p.1 

OAR Box 1865 

Prepped by Charmelle Mathews 

Document Number: 

143) VI-B-8 

Docket Number: 

A-83-27 

Printed 12/3/2008 3:22:20 PM Sheet 143 of 198 
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FROM 01/07/89 13:04 

A-83-27 

TO: 

FROM 

SUBJ 

DATE 

VI-B-8 

S02 Docket (A-83-27) 

David White, Radian 

Use of Low Sulfur Residual 011 by California Electric Utilities 

January 4, 1989 

Telephone contacts were made with the California Energy Commission, Los 

Angeles Water and Power Department, San Diego Gas & Electric, and Chevron 

U.S.A. regarding the use of low sulfur oil by California electric utilities. 

Copies of the contact reports with each of these organizations are attached. 

The general conclusions reached from these discussions are as follows: 

1. Low sulfur residual oils of between 0.2 and 0.5 percent sulfur are used 

by California utilities. These resids are produced mainly from 

Indonesian and Australian crude oils. Although California refineries 

periodically produce low sulfur resids from these crudes, most of the 

utilities import low sulfur resid directly from refineries in the Far 

East (e.g., Singapore). 

2. All of the low sulfur residual oils produced from Indonesian crude are 

waxy and require heating in order to flow. No significant handling 

differences exist between 0.3 and 0.5 percent sulfur content resids. No 

problems are currently reported in handling these resids. There are 

higher sulfur resids (roughly 2 percent sulfur) available on the West 

Coast that can be pumped without heating 1n warm climates. 

3. The state's utilities have been firing low sulfur resid rather than 

natural gas since about October, 1988 due to Its low price and 

availability relative to natural gas. This includes resids of less than 

0.3 percent sulfur. 
\ :FROM 01/07/6 9 13:05 P. 5 

P.3 

C O R 

CONTACT REPORT 

Date 12/29/88 Originator n.M. UMto 

CONTACT BY: TELEPHONE df MEETING D Other 

NAME, TITLE & ORGANIZATION 

Joe O'Brien, San Diego Gas & Electric 

ADDRESS & TELEPHONE NUMBER 

P.O. Box 1831, San Diego, CA 92112 

(619) 696-1882 

PURPOSE OR SUBJECT (Give project number if appropriate) 

Oil burned by San Diego Gas & Electric (SDG&E) 

SUMMARY 

SDG&E is required to burn oils with less than 0.5% sulfur. 

To meet this limit, they purchase residual oils (based on market prices) 

of greater than 0,5% S and less than 0.3% S and blend. 

The residual oils of 0.3% S and less are refined from Indonesian and 

Australian crudes. 

The 0.3% S and 0.5% S residual oils they purchase must both be heated. 

However, the 0.3% S resid presents no unusual handling problems relative 

to 0.5% S resid. 

Supplies of 0.3% S resid are currently readily available. 

ACTION 

Distribution: 
FROM 01/07/83 13:05 

P.4 

CORPORATI O 

TELEPHONE CALL RECORD 

Qlncomlnj al l 

utfolrn C«U 

PtttoA Calling 

J.T. Waddell 

Pi-r.on Callfd 

Ron Nelson,. 

floJ.Cl Ho. 

P39-n03-45 

PtoJ.tf H.B. 

lilt* 

Industrial boiler litigation support 

1/3/89 

TIM 

12:45 am 

Activity 

AcClvlCjr 

RarHan r.r>rpnrafinn 

nc flngftloc Ulator anH Pftu.ov. 

m.mbutLon 

Gtnattl Subj.et 

011 hurnpd hy I nf; Ano/lps UatPr nnri Pnw>r 

TOPICS DISCUSSED AND ACTION TAKEN 

Los Angeles Water & Power hums a low -sulfur, wavy rpgirf—QH which CQm.es from. 

Indonesia. The oil is already refined when they buv it. Mr. Nelson t;hipks ._ 

it is refined in Indonesia. The oil is about 0.25%_S as required bv t>n 

South Coast AQMD. Because the oil is wa^v. it does requirp heating anH ie 

stored in heated tanks. The supply department had just bought a shipment 

and there seemed to be no availability problem. Demand, however, is low 

right now. 

Mr. Nelson did not know the current price difference between 0.25% S and 

0.5% S oil. He thinks that when LA Water & Power used to buy 0.5% sulfur oil 

(i.e., before SCAQMD 0.25% S limitation), it also came from Indonesia and __ 

required the same handling procedures. 

Slpnitutf 
I 

FROM 01/07/89 13:06 P. 7 

P OR A TIO N 

P.5 

CONTACT REPORT 

Date 1/q/ftQ ftrlnlnator P-M- WhitP 

CONTACT BY: TELEPHONE a MEETING • Other 

NAME, TITLE & ORGANIZATION 

Bil l Wood, California Energy Commission 

ADDRESS & TELEPHONE NUMBER 

Sacramento, California 

(916) 324-3189 

PURPOSE OR SUBJECT (Give project number if appropriate) 

Residual Oil Use by California Utilities 

SUMMARY 

California utilities have been burning low sulfur resids for over 

ten years (0.25% S in the South Coast Air Quality District, 0.50% S 

elsewhere). , 

None of the state's utilities report any problems handling these fuels. 

Pacific Gas & Electric reported some problems handling these oils 

initially due to improperly designed facilities, but the problem has 

been solved. 

Given current resid and natural gas supplies and prices, all of the 

state's utilities have been burning resid since roughly October. 

ACTION 

Distribution: 

91 
- F.ROM 

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01/07/8 9 13:0 7 

RADIAN 

CORPORATIO N 

CONTACT REPORT 

Date i/fl/RQ Originator P»M. White 

CONTACT BY: TELEPHONE qt MEETING D Other _ _ 

NAME, TITLE & ORGANIZATION 

Ken Bergsman, Chevron, U.S.A. 

ADDRESS & TELEPHONE NUMBER 

P.O. Box 7006, San Francisco, CA 94120 

(415) 894-0720 

PURPOSE OR SUBJECT (Give project number if appropriate) 

Characteristics of low sulfur resid 

SUMMARY 

Very low sulfur resids available on the West Coast and in Hawaii 

are produced mainly from Indonesian and Australian crudes. California 

refineries are capable of refining the crudes; however, most very 

low suflur resid is refined in the Far East (e.g., Singapore) and 

imported as resid. 

These resids are waxy and require heating to flow, but no significant 

differences exist between 0.3 and 0.5 percent resids. The higher 

sulfur resids used 1n Hawaii (2% S) can be handled without heating 

due to the Hawaiian climate. 

Distribution: