In addition, the possibility of increased coal exports exists if we can reduce the U.S. inland transportation costs. We suggest we eliminate this roadblock to competition and let the market place determine the role that coal slurry pipelines will have in the U.S. Thank you for the opportunity to give you these comments, and we submit further detailed testimony for your consideration. [The prepared statement of Mr. Brolick follows:] Testimony Of Henry J. Brolick Vice President Williams Technologies, Inc. On Behalf of Williams Technologies, Inc. Black Mesa Pipeline, Inc. Before The Committee on Energy and Natural Resources U. S. Senate On S. 318 Coal Distribution and Utilization Act Washington, D.C. INTRODUCTORY STATEMENT Mr. Chairman and Members of the Committee, I am Henry Brolick, Vice President of Williams Technologies, Inc. and Black Mesa Pipeline, Inc. and a Director of the Coal & Slurry Technology Association. Williams Technologies manages the operation of Black Mesa Pipeline, Our personnel have been involved in the planning and development of coal slurry and other slurry pipeline projects throughout the world since the first long distance coal slurry pipeline in Ohio in 1957. Williams Technologies also has ongoing R&D activities in Clean Coal Technology. Obviously we have an extensive involvement and commitment to the advancement of coal and clean coal. Williams Technologies, Black Mesa Pipeline and the Coal & Slurry Technology Association strongly support Federal Eminent Domain Legislation (as embodied in S. 318) which will be a significant development to improving the competitive nature of coal transportation in the United States. Black Mesa Pipeline is a highly visible example of how successful a slurry pipeline project can be and how it can serve to minimize the transportation cost of coal to a power generation facility. The 273-mile pipeline transports coal slurry from Peabody Coal Company's Black Mesa Mine near Kayenta, Arizona, to the Mohave Generating Station at Laughlin, Nevada. Black Mesa began operation in 1970, and through 1988 had transported in excess of 68 million tons of coal. The pipeline is the only coal fuel supply for the power plant, and it has met the power plant demands throughout the 18-year history of the contract. The reliability of the pipeline has typically been greater than 99%. This record of successful operation is certainly a statement that coal water slurry technology is proven and ready for additional commercial applications to provide a reliable and safe alternative transportation mode. A brief description of Black Mesa operations may help in understanding the advantages of coal transportation by pipelines. The pipeline transports solid particles suspended in water in roughly a 50-50 ratio by weight. The fluid flows at velocities in the range of 5-6 feet per second. The facilities consist of a coal preparation plant, pump stations, receiving terminal and 273 miles of buried, coated steel pipeline. At the pipeline source the coal is received from the mine, crushed and mixed with water to the proper consistency. The initial pump station provides the energy to move the slurry through the pipeline. Additional energy input is provided by three other booster pump stations located along the pipeline. Each pump station has spare pumping facilities to ensure continuous 24 hour operation whenever necessary. In its 18 years of operation, Black Mesa has had no extended shutdowns caused by operating problems with the pipeline. Water for the pipeline is supplied from eight 3,500-foot wells from an aquifer underlying the Hopi and Navajo Indian Reservations. The pipeline has averaged less than 3,800 acre-feet of water usage per year since it began operation in 1970 (one acre-foot is approximately 326,000 gallons). The United States Geological Survey published Open File Report No. 81-911 in 1981, on the effects of water usage in the Black Mesa area. The pumpage drawdowns are monitored on a continuing basis and an annual hydrology report is issued. Roughly 70% of the pipeline water is separated from the coal at the generating plant. The remaining water stays with the coal as it is injected into the boilers. Water from the pipeline supplies approximately 10% of the total power plant cooling water requirement. Over the 18-year life of the pipeline, there have been four leaks. None of the leaks resulted in injury or death, or caused damage to surrounding facilities or the environment. In fact, none of the leaks have required extensive cleanup operations. We have statements from the U. S. Department of Interior, the Environmental Protection Agency and Arizona state agencies that the coal slurry is inert, nontoxic and nonhazardous; and in most cases, a slurry spill is best left to incorporate into the environment through natural events. The total estimated loss of coal from these leaks was 5,000 tons. It should be mentioned that coal losses for rail transit of 68 million tons of coal would be in excess of 300,000 tons of coal lost by blowout from open top rail cars. The pipeline presently transports coal for less than 1.4 cents per ton mile. As a result, the Mohave Generating Station is among the lowest cost coal-fired power plants in the western United States. To demonstrate the low inflation rate of coal slurry pipelines, the original difference between pipeline and rail tariff at the conception of Black Mesa Pipeline was approximately 50 cents per ton with the pipeline being the low cost transporter. The proposed rail system involved a new rail link with the total rail distance being approximately 400 miles, almost 50% greater than the pipeline. The estimated tariff difference today is in the range of $6.00 to $8.00 per ton. This is an estimate because there still is no rail service linking the coal mine and power generating plant. The issue of water is probably one of the most emotionally sensitive issues concerning coal slurry pipelines. In the case of Black Mesa Pipeline, the removal of this water resource from a deep aquifer has to our knowledge not adversely affected the water availability on the Navajo Reservation for domestic use and has not prevented other industrial development. Water from an aquifer of this depth is normally not economical for agricultural According to reports, the total aquifer depletion will be less than 1% over the life of the coal supply contract and will completely recover within 15 years after termination of pumping. use. Let us remember that there are a number of alternative transport medias for coal slurry pipelines on the horizon. Coal methanol slurries are technically feasible. Coal/liquid carbon dioxide slurry is in the development stage and holds promise for specific projects where CO2 can be used for enhanced oil recovery. Other possibilities as a media of coal transportation are petroleum fractions and other coal-derived liquids. Of course, coal/water fuels which use 50% less water than coal/water slurries and are direct-fired are also commercially available and merit consideration for pipeline transportation. 1 |