion of the state.
Urbanized Areas - For a variety of reasons, the
densely populated areas within the corporate
limits and extraterritoral jurisdictions of
cities are unlikely sites for future mines or
power plants. Although urban areas in Texas are
continuing to expand rapidly, this is not viewed
as a major constraint to lignite development be-
cause of the small percentage of the state's
area involved.
Construction Suitability - Data from the Texas
Bureau of Economic Geology were used to prepare
maps of the study region to show the suitability
of geological conditions for construction of
power plants and cooling ponds. Within the
study region, the best areas for construction
tended to coincide with the lignite belt. Con-
struction suitability is not considered to be a
constraint to the projected levels of lignite
development.
16
-------
The state's major utility and
industrial dttnand canters are
located near the lignite
The lignite belt is relatively lass
constrained than other areas in
the study region
• Distance from Lignite Belt - Currently,
virtually all lignite use in the state occurs
within a few miles of the mine. Lignite's low
energy content per pound reduces the attrac-
tiveness of long-range transport. Nevertheless,
the study indicates lignite may be shipped to
the Gulf Coast and still compete with imported
coal. The state's three largest cities, Houston,
Dallas, and San Antonio, lie within 100 miles
of some portion of the lignite belt. The major
utility and industrial demand centers are within
a reasonable distance of the lignite source.
Figure 4 is the overall facility siting constraint
map. It combines all of the factors described above with
greater weighting on the more crucial factors such as air
quality and water availability. This map shows that the
lignite belt is relatively less constrained than the areas
to either side. Of special note is the relatively high level
of constraint existing in the industrialized coastal areas.
COMPOSITE SITE
SUITABILITY
MAP
Northeast
Most
FIGURE 4
17
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No regionwide barriers exist to
the siting of the projected lignite
and coal fired power plants
Technology exists to meet
current emission standards from
lignite and coal combustion
Emissions of SOj, NOX and
particulates will increase
significantly
The application of proposed new
source standards will reduce
potential emission levels
Conclusion
The siting analysis concludes that on a regional and
subregional basis, chere are no major barriers to siting the
number of coal- and lignite-fired power plants whi'ch will be
required to meet the estimated year 2000 energy requirements
for utilities. Site-specific constraints, however, are likely
to be significant. These may include local siting considera-
tions below the level of detail considered in this study and
the important, but unquantifiable, constraints imposed by the
attitudes of local citizens and landowners.
IV.
IMPACTS OF LIGNITE DEVELOPMENT
The anticipated impacts of lignite production and
lignite and coal utilization between 1978 and 2000 were
assessed in five major areas: air quality, solid waste,
water quality and quantity, fish and wildlife, and socio-
economics.
Air Quality Impacts
Air pollutants from lignite mining include dust
from surface mines and from coal piles. Air pollutants
from lignite and coal combustion include particulatas,
sulfur dioxide (SO2) and nitrogen oxides (NOX) as well as
small amounts of carbon monoxide, hydrocarbons and trace
metals. Since Texas lignites generally have higher sulfur
and ash contents than western sub-bituminous coals, potential
emissions are greater. However, controls are available to
substantially reduce emissions of all pollutants from com-
bustion.
Currently, the study region is in attainment of the
National Ambient Air Quality Standards (NAAQS) in both SOz
and NOx, but a few small areas are nonattainment for particu-
lates.
Even under the stringent new source performance
standards proposed by EPA, coal and lignite emissions of
S02 are expected to increase Co 865,000 cons per year by
2000 or six Cimes Che 1973 levels. NOX emissions would
increase from 32,800 cons per year in 1973 Co 1.3 million
tons per year in 2000. Particulate emissions would increase
from 30,000 cons to 75,000 tons in 2000.
Although the increases in emissions are large, they
are small compared to increases which would occur with the
application of less stringent emission standards required
for existing facilities.
18
-------
Texas can accommodate
projected lignite and coal
development and comply with
ambient standards
Several areas of uncertainty
remain regarding the effects of
currently unregulated pollutants
The clean-up of air emissions
creates solid waste disposal
problems
The disposal of solid wastes above
aquifers could create ground
water quality problems
The key issue is not Che total amount of emissions
increase, but rather how net air quality will be affected.
As noted in the previous section, the federal PSD regulations
are designed to prevent significant deterioration of air
quality within a given area while the NAAQS are established
to protect public health and welfare. The principal con-
clusion of the air quality siting analysis was that the PSD
and NAAQS requirements can be satisfied within the forecast
level of lignite and coal combustion.
If it is assumed that these regulations are adequate
to protect public health and welfare and that they will re-
main in force, it is concluded that there will be no signifi-
cant air quality impacts from currently controlled pollutants
resulting from lignite and coal utilization in Texas through
year 2000.
Such a conclusion must be tempered by the uncertain-
ties regarding the effects of fine particulates,'sulfates,
ratioactive emissions, and acid rain. The potential also ex-
ists for long distance transport of air pollutants. Continu-
ing research in these areas is needed.
A by-product of the technologies employed to clean
up air emissions from coal and lignite combustion is the
creation of large amounts of solid waste--primarily scrubber
sludges and ash. In principle, the transformation of air
pollution to solid waste results in a more easily managed
disposal problem. In fact, the potential for adverse
health impacts from scrubber sludge and disposal is a source
of significant concern. The principal concern over improper
disposal is on groundwacer quality. This concern is based
on the following:
• Evidence exists that groundwater contamination
from improper disposal has occurred in the past.
• Groundwater is often used without treatment for
drinking water.
• Contaminants from solid waste usually persist
in groundwater indefinitely.
The amount of waste produced is proportional to the
amount of coal or lignite combusted, the type of emission
controls employed, and the degree of air emission cleanup.
Based on the nominal case estimates for coal and lignite
consumption and EPA's proposed NSPS, the amount of wastes
19
-------
Solid waste disposal costs
will increase
Opportunities for solid waste
utilization exist
Solid waste disposal poses the
most uncertainty among
environmental issue*
Consumption of water to support
lignite development will result
in small but possibly important
stream flow reductions
Co be produced by utilities alone in the year 2000 could re-
quire 1600 acres of 20-foot deep disposal ponds.
A major concern regarding solid waste disposal in
Texas is the coincidence of the lignite belt with one of
the state's major aquifers, the Carrizo-Wilcox. Careful
site selection and disposal techniques are needed to
avoid threats of contamination as both groundwater use and
waste disposal increase.
Proposed regulations for the federal Resource Con-
servation and Recovery Act (RCRA), designed to protect
groundwater quality, could sharply increase disposal costs
if ash and scrubber sludges are declared to be hazardous.
A significant increase in costs could influence utilities
to choose regenerable scrubbers, which have higher costs
and lower reliability but produce no scrubber sludge. In
either case, RCRA will raise the cost of waste disposal.
An alternative to disposal is recycling. Currently,
about one-fourth of the lignite ash produced in Texas is
sold for commercial uses—either in cement production or
roadbed materials. Recycling reduces disposal area re-
quirements and costs, but is not always feasible.
It does not appear that the solid waste disposal
problems will limit the magnitude of lignite development.
However, of all the regulatory issues associated with
the environmental impacts of lignite and coal use, the
solid waste picture is the most uncertain. In addition to
RCSA, the Toxic Substances Control Act, the Safe Drinking
Water Act and the State's regulatory role in waste disposal
will influence the future solid waste disposal options
available to coal and lignite users.
Water Quantity and Quality Impacts
Water consumption for lignite development by the
year 2000 is estimated to vary at the subregional level from
an estimated 0.1 percent of total planned supply (in the
Gulf Coast subregion) to more than 10 percent (in the North-
east) . This consumption will result in reductions in stream
flow, both near major diversions and cumulatively. These
reductions can affect navigation, groundwater recharge,
stream ecology, coastal freshwater inflows to bays and
estuaries, and capacity to assimilate pollutants.
Although flow reductions are relatively small, they
can be critical when flows are low during times of drought.
20
-------
Surface water quality will be
affected by lignite operations
Surface mining could locally
disrupt aquifer recharge
Also, because of highly variable site specific conditions,
local impacts cay be significant. Conflicts may develop
over water rights and water quality. These impacts could
be controlled, however, by tining withdrawals and reservoi:
releases to maintain a given low flow level.
CRITICAL WATER PLANNING REGIONS
i Areas which could develop water
deficits by the year 2000.
LAVACA
UADALUPE
NUECES-RIO GRANDE
•Even though the Brazos basin is indicated
here as having a year 2000 surplus, much
of this surplus water must be passed
through to satisfy downstream water
rights.
FIGURE 5
Surface water quality will be affected by effluent
sources associated with power plant operation and lignite
mining. Power plant cooling, boiler blowdown, ash and
scrubber sludge handling, and other power plant operations,
will increase dissolved solids levels in return flows to
receiving water bodies. Control of dissolved solids levels
will, in turn, reduce the amount of water available for
other uses. These effluents may contain toxic substances.
However, technology is available for control of these ef-
fluents .
Surface mining in some parts of the state may result
in a long-term reduction in groundwater recharge due to the
21
-------
Growing demand for surface
water may increase demand on
groundwatar
Wildlife impacts will result from
surface mining, cooling ponds, and
secondary developments
Current habitat quality is
poor
Present reclamation practices do
not favor habitat maintenance
Cooling ponds may remove high
quality habitat
disruption of aquifer recharge areas. The permeability of
a mined area will affect the degree to which groundwater
quality problems develop. Likely processes of contamination
are leaching of pollutants from disturbed overburden and
from solid wastes disposed of in the mine. Of these, the
greatest threat is from solid waste leaching.
It is expected that surface water will continue to
be preferred for power plant cooling. Groundwater use may
be indirectly increased, however, by growing competition
for surface supplies. Most of the study region's aquifers
already have both quality and drawdown problems arising from
over-pumping.
Wildlife and Fish Impacts
Major impacts on wildlife from lignite development
result primarily from direct destruction of habitat caused
by surface mining, removal of habitat by impoundments for
cooling reservoirs, and reduction of habitat quality from
the impacts of population growth.
Surface mining alone is expected to result in the
cumulative disturbance of approximately 374,000 acres by
year 2000. Approximately half of this is anticipated to
occur in the Northeast subregion.
Since the land will be reclaimed and revegetated
within three years of mining, the amount of disturbed
surface at any one time will be a small portion of the
cumulative total. The total acreage which may be mined is
less than one percent of the total habitat available. The
real impact of lignite development, however, must be mea-
sured against the quality of the areas affected. Currently,
habitat quality throughout many parts of the lignite belt
is low and wildlife populations are subject to considerable
man-made disturbances. Thus, ecosystems affected by mining
are already stressed.
Since existing conditions are often poor, reclama-
tion to restore a native mix of species could result in
improved habitat quality. However, current reclamation
practices often feature monocultures such as Coastal Bermuda
and other tame grasses planted for grazing. This kind of
vegetation provides little cover and food for wildlife.
Over much of the study region, bottom lands,
rivers and stream courses provide continuous ribbons of
good cover and abundant food for terrestrial wildlife
22
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Socioeconomic impacts associated
with coal and lignite development
are anticipated
The current distribution of
population will moderate
boom-bust tendency
Lignite development will span
the next two decades
PSD will discourage concentrated
development
Texans are generally receptive
to continued energy development
as well as aquatic species. The construction of cooling
reservoirs represents a threat to wildlife based on the
quality—rather than quantity—of habitat destroyed.
Many ligiJite-related impacts on aquatic habitats are
likely to be site-specific. The most likely widespread ef-
fects would arise from increased frequency of low-flow con-
ditions, and from the fragmentation of river habitats by
reservoir construction.
Soeioeconomic Impacts
The spatial, temporal, regulatory and aoa-ial context
of Texas lignite development can reduce the likelihood of
serious socioeconomic problems such as those associated with
the coal mining boomtowns in the Rocky Mountain West.
• Spatial - As illustrated in Figure 6, the lig-
nite belt is bounded on either side by the
state's two largest'urban concentrations--the
Gulf Coast, and the Dallas-Austin-San Antonio
corridor. Within the lignite belt are numerous,
rather evenly distributed small cities and towns.
This pattern of development indicates that no
single community will bear all the impacts re-
sulting from large developments located in rural
areas.
• Temporal - The lignite development scenario
projects sustained growth and increased develop-
ment throughout the 1980's and 1990's rather
than a large and sudden exploitation of the re-
source followed by the "bust" as the resource
is depleted.
• Regulatory - Environmental regulations—par-
ticularly the Prevention of Significant Deteriora-
tion (PSD) of air quality—will tend to discourage
concentration of development. This in turn, will
tend to spread the benefits as well as impacts
of population growth associated with lignite
mining and use.
• Social - The lignite belt is a region of earlier
oil and gas development which has had slow eco-
nomic growth and population out-migration in
recent decades. As a result, much of the region's
population views lignite development as economic
stimulus which is simply an extension of this
earlier oil and gas development.
23
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Lignite development impacts will
effect housing, water and waitewater
supply, public safety and fire
protection, her'tii care and education
POPULATION DISTRIBUTION AND LIGNITE BELT
N
100
• 200 • 999
1,000-2.499
• 2,500 - 4,999
• 5,000 • 9.999
• 10.000-24.999
• 25.000 - 49,999
• 50,000 • 9,999
• 100,000-249,999
D
Lignite Arees
Adapted from: Robert K. Holz, "Population Distribution in Texas:
Patterns of Population Distribution", Texas Business Review, June 1973.
FIGURE 6
Regardless of whether che impacts of new mines and
power plants are shared among several towns or concentrated
in a few communities, demand for new services and facilities
will occur in the following areas:
• ffousing--Demands are usually met by the private
sector—somec es -~'.th the proliferation of
mobile homes, .imj ary scarcity, higher rents,
and long distance cocmuting.
24
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Financing needed for improvements
requires front-end capital
The purpose of the policy analysis is
to present a range of alternatives
to policymakers
18 issues Mt addressed
• Water supply and aasteuater—Nee •Is are met by the
public sector which requires time for planning
and may require financial assistance. Septic
tanks may be a short-term solution.
-i
• Public safety and firs protection—Services
are provided by public sector but labor short-
ages may occur due to competition from energy
developments.
• Health care — Many small towns already have dif-
ficulty attracting qualified medical profes-
s ionals.
• Education—CapCial for new schools must be raised
by the public sector and new teachers hired.
In the areas requiring a public sector response, the
problem of providing front-end financing before the increased
tax revenues are available is common. The problem of fi-
nancing is compounded when a new facility is sited in one
taxing jurisdiction and the impacts are borne by another
jurisdiction. This is an equity consideration which must
be addressed on a regional level.
V. POLICY ANALYSIS
Method of Analysis
The policy analysis section of the full report pro-
vides a means for federal, state, and local policymakers to
view a range of policy options and to select for themselves
the preferred course of action. This is achieved through
a presentation of the advan1. iges and disadvantages of each
policy alternative. In some cases, the alternatives are
not necessarily mutually exclusive. The report does not
attempt to make policy recommendations.
This task was conducted in the following steps:
• Eighteen policy issues were identified based
on findings or conclusions from the first
three tasks. These IS were selected from a
larger collection identified earlier in the
study.
e> The principal conflicting objeativas or value
orientations were identified for each issue.
25
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Driving issue* are nationally
oriented
Resource management issues are
state and national questions
Response issues are primarily
of local and state concern
The impacts of mandatory
boiler fuel conversion will affect
Texas relatively more than other
regions
• For each objective, one or more general policy
alternatives for achieving the objectives were
identified. •
• In some cases, specific implementation measures
(i.e., changes in regulations or new legisla-
tion) to execute the alternative were identified.
Results
The policy issues dealt with in this study can be
grouped into three principal categories:
• Driving Issues - There are two issues which
were judged to be of national character and of
overriding significance to the demand for Texas
lignite. These relate to the policies required
with mandatory boiler fuel conversion and National
Ambient Air Quality Standards for ozone. Of these
two, the national policy promoting coal conversion
and discouraging oil and gas use in utility and
industrial boilers is the single"most important
issue affecting the rate and scale of lignite
development.
• Resource Management Issues - These are a set of
issues which involve both state and federal
participation and concern the management of lig-
nite and water resources.
• Response Issues - These issues deal primarily
with the mitigation of impacts resulting from
lignite development. The chief actors in this
area are state and local governments.
Following is a brief outline of the findings, issues,
objectives and some of the major alternatives assessed in
the policy analysis task. The specific implementation al-
ternatives and the implications are not discussed in this
summary. Issues 1 and 2 are the driving issues; 3 through 7
are the resource management issues, and 3 through 13 are re-
sponse issues.
1. Driving Issue: Mandatory Boiler Fuel Conversion
The federal policy requiring the phasing out of util-
ity use of gas and the prohibition of new utility and indus-
trial boiler fuel use of oil and gas is the thrust of the
Fuel Use Act of 1978—one of five comoonents in the National
26
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This issue involves the balancing
of three objectives:
Energy independence
Meeting clean air goals
Continuing economic and industrial
growth
Energy Act. The impacts of this legislation will affect
Texas and the Gulf Coast more than any other part of the
nation. If this act is interpreted strictly, the resulting
high levels of fuel switching may be economically and environ-
mentally burdensome to the state. This policy will require
the balancing of three distinct objectives. These objectives
are:
• Reduce national energy dependence on foreign
sources. The idea of energy independence dates
back to the 1973 Arab oil embargo. It is still a
major focus of national energy policy and was the
impetus for enactment of the Fuel Use Act. Major
alternatives to mandatory fuel conversion include
import restrictions, enforced conservation, oil
and gas price deregulation, incentives for syn-
fuels and renewable energy development, and re-
laxation of air quality-related siting constraints.
a> Maintain clean air goals. A major conversion
to lignite and coal is likely to bring about
conflicts over use of the limited clean air re-
source under current PSD and nonattainnient
policies. Long-distance transformation and
transport of air pollutants could also result
in deteriorated air quality outside the state.
Interstate conflicts over economic growth op-
portunities could raise. Among the alternatives
for achieving this objective are the granting
of generous exemptions to mandatory fuel conver-
sion, requiring more stringent controls for new
and existing sources, and promotion of conserva-
tion and alternate energy technologies.
• Mi.nimi.ae disruption of economic growth. Both
the energy independence and air quality pro-
tection objectives can be met only at a certain
cost, which is spread through the economy as a
whole. This cost could be held down by relax-
ing either or both of these two objectives.
Within the context of current laws and regula-
tions, there are a variety of alternatives which
would relax the requirements to convert (such
as the granting of exemptions to provisions of
the Fuel Use Act) and to protect air quality
levels (such as reclassification under PSD).
Each of these three objectives is supported by
powerful interest groups and each can be defended in terms
27
-------
How can the state cope with ozone
air quality nonattainment and
continue to provide industrial
growth?
Will mandated interconnection
of Texas electric utilities result
in export of lignite-generated
energy?
of serving che public good. For example, national security
and balance of payments arguments are persuasive reasons
for supporting mandatory fuel conversion. Likewise, concerns
over public health, which support the objectives of clean
air, and over economic growth and jobs', which support the
objectives of industrial development, are equally compelling.
The resolution of these conflicts will have a major effect
on the level and rate of lignite development in Texas.
Air Quality Nonattainment
2. Driving Issue:
for Ozone
Widespread violation of the National Ambient Air
Quality Standard for photochemical oxidants (or ozone)
threatens to constrain continued growth of the major con-
centrations of refining and petrochemical production in
Texas. This, in turn, could reduce the demand for lignite,
directly and indirectly.
The key issue is over finding ways to provide for
continued growth in these sectors while progressing toward
attainment of the standard. Major alternatives addressed
include a change in the NAAQS, redirection of growth into
clean air areas, statutory revision of the Clean Air Act,
improved control technology and imposition of transportation
controls to cut down on ozone precursors emitted by autos.
Electricity Grid
3. Resource Issue:
Interconnection
Federal policy supports interconnection of the intra-
state electric utility systems. While most members of"the
Texas Interconnected System (TIS) believe that interconnec-
tion would increase costs and reduce reliability, other
members dispute this and favor interconnection.
An issue involved in this controversy relates to the
possibility that significant amounts of lignite-generated
electricity will be exported out-of-state, resulting in
regional equity problems. Objectives to be considered in
this issue are:
• To provide for increased economies of scale
and reliability for all Texas electric utili-
ties while minimizing economic impacts on TIS
members and customers
• To spread the benefits of low cost lignite-
generated power to non-TIS consumers
28
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How can lignite R & D limitations
of the near-surface lignite resource
size and reduce the cost of using
lignite?
Should the state act to discourage
rapid depletion of the lignite
resource?
• To minimize federal involvement in the intra-
state power grid and confine the indigenous
lignite resource to Texas users
--»
4. Resource Issue: Lignite Research and
Development Priorities
Given this study's estimates of the near-surface
lignite reserves and of lignite demand by electric power
utilities and industry, it appears likely that almost all
of the recoverable near-surface resource could be committed
by the year 2000. It also appears likely that the bulk of
this resource will be fired directly in combustion processes.
However, coal and lignite are not now cost-effective choices
for most industrial uses. The Fuel Use Act prohibits oil
and gas use in new industrial boilers and could prohibit
other industrial use of oil and gas. Research to reduce
the costs of coal and lignite use in industry can help re-
duce fuel conversion costs.
Assuming that these findings are correct, the state's
energy research, development and demonstration priorities
should focus on three research objectives:
• To expedite the development of technologies
for recovery of the lignite resource which
lies at depths below the strippable range,
• To continue to identify and to mitigate bar-
riers to the environmentally and socially
acceptable recovery and use of the near-surface
resource, and
• To encourage the development of technologies
which will make the industrial use of lignite
more economically and environmentally attractive.
5. Resource Issue: Lignite Resource Depletion
Current projections of lignite demand together with
estimates of strippable lignite resources in Texas indicate
that nearly all of Texas' near-surface reserves may be com-
mitted for use by the year 2000.
This finding inevitably leads to the basic alter-
natives of whether it is in the best long-term interest of
Texas to allow all its near-surface, lignite deposits to be
developed at such a rate, or whether the rate and scale
of development should be managed to save part of the re-
29
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EXISTING AND PLANNED COAL AND LIGNITE
POWER PLANTS IN TEXAS THROUGH 1987
(AS OF 10/78}
KARNACK
• HARRINGTON
Amarillo-
Wichita Falls41
• LAKE KEMR
Ft. Worth
DeCORDOVA*
PIRKEY
Longvtew^ (
MILL CREEW;
FORESTGROVEBMJART.NLAK
IG BROWN
• MORGAN CREEK
• FAYETTE
Houston
N •COLETO
MIGUEL CREEK
COAL PLANTS
(through 19871
Harrington (3)
Deely (2)
Walsh (3)
Parish (4)
ColatoCraek (1)
Fayatta (2)
Tolk (2)
Morgan Creak (1)
DaCordova (1)
Lake Kemp (11
Others:
Site Unnanounced (2)
LIGNITE BELT
FIGURE 7
LIGNITE PLANTS
(through 1987)
Plant/Units
Sandow (4)
Big Brown (2)
Monticallo (3)
Martin Lake (4)
San Miguel (2)
Gibbons Creak (1)
Pirkey (1)
Forest Grove (1)
Fayette (1)
Twin Oak (2)
Karnack (1)
Mill Creek (21
Oak Knoll (1)
Others:
Site Unannounced (2)
TOTALS (27|
Size
905
1150
1900
3000
800
400
640
750
400
1126
640
1500
750
1500
15,461
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How can water development
and allocation insure adequate
supplies for lignite while
mitigating conflicts among
users?
What are the most appropriate
power plant cooling techniques?
source for use in advanced technologies such as a synfuels
feedstock. Protection against early depletion might also
insure a more economic or attractive long-term fuel mix,
rather than converting now to lignite and then having to
rely entirely on more expensive fuels later.
6. Resource Issue: Water Supply
It was determined that adequate water supplies would
be available for lignite development, if development and al-
location of water resources are properly managed. The is-
sue is how to coordinate the development and allocation of
water resources to insure supplies for lignite development
while mitigating the inevitable conflicts among competing
users.
Three basic alternatives for insuring sufficient water
supplies for use in lignite development are: _
• To develop additional supplies through the
construction of new reservoirs;
• To allocate existing water resources more
efficiently among competing users; and
• To conserve water through improved efficiency
of use, both for lignite and for other uses.
7. Resource Issue: Power Plant Cooling
A major issue relating to water availability and
quality involves power plant cooling technology. There are
several methods of power plant cooling. The choice of which
method to employ is a point of sharp controversy in Texas.
Power plant cooling alternatives are:
• To control fresh water consumption in the
cooling process through use of dry cooling
towers or through siting along the Gulf
Coast.
• To increase siting flexibility and minimize
costs through continued use of cooling ponds.
• To eliminate theraal discharges by requiring
cooling towers,.
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How should th« state maintain
regulatory jurisdiction ovar
turtle* mining?
What criteria should the statt us*
for designating lands unsuitable for
mining?
How can landowners be
encouraged to improve habitat
of reclaimed areas?
8. Resource Issue: State Surface Mining Approval
An immediate issue before Che state legislature is
the problem of redrafting the state surface mining statute
to comply with federal statute. The objective of the state
is to continue to maintain exclusive jurisdiction over sur-
face mining. Many lignite developers fear that assumption
of this program by the federal government will lead to sig-
nificant delays 'and uncertainties in the permitting process,
thus increasing costs and reducing production. A variety
of alternatives are available to achieve this objective.
9. Resource Issue-. Designation of "Lands Unsuit-
able" for Surface Mining
Several hundred thousand acres of the state will be
disturbed by surface mining operations to recover lignite
between now and 2000. Although the process of mining and
reclamation will be sequential (thus mitigating the cumula-
tive impact), there is a potential for the loss of certain
environmentally sensitive areas. Under the state's surface
mining and reclamation act and proposed federal regulations,
the Railroad Commission may make designations of areas un-
suitable for mining.
At issue is what criteria the state should use to
delineate areas unsuitable for mining.
The objective is to protect critical environaentally
sensitive areas from permanent damage without unduly inter-
fering with the economic recovery of lignite.
10. Response Issue: Ecological Impacts of Mining
Habitat conditions over much of the lignite belt are
poor for wildlife and could actually be improved by reclama-
tion. At the same time, there is a large and growing demand
for outdoor recreational opportunities easily accessible to
residents of the metropolitan areas on either side of the
lignite belt. Currently, ecosystem quality is not highly
valued by landowners in general. Experience to date suggests
a preference on the part of many landowners to have their
land reclaimed with monocultures of cultivated forage grasses.
The issue is whether and how incentives can be de-
veloped that will encourage landowners to include wildlife
values in post-mining land use.
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Can groundwatar be protected
from contamination without
inhibiting lignite development?
Should the state establish a
formal mechanism for coordinating
•nergy facility siting?
The two principal objectives are to prevent degrada-
tion of wildlife habitat after mining and to provide, if
possible, additional wildlife-related recreational opportuni-
ties. A variety of incentives are explored such as strict
enforcement of surface-mining regulations and providing tax
incentives to reclaim lands for habitat.
11. Response Issue: Solid Waste
Considerable volumes of solid waste will result from
combustion of lignite in Texas most of which will be disposed
of in surface impoundments. Because of the coincidence of
the majority of lignite deposits with the Carrizo-Wilcox aqui-
fer, there is a potential for disposal in areas where ground-
water resources could be contaminated if not done properly.
The chemical composition of the wastes may result in its
classification as hazardous under RCRA, making it subject
to hazardous waste regulations of EPA.
The issue is over appropriate requirements of state
and federal regulations in protecting aquifers from con-
tamination without severely inhibiting industry's flexibility
in developing economic means of disposal.
The primary objective is the protection of aquifers
while minimizing the costs of disposal. Sone of the alter-
natives assessed include mine disposal, recycling, classifi-
cation of wastes as non-hazardous, revision of air quality
regulations to avoid full scrubbing, and pre-disposal waste
treatment.
12. Response Issue: State Agency Permitting: Review
Several state agencies have statutory responsibility
relating to the siting of lignite mines and associated
power plants. Each is concerned only with the impact(s) re-
lating specifically to its jurisdiction. Currently, there
is no formal governmental mechanism for coordinating these
decisions.
The issue is whether the state should establish a
formal mechanism for coordinating siting decisions relating
to coal/lignite power plants.
The primary objectives are:
• To reduce permitting delays, jurisdictional
conflicts and the uncertainties and costs of
permitting, and
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Will the current institutional
system result in coordinated
management of water quality
and water use?
How should government respond
in the face of uncertainties
associated with sulfate formation
and acid rain?
• To insure chat all significant impacts are
addressed and that public participation occurs
in the permitting process.
-•»
The alternatives range from a new siting authority
to simple coordinating mechanisms using the existing in-
stitutional arrangement.
Stream Flow Reduction and
13. Response Issue:
Water Quality
Consumptive water use related to lignite development
can reduce in-stream flows, resulting in lowered assimila-
tive capacity and increased dissolved solid levels. The prob-
lem is not severe, however, and potentially can be prevented
by coordinating the management of water use and water quality.
The issue is whether or not the current institutional
system permits such coordinated water management.
The primary objectives are the preservation of water
quality and the fair allocation of costs between wastewater
dischargers and water consumers. Alternatives include basin-
wide coordinated planning, better monitoring programs, and
changing low-flow averaging rules.
14. Response Issue: Control of Atmospheric
Sulfates
Sulfates from coal and lignite combustion potentially
have adverse effects on health and visibility. Sulfate form-
ation is a strong contributor to acid rain. However, too
little is known about these phenomena either to define an
impact-related ambient standard or control' strategy that can
be tied to meeting such a standard.
Faced with uncertainty, both in how to regulate sul-
fates and in how much to regulate them, the issue is whether
a policy of risk minimization should be adopted or an attempt
made to establish an acceptable level of risk.
Two alternative objectives are:
• To reduce sulfate levels in the ambient air
below the most conservative estimate of
health hazard, using an alternative such as
immediately setting sulfate standards, and
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Will inequities result from the
regional lignite development
pattern?
How can local governments
be provided with adequate and
timely financial assistance?
• To deCarmine an acceptable level and define
control .strategies prior to setting standards,
so as to avoid over-regulation.
Lignite Belt Regional
15. Response Issue:
Develooment
The most probable developmental pattern for Texas
lignite involves the siting of numerous mine-mouth electric
generating plants along the lignite belt which will transmit
power to the large urbanized areas on either side of the
lignite belt.
The issue, is whether this pattern of development and
use will result in inequities of economic opportunity and
disproportionate environmental and social impacts without
corresponding long-term benefits to the producing region.
The primary objective is to equitably spread the
costs and benefits of the production and use of the lignite
resource between producing and consuming regions x^ithin the
state. Alternatives include diversifying development, hav-
ing utilities pay impact mitigation costs, or having miti-
gation costs paid by -the state or federal government.
16. Response Issue: Infrastructural Financing
Lignite mining and mine-south power plant construc-
tion will continue to cause temporary and site-specific
shortages of local government services and facilities. The
problems of providing adequate services and facilities in-
volves issues of timing and equity. Two objectives emerge
from this finding:
• To provide the needed services and facilities
when the need arises rather than waiting until
the revenues are available.
• To provide the local jurisdiction which must
finance the additional services and facilities
with revenues proportionate to the demand.
Many general alternatives and specific implementation
options are available for achieving these objectives, involv-
ing alterations in the methods of taxation, the means of dis-
tributing revenues, and alternatives to the present delivery
of government services.
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What mwiurM are available
to raduca boom and bust
tandancias?
How can tha aasthatic conearns
relatad to lignita davalopmant
be addressed?
L7. Response Issue: Boom-and-Ijiust Cycle
Without proper planning, a local area near a lignite
mine and associated power plant may undergo a sudden spurt
of economic and population growth followed by sharp decline
as the construction of the facility is completed.
The issue is over how to reduce the severity of the
boom-and-bust cycle.
The impacts task concluded that the likelihood of
the boom-and-bust phenomenon in the lignite belt is small.
Nevertheless, it could occur in some areas and a variety of
preventative and mitigation alternatives exist.
18. Response Issue:
Towards Growth
Aesthetics and Attitudes
Lignite-related growth will alter the appearance of
the landscape both directly (mining and use of lignite) and
indirectly (residential and commercial development). Al-
though there are many individuals who feel that this activity
will cause visual blight and erode the overall quality of
life in the lignite belt, most Texans appear to be relatively
more receptive to growth and its consequences than is the
nation as a whole.
The issue is how and if these primarily aesthetic
concerns should be addressed.
The three objectives related to this issue are the
following:
• To reduce visual blight associated with hap-
hazard secondary development.
• To preserve selected areas from development
in order to retain and enhance character of
landscape.
• To maximize the distribution of the economic
benefits of lignite-related development in
order to minimize antagonistic local attitudes
toward growth.
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VI. FUTURE RESEARCH AND INFORMATION NEEDS
One of Che purposes of this study was to identify
future research and information needs. These are listed
below:
Lignite-Related Technologies:
• Develop improved extraction techniques that
lower the cost of mining lignite and thus
extend the lignite reserve.
• In-situ gasification: improved product qual-
ity, burn control; assessment of environmental
impacts; techniques^to control subsurface pol-
lution problems; combustion technology adapted
to use with in-situ gasification.
• Economic and engineering feasibility and en-
vironmental consequences of lignite-based
industrial parks based on cogeneration and/
or gasification for fuel and feedstocks.
• Identify and develop process improvements that
lower capital costs and reduce the environmental
impacts of aboveground lignite combustion and
gasification technologies, improving their com-
mercialization potential.
• Study feasibility of state options for pro-
viding incentives through taxation and utility
rate-setting for new technology introduction.
Lignite Supply and Demand:
• How is the amount of economically recoverable
lignite related to price?
• How might Mexican oil and gas discoveries af-
fect the energy mix in Texas? What are the
potential effects on lignite demand?
• How might interconnection of Texas electric
utilities with grids in adjacent states affect
lignite demand?
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Industrial Lignite Use
• Characterize possible future industrial mixes
in Texas and cheir fuel demand patterns. What
factors drive industrial development? How can
the state influence the resulting mix?
• Identify future trends in industrial siting.
How do these trends affect potential lignite
use? How does lignite affect industrial siting?
• Given existing energy, environmental and eco-
nomic policies, how will industry respond re-
garding fuel selection?
• How might industry and utilities compete for
limited supplies of lignite? Does the resulting
distribution allocate lignite to uses which pro-
duce the greatest return to the state's economy?
Constraints on Lignite Development
• Develop an improved method of estimating water
available for energy development. What potential
conflicts exist among users and what can be their
economic effects? What measures can be taken
to reduce or avoid these results?
Inventory lands that might be declared unsuit-
able for mining under the Surface Mining Act.
Could such designations reduce the amount of
lignite economically mineable?
What options exist to allocate PSD increments
through economic means, such as marketable
permits? Could such methods increase the
amount of lignite use possible at the mine-
mouth? Compare the economic effects of these
methods with first-come-first-serve permitting.
Develop improved models for air quality im-
pacts of multiple sources throughout the lig-
nite belt. What spacing patterns are necessary
to meet PSD and ambient air quality standards?
Inventory the status of PSD increments through-
out the state. Is mine-mouth siting of lignite-
fired facilities likely to be restricted?
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Impacts of Lignite Development
• Develop models of sulfate and ozone formation
downwind of lignite-fired power plants. Evalu-
ate potential long-distance transport and its
effects. Could mine-mouth siting of lignite-
fired facilities be restricted?
• Characterize possible ranges of radioactive
emissions and trace element emissions from
lignite burning. Might special control measures
be needed if federal emission standards are im-
posed?
• For major river basins, model potential reduc-
tions in waste assimilative capacity resulting
from consumptive water use for energy develop-
ment. What changes in management are needed to
counteract these effects?
• Characterize solid wastes from Texas lignites.
What disposal options are available for these
wastes? How are these options affected by de-
veloping federal regulations? How do disposal
costs for lignite wastes compare with those of
coal?
• Characterize in detail the potential subregional-
level socioeconomic impacts of growth in the
lignite belt. What new services are needed and
how might the costs be spread? What planning
problems occur at this level and what groups
might take responsibility for planning?
• Evaluate the use of a severance tax on lignite
as a source of revenue for offsetting impacts
of mining and use. What level of tax would pro-
vide revenue without raising prices enough to
reduce lignite use? How might such revenues be
distributed?
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