An Analysis of the ERDA Plan and Program

October 1978

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ii
TECHNOLOGY ASSESSMENT BOARD Congress of the United States EMILIO Q. DADDAR1O

OLIN E. TEAGUE, TEXAS, CHAIRMAN

DIRECTOR

CLIFFORD P. CASE, N. J., vICE CHAIRMAN O FFICE OF T ECHNOLOGY A SSESSMEN T DANIEL V. DE SIMONE

EDWARD M. KENNEDY, MASS. MORRIS K. UDALL, ARIZ. W ASHINGTON , D.C. 20510 DEPUTY DIRECTOR

ERNEST F. HOLLINGS, S.C. GEORGE E. BROWN, JR., CALIF.

HuBERT H. HUMPHREY, MINN. CHARLES A. MOSHER. OHIO

RICHARD S. SCHWEIKER, PA. MARVIN L. ESCH, MICH.

TED STEVENS, ALASKA MARJORIE S. HOLT, MD.

EMILIO Q. DADDARIO

October 21, 1975

The Honorable Henry M. Jackson

Chairman, Committee on Interior

and Insular Affairs

United States Senate

Washington, D.C. 20510

The Honorable Olin E. Teague

Chairman, Committee on

Science and Technology

U.S. House of Representatives

Washington, D.C. 20515

Gentlemen:

On behalf of the Office of Technology Assessment, we are pleased

to forward a report: An Analysis of the ERDA Plan and Program.

The report was prepared by the Office of Technology Assessment

with the assistance of six panels of experts conversant with the

major program areas of the Energy Research and Development

Administration (ERDA). It is an analysis of the program plan

submitted by ERDA to the Congress on June 30, 1975, entitled:

A National Plan for Energy Research, Development and Demonstration:

Creating Energy Choices for the Future.

This report is being made available to your Committees in accordance

with Public Law 92-484.

Chairman u Vice Chairman

of the Board f the Board

. . .

Ill
T ECHNOLOGY A SSESSMENT B OAR D

OLIN E. TEAGUE, TEXAS, CHAIRMAN

CLIFFORD P. CASE, N. J., VICE CHAIRMAN

EDWARD M. KENNEDY, hlASS. MORRIS K. UDALL, ARIZ.

ERNEST F. HOLLINGS, S.C. GEORGE E. BROWN, JR., CALIF.

HUBERT H. HUMPHREY. MINN. CHARLES A. MOSHER. OHIO

RICHARD S. SCHWEIKER, PA. MARVIN L. ESCH, MICH.

TED STEVENS, ALASKA MARJORIE S. HOLT, MD.

EMILIO Q. DADDARIO

Congress of the United States EMILIO Q. DADDARIO

DIR EL ,0,7

O FFICE OF T ECHNOLOGY A SSESSMEN T DANIEL V. DE SIMONE

W ASHINGTO N , D.C. 2051 0

DEPUTY DIRECTOR

October 21, 1975

The Honorable Olin E. Teague

Chairman of the Board

Off ice of Technology Assessment

Congress of the United States

Washington, D. C. 20515

Dear Mr. Chairman:

In response to the requests to OTA from the Chairman of the

House Committee on Science and Technology and the Chairman

of the Senate Committee on Interior and Insular Affairs, I

am pleased to submit a report entitled: An Analysis of the

ERDA Plan and Program.

This report was prepared by the staff of the Office of Technology Assessment with the assistance of six panels of experts

conversant with the major program areas of the Energy Research

and Development Administration (ERDA) and personnel from three

universities with centers for energy policy analysis.

It is anticipated that this analysis, which identifies major

issues, summarizes their import, raises key questions, and provides background data, will be of use to Congressional committees

reviewing the comprehensive energy research plan and program

submitted by ERDA to Congress on June 30, 1975, in accordance

with Public Law 93-577.

EMILIO Q . DADDARIO

Director

v
INTRODUCTION

The Office of Technology Assessment is pleased to present this report on its

analysis of the Energy Research and Development Administration (ERDA) Plan

and Program “Creating Energy Choices for the Future. ” The Plan, was presented to

Congress on June 30, 1975 in accordance with Public Law 93-577.

The Office of Technology Assessment (OTA) was asked by Chairman Teague

and Congressman Mosher of the House Committee on Science and Technology to

analyze the Energy Research and Development Administration Plan and Program.

This request was joined by Senator Jackson, Chairman of the Senate Interior and

Insular Affairs Committee and by the Joint Committee on Atomic Energy.

ERDA became operational on January 19, 1975. It was created by combining

elements from several agencies, notably the Atomic Energy Commission,

Department of Interior, National Science Foundation, and Environmental

Protection Agency. During the initial months of its existence, ERDA’s task was to

develop and staff an organization which would concern itself with all forms of

energy supply and use, not exclusively with one form of energy (e.g. as in the case of

the AEC).

The Non-Nuclear Energy Research and Development Act (Public Law 93-577)

which established ERDA, also required the agency to submit to the Congress a

national plan for energy research, development, and demonstration, hereafter

referred to as the Plan. This document was issued as ERDA-48, volumes I and II.*

Volume I articulates a set of goals for national energy R&D policy, discusses these

goals in light of a set of energy scenarios, and identifies R&D priorities for three

time scales: near-term (to 1985); mid-term (to 2000); and long-term (past 2000),

Volume II of the Plan sets forth a set of specific programmatic elements intended to

achieve the Plan objectives.

In the letter from Chairman Teague and Congressman Mosher to OTA, dated

December 17, 1974, they foresaw that before the Congress could satisfactorily

judge the Plan and Program that would be submitted to it by ERDA, analysis,

interpretation, and evaluation would be required. Since the ERDA plans reflect the

President’s view of national energy R&D policy, they will in large measure

determine the broader options for our future national energy policy. The OTA

assessment of the ERDA Plan and Program is intended to provide the Congress

with much of the background information necessary for an effective analysis of

ERDA’s energy R&D programs.

The analysis was performed largely by task groups assembled in each of the

ERDA major programmatic areas:

1.

2.

3.

4.

5.

Fossil Energy;

Nuclear Energy;

Solar, Geothermal, and Advanced Technologies;

Conservation; and

Environment and Health.

* The ERDA Plan is supplemented by certain additional materials in the area of solar energy. These

are ERDA-49, National Solar Energy Research, Development Demonstration Program (June 1975), and

ERDA-23, National Plan for Solar Heating and Cooling [March 1975).

vii
These panels, whose members are identified at the beginning of each chapter, were

structured to contain a balance of viewpoints; participating authorities were

drawn from major manufacturing industries, energy utilities, academic research

centers, public health disciplines, environmental protection groups and

professional engineering, architectural, and legal societies. The five panels

addressed specific aspects of energy, development, and demonstration in weeklong sessions starting in early July, A sixth panel, which included the chairmen of

the first five groups, was assigned the task of providing a coordinated overview.

Each task group prepared written material on the important issues it had

identified.

Three universities which have developed active centers for energy policy

analysis provided personnel to support the task groups and to assist the OTA staff

in conducting this project. Staff members from the Massachusetts Institute of

Technology, the University of Oklahoma, and the University of Texas at Austin

worked with each of the six review panels, aided in the preparation of this report,

and prepared background papers on a variety of topics not easily covered by a task

group. Independent papers on other subjects were also prepared by a number of

diverse outside groups and individuals. Critiques of the ERDA Plan were solicited

from a wide range of organizations.

In undertaking this analysis, the OTA task groups relied not only on the ERDA

Plan and Program, but also on the President’s amended budget; interviews with

key energy staff members from the Environmental Protection Agency, Federal

Energy Administration, and Office of Management and Budget; and interviews

with a large number of senior ERDA management personnel. Special thanks are

due to ERDA Administrator Robert Seamans, Deputy Administrator Robert Fri,

Assistant Administrators Roger LeGassie (Planning and Analysis), Philip White

[Fossil), Richard Roberts (Nuclear), John Teem (Advanced Systems), James Kane

(Acting–Conservation), and James Liverman (Environment).

This report contains an executive summary with the major conclusions of each

task group and a chapter for each of the six task groups, includes a summary, and

set of related issue papers representing the diverse viewpoints of the task group

members. Each issue paper provides a list of specific questions relating to the

ERDA Plan.

Attachment I contains critiques of the ERDA Plan received from diverse

interest groups listed in the attachment.

The OTA staff effort was directed by Dr. Jon M. Veigel. The regular OTA

energy staff of Mr. Alan T. Crane, Mr. T. Patrick Gaganidze, Mr. Lionel S. Johns,

Ms. Linda M. Parker, and Ms. Joanne M. Seder. The staff was supplemented by Ms.

Pamela Bloomfield, Dr. George Leppert, Dr. Richard E. Rowberg, Dr. George M.

Seidel, and Dr. N. Richard Werthamer. Dr. Rowberg was on loan from the Federal

Power Commission. The others came from universities or private industry.

. . . VIII
CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 1. OVERVIEW ISSUE PAPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A, OVERVIEW TASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B. OVERVIEW TASK GROUP ISSUES LIST . . . . . . . . . . . . . . . . . . . . . . .

C. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. OVERVIEW ISSUE PAPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. The Nature of the National Energy

Policy Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Overall Level of the Federal Budget

for Energy R, D&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. The International Aspects of

ERDA’s Plans and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Coordination of Programs Between

ERDA and Other Federal Agencies . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Cooperation Between ERDA and State

and Local Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Near-Term Energy Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Socioeconomic Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Balance Between Supply Versus

Demand R, D&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. ERDA’s Basic Research Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Commercialization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Resource Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Physical and Societal Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Overemphasis on Electrification . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Methodology and Assumptions Used

in Developing the R, D&D Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. ERDA Management Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16. Net Energy Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 11. FOSSIL ENERGY TASK GROUP ANALYSIS . . . . . . . . . . . .

A. FOSSIL ENERGY TASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . :. . . . . .

B. FOSSIL ENERGY TASK GROUP ISSUES LIST . . . . . . . . . . . . . . . . .

C. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. FOSSIL ENERGY ISSUE PAPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Fossil Energy Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2, Primary Oil and Gas Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Enhanced Oil and Gas Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Oil Shale Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

vii

1

11

12

13

15

19

19

21

23

25

27

29

30

31

33

35

37

38

39

41

43

45

47

48

49

51

53

53

54

56

58

ix
5. Synthetic Liquid Fuels From Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. High-Btu Gasification of Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Low-Btu Gasification for Industrial Use . . . . . . . . . . . . . . . . . . . . . .

8. Mining Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Direct Coal Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Low-Btu Gasification, Combined Cycle

Powerplants . . . . . . . . . . . . . . . ...................*..********* -

11. Advanced Fossil Fuel Combustion

Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Interagency Coordination: Coal Cleanup . . . . . . . . . . . . . . . . . . . . . .

13. Environmental, Social, and Political

Impacts of Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Manpower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Transportation Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16. Water Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER III. NUCLEAR TASK GROUP ANALYSIS . . . . . . . . . . . . . . . . . .

A.

B.

c .

D.

NUCLEAR TASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NUCLEAR TASK GROUP ISSUES LIST . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NUCLEAR ISSUE PAPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12,

13.

14.

15.

16.

17.

18.

Standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Performance and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Floating Nuclear Powerplants ,. . . . . . . . . . . . . . . . . . . . . . . . . . .

Helium-Cooled Reactor—Convertors and Breeders . . . . . . . . . . . .

Liquid Metal Fast Breeder Reactor . . . . . . . . . . . . . . . . . . . . . . . . . . .

Light-Water Breeder Reactor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Molten Salt Breeder Reactor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nuclear Environmental Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plutonium Toxicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Waste Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Safeguards for Nuclear Materials ● . . . . . . . . . . . . . . . . . . . . . . . . . . .

Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Uranium Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Uranium Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fuel Recycle . ..............................*...*****.****** .

Public Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Controlled Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Technologies for Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59

61

63

64

66

68

69

72

74

76

78

80

83

84

85

87

91

91

93

95

97

99

102

104

105

107

108

110

112

113

115

117

119

121

123

CHAPTER IV. SOLAR, GEOTHERMAL, AND ADVANCED TECHNOLOGIES

GROUP ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TASK 125

A

B.

c .

SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMS

TASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMS

TASK GROUP ISSUES LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
D. SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMS

ISSUE PAPERS .... ... .... .... ... .... .... ... .... .... .000 . o

1.

2.

3.

4.

5.

6.

7.

8.

9,

10.

11.

12.

13.

14.

15.

16.

17.

Setting Criteria for Program Priorities . . . . . . . . . . . . . . . . . . . . . . .

Rationale for Funding of High-Risk Projects . . . . . . . ........+ . .

Resource Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organizationof ERDA’s Research Program . . . . . . . . . . . . . . . . . . .

ERDA Program Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Support for Study of Decentralized Solar

Electrical Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Emphasis on Electric Energy Systems . . . . . . . . . . . . . . . . . . . . . . . .

Emphasis on Solar Heating and Cooling

of Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..””””

Purposes of the Solar Heating and Cooling

Demonstration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Role of User Incentives in Solar Heating and

Cooling of Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Standards for the Measurement of Solar Heating

and Cooling Equipment Performance . . . . . . . . . . . . . . . . . . . . . . . .

Impact of Solar Energy on Utility Peak Demand . . . . . . . . . . . . . .

Biomass Energy and Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Legal and Institutional Constraints in

Geothermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Environmental Constraints of Geothermal

Energy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonelectric Uses of Geothermal Energy

and Geothermal Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Variability of Geothermal Reservoirs . . . . . . . . . . . . . . . . . . . . . . . .

E. COMMENTARY ON ERDA PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER V. CONSERVATION TASK GROUP ANALYSIS . . . . . . . . . . .

A.

B.

C.

D.

CONSERVATION TASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONSERVATION TASK GROUP ISSUES LIST . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONSERVATION ISSUE PAPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13,

14.

Importance of Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Program Management and Coordination . . . . . . . . . . . . . . . . . . . . .

Interaction With the Private Sector . . . . . . . ● . . . . . . . . . . . . . . . . . .

Use of the Term ’’Conservation” . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Need for Nontechnological Research . . . . . . . . . . . . . . . . . . . . . . . . .

Demand Modeling and Conservation Planning . . . . . . . . . . . . . . . .

Design Methods and Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Development and Demonstration . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Constraints in Building Construction . . . . . . . . . . . . . . . . . . . . . . . .

Need for Thermodynamic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . .

Oil and Gas Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Use of Foreign Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ● . .

Transmission and Distribution Priorities . . . . . . . . . . . . . . . . . . . . .

Active Load Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133

133

135

137

139

141

143

144

146

148

150

152

154

155

157

159

161

163

165

169

170

171

173

175

175

177

179

181

183

185

187

189

191

193

195

197

200

202

xi
15. Orientation of Automotive Programs . . . . . . . . . . . . . . . . . . . . . . . . . 204

16. Cooperation With the Transportation Industry . . . . . . . . . . . . . . . 206

17. Nonhighway Vehicle Transportation Program . . . . . . . . . . . . . . . . 208

18. Energy Recovery From Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

CHAPTER VI. ENVIRONMENTAL AND HEALTH TASK

GROUP ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. .. ... .. ...+..... 211

A. ENVIRONMENTAL AND HEALTH TASK GROUP . . . . . . . . . . . . . 212

B. ENVIRONMENTAL AND HEALTH TASK GROUP

ISSUES LIST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........o.o.00” 213

C. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

D. ENVIRONMENTAL AND HEALTH ISSUE PAPERS . . . . . . . . . . . . 217

——

1.

2.

3.

4,

5.

6.

7.

8.

9,

10.

11.

12.

13.

14.

Environmental Impacts of High Voltage

Transmission Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ground and Surface Water Contamination From

Surface Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Energy Consumption and Inadvertent Climate

Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Variance on Environmental Standards During

Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Energy Modeling and DataBank Requirements . . . . . . . . . . . . . . .

Site and Technology-Specific Nature of

Cause-Effect Relationships in Environmental

Health Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Integration of Environmental, Health, Social,

and Institutional Research Into Technology Programs . . . . . . . .

Energy Impacts of Air and Water Pollution

Control Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Competing Demands for Water in Western River

Basins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Need for Social Research in Offshore Energy

Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of Public Attitudes on Program

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Program Focus in Fossil Fuel Health Effects

Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inadequate Inventory of Skills and Techniques

in Health Effects Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Atmospheric Sulfates as a Potential Constraint

on ERDA’s Fossil Fuel Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ATTACHMENT I–OUTSIDE CRITIQUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ATTACHMENT II—ERDA AND THE CONGRESSIONAL ACTS . . . . . . .

217

218

220

221

223

225

227

229

231

233

234

236

239

241

243

311

xii
EXECUTIVE SUMMARY

The ERDA Plan (volume I) is a significant

milestone in the evolution of a long-term national

energy policy, However, the ERDA Program

(volume II), to implement this plan does not

appear adequate to achieve the stated goals,

In particular, there are two broad areas in

which the differences between the policy goals

mandated by Congress and the programs proposed by ERDA to meet those goals are especially

significant. These deficiencies, unless remedied,

could impede the solution of short-term and midterm energy problems by the United States,

which could lead to an increased dependence on

foreign energy sources.

The first deficiency occurs because of ERDA’s

pursuit of technological options at the expense of

a focus on a broader approach toward the

solution of energy problems. Simply establishing

technical feasibility is insufficient as nontechnical constraints may prohibit implementation. Such constraints could include any or all of:

transportation, resource, manpower, and capital

availability y; public acceptability; or in -

stitutional, jurisdictional, economic, and environmental compatibility. If ERDA is to supply

solutions to energy problems as mandated by

Public Law 93-577, none of these can b e

neglected. If ERDA confines its activitie s

predominantly to the proving of the feasibility of

technological options, some other entity should

address the more complex issues underlying

energy solutions. In such a case clear coordination with ERDA would be essential.

The second departure from congressional

mandate is to be found in the emphasis of both the

ERDA Plan and Program on options directed

toward increased energy supply, relative to the

programs in end use demand reduction, In Public

Law 93-577 (Sec. 5(a)(l)), the Congress defined

energy conservation as meaning “both improvement in efficiency of energy production and use

and reduction in energy waste. ” The law requires

energy conservation be “a primary consideration

in the design and implementation” of the ERDA

program, Yet only 2 percent of ERDA’s budget

appears to be allocated to conservatio n

programs.

It is well recognized that expansion and

conversion of our large energy supply systems

will be very costly and cumbersome, but that our

dwindling oil and gas reserves dictate such

modification. By contrast, successful widespread

implementation of conservation programs with

increased efficiency or waste reduction objectives can have both a rapid and a continuing

effect. Such improvements need not b e

technologically complex; they may include

merely removing jurisdictional or institutional

constraints, such as building codes which require

energy-inefficient designs.

If ERDA is to provide near-term and mid-term

energy problem solutions, conservation through

efficiency and waste-reduction programs should

be an essential ingredient. The present ERDA

program orientation toward developing complex

technological supply options for the long-term

overshadows the importance of less-complex

so

OVERVIEW

I. The Nature of the Energy Goals

In preparing its Plan, ERDA proposes five

goals which, taken together, may constitute the

energy policy for the Nation.

The five energy goals are stated as follows:

1 , To maintain the security and in -

dependence of the Nation;

lutions with near-term potential,

ISSUES*

2. To maintain a strong and health y

3.

economy, providing adequate employment

opportunities and allowing the fulfillment

of economic aspirations (especially in the

less affluent parts of the population);

To provide for future needs so that life

styles remain a matter of choice and are

not limited by the unavailability of energy;

* Attachment II, page 311, compares overview issues to Public Law 93-577 and Public Law 93-438. 1
4.

5.

To contribute to world stability through

cooperative international efforts in the

energy sphere;

To protect and improve the Nation’s

environmental quality by assuring that

the preservation of land, water, and air

resources is given high priority;

These goals and the emphasis among them

warrant careful congressional review. Without

agreement between the Administration and

Congress on these overall objectives and

priorities, ERDA’s development of an R, D&D

program is more difficult.

Review and consensus become all the more

appropriate in view of the major influence these

goals and their priorities will have on the

Nation’s economy, quality of life, environment,

foreign affairs, and many other sectors.

2. The ERDA Response

ERDA acted ambitiously in proposing the set of

national energy policy goals, Its interpretations

of them are much too modest, however,

Basically in addressing the energy goals ERDA

adopted a narrow, hardware-oriented approach.

Its R, D&D effort is designed primarily to develop

technologies . . . rather than to explore solutions

to energy problems.

An almost exclusive emphasis on technology

has gotten results in some other national research

effort s—not ably, in the space program and

military weaponry,

In these cases however, the “missions” have

been very sharply defined, decisionmaking has

been centralized, and ample resources have been

available. The relative narrowness of these

miss ions allowed a heavy application o f

hardware, and success has been achieved,

The energy crisis is a far more complex and

wide-ranging challenge. It is a problem spanning

the whole of man’s activity. It involves decisions

from individual householders to entire blocs of

nations. Its “solution” depends on natura l

resources and human values, new sources of fuel,

public perceptions, and government and industry

responses,

As a consequence, ERDA’s narrow approach to

the national energy policy goals might well fulfill

a mission—developing new technology—without

providing an answer—a secure energy future,

Unresolved “nontechnological” issues—from

inadquate incentives for commercialization,

2 EXECUTIVE SUMMAR Y

through environmental demands, competitive

use of resources, to community resistance—could

block the most sophisticated engineering

achievement,

The OTA Overview Task Group identified a

number of very specific issues with respect to the

approach of the ERDA Plan and Program to the

national energy goals. These issues have an

important common denominator— they aris e

from, and reflect, the narrow, hardware-oriented

approach reflected in ERDA’s Plan and Program.

3. The Issues

The issues with respect to the ERDA approach

are summarized as follows. Each of the following

is treated in more detail in chapter 1.

(a) Insufficient emphasis is placed on international considerations: International cooperation is essential to cope with the environmental

effects of energy-generating technologies; to

address security issues such as, specifically, the

management of nuclear materials and wastes,

and to manage resources, like the oceans, that are

a common world heritage. ERDA identifies such

considerations in its Plan but barely recognizes

them in its Programs.

(b) Incomplete plans are provided for coordination with other Federal agencies: Split

responsibilities among Federal agencies are a

major potential obstacle to a comprehensive and

balanced energy R, D&D program. ERDA has

been mandated by Congress as the leading energy

R, D&D agency and has been given responsibility

to integrate and coordinate national efforts, But it

is not evident in ERDA’s plans whether a

framework is being established to permit adequate performance of this role,

(c) Inadequate provision is made for cooperation between ERDA and State and loca l

governments. The involvement and support of

State and local governments is crucial to the

success of ERDA’s projects. These levels offer

strong experience and capabilities in important

“nonhardware” areas such as water allocation,

land use, taxing policies, manpower training,

environmental controls, and public education.

While the ERDA plan recognized the importance

of close and continuous coordination, it does not

include procedures or mechanisms for ac -

complishing it.

[d) Little attention is devoted to near-term

(next ten years) energy problems: The first
strategic element in ERDA’s Plan is “to ensure

adequate energy to meet near-term needs until

new energy sources can be brought on line.”

ERDA plans to accomplish this through enhanced gas and oil recovery, direct use of coal,

more nuclear reactors, shifting demand away

from petroleum, and increased conservation

practices. However, a review of ERDA’s FY 76

budget indicates that only about 5 percent is

devoted to solving near-term problems.

(e) Only limited attention is given t o

socioeconomic research and analysis in addressing the Nation’s energy problems: Broadranging research is needed to identify nontechnological obstacles to energy solutions and

to better understand the relationships of energy

and the quality of life. ERDA’s program and

budget do not give adequate attention to social,

economic, environmental, and behaviora l

research needs, even though the legislative

record makes clear that ERDA is given responsibility beyond technical R&D.

(f) ERDA’s program overemphasizes energy

supply technology relative to consumption: In

the past era of constantly decreasing real energy

prices, little emphasis was placed on efficiency in

“end-use” - energy consumption in the business

or home. This, however, is now an area in which

significant and cumulative gains could be accomplished.

ERDA’s plan makes provision for energy

conservation. But the focus is primarily on the

near-term, estimates of long-term importance of

improved efficiency in energy end-use are undefined.

(g) The development of effective commer -

cialization policies is not adequately addressed

in the ERDA Plan: Bringing a new energy

technology to the point of commercial feasibility

is a risky process, especially when it involves

diffuse markets, the uncertainty of global energy

and economic circumstances, the competition for

capital. ERDA’s Plan outlines a philosophy for

commercialization, but clearly needs a more

detailed explanation and careful definition of

plans for developing a mechanism for coordination with industry.

(h) Careful attention should be given to

assessing energy resources: An incorrect assessment of the Nation’s energy resource base could

cause severe distortions in ERDA priorities and

schedules.

Recent analyses clearly show there is still

major uncertainty regarding the nature of our

energy resources and point out the critical need

for developing better estimation methodologies,

(i) Physical, institutional, and social constraints may limit the progress of the ERDA

Energy Plan: As indicated earlier, there are many

potential physical and social constraints to the

introduction of new energy technologies. The

potential for program disruption by possible

obstacles demands careful study by ERDA.

(j) The ERDA Plan appears to overemphasize

electrification: All three major “inexhaustible”

sources (solar, breeder, and fusion) identified by

the ERDA Plan are producers of electricity, Yet

intensive electrification will have a noticeable

social impact and may present problems of

vulnerability and reliability.

In order to avoid dangerously narrow future

options, the long-term electrification approach

should be more thoroughly analyzed tha n

presently proposed to make sure that viable

alternatives are not lost by default.

(k) The ERDA Plan relies on assumptions

which appear to bias its priorities toward high

technology, capital intensive energy supply

alternatives: Many of these not only ar e

questionable, but, further, tend to distort the

value of various R, D&D options, ERDA plans do

not take into account the effect of higher prices on

energy demand; they do not include consumer

costs in calculating the costs of new energy

systems, and they assume exponential energy

growth will resume after 1985.

This concentration of focus tends t o

minimize the potential impact of R, D&D to

improve end-use energy efficiency and bias the

choice of research priorities toward the supply

sector.

(1) Application and questions with respect to

net energy analysis receive little attention: “Net

energy” measures total energy output relative to

total energy input, thereby indicating which

technologies are likely to be most useful,

This technique can aid in the establishment

of prioritie s for existing and developing

technologies, but research is needed before it can

be a consistent and widely accepted tool. The

ERDA Plan and Program is not responsive to the

Act in this area.

EXECUTIVE SUMMAR Y 3
4. Other ERDA Issues

In addition to the above issues related to

ERDA’s narrow approach vis-a-vis energy policy

goals, the OTA overview analysis identified the

following three concerns:

(a) There is a need for a reexamination of the

overall energy R, D&D budget: The Federal

energy R, D&D budget (about $2.3 billion for FY

1976) was largely an outgrowth of decisions

made prior to the Arab oil embargo, and should

be reexamined.

(b) ERDA’s present management policies

could hinder achievement of its goals: present

ERDA management practices have thre e

recognizable drawbacks: (1) Internal project

management tends to impose inhibitingly

detailed restrictions on the R, D&D program; (2)

project management delegated to externa l

organizations has been awarded to organizations

having excessively detailed management structures, resulting in a corresponding loss of

program control by ERDA; (3) there is too little

emphasis on systems analysis and too much on

proof-of-concept experiments,

(c) The goals of ERDA’s basic research

program have not yet been established: ERDA’s

program for basic research has largely been

inherited from the agencies which it incorporated, It is not surprising because of the short

life of ERDA, but nonetheless a concern that the

basic research program does not yet reflect

ERDA’s basic R, D&D goals.

5. Possible Remedies

Whether or not ERDA assumes responsibility

for the broader, “nonhardware” R, D&D issues

described above, there can be no question of their

importance. As emphasized earlier, technology

alone will not solve the Nation’s energy

problems.

Thus, answers to the Nation’s energy problems

require that the programs deemphasized by

ERDA in its narrow interpretation of its role be

vigorously pursued somewhere in the Government. Most are not, at present, receiving priority

attention anywhere.

One possible answer lies close at hand—in the

Acts of Congress. The Energy Reorganization Act

establishing ERDA and the Energy Research and

Development Act authorizing its programs

provide ample latitude for a broad-gaged, wellcoordinated R, D&D effort led by ERDA.

ERDA’s Plan in many instances acknowledges

the need for such a broad perspective and

program, In fact, the problems are not so much

within the Plan itself—which is a serious and

praiseworthy initial effort—but in the lack of

broad commitment and coordination when the

Plan, Program and Budget are considered

together.

Within the mandates of the Congressional

Acts, a variety of actions could be considered.

They are summarized as follows:

(a) The scope of ERDA’s mission could be

expanded and clarified, particularly in the areas

of demonstration and commercialization. A

major requirement is to clarify ERDA’s jurisdiction and responsibilities with respect to those of

the Federal Energy Administration, the Environmental Protection Agency, the Nuclear

Regulatory Commission, and the Department of

the Interior, in order to remove overlap, and

ambiguity and to provide the grounds fo r

efficient and effective mission management.

(b) As noted, widespread utilization of

newly developed technologies depends on a

complex process involving the removal of nontechnological constraints on commercialization,

industrial incentives, and technology transfer.

This process requires further delineation than

exists in the present ERDA Plan,

(c) Programs associated with the identification and evaluation of environmental, institutional, and societal constraints associated

with alternative energy technologies should

receive immediate and substantial attention,

(d) Programs directed toward increasing the

efficiency of energy use should be accorded the

highest priority,

[e) New efforts to assess global issues

associated with energy , such a s climate

modification, international energy supply and

demand estimates, the role of multinational

energy corporations, and the link with ocean

resources, should be instituted,

(f) The ERDA management approach, including the management of national and Federal

laboratories and the role of contract R, D&D

should be reevaluated.

(g) Closer working relationships with State

and local governments, including their participation in ERDA program planning, should be

established.

4 EXECUTIVE SUMMAR Y
(h) The potential national benefit which

would result from higher ERDA budget levels

should be examined. .

Fossil Energy

●

●

●

●

There is an urgent need to develop increased

supplies of oil and natural gas.

Programs to develop synthetic fuels from

coa1 and shale should continue to be given

very high priority.

The ERDA fossil energy program should

emphasize the demonstration of technologies

on a scale sufficient to provide reliable

information for evaluating their technical,

economic, and environmental feasibility.

Attention should be directed toward the

broad range of non-technological impediments that can seriously delay, if not

altoget her block, th e introduction o f

otherwise economically viable technologies.

By focusing on new technologies, the fossil fuel

program (contrary to the supply projections

contained in it) limits itself to an insignificant

impact on energy supplies in the short-term—

before 1985, The first priority should be to get

better information about presently available

technologies and to facilitate their use when

feasible: primary oil and gas extraction from new

sources (especially the Outer Continental Shelf)

and enhanced recovery of oil. Many of the

problems impeding the increase in production of

liquid hydrocarbons are nontechnical in nature.

Techniques for the production of synthetic oil

and gas from coal and oil shale are available now

and should be vigorously pursued, Although the

economic feasibility of many of thes e

technologies is highly uncertain at present, the

promise of second generation technologies may

not be much brighter. In the meantime there is a

need for better information about the impacts,

economics, and operating experience of

commercial-scale operations. It must be

recognized that the era of abundant cheap energy

is over—especially in the cases of liquid and gas

fuels.

Because of the urgency of the national energy

situation, the ERDA fossil-fuel program should

emphasize the demonstration of availabl e

technologies at a scale appropriate to their stage

of development: near-commercial scale for cases

where no serious technical obstacles exist (such

as high-Btu gas and possible oil shale with

surface retorting ), and pilot scale for cases where

technical problems still need to be solved (such

as tertiary recovery of oil, stimulation of tight gas

formations, coal liquefaction, and low-Btu gas,

combined cycle power plants ). Better and more

universally credible information can only be

obtained through demonstration,

While fuel technologies are discussed in some

detail by ERDA, too little attention may have

been directed towards the broad range o f

impediments that can seriously delay, if not

block altogether, the introduction of otherwise

economically viable technologies, Institutional

constraints must be addressed early if the

technologies upon which ERDA is concentrating

its efforts are to be brought to commercialization.

It is questionable planning, for example, for

ERDA to pour large amounts of funds into the

development of a commercially feasibl e

technology for coal liquefaction if the technology

cannot then be used—because coal mines cannot

supply the coal, transportation facilities are

inadequate, capital is unavailable, or water is

insufficient. The efficient use of ERDA R, D&D

funds requires a systematic look at entire energy

development systems. The fact that ERDA does

not have the primary responsibility within the

Federal Government for dealing with some of

these constraints is not a sufficient response; all

the more reason exists in such cases for concern

that the Government may not adequately consider some components vital for the successful

introduction of new technologies.

Nuclear Energy Program

Improvement in the light water reactor

design and operational reliability is required

to assure the near- and mid-term potential

for nuclear energy,

Uranium resources should be more precisely

defined.

A final decision on disposal of nuclear wastes

should be made and implemented.

The breeder reactor program continues to

require analysis, especially as regards timing

of need for the LMFBR cost and management,

Alternative reactor systems need to be reexamined, and consideration given to exEXECUTIVE SUMMAR Y 5

60-411 0 - ’75 - 2
ploratory program plans to develop such

systems,

● Reexamination, should be considered of the

balance and rate of expansion of the fusion

program.

The present generation of light water reactors

is well developed, but problems still exist, as

evidenced by rapidly increasing construction

costs and disappointing reliability. In a major

shift from AEC policy, ERDA recognized a

responsibility to support light water reactor

technology, but the program is not clearly spelled

out; how does ERDA intend to encourage the

standardization of power plants, improve their

reliability, and build LWR’s on floating platforms? Continuation of ERDA’s LWR safety

research is a part of this support, and should be

encouraged,

The future of nuclear fission power is dependent on an adequate fuel supply. The present,

highly speculative estimates indicate a uranium

shortage early next century. More precise estimates are needed for better planning of LWR

growth and scheduling of the breeder development program. The National Uranium Resource

Evaluation (NURE) is now underway; when

completed in 1980 it should tell us whether we

have enough uranium to fuel the LWR’s until the

breeder can be deployed, It seems, therefore, that

NURE ought to be pressed with more vigor than

is evident in the ERDA program.

The rest of the fuel cycle—reprocessing,

enrichment, and waste disposal—is probably not

in as critical a state as is the supply of uranium, at

least if the nuclear industry expands no faster

than at the moderate rate now projected. Of the

remaining components of the fuel cycle, waste

disposal should be regarded as the one which

needs most attention. In principle, safe disposal

of reprocessed radioactive waste in salt appears

to be technically feasible. Prompt resolutions of

remaining questions and a firm decision by

ERDA to proceed with a demonstration are

urgently needed.

By far the largest component of the ERDA

nuclear program is the development of an

“inexhaustible” energy source based on fission

breeders, in particular the liquid metal fast

breeder. The high cost of the program, especially

when compared to its French equivalent, has led

to extensive criticism. In retrospect, it may be

that the early emphasis on commercialization

was premature and expensive. Recent management changes should streamline the project and

help prevent further cost escalation, but their

effectiveness remains unproven. Although the

schedule for demonstration has slipped recently,

delayed commercialization of the LMFBR is

consistent with lower projections now being

made for nuclear power growth. Safeguards

against plutonium diversion is a problem intimately involved with the LMFBR, but adequate

solutions appear to be possible.

With the creation of ERDA, AEC policies

should be reexamined, Perhaps most importantly, it is now possible to reopen the issue of

alternative breeder systems, Three such systems

are being worked on: the light water breeder

(LWBR), the gas cooled fast breeder, (GCFBR),

and the molten salt breeder (MSBR), Of these

only the LWBR is being pursued vigorously, It is

appropriate to ask why the MSBR and the

GCFBR should not receive emphasis at least

comparable to the LWBR.

The plutonium-based economy entailed by

LWR's and LMFBR’s increases concern over

plutonium toxicity safeguards against diversion

and possible problems with long-term waste

management. A nuclear system based on thorium

(LWBR, MSBR, high-temperature gas-cooled

reactor, HTGR, or thorium version of LMFBR),

may be less vulnerable to some of these difficulties, Yet a fuel analysis has never been made

of thorium-based systems as an alternative to the

plutonium-based system; such an analysis is

badly needed as a guide to comprehensive

nuclear system development. Additionally, the

role of high temperature process heat from

nuclear reactors, most importantly the HTGR,

should be examined. The use of nuclear energy

for this purpose could save large amounts of

fossil fuel.

Fusion is the other potential “inexhaustible”

nuclear energy source, The prevailing opinion is

that fusion will probably be successfully

harnessed, and that it could be an attractive

means of supplying much of the Nation’s electrical energy next century. Thus fusion appropriately occupies a prominent position in the

ERDA plan, yet there are reasons to remain

cautious about the development of the program,

Scientific demonstration of controlled fusion,

i.e., achieving energy “breakeven” conditions, is

still to be reached, This is the goal of the next

generation of fusion devices, called “fusion test

reactors”, which in fact are large experimental

devices to test the concept not generate power,

6 EXECUTIVE SUMMAR Y
They will operate in new regimes of physics and

technology. Because these machines are so

costly, a central issue is whether ERDA can meet

its very heavy commitment to the tokamak fusion

concept while, at the same time, preserving its

options on other promising fusion concepts in

case the tokamak is not successful,

Solar, Geothermal, and Advanced

Technology Programs

●

●

●

●

The ERDA solar-energy program un -

deremphasizes the potential of solar heating

and cooling relative to solar electri c

technologies.

In its solar heating and cooling program,

ERDA should consider giving increased

emphasis to: user incentives, standards for

measurements of equipment performance,

and impact on utility peak demand of solar

systems,

Improved decision criteria in the sola r

electric program are needed to avoi d

premature exclusion of promising concepts.

All the technologies proposed for solar

electric generation presently have large cost

uncertain ties.

The legal and institutional problems

associated with geothermal resources should

receive greater emphasis in ERDA planning.

The principal issue raised with respect to the

ERDA Plan concerns the relative emphasis

accorded solar-electric and solar heating and

cooling technologies, Solar-electric technology is

identified by ERDA as one of the three long-term

inexhaustible sources; solar heating and cooling

is listed merely as an underexploited technology

appropriate for mid-term utilization. The relative

importance of these two technologies thereby

implied by the Plan is judged to be out of balance.

The technology and economics for solar water

and space heating are available now, A greater

near-term emphasis placed in this area relative to

solar electric along with acceleration of the solar

heating and cooling demonstration program, may

be the most effective way to develop solar energy.

Solar energy is suited to many direct thermal

applications, and it is in these areas that solar

energy can have its most immediate impact on

our energy economy and can contribute substantially as a long-term inexhaustible energy source,

It is, however, extremely important tha t

necessary attention be given to user incentives,

standards for measurement of equipment performance, and the impact on utility peak demand of

solar power systems, including wind-energy

users.

Although no technical barriers exist to solar

generation of electric energy, the high costs

estimated for these technologies necessitate a

long-term research program if they are to be

economically competitive. The large cost uncertainties of different solar electric concepts (ocean

thermal energy conversion, wind energy, solar

satellite, solar thermal) necessitates development of precise decision criteria for alternative

energy technologies. Consideration of resource

availabilities is critical due to the extensive use

of land and, in some cases, water, by solar electric

systems. One specific concern with the ERDA

Plan involves the apparent lack of consideration

of a number of promising candidate s for

photovoltaic cell materials.

Legal and institutional constraints are more

severe impediments to the rapid utilization of

geothermal resources than are technical

problems. The ERDA near-term projections for

geothermal energy development appear to be

optimistic, although geothermal resources do

have the potential to meet ERDA goals, if not

limited solely to electricity product ion. The most

important role for geothermal energy in the

United States may be in nonelectric uses, a role

which is given inadequate significance in the

ERDA Plan. Because each geothermal reservoir

has unique characteristics, research strategy on

power conversion will have to consider a wide

variety of possible utilization systems in order to

minimize resource waste.

Conservation Program

The ERDA Plan for conservation is timid and

underfunded, despite strong congressional

encouragement,

The conservation program contains elements

largely unrelated to end-use conservation, a

situation which threatens to keep the

program unfocused and further exacerbate

the problems of funding and staffing for end

use conservation R, D&D.

ERDA has not adequately established

priorities within its conservation program.

EXECUTIVE SUMMAR Y 7
●

●

●

The success of ERDA’s conservation efforts

will depend on close cooperation with

Federal, State and local agencies, industry,

and private citizens.

Nontechnological constraints could impede

the implementation of energy conservation

technologies unless addressed and removed,

ERDA’s program does not sufficiently address nontechnological aspects of energy

conservation. Social science research is

needed to:

1. Identify and overcome institutional

obstacles to implementation.

2. Evaluate the economic (e.g., labor, capital,

growth) implications of alternative conservation programs,

3, Analyze the appropriate roles of Federal

and State regulatory agencies with respect

to energy use,

4. Assist in continuing cost/benefit analyses

of conservation options and research

programs.

The new high price of energy has made our

present use of energy wasteful and uneconomic.

There are wide variations in the possible savings

among energy use sectors but a major efficiency

of energy use over pre-1973 practices will be

cost-effective. The optimum rate at which the

transition to higher efficiency should be made

depends upon market factors, such as th e

inventory of existing stock, and upon nonmarket

factors, such as the national policy decision to cut

oil imports. There are, therefore, two reasons for

active Federal energy conservation efforts: 1) to

assist governmental, corporate, and individual

energy consumers to become more energyefficient in order to ease the economic hardship

caused by higher prices; and 2) to accelerate this

transition in accordance with the national policy

of reduced dependence on imported oil. Although

ERDA was assigned broad responsibilities for

energy conservation R, D&D, and has been given

strong congressional encouragement, the

program as presently conceived is very limited

compared to the productive opportunities in the

near-term and major savings in the mid- and

long-term. Only about two percent of the revised

fiscal year 1976 budget sent to the Congress can

properly be termed applicable to “conservation”

activity; moreover, only about one percent is

8 EXECUTIVE SUMMAR Y

actually designated for end-use conservation

programs.

ERDA’s Plan contains a very broad interpretation of conservation, It includes increased enduse efficiency through use of technology and

elimination of waste; fuel shifts away from

petroleum; energy storage; and even capital

savings in various parts of the supply/demand

system, However important all these actions may

be, there is danger that such a broad operational

definition can shift the emphasis on conservation

from the consumer to the suppliers and distributors of energy. For example, inclusion of

electric power transmission and distribution and

energy storage as conservation programs could

mask a low level of commitment to important

programs directed at increasing efficiency of

energy utilization.

Federal investments in various supply and

conservation efforts should be weighted in terms

of their cost-effectiveness, taking environmental

consequences as well as other nonmarket considerations into account. The amount spent to

save a barrel of oil, or its energy equivalent, is

directly comparable to the money spent on new

domestic supplies to produce an additional barrel

of oil or its energy equivalent. The ERDA Plan

does not appear to employ this type of assessment in determining priorities, although there are

many conservation opportunities that appear

more attractive than many new supply options

on this cost basis, When environmental costs are

included, the advantage to conservation efforts

usually becomes even more impressive. ERDA

should incorporate this kind of trade-off analysis

into its program decision structure more explicitly.

The implementation of energy conservation

measures can be significantly influenced, not

only by technical problems but by nontechnical

difficulties as well. Impediments to the adoption

of sound energy conservation practices include

government regulations, building codes, lack of

consumer understanding of life cycle costs,

industry and consumer resistance to change, and

capital availability, Development of technologies

without regard for the institutional constraints,

social impacts, and the imperfect workings of

the market is unlikely to achieve optimal energy

conservation results,

ERDA’s separation of programs by end-use

sector appropriately mingles research, development, and implementation. This problem-solving

approach to conservation should prove very
productive in coordinating the Federal program,

assuring comprehensiveness and relevancy in

research, promoting rapid information transfer,

and facilitating effective implementation.

Environment and Health Programs

●

●

●

●

●

●

Better integration of means to minimize

environmental and health impacts should be

integrated into the ERDA development

programs.

ERDA should analyze the environmental

impact of the vastly enlarged use of fossil

fuels in conventional technology envisioned

in the Plan.

ERDA should address the environmental and

health problems that may be created by the

emerging synthetic fuels technologies.

Regulations concerning environmental quality should be analyzed as they often impose

energy penalties.

ERDA should examine the global environmental consequences of new energy

technologies.

ERDA should take a more active role in

assessing its programs in the context of

energy and non-energy demands for water.

The ERDA Program document contains an

extensive description of proposed activity in

environmental, health, social, and institutional

topics. Almost all of this description occurs in the

sections of the report devoted to Environment

and Safety and Systems Analysis. Discussion of

these topics in the sections of the report devoted

to technology development generally consisted of

one-line statements recognizing the existence of a

potential constraint. There was no reference in

the schedules appended to technology oriented

sections to the environmental or health research

programs. Interviews with ERDA personnel

yield the strong impression that the stated

objective of integrating the environmental control research into the technology development

was at present illusory. Given that environmental, health, social, and institutional problems are

likely to impose serious constraints on implementation of ERDA’s programs, much better

integration of these concerns into the pursuit of

the technology programs themselves is indicated.

At this time, the adequacy of air quality

regulations concerning sulfur dioxide is being

questioned. The complex interaction between

sulfur oxides and other constituents in the

atmosphere, rational and noninduced, is the

subject of extensive study by EPA, ERDA, and

others. The outcome in terms of sulfate standards

for protection of public health and environmental

quality is unknown, but could have a serious

constraining effect on achievement of ERDA’s

Plan, which relies heavily on coal in the near and

intermediate term. The health programs relating

to potential new chemical intrusions from coal

conversion and oil-shale programs, some of

which may be potent carcinogens should be

considered. In the general area of health studies,

there is little evidence of a serious effort to define

the relative priority between programs. There are

also indications that ERDA is involved in

programs which do not relate to its energy

mission and needs to reassess the usefulness of

other programs in terms of the validity of the

results these programs will yield.

Existing regulations concerning air and water

quality and some which will become effective in

the next few years may impose significant energy

costs or environmental impacts in categories

which are not encompassed by the regulating

agency. There has been no systems evaluation of

the interact ions between environment al

regulations and their total effect. This is a valid

and important area of inquiry for ERDA which

has not been addressed.

There is a significant risk inherent in the

totality of ERDA’s mission. The impact on

climatic balance of massive increases in heat

rejection to the atmosphere by man is unknown

but potentially catastrophic. There is an urgent

need for careful analysis by ERDA of global

meteorological consequences of the atmospheric

impacts (heat, C02, particulate matter, etc. ) from

the processes it proceeds to develop.

The problems of water availability for coal

conversion to liquid or gaseous fuels, shale oil

retorting, electrical generation by any means and

other energy oriented activities will have to

compete with other uses for water in water-short

areas, These same activities and associated

mining and waste management operations may

impact water quality in the same areas, thus

potentially affecting agriculture and domestic

and municipal water supplies. There are serious

questions concerning the impact on air quality of

the addition of new energy facilities to the

EXECUTIVE SUMMARY 9
existing field of air pollution sources. These regional and site-specific component in ERDA’s

problems indicate an urgent need for a strong systems modeling and data acquisition program.

10 EXECUTIVE SUMMARY
Chapter I

Overview Issue Papers

11
MEMBERS

Dr. Paul Craig, Chairman, University of California

A. OVERVIEW TASK GROUP

Mrs. Elizabeth Mann Borghese, Center for the

Study of Democratic Institutions

Prof. John H. Gibbons, University of Tennessee

Dr. Jerry Grey, Independent Consultant

Prof. Stanford S. Penner, University of California at San Diego

Prof. David J. Rose, Massachusetts Institute of

Technology

Dr. Robert Socolow, Princeton University

Dr. Alvin M. Weinberg, Institute for Energy

Analysis

Prof. Wendall H. Wiser, University of Utah

CONTRIBUTORS

Dr. George Argyropoulos, Massachusetts Institute of Technology

Prof. Michael D. Devine, University of Oklahoma

Prof. John H. Vanston, University of Texas at

Austin

Prof. David White, Massachusetts Institute of

Technology

Prof. Irvin L. White, University of Oklahoma

Prof. Herbert H. Woodson, University of Texas at

Austin

12 CHAPTER I
B. OVERVIEW TASK GROUP ISSUES LIST

1.

2.

3.

4.

5.

6.

7.

The Nature of the National Energy

Policy Goals . . . . . . . . . . . . . . . . . . . 19

The national energy policy goals stated by

ERDA deserve review and clarification.

Overall Level of the Federal Budget

for Energy R, D&D . . . . . . . . . . . . . 21

The overall level of the Federal budget for

energy R. D&D [about $2.3 billion for FY 76)

a p pears to be an o u t growth of decisions made

prior to the Arab oil embargo and should be

re-examine d

The International Aspects of ERDA’s

Plans and Programs . . . . . . . . . . . 23

‘1’he ERDA Plan does not place sufficient

emphasis on international considerations.

Coordination of Programs Between

ERDA and Other Federal

Agencies . . . . . . . . . . . . . . . . . . . . . . 25

ERDA’s plans for coordination with other

Federal energy agencies need to be more fully

developed ,

Cooperation Between ERDA and

State and Local Governments . . 27

Success of the ERDA program will depend

largely on close and continuous coordination

with State and local governments, The ERDA

Plan inc1udes neither procedures no r

mechanisms for accomplishing this coordination.

Near-Term Energy Problems . . . 2 9

The ERDA Plan gives very little attention to

near-term (to 1985) energy problems.

Socioeconomic Research . . . . . . . 30

ERDA’s program of R, D&D does not give

enough attention to socioeconomic analysis

and research in addressing the Nation’s

energy problems.

8.

9.

10.

11.

12.

13.

14.

Balance Between Supply Versus

Demand R, D&D . . . . . . . . . . . . . . . 31

ERDA’s program overemphasizes energy

supply technologies relative to energy consumpt ion.

ERDA’s Basic Research Program 33

The goals of ERDA’s basic research program

have not yet been establishcd, Considerable

effort is required t o organize a perti

program of basic research.

Commercialization . . . . . . . . . . . . .

The development of effective commercia

tion policies and procedures is not adeql

ly addressed in the ERDA Plan.

Resource Constraints . . . . . . . . . .

Careful at tent ion should be given to assess -

ing energy resources, since the}’ represent

assumptions basic to the ERDA Plan.

Physical and Societal Constraints 38

Numerous physical, institutional, and social

constraints may limit the orderly development and implement at ion of thc ERDA

energy plan.

Overemphasis on Electrification 39

The ERDA Plan appears to lean toward an

overemphasis on electrification. This lack o f

diversity, especially in the long-term “inexhaustible” sources, may not be t h e most

effective approach.

Methodology and Assumptions Used

in Developing the R, D&D Plan . 41

The ERDA Plan relies on a methodology and

as sump t ions for developing R, D&D

priorities that appear to bias the priorities

toward high technology and capitalintensive? energy supply alternatives and

away from end-u se technologies.

CHAPTER I 13
15. ERDA Management Policy . . . . . 43 16. Net Energy Analysis . . . . . . . . . . . 45

ERDA’s present management policies could Net energy analysis can aid in decisions as to

hinder achievement of its goals. which existing and developing technologies

deserve emphasis, but this methodology

must be employed with caution.

14 CHAPTER I
C. INTRODUCTION

Plans and Programs

Ideally, energy R&D programs should be

derived from R&D plans which, in turn, should be

derived from a national energy policy. National

energy policy, for its part, should flow logically

from a set of broad national goals agreed upon b y

both the Administration and the Congress. In

practice the formulation of energy programs does

not operate in such a tidy, rational way, It is

reasonable, however, to expect that energy R&D

programs be consistent, or at least compatible,

with R&D planning and with energy policy in

general. Thus, potential effectiveness, rather

than perfection, has served as the standard for

this review of the ERDA Plan, Using this

standard, the OTA analysis produced the following consensus about the ERDA Plan an d

Program:

● Volume I of the ERDA Plan represents a

serious and praiseworthy initial effort to

formulate a procedure whereby energy R&D

can contribute to the realization of the five

goals postulated as guidelines for national

energy policy.

● Volume 11 of the ERDA Plan and Program is

markedly inferior to volume I and does not

always present a convincing programmatic

approach to realizing the objectives set forth

in volume I.

The lack of coordination between the plan of

volume I and the program of volume II was cited

repeatedly by ERDA administrators during the

oral presentations at the OTA review, The Plan

was prepared in the spring of 1975, in the context

of ERDA’s still-evolving definition of its role and

mission. Because of the short time available to

ERDA personnel for the preparation of the Plan,

the program plans of volume II appear to have

been compiled from those of severa l

organizations folded into ERDA. Therefore, they

do not properly reflect the policy goals set forth

in volume 1. The effectiveness with which ERDA

will relate its programs to its plans, and its plans

to national goals should improve with the plans

and programs that will evolve in the coming

years.

A major objection to the Plan is its reliance on a

very limited range of scenarios. There is no

investigation of the effects of price on the demand

for energy services, If the international oil price

or policy affecting low cost supplies change

drastically, clearly the demand for expensive

new low cost supplies change drastically, clearly

the demand for expensive new energ y

technologies will also change. A high priority for

ERDA in future versions of the Plan should be to

link energy demand to economics,

Goals

The ERDA Plan addresses 5 national policy

goals. Realization of these goals requires that

inherently difficult choices be made between

international cooperation and domestic selfsufficiency as well as between environmental

versus energy emphasis, These conflicts appear

to have led ERDA to a very narrow, technological

interpretation of the 5 goals. For example, the

first goal is apparently the most important as the

major thrust of the Plan is to minimize reliance on

imported oil, This is to be done by vastly

increasing domestic supplies. An alternative

approach would be to store sufficient supplies of

petroleum to make an embargo ineffective and

striving to reduce our growing dependence on

energy. In addition, the ERDA Plan places little

emphasis on programs addressing regional

issues; it also neglects to identify programs

which might facilitate the implementation of

technologies, such as commercialization

strategies, end-use conservation technologies,

macrosystem modeling, and international institutional development. Each of these subjects

falls within the purview of the 5 goals and the

ERDA enabling legislation. Whether or not ERDA

assumes responsibility for these broader R, D&D

issues, there can be no question as to their

importance to the evolution of a national energy

posture, Solutions to our national energy concerns require that those energy-related programs

reemphasized by ERDA be vigorously pursued

CHAPTER I 15
somewhere in the Government. Most are not, at

present, receiving priority attention anywhere.

“Is ERDA’s role to develop technologies or to

solve problems?” was a basic question asked by

the OTA task groups. In general, it was agreed

that the ERDA programs are too narrowly

defined and that ERDA appears primarily

concerned with developing technological options

rather than exploring solutions to energ y

problems. This hardware orientation has the

following consequences:

International cooperation receives minor

emphasis as compared to domestic selfsufficiency.

Environmental concerns receive minor

emphasis as compared to energy development,

Elaborate technology is favored over simpler

technology,

Supply technology is favored over end-use

technology.

Technical R, D&D is favored over nontechnical R, D&D.

Demonstration projects in partnership with

energy suppliers are favored over projects

with energy consumers.

Mid- and long-term results are favored over

short-term results, except for certain energy

conservation programs.

Electrification options are favored over other

options.

As we move to diversify energy supplies and

increase efficiency, a number of elaborat e

technologies will be developed; these will result

in large-scale projects such as breeder reactors

and central station solar electric facilities.

However, many of our most promising opportunities are smaller in scale. Examples are solar

water heaters, electricity peak shaving, and

modified transportation systems. Large and

sophisticated technologies have inherent appeal,

especially to scientists and engineers, while “low

technology” opportunities may seem mundane.

ERDA should therefore maintain a program focus

which continually measures relative economic

and energy benefits, not merely technological

accomplishment, as its objective, Success in

developing technological capabilities alone is not

likely to solve energy problems.

In order to avoid the bottlenecks that will delay

or prevent solutions to energy problems, especially in the short-term, a variety of actions

could be considered:

The scope of ERDA’s mission could be

expanded and clarified, particularly in the

areas of demonstration and commercialization, Central to this is a clarification of

ERDA’s responsibilities vis-a-vis the Federal

Energy Administration, the Environmental

Protection Agency, the Nuclear Regulatory

Commission, and the Department of the

Interior,

Widespread utilization of newly developed

technologies depends on a complex process

involving the removal of constraints on

commercialization, industrial incentives,

and technology transfer, This process requires further delineation than exists in the

present ERDA Plan.

Programs associated with the identification

and evaluation of environmental, ins tit u t ion a 1, and societal constraints

associated wit h alternativ e energ y

technologies should receive immediate and

substantial attention,

Programs directed toward increasing the

efficiency of energy use should be accorded

the highest priority.

New efforts to assess global issue s

associated with energy, such as climate

modification, international energy supply

and demand estimates, the role of multinational energy corporations, and the link

with ocean resources, should be instituted.

The ERDA management approach, including

the management of National and Federal

laboratories and the role of contract R, D&D

should be reevaluated.

Closer working relationships with State and

local governments, including their participation in ERDA program planning, should be

established.

The potential national benefit from higher

ERDA budget levels should be examined. The

present ERDA budget derives from preembargo assumptions which are highl y

questionable at the present time.

16 CHAPTER I
Institutional Issues

The OTA review of ERDA’s Plan and Program

identified the problem of divided or uncertain

jurisdiction as a major concern. For example,

responsibility for developing technologies to

remove sulfur from coal is divided among

Interior, EPA, and ERDA. Similarly, coal mining

technologies are the responsibility of the Department of the Interior, while burning and processing technologies are ERDA’s responsibility. This

situation of split responsibilities inhibits

development of a comprehensive and balanced R,

D&D program for coal.

Uncertainty concerning the roles of ERDA and

FEA in providing incentives for commercialization of new technologies poses problems. Incentives may range from provision of capital for

commercial demonstration plants to loa n

guarantees to insuring floor prices for fuels

produced from pioneer commercial plants. If the

various types of incentives are divided between

ERDA and FEA, orchestration of the most

appropriate incentive package for commercialization of a given technology will be difficult.

This issue might warrant specific attention as the

Congress considers extension of the FEA enabling legislation. Moreover, institutional issues

permeate the whole question of the separation of

energy R, D&D from the broader responsibility

for energy policy which is presently divided

among numerous agencies, Although the Congress has designated ERDA as the lead energy R,

D&D agency, the ERDA Plan indicates a timidity

as to accepting this role. It is not clear that the

ERDA Plan and Program provide for effective

coordination with other Federal agencies. ERDA

could be more assertive in assuming the lead role,

in order to assure that the R, D&D needed to

achieve the Nation’s energy goals and objectives

is undertaken.

Marketing and Commercialization

Because of the long lead times and high capital

costs involved, special attention should be given

to commercialization of new technologies. The

energy market is complex, ranging from the

individual consumer to large industrial facilities.

The market for energy R, D&D is different from

that supported by DOD and NASA, both of which

provided the markets for their own R, D&D.

Similarly, the R, D&D of the AEC was aimed at a

specific market consisting of the large-scale

electric power industry.

The broad responsibilities inherent in ERDA’s

programs call for an approach that involves both

producers and consumers from the initiation of

program planning. R, D&D should reflect ultimate consumer preference and conditions of use

(e.g., convenience, acceptable environmental

impacts). The phasing from R, D&D to commercialization (usually by private enterprise) must

take such issues as proprietary rights, patent

rights, and licensing into careful consideration.

Resource Constraints

The various energy technologies addressed in

the ERDA Plan frequently draw upon resources

which are also in demand for nonenergy uses. It

appears necessary that these multiple use factors

receive greater priority than they were accorded

in the Plan and Program. Although the ERDA

Program emphasizes fuel resource constraints,

there are actually two categories of resources

whose availability could constrain ERDA

program developments: physical and societal,

The physical resources include water, land, raw

materials, equipment, and atmosphere. Of these,

water appears to pose the most urgent physical

problem, particularly in the western United

States. Societal factors which may constrain

energy developments include manpower constraints, regional impacts, capital and financing

availability y, and information collection, processing and dissemination.

Supply Versus Conservation Balance

Lack of concern with end-use efficiencies

developed during an era of decreasing energy

prices. At current prices, it pays to shift to a

system of much more efficient energy use.

Although this will require years to achieve, it

will have the ultimate effect of greatly stretching

out energy resources. Hence, energy conservat ion will not only help “buy time” in the near-term

(the ERDA emphasis) but also dramatically

reduce the rate at which resources are consumed

in the long-term future. Furthermore, improved

energy efficiency has distinct and permanent

environmental benefits.

CHAPTER I 17
Unlike supply expansion, some conservation

improvements can be made quickly and with

minimum investment. However, many of the

achievable and cost-effective improvements will

require R, D&D, Unfortunately, the ERDA Plan

for conservation focuses on the near-term and

thus neglects its long-term importance, It implies

an emphasis on conservation (principally higher

efficiency of use) only until new supplies come on

line, thus ignoring the potential of a long-term

efficiency improvement program. Funds committed to conservation, as opposed to supply

increase, are out of balance in terms of (a) costeffectiveness; (b) time until payoff; (c) environmental benefits versus cost; and (d) demand

on resources. ERDA also pays insufficient

attention to research related to implementing

known energy conservation technologies.

Global Issues

One of the five national policy goals listed in

ERDA’s Plan is “to contribute to world stability

through cooperative international efforts in the

energy sphere.” Clearly ERDA has to take the

world community into account if its Plan and

Program are to succeed in the long run. International cooperation is essential in the short- and

medium-term to cope with the environmental

effects of energy technologies such as global

pollution of air and water; to address security

issues arising from the management of nuclear

materials and wastes; and to manage resources,

such as the oceans, that are the common heritage

of mankind. Finally, cooperative efforts in

research programs can take advantage of substantial advances in certain energy technologies

achieved in other countries.

Basic Research

ERDA’s inherited

need reorientation

programs in

in order to

basic research

conform more

closely with the ERDA Plan. Such reorientation

should not damage the vitality of existing

programs such as particle physics. Rather, other

basic energy research needs should be defined.

Specific attention should be focused on the

appropriate distribution between ERDA inhouse (i.e., National laboratory) and contracted

research; strengthening of social and behavioral

research programs; and establishment of an

effective role for universities.

18 CHAPTER I

Relations to State and Local

Governments

The ERDA Plan neither describes mechanisms

for incorporating state and local inputs into

program development nor shows any indication

that these groups were consulted during the

preparation of the Plan; these omissions suggest

that State participation in energy programs may

be restricted primarily to the implementation

phases. The ERDA Office of Industry and State

and Local Government Relations is much too

small to ensure effective coordination between

the Administration and the various State and

local governments,

ERDA and many of the State and loca l

governments differ in their perceptions of energy

problems and in approaches to solutions. The

State and local governments tend to attach more

importance to conservation efforts than ERDA;

they are more concerned with the potential

impact of energy R, D&D projects on local

communities; and they have greater concern for

states-rights issues, including the allocation of

water rights and the regulation of land use, The

smaller jurisdictions could also benefit from the

broader viewpoint that ERDA can provide.

Failure of ERDA to adequately consider State

and local viewpoints and to include thes e

agencies in early program planning will result in

unnecessary conflict and costly delays in the

implementation phases of these programs. More

importantly, such failure will limit the Administration’s ability to take advantage of these

groups’ experiences and capabilities in the areas

of land and water rights management, taxing and

regulatory incentives, manpower training,

mobilization of public support, and many other

areas vital to program success.

ERDA Budget

Finally, the ERDA budget is largely an outgrowth of decisions made in 1973, before the

OPEC embargo led the United States t o

emphasize self-sufficiency. This budget, about

$10-15 billion over a 5-year period, deserves reexamination in the light of the much greater

urgency now accorded the energy problem.

ERDA could usefully develop alternative 5-year

budgets at several specific levels (e.g., $20

billion, $30 billion and so forth) as a device to

stimulate new thinking and to assist ERDA in

breaking out of established patterns of designing

R&D programs,
D. OVERVIEW ISSUE PAPERS

1. The Nature of the National Energy Policy Goals

The national

clarification.

ISSUE

energy policy goals stated by ERDA deserve review and

1.

2.

3.

ERDA’s R, D&D plan, as outlined in ERDA-48, volume I, states five national

energy goals to which energy R, D&D should contribute. Heavy emphasis on selfsufficiency as opposed to environmental concerns will have major consequences in

the quality of life and economic well-being of the American people. Similarly,

emphasizing self-sufficiency rather than international cooperation will have major

impacts on our foreign policy. Emphasis among these goals warrants congressional

review. Unless there is agreement between the Administration and the Congress on

the priorities given different national energy goals, ERDA’s development of an R,

D&D program is made more difficult.

A congressional review of the priorities assigned to the five goals takes on

particular importance because energy is so central to other policy areas. Other

Government agencies will be planning programs ranging from foreign trade to

welfare based on their perceptions of these priorities. For these reasons maximum

clarificat ion of priorities will be beneficial.

QUESTIONS

How were the goals determined? interpretation of “adequate” have a signifiDid representatives of agencies responsible

for economics, international affairs, the

cant effect on the phasing, size, and nature of

an energy R, D&D effort?

environment, and natural resources have an

opportunity to participate in the formulation 4. How does ERDA interpret Goal 1 (in -

of the goals? dependence)? How will ERDA achieve a

What is meant by “adequate” employment balance between Goals 1 and 5 (environopportunities (Goal 2)? Will not a particular mental quality)?

BACKGROUND

The possible conflicts that can flow from the illustrated by looking at how each goal appears to

emphasis ERDA gives the various goals can be be pursued. Taking each goal in order:

CHAPTER I 19
●

●

20

To maintain the security and policy independence of the Nation.

ERDA, especially in the system s

methodology of ERDA-48, volume I, reduces

this goal to a narrow concern for eliminating

oil imports, which seriously distorts the

meaning of policy independence. ERDA could

have read this goal as a mandate to explore

with a far greater sense of urgency any of the

following, for example:

—

—

—

—

—

New international institutions for managing fissionable materials and fission

products

The role of the multinational corporations

in global energy policy and the impacts of

actual and potential United States,

foreign, and international regulations on

their conduct

The potential impact of international

political developments on energy policies

The potential role of the United States, as

an exporte r of fuels (e.g., coal and

uranium) and energy technologies (e.g.,

solar heating) and cooling synthetic fuel

processes

The potential for cartelization of critical

materials other than oil, notably uranium.

To maintain a strong and healthy economy,

providing adequate employment opportunities, and allowing the fulfillment of

economic aspirations [especially in the less

affluent parts of the population).

ERDA nowhere interprets this goal explicitly, The goal statement perhaps does not

address a critical question concerning energy

and society —the degree of coupling of the

maintenance of “a strong and healthy

economy” with the perpetuation of increases

in the quantity of physical resources used in

the Nation’s economy each year. ERDA’s

scenarios (including its conservatio n

scenarios) postulate exponential increase in

the use of these resources, continuing indefinitely. ERDA could have seized this goal

as a mandate to launch a vigorou s

socioeconomic research program to gain

some understanding of the relationship of

economic growth, energy, and the quality of

life, and to shed light on the potential

viability of low-growth societies.

CHAPTER I

To provide for future needs so that lifestyles

remain a matter of choice and are not limited

by the unavailability of energy.

From available evidence, ERDA uses this

goal as a rationale for emphasizing the period

beyond the next decade and concentrating on

energy supply rather than energy demand.

This goal could readily have been interpreted

by ERDA as a mandate to plunge into the

short-term problems, where life style s

throughout the country are being affected by

energy shortages and rapidly rising prices.

This goal could also have been interpreted by

ERDA as a mandate to proceed rapidly to

expand its R, D&D program in order to

improve the efficiency by which energy is

used, since problems with the availability of

energy are as much alleviated by reductions

in demand as by expansions in supply.

Indeed, if supply and demand are no t

examined evenhandedly, there is a serious

possibility of the misapplication of the

Federal R, D&D dollar. Even if an “infinite

energy source” were found, the extravagant

use of energy to provide and convert

materials would create material shortages

and environmental problems.

To contribute to world stability through

cooperative international efforts in the

energy sphere.

ERDA appears to interpret this goa l

narrowly as bilateral and multilatera l

technical cooperation, such as the research

program on magnetohydrodynamics being

conducted jointly with the Soviet Union.

This goal could have been interpreted as a

mandate to launch far more vigorou s

research efforts to explore, for example:

— The adverse global environmental effects

of energy generating technologies

— The management of the energy supply

technologies which have significant impacts on the ocean (e.g., sea thermal

gradient technologies, oil tankers, and

offshore nuclear plants)

— The joint creation of short- and long-term

targets for energy conservation among the

major energy consumer nations

— The potentiality of one or more new

international institutes to examine energy

problems globally
— Alternative approaches to the resolution

of the growing energy problems of the less

developed nations of the world

— The worldwide economic effects of capital

shifts due to petroleum purchases by this

country.

● To protect and improve the Nation’s environmental quality by assuring that the preservation of land, water, and air resources is given

high priority.

This goal is apparently interpreted by

ERDA as a mandate to extend prior research

programs on the generation, transport, and

health effects of nuclear radiation so as to

include the physical environmental impacts

associated with fossil and other energy

technologies. This goal could have been

interpreted as a mandate to cast the net wider

still and to grapple with the social concern

and community resistance (expressed

primarily at the local, State and regional

levels) associated with virtually every

available energy supply technology; that is, a

resistance which focuses on adverse impacts

to environmental quality, the chance of

damaging accidents, and the possibility that

the technologies may hold unanticipated, and

unwelcome, surprises. These issues ar e

inseparable from the physical environmental

impacts, as far as energy policy is concerned,

It would be unreasonable to expect ERDA to

have developed responses along very many of

these lines in the short time since its creation. It is

reasonable, however, to call attention to the

apparent reluctance of ERDA to contemplate any

broader construction of the five national goals

such as those that are illustrated here. Of course,

it is quite legitimate that ERDA undertake

research in all those energy-related areas discussed here (and others not discussed here),

provided that ERDA assures that the areas are

explored elsewhere with adequate intensity.

2. Overall Level of the Federal Budget for Energy R, D&D

ISSUE

The overall level of the Federal budget for energy R, D&D (about $2.3 billion for

FY 76) appears to be an outgrowth of decisions made prior to the Arab oil embargo,

and should be re-examined.

SUMMARY

In theory, the overall Federal budget for energy R, D&D is established by

developing a budget need for each component and then summing the components.

In practice, however, the development of budgets for each component and the

choices among components are greatly influenced by what is perceived to be the

limit on the overall scale of the budget. The FY 76 Federal budget for energy R, D&D

of $2.3 billion is largely influenced by decisions taken in 1973 before the Arab oil

embargo had committed the United States to a policy of energy independence.

ERDA should prepare R, D&D programs for higher overall budget levels (e.g., $20

or $30 billion for the 5 years beginning in FY 76).

QUESTIONS

1. How would ERDA’s programs change with a 2. How will the inflation rate be factored into

5-year budget of $2O or $30 billion? the development of future budgets?

CHAPTER I 21

60-411 0 -75 - 3
BACKGROUND

The total energy research and development

budget for ERDA in FY 76 is approximately $1.8

billion. To this must be added the energy R&D

budgets in other Federal agencies, $540 million,

and about $884 million spent in private industry.

The total national energy R&D budget is about

$3. I billion. It is estimated that the runout costs

for the Federal portion of the energy R&D budget

amount to about $15 billion for the next 5 years.

The overall Federal energy budget is

presumably developed by summing con -

tributions of the various components of the

program. However, the general scale of the

program is inevitably influenced by the implicit

and explicit guidelines as to the size of the overall

budget for energy R, D&D. Two such guidelines

have had prime influence in scaling our present

Federal energy, R, D&D program. First, the

December 1973 Dixy Lee Ray Report to the

President on energy R, D&D, largely prepared

before the oil embargo, was geared to an $ 1 1

billion, 5-year program of energy R, D&D. The

other guideline is supplied by the Federal NonNuclear Energy R&D Act which specified that the

Federal investment “. . may reach or exceed $2O

billion over the next decade.” (Public Law 93-577,

Section 2(c), 93d Cong., S. 1283, December 31,

1974).

The proposed Federal energy R&D budget is

now within guidelines set forth in the Dixy Lee

Ray Report to the President. However, it is by no

means clear that this budgetary framework is

adequate for the present situation.

22 CHAPTER I
3. The International Aspects of ERDA’s Plans and

Programs

ISSUE

The ERDA Plan does not place sufficient emphasis on

international considerations.

SUMMARY

ERDA’s mission extends well beyond America’s national borders. In the

interdependent world of the 1970’s and 1980’s, energy independence, economic

well-being and environmental quality (the essence of the five national energy

goals) cannot be achieved without considering international factors. “Project

Independence” with its go-it-alone implications for R, D&D (let alone for national

energy policy in general) may well be inconsistent with requirements for

developing new energy sources in cooperation or coordination with other

countries, particularly in undertaking joint exploration and exploitation of

nonnational resources (e. g., the oceans). Moreover, the current proliferation of

nuclear facilities in the face of the Nonproliferation Treaty poses difficult technical

as well as institutional problems of monitoring, inventories, and control. ERDA

identifies these considerations in its Plan (volume I,) but barely recognizes them in

its Programs (volume II).

QUESTIONS

1. How does ERDA’s new Assistant Ad - 3. What is the division of

ministrator for International Affairs plan to international energy

approach such issues a s energy in - Department of State

dependence, the need for international coor- national staff?

responsibility in the

area between th e

and ERDA’s interdination of energy, economic and environ- 4. What plans or programs does ERDA con- mental policy , t h e exploitation o f

template for nonnational energy sources, and the new international research and

development in the control and disposal of challenges to nonnuclear proliferation? radioactive waste?

2. What has been the role of ERDA’s overseas

staff? Why should such a staff be concentrated in Brussels? Should not ERDA be in

close liaison with the International Atomic

Energy Agency, the International Institute

for Applied Systems Analysis in Vienna, and

the International Energy Agency in Paris?

BACKGROUND

ERDA must adjust to a rapidly changing world. to fall tidily into “national” or “international”

Many problems that, until very recently, seemed categories now spill over, one into the other. A

CHAPTER I 23
national energy policy, like a national food policy

or a national growth policy, may have profound

implications for world order.

But ERDA’s problems in this regard are even

more acute than those of many other agencies of

the Government. “Energy independence,” by

definition, assumes an international posture that

may be incompatible not only with other important energy objectives, but also with critical

nonenergy national goals and America’s international role. Moreover, the quest (and the

competition ) for a nuclear solution to the

impending shortage of fossil fuels poses some

potential dangers that dwarf most other international problems.

ERDA’s predecessor agencies

circumscribed responsibility and

world. This is a legacy that ERDA

had only a

view of the

must quickly

strive to remedy. Its problems in this regard may

be complicated because of long established

responsibilities for international affairs in the

executive branch. These constraints are mirrored

in the current R&D plan and program.

The appointment of a new Assistant Administrator for International Programs provides

ERDA with a timely opportunity to define its role

in the international energy area. Until this new

official has had a chance to explore and resolve a

host of difficult institutional and substantive

questions, it would be premature for ERDA to

launch new major research initiatives in the

international area. Nonetheless, the Congress

may wish to express its interests and concerns

with respect to the interpretation of ERDA’s

responsibilities for the international energy

issue.

24 CHAPTER I
4. Coordination of Programs Between ERDA and Other

Federal Agencies

ISSUE

ERDA’s plans for coordination with other Federal energy agencies need to be

more fully developed.

SUMMARY

ERDA has been mandated (Public Law 93-577) as the primary agency in energy

R, D&D with responsibility to integrate and coordinate national efforts. It is not

evident in ERDA’s plans whether a comprehensive framework is being established

to permit ERDA to perform this role adequately. Two types of multiagency

research efforts exist where coordination is required. In the first, several agencies

undertake different R&D programs aimed at one energy technology. An example

are the three different approaches to coal cleanup by ERDA, Environmental

Protection Agency, and Department of the Interior. Without a formal structure to

bring together these diverse efforts, much waste can ensue with no assurance that

the technology will be effectively developed. In the second case, different agencies

are concerned with separate elements, such as regulatory, economic, and

technological, of a given energy technology. The lack of effective coordination

could lead to development of policy which could hinder introduction of

technologies developed, for example, by ERDA.

QUESTIONS

1. How broadly does ERDA view its role in Z . What specifi c management mechanisms,

energy R, D&D? Does ERDA have the techniques, or coordination controls will

responsibility for ensuring that all research ERDA use to integrate and coordinate its

needed to help solve the Nation’s energy activities with other affected Federal agenproblems (including those that are non- cies?

technological) is receiving proper attention

in either the Federal Government, local or

State governments, or the private sector?

BACKGROUND

Each task group notes areas where the coor- . In the 1972 Energy Reorganization Act, the

dination between ERDA and other Federal Nuclear Regulatory Commission is required

agencies is required, and the reader is referred

those reports for more detailed descriptions

problem areas, They can be characterized

brief, however, by the following examples:

to to report to-the Congress on the clustering of

of nuclear reactors and supporting facilities in

in “nuclear parks.” However, this topic may be

vital to the entire future of nuclear energy,

CHAPTER I 25
and the ERDA Plan does not indicate how

heavily ERDA will be involved with the

Nuclear Regulatory Commission in addressing this topic.

● In the energy conservation area, some means

of formal management control must be

developed to assure coordination of related

programs in various Federal agencies and

departments (e.g., Federal Energy Adminis t ration, Environmental Protect ion

Agency, Federal Power Commission, Department of Transportation, Department of

Commerce, Department of Housing and

Urban Development, and U.S. Department of

Agriculture) that impact on energy demand.

Of critical concern is the relationship

between ERDA and the Federal Energy

Administration in efforts to coordinate

analysis and policy input in R, D&D program

design, The lack of a clear statement regarding the way in which the implementation

measures managed by the Federal Energy

Administration will be integrated with the

R, D&D programs of ERDA requires attent ion,

● In the fossil fuel area, a point of concern is the

division of responsibility for the clean direct

utilization of coal. Precombustion cleanup

(e.g., by magnetic desulfurization) is in the

scope of the Bureau of Mines; cleanup at the

point of combustion (e.g., by fluidized bed

combustion) falls within ERDA; postcombustion cleanup (e.g., by stack gas scrubbers)

is largely within the Environmental Protection Agency.

The ERDA Plan does not indicate how tradeoff

evaluations or a balance among these separate

responsibilities and/or alternative approaches

are to occur. The criteria used to evaluate each

option could vary with the lead agency, and there

may be no place where the entire profile of

criteria—environmental, economic, institutional,

efficiency—is applied across the board to all

options. The size and effectiveness of programs

devoted to each technology or problem element

by different agencies could be quite variable, and

there is no guarantee that the overall effort will

be properly balanced or that its components will

be compatible.

26 CHAPTER I
5. Cooperation Between ERDA and State and Local

Governments

1.

2.

3.

Success of the ERDA program will depend largely on close and continuous

coordination with State and local governments. The ERDA Plan includes neither

procedures nor mechanisms for accomplishing this coordination.

SUMMARY

State and local governments are well aware of the Nation’s energy problems

and are committed to support the programs necessary to meet these problems.

Their perception of the Nation’s energy problems, however, differ from ERDA’s.

They are more concerned with local impacts of energy projects, accord more

importance to conservation and, most important, feel strongly that they should be

included not only in the planning phases of R, D&D programs but also in the

implementation phases.

Failure of ERDA to consider properly these viewpoints may well result in

unnecessary conflict and delays in program implementation. Thus, it is important

for ERDA to expand the Office of Industry and State and Local Government

Relations and to provide the local governments regularly with information, such as

a listing of all energy R, D&D projects, clear definitions of State and local roles in

energy R, D&D, and well defined planning procedures.

QUESTIONS

What specific procedures does ERDA project

for effecting coordination of its program with

State and local governments through the R,

D&D process? What is the schedule for their

implementation?

Does ERDA plan to produce and circulate to

State and local governments a listing of

program plans to assist states in their own

planning processes? When can distribution

be expected?

Does ERDA plan

research projects

Although volume I

ERDA recognizes the

local participation in

to conduct or sponsor

concerning the potential

4.

impacts of its R, D&D program? What will be

the scope of such research; by whom will it be

conducted; and how will State and local

governments be included in research efforts?

What plans does ERDA have for supporting

and maintaining liaison with multistate

organizations interested in regional energy

planning? What are the mechanisms involved; who is responsible for coordinating

ERDA’s efforts; and what will be the scope of

the effort in terms of manpower and funds?

BACKGROUND

of ERDA-48 states that mechanisms are specified by which such input

importance of State and into program planning and execution can be

its energy programs, no accommodated.

CHAPTER I 27
The State and local governments are well

aware that the primary responsibility for initiating and carrying out large governmental

research and development programs resides with

the Federal Government and, more specifically,

with ERDA. However, they recognize that they,

too, have major contributions to make in the

translation of these programs into energyproducing facilities. The successful development and implementation of ERDA’s energy

projects will depend on appropriate wate r

allocation, on reasonable land use regulation, on

realistic local taxing policies, on successful

manpower training programs, on consistent

environmental controls, and ultimately on public

acceptance of new technologies and procedures.

All of the foregoing are areas in which State and

local governments possess valuable experience

and expertise, and their cooperation could prove

extremely useful to ERDA. However, if these

governmental bodies are to lend effective support

to the ERDA program, it is imperative that their

involvement begin in the early stages of program

development.

If, on the other hand, local governments feel

that Federal agencies are encroaching on their

responsibilities, their opposition can generate

delays or eve n cancellation of important

programs. Delays may also occur simply because

the States are not kept abreast of energy related

decisions, State and local governments may be

willing, for example, to provide roads, schools,

utilities, and other facilities to support pilot,

demonstration, or commercial plants; however,

even the planning for such facilities cannot be

started until locations and constructio n

schedules are known.

To assure maximum positive participation by

State and local governments in its energy

programs, ERDA could establish and utilize

several practical mechanisms for effective coordination. Examples of such mechanisms are:

Expanding the Office of Industry and State

and Local Government Relations to provide

an effective ERDA contact point for nonFederal government bodies, keeping them

abreast of ERDA policies and programs, and

transmitting their recommendations and

concerns to the proper ERDA office.

Establishing procedures to consider State

and local government positions in all

program planning activities; e.g., via the

National Governors’ Conference.

Keeping State and local governments informed and updated of ongoing and planned

energy R, D&D projects.

Providing for studies to analyze the potential

impacts of implementation plans for all R,

D&D projects on local areas.

Encouraging multistate cooperation in

energy program planning, by liaison with

existing regional organizations.

28 CHAPTER I
6. Near-Term Energy Problems

1.

2.

ISSUE

ERDA’s Plan gives very little attention to near-term to 1985 energy problems.

SUMMARY

The “first strategic element” in ERDA’s Plan is “to ensure adequate energy to

meet near-term needs until new energy sources can be brought on line. ” ERDA

plans to accomplish this through enhanced gas and oil recovery, direct use of coal,

more use of nuclear reactors, shifting demand away from petroleum, and increased

conservation practices. A review of ERDA’s FY 76 budget indicates, however, that

only about 5 percent is devoted to solving near-term problems, which does not

seem consistent with the stated goals, This deficiency results primarily from the

lack of emphasis given to end-use conservation, the lack of attention to

nontechnical research needs, and a tendency to focus on large-scale electric supply

technologies.

QUESTIONS

Does ERDA feel that its Plan gives sufficient identify institutional and social barriers to

attention to the energy problems faced over increasing energy supply or reducing conthe near-term (next 10 years)? sumption. Does ERDA feel it should increase

Three options for dealing with near-term its efforts in these areas?

problems not given much attention by ERDA 3. How will ERDA ensure that proper attention

are end-use energy conservation, incremen- is given to advancing the arts in “low

tal improvements i n existing supply technology” areas?

technologies, nontechnological research to

BACKGROUND

Of a

billion,

total ERDA energy budget of about $1

the only items relevant to the next decade

are energy supplies ($80 million) and end-use

conservation (less than $7 million).

ERDA’s lack of attention to near-term

problems is closely connected with two other

issues: (1) too little emphasis on end-use conservation, and (z) inadequate programs of nontechnological research aimed at understanding

institutional, social, and regulatory constraints.

Serious R, D&D in these areas could be highly

productive in the near-term. The reader is

referred to chapter V for a more detailed

discussion of these deficiencies.

Also related to the lack of priority given nearterm problems is ERDA’s tendency to focus

primarily on large-scale electric powe r

technologies. ERDA’s strength in these advanced

areas of science and technology (e.g., fusion and

breeder reactors] is good and should be extended.

However, many potential improvements relate to

simple technology, and many of these could have

near-term impacts, such as better storm windows; home furnaces; home, commercial, and

industrial lighting systems; tires; and solar water

heaters. Large and sophisticated technologies

have inherent appeal, especially to scientists and

engineers, but ERDA must be careful to give

proper priority to incremental improvements in

existing technology.

CHAPTER I 29
7. Socioeconomic Research

ISSUE

ERDA’s program of R, D&D does not give enough attention to socioeconomic

analysis and research in addressing the Nation’s energy problems.

SUMMARY

ERDA’s program plans, budgetary commitments, and professional staffing do

not give adequate attention to social, economic, environmental and behavioral

research needs, even though the legislative record makes clear that ERDA is given

responsibility beyond technological R, D&D (Public Law 93-577, section 5A). Such

research is needed for two reasons: (1) to better understand the relationships of

energy and the quality of life, and (2) to identify nontechnological constraints to

increased energy supply or reduced energy demand. The nonhardware research

programs must be integrally tied to the hardware programs and the results used

when evaluating and comparing alternative approaches to “solving the energy

problem,”

QUESTIONS

I. How much effort is being devoted by ERDA energy supply and use patterns and the

to socioeconomic research? quality of life?

2. What research program does ERDA envisage 3. How many professionals with social science

to explore the intimate connection between backgrounds are employed by ERDA?

BACKGROUND

Although legislation gives ERDA broad

responsibility beyond technological R, D&D

(Public Law 93-577, section 5A), many important

energy supply and demand issues have major

nontechnological components. In spite of this,

ERDA’s program plan, budgetary commitments

and professional staffing show little emphasis on

such problems. If ERDA intends to help solve

energy problems through R, D&D rather than

merely create new technological options relevant

to solving energy problems, it must place more

emphasis on social science and other nontechnological issues. The degree and nature of

coupling between the condition of the economy

and the quantity of resources, especially energy,

consumed each year is poorly understood, yet

crucial to national energy goals.

Each of the five task group reports explicitly

criticizes ERDA’s disproportionate emphasis on

hardware research and development. These

observations emphasize the need for a balanced

program, since nontechnical constraints are

often the most serious impediments to deployment of a technology. Specifically, the Fossil

Fuels Task Group reports that little attention is

paid to nontechnical constraints that can seriously delay or altogether block the introduction of

new technologies; the Nuclear Task Group

concludes that some of the primary obstacles to

achieving nuclear goals and objectives are

financial and institutional; the Solar Geothermal

and Advanced System Task Group reports that

major impediments to rapid utilization of

geothermal resources are legal and institutional;

3 0 CHAPTER I
the Conservation Task Group states that ERDA48 does not adequately address the social,

political, economic, and environmental problems

inherent in the application of energy conservation technologies; and the Environmental Task

Group notes that ERDA overemphasizes the

engineering aspects of environmental protection,

As one example, consider the case of offshore

oil and gas development. Currently, ERDA has no

identifiable R, D&D component associated with

this particular resource, even though most

qualified observers agree that this is one of the

few options available for increasing oil and gas

fuel supplies in the near-term (by 1985). The

hardware associated with offshore development

is commercially available, and there are probably

adequate incentives for industry to continue to

improve the technologies where possible. Thus,

there is probably no reason for ERDA t o

undertake hardware research in this field. On the

other hand, there are serious obstacles to

expanded offshore development that are related

to the environmental impacts—concern about the

effects of oil on marine ecosystems and about the

onshore socioeconomic effects. Whereas some

recent legislation has proposed that coastal

states be compensated for adverse impacts

produced by offshore development, currently

very little is known about how to measure these

adverse impacts. If offshore oil and gas development is proceeding at a significant rate, then a

greatly expanded research effort is needed to

determine its environmental, social, an d

economic impacts. This research obviously

should and could not be done by the industry—it

is the responsibility of the Federal Government.

Some research of this type is currently being

done by the Environmental Protection Agency,

National Oceanic and Atmospheric Administration and Office of Technology Assessment, but

no such programs currently exist in ERDA.

8. Balance Between Supply Versus Demand R, D&D

ERDA’s program overemphasizes energy supply technologies relative to

energy consumption.

SUMMARY

The present pattern of energy consumption was developed during an era of

constantly decreasing real energy prices, so little emphasis was placed on end-use

efficiency. Although there is some recognition of the need for improvement,

ERDA’s conservation program focuses primarily on the near-term and underestimates its long-term importance. Factors inadequately considered in the

relative emphasis on consumption and supply technologies are cost-effectiveness,

time to payoff, environmental benefits versus costs, and demand on resources.

QUESTIONS

1. How is ERDA planning to investigate the energy consumption near its current level to

relative cost-effectiveness of research on the year 2ooo while simultaneously mainenergy demand and research on energy taining a strong and healthy economy.” What

supply? R, D&D program would ERDA undertake to

2. Suppose a National goal with respect to establish whether such an energy future is

energy was specified as follows: “to maintain achievable and how it might be obtained?

CHAPTER I 31
BACKGROUND

ERDA inherited most of its programs from the

Atomic Energy Commission and from the Office

of Coal Research in the Department of the

Interior. These programs emphasized large-scale

energy supply projects in the nuclear and coal

technologies. ERDA has been mandated by the

Congress to undertake energy conservation

research, but as yet this program has not fully

developed, and it is not yet possible to state with

assurance what the payoff from this type of

research will be.

Although preliminary analyses suggest that

the payoff is potentially large, the situation is

especially complex because of the degree of

fragmentation in the end-use sectors as compared to energy supply sectors, Another complicating factor in estimating the payoff from

conservation is the division of responsibilities

between ERDA and other agencies within the

Government having responsibilities for the use

of energy, notably the Federal Energy Administration,

Historically, government involves itself in the

expansion of production and exploitation of

natural resources but avoids intruding into how

its citizens consume them. For example, the

Nat ion’s water programs have almost exclusively been designed

not to husband

to augment the supply of water,

water at the point of use. The

Helium Conservation Program never sought to

reduce the demand for helium by end-us e

conservation practices.

This involvement by the Government with

supply rather than consumption exists in the

area of regulations and subsidies as well as in

energy research. For example, the Federal

Government contemplates assuring the producer

of synthetic fuels a guaranteed price for his

product in case the price of alternative fuels

should fall, but does not consider supporting the

investment by a homeowner in upgrading the

thermal performance of his home. There is a

mandated plan for a national solar energy

laboratory to assure that new technologies to

harness solar energy are pursued vigorously

across the board, but no comparable intensity of

effort and imagination has been directed toward

creating programs to develop new end-use

technologies. Yet the two sets of research

problems involve similar areas of engineering

and physics (heat transfer, surface properties of

materials, energy storage), as well as similar

problems of information dissemination.

32 CHAPTER I
.

9. ERDA’s Basic Research Program

ISSUE

The goals of ERDA’s basic research program have not yet been established.

Considerable effort is required to organize a pertinent program of basic research.

SUMMARY

ERDA’s program for basic research has largely been inherited from the

agencies that it incorporated. It is not surprising, because of the short life of ERDA,

but nonetheless worrisome, that the basic research program in large measure does

not reflect ERDA’s R, D&D goals. In particular, a need exists to reexamine (a) the

relationship between ongoing research and ERDA’s program disciplines, (b) the

integration of basic and supporting research, (c) the distribution of emphasis on inhouse and contracted research and (d) the role of the national laboratories vis-a-vis

universities and industry. In addition, the program indicates no basic research in

the social sciences, which could have a significant impact on the institutional,

legal, and social aspects of ERDA’s program.

QUESTIONS

1.

2.

3.

4.

What are the pros and cons of a research

policy that separates basic and supporting

research?

Does ERDA intend to reorient its research

program to reduce the emphasis on nuclear

power and high-energy research relative to

materials and molecular research?

How does ERDA intend to deal with “inherited” ongoing research that seems inappropriate or redundant in terms of ERDA’s

mission?

How does ERDA envision the research role of

the national laboratories, the universities,

and industries? How does ERDA plan to

rationalize and balanc e these various

research capabilities?

5. With particular regard to the university role

in energy research, how does ERDA view the

establishment of “Centers of Excellence” for

energy-related research in the pure and

applied sciences, engineering, and interdisciplinary programs dealing with environmental, health, and policy issues?

6. What is ERDA’s view and intent with respect

to social science research, which bears on the

institutional, social, and legal aspects of its

energy program?

BACKGROUND

With regard to the issue of research disciplines, power and to high-energy physics. Despite the

ERDA’s Plan (volume II, p. 125) identifies clear value of high-energy physics, there is some

materials and molecular research as two of the question as to whether it properly belongs to

four basic (physical) research areas, but prac- ERDA rather than, say, to the National Science

tically all the budgetary emphasis in FY 76 is Foundation, since it does take by far the lion’s

devoted to research associated with nuclear share of ERDA’s basic research budget. On the

CHAPTER I 33
other hand, basic research efforts are weak or

nonexistent in nonnuclear aspects of materials,

combustion, thermodynamics, fuel chemistry,

environmental processes, nonnuclear radiation,

non fusion plasmadynamics, biomedicine,

geology, cryogenics, and other disciplines pertinent to the nonnuclear ERDA programs. Assessment of the basic research program is therefore

needed to align it more closely with the overall

energy goals stated in ERDA-48.

With regard to integrating basic and supporting research, there appears to be some indication

(ERDA-48, volume I, p. VIII-11) that the polarized research management policy characteristic of

the Atomic Energy Commission may be carried

over into ERDA. Although there are some

benefits to this policy, such an approach can tend

to isolate scientific and engineering research and,

therefore, has not produced innovative advances

in technology comparable to those, say, in the

pace-setting electronics laboratories, where a

centinuous spectrum of applied and fundamental

research has been carried out under th e

cooperative leadership of scientists an d

engineers, Experience has shown that those

charged with engineering responsibilities and

constrained by timetables are not effective

managers of basic research, whereas scientists

do not generally apply their insights to the

solution of practical problems when they are

isolated from engineers and participating in

mission-oriented problems. The optimum solut ion to innovation in advanced technology is,

therefore, cooperative leadership between scientists and engineers, rather than separation of

basic and supporting research. Such interdisciplinary teams, sharing a common sense of

responsibility, are characterized by elements:

● A larg e mea sure of 1oca1 management

autonomy.

● A definite, though broadly defined, mission.

t.

● Full-time, interdisciplinary technical and

nontechnical staff selected by management

to implement an engineering objective having

a multidisciplinary dimension,

. Adequate support that allows for program

continuity by committing a full-time staff

engaged in high-risk, high payoff technical

development.

● Intelligence and strong personal motivation

for performance at all levels of the organization.

Neither management practices nor funding

decisions by ERDA have yet given adequate

recognition to the advantages o f interdisciplinary organizations.

Aside from programs inherited from th e

National Science Foundation, the bulk of ERDA’s

research is performed at the nationa l

laboratories, As a consequence, the extensive

national research capability available at the

universities and in industry has not yet been

utilized effectively.

One mechanism for utilizing these capabilities

is the establishment of university-based centers

of excellence for energy-related research. Such

centers should often assure continuity of funding

for reasonably long periods of time (5 to 1 0

years), thereby eliminating the costly and timeconsuming necessity for annual proposa l

preparation and providing the necessary longterm support for both faculty and student

research participation, An important benefit is

thus the training of the students needed to tackle

the Nation’s energy problems. Precedents for

such university centers of excellence for energy

research are the successful Interdisciplinary

Laboratories for Materials Science, which have

been supported on a continuing basis by Atomic

Energy Commission and Advanced Research

Projects Agency at a number of major universities.

34 CHAPTER I
10. Commercialization

ISSUE

1.

2.

3.

What

been

The development of effective commercialization policies and procedures is not

adequately addressed in the ERDA Plan.

SUMMARY

program and the plans for its

considered the commercialization

specific mechanisms for assuring

ERDA-48 identified commercialization

implement at ion; however, ERDA has not

process in sufficient detail, For example,

ERDA/industry coordination are not clearly outlined, and the administration’s

relationships with international companies is not defined. Moreover, the Plan does

not address a number of very important issues; e.g., long-term support of energy

industries that can be undercut by reduction in foreign energy prices. Because of

the complexity of ERDA program markets, an effective commercialization program

is very difficult to formulate. The key questions are which commercialization

processes could be suitable for implementation and how will implemental ion be

achieved.

QUESTIONS

formal procedures and agencies have 4. How does ERDA plan to address the problem

established by ERDA to facilitate Of long-term support of neocommercial

coordination with private industry? energy industries; i.e., those which require

large capital expenditures but which can be In specific terms, how does ERDA plan to underbid by lowered imported energy costs? encourage industry to participate in the

development of new energy technologies? 5. Does ERDA plan to conduct or support any

How does ERDA plan to ensure that small research in commercialization and incentivization policy and procedures?

energy companies and energy consumers are

not excluded from its R, D&D program and

their subsequent commercial implementat ion?

BACKGROUND

ERDA’s commercialization philosophy is outlined in chapter VII, volume I, of ERDA-48. The

procedures for applying this philosophy to

specific projects (volume II) are, for the most

part, very general and, in some cases, inconsistent from one program area to another, Clearly,

the Plan needs a more detailed explanation of

commercialization plans, a more carefu1 definit ion of patent policies and procedures, and

further discussion of the role of small industries

and energy consumers in the ERDA program,

Several aspects of commercialization and the

ERDA/industry relationship problems do not

appear to have been adequately considered in

ERDA-48 such as the relationship between

ERDA and international companies, the possible

need for long-term government support of

commercial-sized energy programs, and the role

CHAPTER I 35
of ERDA in coordinating the commercialization

process with other government agencies.

Although ERDA-48 indicates that the ultimate

objective of each research program will be its

introduction into the commercial market, the

diverse nature of the ERDA programs presents a

number of complicating factors.

First, the market for the ERDA R, D&D output

is both diffuse and, in some cases, poorly defined.

Whereas, the products of the Department of

Defense- and the National Aeronautics and

Space Administration-supervised research and

development have been primarily used internally, and those of the Securities and Exchange

Commission were intended for the power production industry, the market for the results of

successful ERDA programs may range from the

large energy companies to the local baker. To

some extent, this problem can be ameliorated by

including comprehensive industrial and consumer participation in the planning phase of new

projects, These groups probably have the best

perception of society’s requirements, and their

early involvement in program planning can help

to prevent the development of products and

processes that simply “won’t sell.” ERDA-48 does

not recognize or recommend the utilization of this

type of input.

Second, in those programs where the market is

clearly defined, the ERDA Plan implies that

commercialization will occur when the risks

involved in introducing a new energy technology

are reduced to the point where private industry

will be willing to invest in it. However, corporate

investment decisions are based not only on the

risk of investment loss versus potential profit,

but also on the size of the investment required,

the compatibility of the technology with the

overall company structure, the breadth and

centinuity of the market, the long-term

availability y of raw materials and other necessary

resources, and many other factors.

The Federal Government may therefore seek to

tilt corporate decisions in a desired direction by

offering special incentives, such as tax credits,

loan guarantees, and direct subsidies. However,

the complexity of the energy milieu may require

new incentive concepts. It will be increasingly

important to plan incentives much earlier in the

R, D&D process; the need for multiple incentives

will probably increase; and active privat e

participation may require continued Federal

support, in one form or another, well into what is

now thought of as the commercialization phase of

project development. At present, the basic

mechanism to create incentives in new energy

technologies is not well understood, and there is

little indication in ERDA-48 that research in

understanding these mechanisms is contemplated,

A third major problem involved in bringing

ERDA programs to the commercial stage is that

of “blurred competitive horizon s.” For example,

although it may be possible to estimate fairly

accurately the cost of producing gasoline from oil

shale, the oil-exporting nations can always lower

the prices of oil to undercut any potential market

for such gasoline, Thus, the construction of

shale-oil extract ion and refinement facilities may

depend on subsidies in some form by the Federal

Government. Projects of this type may, therefore,

never reach a true commercialization stage.

Consideration could be given to forming special

public agencies (e.g., Amtrak) to manage enterprises of this type. However, formation of such

enterprises could have significant impacts on the

Nation’s basic economic structure. The present

ERDA plan does not appear to address these

cons ideations.

The success of ERDA’s commercialization

program will depend in large measure on its

patent and proprietary rights policies. Many

companies, particularly small ones, will be very

hesitant to become involved in ERDA programs

unless they are confident that their rights in these

areas will be adequately protected. Efforts to

develop acceptable regulations should begin

immediately.

The existence and growing importance of

multinational companies further exacerbates

ERDA’s difficulties in program commercialization, The desirability of subsidizing such companies, the problems involved in protection of

United States patent rights, the differences in

regulatory philosophy among countries, the

effect on international treaties and agreements,

and numerous other issues have only been

touched on in ERDA-48.

Although many aspects of commercialization

lie outside ERDA’s jurisdiction, the lead role of

ERDA in energy R, D&D and its important role in

commercialization as recognized in ERDA-48

requires ERDA to understand the overall commercialization process and to employ this understanding effectively.

36 CHAPTER I

,? ,
11. Resource Constraints

Careful attention should be given to assessing energy resources, since they

represent assumptions basic to the ERDA Plan.

SUMMARY

The direction and timing of the ERDA Plan is predicated, to a large extent, on

the Nation’s energy resource base, An incorrect assessment of the extent of all or

part of the resource base could cause severe distortions in ERDA priorities and

schedules. If the estimated recoverable reserves of a given resource are greatly

overestimated, and several different technologies are developed and commercialized which would utilize that resource, the Nation could be in the position of

developing a new energy infrastructure that would quickly find itself running out

of fuel. On the other hand, underestimating these resources could cause a

dependency on uneconomic energy systems,

To reduce the probability of such occurrences, accurate determinations of the

upper and lower bounds of recoverable resource estimates are required,

necessitating high priority efforts to improve the methods for making these

estimates.

QUESTIONS

1. How reliable are energy resource estimates 2. How are these uncertainties incorporated

for petroleum, natural gas, coal, uranium ore, into the R, D&D strategies?

and thorium ore?

BACKGROUND

There have been several estimates of energy

resources made over the last few years, for which

extensive ranges of values exist. For example,

undiscovered recoverable natural gas resources

have been estimated to range from 322 to 5,572

trillion cubic feet. The most recent survey gives a

range of 524 to 857 trillion feet. Similar wide

variations are available for oil, coal, and

uranium. A more complete analysis of energy

resources is given in Energy Alternatives, A

Comparative Analysis, U.S. Government Printing Office, Stock No. 041-011-00025-4, May

1975, Washington, D.C. These documents show

that a great deal of uncertainty still exists

regarding the nature of our energy resources and

points out the need for developing better estimate

methodologies,

CHAPTER I 37

60-411 0 - 75 - 4
12. Physical and Societal Constraints

Numerous physical, institutional, and social constraints may limit the orderly

development and implementation of the ERDA energy plan.

SUMMARY

Potential physical constraints to the implementation of the ERDA Plan include

water requirements, materials limitations, air pollution, land use, and net energy

considerations, Among the social and institutional constraints are manpower;

capital; lags in technology transfer; information accession, retrieval, and

dissemination; regional and community impacts of mining and plant construction;

metropolitan dislocations caused by fuel shortages and price increases; and social

acceptability of new technology.

QUESTIONS

1. What is ERDA’s strategy for identifying and 2. What levels of effort are planned with respect

assessing the physical and societal con- to systems studies, cost-benefit analysis,

straints upon the implementation of the technology assessment, and other energy

National energy plan? policy planning research?

BACKGROUND

The identification and assessment of materials

limitations which might arise in the construction

and operation of large numbers of energy

conversion facilities is a major task which ERDA

must address, Examples include not only rare

photovoltaic materials such as gallium, cadmium, and iridium for photocells, but also more

common materials such as copper, aluminum,

high temperature alloys, and conversion resist

alloys. Extensive studies of near-term potential

shortages in materials, components (e. g., valves

and pumps) and major equipment (e.g., drill rigs)

are described in the Project Independence Report.

Air pollution constitutes a major “expenditure”

of natural resources, with oxygen depletion,

carbon dioxide buildup, and thermal input

representing possible long-term constraints.

Land,

types

38

too, is a natural resource of which certain

and locations are already in short supply.

CHAPTER I

Some of the nonphysical constraints may be

more difficult to assess than the physical ones.

For example: in principle, capital for economic

ventures is always available at some interest

rate, In fact, however, government intervention

may be appropriate when an overriding social

need, such as independence from imported oil, is

identified. There are many forms which such

intervention might take; careful study is needed

in this area to ensure that a wise course of action

is chosen.

Information handling—accession, retrieval,

and dissemination—and technology transfer

constitute a set of closely related institutional

constraints. An objective methodology for

assessing the impact of a new technology—let

alone quantifiable measures of socia l

acceptability—has yet to be developed,

Another set of social constraints, perhaps the
least understood and hardest to define, concerns

the regional and community impacts, including

the social acceptability, of the drastic shifts

expected in energy supply and demand. Where

and how people live affec t the amounts and kinds

o f energy they consume; conversely, fuel

availabi1ity and cost significantiy affect 1iving

patterns and associated urban and suburban

development. Furthermore, some of the remote,

sparsely populated regions of the Nation in

which most new coal mining and processing

plants must be located are already beginning to

experience severe social, political, and institutional stra ins from the large influx of new

workers and their families. (For example, a 1,000

MW nuclear plant requires a peak construction

site force of 2,000 to 3,000 workers; coal-fired

powerplants, as well as gasification and liquefaction facilities, will require similarly large

forces, ) Furthermore, workers and their families

may be stranded in remote locations when

construction is completed, thereby contributing

to as serious a set of community problems at the

end of a program as at the beginning. These and

other potential problem areas could benefit from

further research.

Some of the constraints enumerated in the

summary are addressed elsewhere in this report:

See chapter II, issue 16 on Water Resources;

chapter VI, issue 14 on Air Pollution; issue 16 of

this chapter on Net Energy.

13. Overemphasis on Electrification

The ERDA Plan appears to lean toward an overemphasis on electrification.

This lack of diversity especially in the long-term “inexhaustible” sources, may not

be the most effective approach.

SUMMARY

All three major “inexhaustible” sources identified by the ERDA Plan are

producers of electricity having high capital cost and low operating or fuel cost.

Examination of the functional energy needs indicates, however, that other

concepts, although having less ultimate potential, should be given equal priority,

Intensive electrification itself will have a noticeable social impact and may present

problems of vulnerability y and reliability. Alternatives include expanded direct use

of solar, geothermal and other direct heat sources for industrial process,

production of synthetic 1iquid or gas fuels b y solar or nuclear energy, and increased

emphasis on hydrogen, biomass and conservation.

●

BACKGROUND

Breeder reactors, solar-electric systems, and This commonality, particularly the intensive

f us ion reactors identified in the ERDA Plan as t he electrification these technologies will entail, may

three “inexhaustible” energy sources have a dangerously narrow future options. Thus this

certain degree of functional commonality, All are approach must be thoroughly analyzed to make

capital intensive, have a low fuel cost, and are sure that viable alternatives are not lost by

primarily suited to the production of electricity, default.

CHAPTER I 39
There is already considerable concern about

the ability of the energy industry to raise needed

capital, (see issue 12 of this chapter), If industry

is forced by resource depletion and lack of

alternatives to deploy the capital-intensive

technologies, but is unable to raise the capital,

massive Federal subsidies may be required.

Electricity has many advantages as an energy

form, It can be generated from a variety of

resources and mixed with impunity. At its point

of use it is clean, efficient, and versatile.

Increased use can reduce consumption o f

petroleum, particularly in electric cars and

trains, heat pumps for space conditioning and

medium- temperature process heat, etc .

Nevertheless, intensive electrification involves

many uncertainties. The environmental problem

associated with heat rejection is a primary

concern in the massive generation of electricity,

The very complexity of the “inexhaustible”

systems makes them more vulnerable to equipment malfunction or sabotage, The reliability of

present day nuclear plants has been less than

expected; breeders and fusion reactors can be

expected to suffer from similar problems, Solar

electric systems and transmission networks are

especially vulnerable to sabotage. The disruptions caused by the 1965 northeast blackout were

severe; a similar event in an economy much more

heavily dependent on electricity could be

devastating.

The potential alternatives to these electricityintensive ERDA choices are more nearly aligned

with current energy demand, over half of which

is for thermal energy and half of the remainder

for transportation. Synthetic fluid fuels can be

emphasized; they are not mentioned in ERDA-48.

Solar or nuclear energy could be used in the

production process. The production of hydrogen

from water directly by light (photolysis) or

moderate temperature catalytic reactions show

promise, but need a substantial research

program. The direct use of solar and geothermal

energ y is feasible for many moderat e

temperature industrial processes. Biomass fuels

from energy “plantations” or from wastes,

mentioned in the Plan, could contribute to

heating and transportation. The relative lack of

emphasis on conservation is also rather surprising, in view of the great benefits it offers in

reducing the demand for now costly energy,

40 CHAPTER I
14. Methodology and Assumptions Used in Developing

the R, D&D Plan

.

ISSUE

The ERDA Plan relies on methodology and assumptions for developing R, D&D

priorities that appear to bias the priorities toward high technology and capital

intensive energy supply alternatives and away from end-use technologies.

SUMMARY

The ERDA R, D&D plan makes use of six energy scenarios as essential

elements in arriving at R, D&D priorities. An analysis of this approach discloses a

number questionable assumptions which tend to distort the value of various

R, D&D options. Included among these assumptions are:

● the scenarios all assume the same set of final demands,

● calculated energy “system capital costs include only supply side costs and

ignore consumer costs, and

● the scenario emphasizing improved efficiency in end-use assumes increased

efficiency will have an effect only up to about 1985, after which exponential

growth resumes.

These and other deficiencies tend to minimize the impact of end-use

technology R, D&D and bias the choice of research priorities toward the supply

sector. Although ERDA appears to recognize this problem, improvements in the

application of the methodology are needed to develop the most effective set of

energy R, D&D priorities.

QUESTIONS

1.

2.

How sensitive are the R, D&D priorities 3.

arrived at by ERDA to the methodology and

assumptions used in the development of the

six scenarios?

Does ERDA believe it can develop a “model”

to generate R, D&D priorities? How important will “professional judgments” be in

developing R, D&D priorities?

How are future projections of energ y

demands arrived at? How do they affect the

R, D&D priorities? What types of social,

economic or institutional changes will lead to

greatly reduced demand projections or greatly increased demand projections?

BACKGROUND

The ERDA Plan for R, D&D makes use of six (2) Improved Efficiencies in End Use;

scenarios: (3) Synthetics from Coal and Shale;

(1) No New Initiatives; (4) Intensive Electrification;

CHAPTER I 41
(5) Limited Nuclear Power; and

(6) Combination of all Technologies,

ERDA uses these scenarios as an essential

element in arriving at R, D&D priorities: “Based

upon an analysis of scenarios, the status of the

candidate technologies, and the extent of the

resources they would use, a national ranking of

R, D&D technologies have been developed to

identify priorities for emphasis in the Plan”

(ERDA-48, volume I, pp. 5 and 6).

The scenarios used were generated, according

to appendi x B, by using a “judgmenta l

procedure.” Analysis of the approach use d

discloses a number of problems, a partial list of

which follows.

● The scenarios all assume the same set of final

demands, The possible effect of price on

demand does not appear to be included in the

analyses in any way, For example, it is

assumed that air passenger miles will increase by an average of 8.14 percent per year

in the 1972-85 time period.

● Calculated energy system capital costs

include only supply side costs. Consumer

costs are not included in the optimization

calculation, thereby biasing the ERDA

analysis in the direction of R, D&D to

decrease supply costs, which will minimize

the potential impact of R, D&D on end-use

capital costs (e. g., refrigerators, heat pumps,

and solar home heating systems),

● In scenario 1, increases in energy utilization

efficiency as a result of the rising cost of fuel

are not considered. Since this is the reference

scenario, the distortion caused by this

omission is perpetuated in all the other

scenarios that ERDA develops.

The “no new initiatives scenario” assumes

automobile efficiency will be 17.5 miles per

gallon in 1985, and 20 miles per gallon in

2000. Many persons feel automobile efficiencies will be substantially better than this

even without substantial government intervention,

The scenarios developed did not take into

account constraints due to capital availability, manpower restrictions, environmental

control regulations, materials supply limitation, competition for water resources, or

regional sensitivities.

The scenario emphasizing improved efficiency in end-use (scenario 2) assumes increased

efficiency will have an effect only up to about

1985. (see ERDA-48 volume I, fig, 5, p. V-5).

Thereafter exponential growth resumes.

Thus conservation R, D&D is assumed to

have negligible long-term impact. As discussed in detail in chapter V of this report

dealing with conservation, it is believed that

there are many areas where conservation R,

D&D might have a long-term and continuing

impact.

While solar electric power plays a role in

some of the scenarios, solar heating of

buildings does not. This technology, which is

thought by many to offer significant potential by 1985 and major potential by 2000,

receives only limited emphasis in any of the

scenarios—a maximum of 3.5 Quads* in the

year 2000.

* A Quad is defined as one quadrillion Btu’s.

42 CHAPTER I
15. ERDA Management Policy

1.

2.

3.

ISSUE

ERDA’s present management policies could hinder achievement of its goals.

SUMMARY

Present ERDA management practices have three recognizable drawbacks:

● Internal project management tends to impose excessively detailed restrictions

on R, D&D program.

● Project management delegated to outside agencies or firms has been awarded

to organizations having excessively detailed management structures, with a

corresponding loss of ERDA program control.

● Improper balance between systems analysis and proof-of-concept experiments.

QUESTIONS

Has ERDA undertaken any formal analyses 4. How does ERDA envision its relationship

of the management problems and successes with the Solar Energy Research Institute?

of similar organizations? If so, what are the 5. What does ERDA consider to be the ap- results? propriate roles for systems analysis, modelHas ERDA formally considered the use of ing, field experiments, and judgmental conless centralized project management? If so, siderations in its decisionmaking

what conclusions have been reached? procedures?

Has ERDA adopted any managemen t

procedure which it considers undesirable to

protect itself from public, executive, or

legislative criticism?

BACKGROUND

Establishment of ERDA as a new agency

provides it with excellent opportunities to

benefit from the experiences of older groups and

to initiate imaginative management procedures

and techniques. For example, at the Department

of Defense and other agencies a growing tendency is to increase the extent and detail of control

over research and development programs.

Between 1947 and 1973 the Armed Services

Procurement Regulation grew from ap -

proximately 125 pages to about 3,000. By 1971,

there were almost 1,300 directives involved in the

systems management process of major defense

programs. This vast expansion of centralized

program control inevitably caused large increases in the number of contractor and Federal

personnel involved in systems management.

This increase in management effort might well

be justified if comparable improvements in R,

D&D results were noted. However, comparisons

of the present R, D&D procedure with earlier, less

centralized U.S. procedures and with foreign

CHAPTER I 43
procedures reveal few differences in technical,

schedule, and cost performance.

A recent study of worldwide space an d

aviation research projects indicates that the most

successful programs have been characterized by

an individual identifiable as chief designer, the

use of small design teams, internal project

autonomy, small governmental project offices,

austere budgets, and strict adherence t o

schedule. Although there are obvious differences

in the R, D&D projects envisioned by ERDA and

those undertaken by the aerospace community,

ERDA should nevertheless give serious consideration to these factors in developing management procedures.

In analyzing its management procedures,

ERDA should carefully consider the need for new

agencies to support its research requirements.

The Solar Energy Research Institute, mandated

by the Congress in 1975, is an excellent example

of the type of new agency that might b e

established to support ERDA’s R, D&D goals. At

present, ERDA is exploring the appropriate role

and structure of such an institute through a

National Academy of Science study, requests for

comments from public groups, and internal

analysis. Issues to be considered include the

relative stress to be given fundamental and

applied science versus demonstration projects,

the inclusion of university and private research

groups in the program, the overlap between solar

and conservation research, and the nature and

extent of institutional problems involved in

widespread solar energy utilization,

Finally, ERDA should give careful consideration to the appropriate use of systems analyses in

lieu of critical field experiments needed to test

the viability of new energy technologies. The

improper use of system analysis in such instances can constitute a serious obstacle to costeffective, rapid and orderly assessment of new

technologies which require primary experimental demonstration of feasibility, Although there

is no quarrel with good systems analyses that

help to generate an overview essential to the

success or failure of a concept, the improper

substitution of systems analyses for critical

experimental tests is basically unsound.

44 CHAPTER I
16. Net Energy Analysis

Net energy analysis can aid in decisions as to which existing and developing

technologies deserve emphasis, but this methodology must be employed with

caution.

SUMMARY

Net energy measures energy output relative to energy input, thereby

indicating which technologies are likely to be most useful. However, the concept

has been very loosely interpreted; as a result, comparisons of numerical estimates

can be misleading, due to the use of differing definitions of net energy. The terms

and assumptions used in calculations of net energy ratios must, therefore, be ‘

carefully defined. In addition, the numerical values of net energy ratios have

different implications for different energy technologies, and even for different

plant locations. Moreover, net energy may not comprise the most significant

criterion in setting energy policies and pursuing national objectives; for example,

reduction of oil imports may be more important than the net energy ratio of a coal

liquefaction facility. The ERDA Plan does not address any of these considerations,

nor does it establish quantitative net energy criteria for the evaluation of energy

technologies.

QUESTION

1. What are ERDA’s intentions regarding the development and use of net energy analysis?

BACKGROUND

Energy analysis is a method used to determine

the amount of energy required to provide a

product or service. Net energy analysis is used to

determine the energy required to produce energy.

For instance, to provide shale oil, the shale must

be mined, transported and heated in order to

release the oil. The energy content of the resulting

oil is compared to the energy required by the

above processes. For most technologies, the ratio

of energy output to energy input must generally

be greater than six in order for the process to be

attractive.

Energy analysis is a subset of economic

analysis. While decisions tend to be made on the

basis of optimizing economics rather than

energy, energy analysis can be useful when costs

are unknown or when nonmarket forces are

involved or contemplated. There are three main

uses for energy analysis: to determine the energy

ratio of a process, as in the shale oil example; to

determine the time required for a new facility to

pay back the energy invested in plant construction; and/or to determine, from a thermodynamic

standpoint, the minimum energy necessary for a

given process.

Energy analysis has yet to advance beyond the

stage of establishing a coherent framework of

definitions and accounting procedures. The

assumptions underlying energy analysis are still

subject to widely varying interpretations,

CHAPTER I 4 5
thereby yielding widely varying results. The

most important difficulty involves determining

the boundaries of the analysis. For example, in

calculating the energy used in equipment production, how far back should one extend th e

calculations of energy used to manufacture the

equipment required by the above process? In

addition, how important are the differences in

powerplant efficiencies or fuel sources which

generate the electricity used in the process?

Clearly, a great deal of research must be

performed before net energy analysis can be a

consistent and widely accepted methodology.

The ERDA Plan and Program virtually ignores

the subject, despite the consideration of net

energy as one of the five basic principles in the

law establishing the agency.

46 CHAPTER I
Chapter II

Fossil Energy

Task Group Analysis

47
A. FOSSIL ENERGY TASK GROUP

MEMBERS

Prof. Wendall H. Wiser, Chairman, University of

Utah

Mr. Russell J. Cameron, Cameron Engineers

Dr. Martin A. Elliott, Texas Eastern Gas Company

Prof. Robert H. Essenhigh

Mr. Robert M. Lundberg, Commonwealth Edison

Mr. John L. McCormick, Environmental Policy

Institute

Mr. Harry Perry, National Economics Research

Associates

Mr. Roland W. Schmitt, General Electric

Prof. Carl M. Shy, University of North Carolina

Dr. John D. Sudbury, Consolidated Coal Development Company

CONTRIBUTORS

Dr. George Argyropoulos, Massachusetts Institute of Technology

Dr. James Gruhl, Massachusetts Institute of

Technology

Prof. Claude Hocott, University of Texas at

Austin

Prof. David Huettner, University of Oklahoma

Prof. Don E. Kash, University of Oklahoma

Prof. Michael Leesley, University of Texas at

Austin

Prof. Thomas Wilbanks, University of Oklahoma

48 CHAPTER II
1.

2.

3.

4.

5.

6.

B. FOSSIL ENERGY TASK GROUP ISSUES LIST

Fossil Energy Objectives . . . . . . . 53

Almost all of ERDA’s programs in fossil

energy contain unrealistically optimistic

projections of the energy supplies that can be

realized from new technologies in the near

term.

Primary Oil and

No Federal agency

prehensive research

Gas Recovery . 54

is engaged in a comprogram for primary oil

and gas recovery from new sources; the

absence of such a program could lead to

delays in the development of these resources.

Enhanced Oil and Gas

Recovery . . . . . . . . . . . . . . . . . . . . . . 56

The proper role for ERDA in enhanced oil and

gas recovery is not well defined.

Oil Shale Processing . . . . . . . . . . . 58

ERDA’s priorities for oil shale R, D&D lack a

sense of urgency in meeting the Nation’s

energy supply needs in the near- and midterms.

Synthetic Liquid Fuels From

Coal ● * * * * * * * * * * . . * * * . *.*..*... 59

New and existing projects in coal liquefaction must be carried through the pilot and

demonstration stages in order to determine

what technical problems remain and to

establish the oil price levels at which

commercial production will occur.

High-Btu Gasification of Coal . . 6 1

The construction and operation of a first

generation, commercial-sized, high-Btu coal

gasification plant is a prerequisite to any

decision on a coal-based synthetic natural

gas industry.

7.

8.

9.

10.

11.

12.

Low-Btu Coal Gasification for

Industrial Use . . . . . . . . . . . . . . . . . 63

The ERDA program on low-Btu coal gasification should give attention to the fuel needs of

industrial furnaces, kilns, and ovens.

Mining Technology . . . . . . . . . . . . 64

Research on underground mining technology

is required if coal production is to double in

the next 10 years as projected.

Direct Coal Utilization . . . . . . . . . 6 6

ERDA’s near-term program for direct coal

utilization by utilities and industry is

narrowly oriented toward fluidized bed combustion.

Low-Btu Gasification, Combined

Cycle Powerplants . . . . . . . . . . . . . 68

The present ERDA program to develop

integrated low-Btu gasifier, combined cycle

powerplants has underestimated their potential.

Advanced Fossil Fuel Combustion

Programs . . . . . . . . . . . . . . . . . . . . . . 69

The balance among various advanced energy

R&D projects, as indicated by the relative

budget allocations, does not reflect the

potential of the competing technologies,

Interagency Coordination: Coal

Cleanup . . . . . . . . . . . . . . . . 72

ERDA must coordinate its activities with

those of other agencies relating to research

and development of fossil energy, This is

particularly evident in the problem of coal

cleanup.

CHAPTER II 49
13. Environmental, Social, and Political

Impacts of Mining . . . . . . . . . . . . . 74

Even if mining technology is adequate to

support an expanded use of coal and oil shale

in the United States, there are potential

obstacles associated with environmental,

social, and political impacts of a massive

increase in mining.

14. Manpower ● .****..******.***** 76

ERDA’s program for massive expansion of

the use of coal will require far more trained

personnel at various levels than can naturally be expected to enter those sectors of the

labor market.

15. Transportation Systems . . . . . . . 78

The application of fossil fuel technology

research will require improved transportation systems in the United States.

16. Water Availability . . . . . . . . . . . . . 80

ERDA has not established a systemsoriented study of water availability related

to its energy program.

50 CHAPTER II
Since ERDA has been in existence for only a

short time, its plans relating to fossil energy have

had to be developed very quickly. This is a

formative period in the creation of a balanced

energy program, pressured by the urgency of

decreasing the national dependence on external

sources of fossil fuel and by the decline in

domestic resource oil and gas. Given the substantial challenge of formulating a balanced strategy

under these conditions, the ERDA program in

fossil energy is a good first effort. There is an

obvious need, however, for continued planning

and improved analyses of alternative strategies,

and the following observations are made in the

hope that they can contribute to this ongoing

planning process in a positive manner,

The Plan lacks a clear and consistent identification of priorities— It is clear that there is a

strong need for some form of systematic, acrossthe-board optimization of energy programs on

the basis of agreed-upon criteria. Congress has

requested that ERDA develop such a capability

and base its decisions on it. The present ERDA

plan (vol. I], however, is merely an indication of

the possible consequences of representative

alternative strategies. The “national ranking of

R, D&D technologies” cannot be used as anything

more than an illustration, and the relative

funding levels of different programs discussed in

vol. II of the ERDA Plan must be determined in

some other manner.

One striking feature of the fossil energy

program is the absence of a clear priorities list of

the various technologies being pursued. The

rationale for this absence is that many of its

research and development programs lack sufficient information to make critical assessments

of the alternative strategies. ERDA has apparently made the decision at this early stage to keep

open all options that hold any promise at all of

having a long-term payoff. Although funding in

the fossil energy program appears to be sufficient

to pursue this strategy at present, the situation

will change radically when the costs of the

program mount in later years. Demonstration

and commercialization will require significantly

increased funding and will force hard decisions

with regard to competing alternatives. It is

important that ERDA move swiftly to build the

necessary decisionmaking capability.

In deciding priorities, the substitutability of

one fuel for another is an important consideration. To what extent can electricity y based on coal

combustion (or systems other than fossil fuels)

substitute for liquid and gas fuels? What are the

needs of industry for liquid and gas feedstock? In

what cases can low-Btu synthetic gas substitute

for natural gas in industry? What are the

economic and social costs of a conversion from

one product to another? What are the likely time

lags? The answers to questions like these will

have a major impact on the relative needs for

different fossil fuel R, D&D programs in ERDA.

Issues 1, 4, 9, 10, and 11 discuss specific cases of

the lack of clear priorities.

The Plan lacks a sense of urgency about

increasing energy supplies from domesti c

resources—By focusing on new technologies, the

fossil fuel program (contrary to the supply

projections contained in it) limits itself to an

insignificant impact on energy supplies in the

short term—before 1985. The first priority

should be to get better information abou t

presently available technologies and to facilitate

their use where feasible: primary oil and gas

recovery from new sources (especially, the Outer

Continental Shelf), enhanced recovery of oil,

pipeline gas from coal, and shale oil from surface

retorting. Although the economic feasibility of

many of these technologies is highly uncertain at

present, the promis e of second generation

technologies is seldom much brighter. In the

meantime there is a need for better information

about the impacts, economics, and operating

experience of commercial-scale operations. It

must be recognized that the era of abundant

cheap energy is over—especially in the cases of

liquid and gas fuels. Issues 2, 3, 4, 5, 6, and 9

express concern about the urgency of the energy

supply situation.

CHAPTER II 51
Demonstration plants should be the keystone

of the fossil fuel technology R, D&D program—

Because of the urgency of the national energy”

situation, the ERDA fossil fuel program should

emphasize the demonstration of availabl e

technologies at a scale appropriate to their stage

of development: near-commercial scale for cases

where no serious technical obstacles exist (such

as high-Btu gas and possibly oil shale with

surface retorting), pilot scale for cases where

technical problems still need to be solved (such

as tertiary recovery of oil, stimulation of tight gas

formations, coal liquefaction, and low-Btu gascombined cycle powerplants). Although the

opinion that emphasis should be placed on

demonstration plants for several technologies is

not universally espoused, it is not just an

industry view. Environmental specialists and

university representatives join in the call for

better, and more universally credible information about alternatives.

An unresolved question is the possible impact

of the proposed national synthetic fuels commercialization program, If this is approved and

implemented, its impact on the development of

fossil fuels would be substantial, As part of the

review of the ERDA programs in fossil energy,

Congress may wish to clarify the status and

effects of the proposed program in synthetic fuels

commercialization, Issues 3, 4, 5, 6, and 10

discuss specific technologies,

Constraints on the commercial application of

fossil fuel technologies are given insufficient

emphasis in the plan—While fuel technologies

are discussed in some detail by ERDA, too little

attention appears to have been directed towards

the broad range of impediments that can seriously delay, if not block altogether, the introduction

of otherwise economically viable technologies.

Institutional constraints must be addressed early

if the technologies upon which ERDA is concentrating its efforts are to be brought to commercialization. It is poor planning, for example, for

ERDA to pour large amounts of funds into the

development of a commercially feasibl e

technology for coal liquefaction if the technology

cannot then be used—because coal mines cannot

supply the coal due to inadequate transportation

facilities, capital is unavailable, or water is

insufficient, The efficient use of ERDA’s R, D&D

funds requires a systematic look at entire energy

development systems, The fact that ERDA does

not have the primary responsibility within the

Federal Government for dealing with some of

these constraints is not a sufficient response; all

the more reason exists in such cases for concern

that the Government may not adequately consider some components which are vital for the

successful introduction of new technologies, In

later plans, perhaps ERDA will assume the lead

role assigned to it by Congress and formulate a

broad interagency approach to all aspects of

fossil energy problems, thereby providing the

assurance that important factors impeding

development are not overlooked. As with the

technologies themselves, a key consideration in

dealing with constraints is the need for information that will be accepted as a basis for discussion by groups in society with varying viewpoints. This is especially important—and

especially difficult—in assessing the effects of

technologies on environmental and socia l

systems, and it emphasizes the importance of

undertaking appropriate studies now. Issue

papers 8, and 12 through 16 treat these questions

in more detail,

52 CHAPTER II
D. FOSSIL ENERGY ISSUE PAPERS

1. Fossil Energy Objectives

ISSUE

Almost all of ERDA’s programs in fossil energy contain unrealistically

optimistic projections of the energy supplies that can be realized from new

technologies in the near term.

SUMMARY

ERDA’s objectives for 1985 call for 13 to 15 Quads* of fossil energy derived from

new technologies. Institutional, environmental, and other nontechnical constraints aside, these objectives cannot possibly be met for the single reason that the

time necessary to develop and demonstrate new technologies and to construct a

commercial industry based on those technologies exceeds the 10 years between

now and 1985. The lack of consistency between ERDA’s overall plan in volume I

and the specific program projections in volume II raises questions concerning the

process by which the objectives were defined and the use served by the objectives

in establishing priorities.

QUESTIONS

1. How did ERDA arrive at its objectives for the 3, What purpose is served by the objectives?

amount of energ y derived from fossil How have ERDA’s programs been deterresources? mined from these objectives?

Z. Why are the objectives different in volumes I

and II of the ERDA Plan?

BACKGROUND

In volume II, Program Implementation, ERDA

specifies the following energy supplies to be

made available from new technologies by 1985.

Direct coal combustion (fluidized bed) 1 Quad

Enhanced oil recovery , , . . . . . . . . . . 2.9 Quads

Stimulation of gas formations . . . . . 3 Quads

Coal gasification . . . . . . . . . . . . . . . . . . 1 to 3 Quads

Coal liquefaction . . . . . . . . . . . . . . . . . (at least) 5 Quads

In-situ recovery of shale . . . . . . . . . . 0.1 Quad

Total . . . . . . . . . . . . . . . . . . . . . 13 to 15 Quads

If realizable, this increase would represent a

truly major contribution to U.S. energy supplies,

as it would constitute approximately 2o percent

of the country’s current annual consumption,

In volume I, Chapter VIII, however, ERDA lists

the following as objectives:

Oil and gas-enhanced recovery . . . . over 6 Quads

In-situ oil shale , . . . . . . . . . . . . . . . . . . up to 2.5 Quads

Coal-direct utilization . . . . . . . . . . . . . over 6 Quads

Gaseous and liquid fuel from coal . beginning in 1985

*A Quad is defined as 1 quadrillion Btu’s.

CHAPTER II 53

60-411 Cl - 75 - 5
Obviously, disparities exist between the two

sets of objectives. While the figures for enhanced

oil and gas recovery are comparable, those for

direct coal utilization and for synthetic fuels are

not, As a consequence, the methods used to

assign these objectives and their influence in

determining the priorities and direction of

programs seem to be compromised,

Whatever the origin of these stated objectives,

they cannot be considered reasonable in the light

of current commercial development. In the

opinion of the experts consulted by OTA, the

ERDA projections are unrealistic and cannot be

achieved with any reasonably designed national

energy R, D&D policy. In almost all areas, the

arguments are similar. The technology first has

to be proved through development an d

demonstration stages; then a commercial industry must be built to provide the energy. In the

case of enhanced oil and gas recovery, field-pilot

tests may take five years or more; a similar period

is required to begin to produce significant new

supplies. Tertiary recovery of oil and stimulation

of tight gas formations do not have quick payoffs.

Although a proven technology exists for coal

gasification, a large commercial industry cannot

begin until the economics of the process have

been verified. Coal liquefaction is even further

removed from commercialization, as is the

introduction of pressurized fluidized bed combustion for direct coal utilization. In the nearterm, the energy self-sufficiency of the country

cannot be based on ERDA’s stated objectives for

energy supplies from new technologies in fossil

fuels.

2. Primary Oil and Gas Recovery

ISSUE

No Federal agency is engaged in a comprehensive research program for

primary oil and gas recovery from new sources; the absence of such a program

could lead to delays in the development of these resources.

SUMMARY

Exploration and development of oil and gas from new sources, particularly the

Outer Continental Shelf, continues to be severely delayed by the lack of planning

on the part of the Federal Government. An aggressive ERDA research program

would complement industrial efforts. In particular, research is needed on the

effects of offshore drilling and on ways of mitigating those which are harmful t o the

environment. Congress mandated in Public Law 93-577 Sec. 6(b)(3)(Q) that ERDA

engage in a program to explore methods for the prevention and cleanup of marine

oil spills, but the scope of ERDA’s proposed activities is not clear.

QUESTIONS

1. What is ERDA’s current schedule fo r 2. Wha t current studies of regional, social, and

development of the congressionally man- economic impacts of Outer Continental Shelf

dated program on methods for the prevention (OCS) exploitation is ERDA performing (or

and cleanup of marine oil spills? monitoring if being performed by other

agencies )?

54 CHAPTER II
3. What are ERDA’s plans for development of a

coherent information base to assist potentially impacted areas in coastal zone planning for

OCS oil and gas development?

4. What studies are underway at ERDA or in

other agencies with which ERDA is

cooperating on alternative OCS oil and gas

lease management arrangements and compensation provisions in the event of adverse

impacts on areas of OCS oil and gas development ?

5. How soon does ERDA anticipate having a

comprehensive data base on site-specific

environmental conditions of potential OCS

lease areas? If the regional data are to be

assembled by an agency other than ERDA,

what is ERDA’s current role in defining the

nature and extent of information to be

acquired and the time schedule for the

program?

BACKGROUND

There are three sources of large quantities of

liquid and pipeline gas fuels from domestic

resources in the near-term (to 1985): production

of oil and gas from the onshore lower 48 States,

offshore sites, and Alaska . Estimates of

petroleum resources on the OCS (to a water depth

of 200 meters) range between 10 and 130 billion

barrels (20-50 percent of U.S. resources); OCS

natural gas resources are estimated at greater

than 100 trillion cubic feet (20-30 percent of U.S.

resources). Most of the present production is

taking place in the Gulf of Mexico, but there are

also sources of oil and gas off the Pacific coast,

the Atlantic coast, and the coast of Alaska.

Although development in some of the promising

areas would be hampered by severe en -

vironments, there are no serious technologic

obstacles to extracting oil and gas. The basic

technology has been well-tested in the Gulf of

Mexico, the North Sea, and elsewhere.

The expansion of offshore production to

increase domestic fuel supplies has recently been

very slow, mainly because of environmental and

institutional obstacles. In particular, the problem

stems from an inability to lease promising

development sites because of public opposition

due to uncertainties about environmental and

social impacts.

One way to remove development delays is to

reduce the likelihood of environmental damage

from oil spills by developing better blowout

prevention and cleanup technology. In the long

run, this would reduce uncertainty and should

help to avoid delays in opening up new areas for

production. In the short run, and especially over

the next several years, other Federal activities

are needed as well. Research requirements

include the following:

●

●

●

●

●

•

Geological information on new potential oil

and gas resource regions.

Site-specific studies of environmental conditions well in advance of lease sales.

Research on the prevention and consequences of oil spills.

Studies of the regional social and economic

impacts of OCS exploitation and possible

frameworks for compensation for adverse

impacts.

Support of coastal zone planning.

Development of alternative lease management arrangements.

The Congress directed ERDA to engage in a

program to investigate methods for the prevention and cleanup of marine oil spills. (Public Law

93-577, Sec. 6(b)(3)(Q)), but it is not clear how

much of an effort is proposed as part of the

Environmental Control Technology program of

ERDA—the only place in the ERDA Plan where

oil-spill cleanup is treated.

CHAPTER II 55
3. Enhanced Oil and Gas Recovery

1.

2.

ISSUE

The proper role for ERDA in enhanced oil and gas recovery is not well defined.

Enhanced recovery

significantly increasing

SUMMARY

of oil and gas from known reserves

the supply of these fuels. The need

development in the area of enhanced recovery clearly exists, but

holds promise of

for research and

opinions differ as

to the proper role of Government in this endeavor. The present pace of industry

R&D could be accelerated by formulation of a detailed workable incentive plan.

The present ERDA tertiary recovery program for oil, which involves special joint

Government/industry field-pilot testing and demonstration, and the similar

research on the recovery of gas from tight formations, will not yield a significant

increase in production by 1985. ERDA’s projection of an additional annual increase

of approximately 6 Quads resulting from enhanced recovery is therefore

unrealistic.

QUESTIONS

On what basis did ERDA make the projection 3. What would be the effect on gas supplies in

of 6 Quads input to U.S. energy supplies from the 1985-90 period of an increase in Governenhanced oil and gas recovery by 1985? — ment funding for research on tight gas

What is ERDA presently doing to ensure that formations from $5 million to $25 million per

yea r

tertiary methods for oil recovery are brought .

to commercial application in the shortest

possible time and with maximum potential

for application over the entire U.S. oil

production industry?

BACKGROUND

Owing to the convenient form and relative

environmental attractiveness of crude oil and

natural gas as domestic resources, it is important

that the United States extract and use what it

has. In fact, the necessary pace of development of

synthetic liquid and gas fuels depends largely on

the amount of oil and gas that can be recovered.

This amount depends partly on the ability to tap

sources like shallow oil beds, oil that remains in

developed oil reservoirs (secondary and tertiary

recovery), and oil that is too viscous to extract

with conventional procedures. The National

Academy of Sciences has recently estimated that

new tertiary techniques might yield 105 billion

barrels of oil from old fields. It is obviously

important to find out how much is actually

recoverable by enhanced oil and gas extraction

techniques, an amount dependent partly on the

state of technology.

Tertiary recovery methods—as distinct from

secondary methods such as water flooding and

natural gas injections—include polymer floods,

surfactants, miscible recovery processes, immiscible gases and thermal (usually steam)

recovery methods. Tertiary recovery methods

are at an early stage of development and much

work remains, particularly in identification of

the most favorable conditions for each method

56 CHAPTER II
and characterization of the economics and net

energy yield from competing methods.

The present ERDA program in enhanced

recovery began in 1974 when a joint

Government/industry project was initiated

between the Bureau of Mines and a private oil

company. These experiments are approximately

50 percent supported by the Federal Government.

The current program calls for roughly 10 tests of

several techniques in different reservoirs over

the next three or four years. Three of these 10

tests are currently underway.

Some experts have characterized the problem

as one of testing and centralizing information on

a variety of techniques (four or five basic types)

in a number of reservoir types (perhaps 30 or 40).

This process would require a total of 80 to 150

experiments. The total cost of such experiments

is estimated at $300 to $400 million. Assuming

that half of the cost is borne by the Government

over a 4-year test period, the Government cost

would be $40 to $50 million per year.

Many support ERDA’s present tertiary oil

recovery program. On the other hand, critics of

the program contend that direct Federal involvement is unwarranted on the grounds tha t

industry can be motivated to develop the

necessary technology on its own. However,

sufficient price and other incentives would be

necessary, since production costs of enhanced

recovery are expected to be high.

Expertise in enhanced recovery resides principally with industry, which has already invested heavily in the needed R&D, As the

incentive approach does not require the release of

proprietary information, it is likely to appeal to

industry. However, this factor may also be

regarded as a disadvantage, as it may deprive

nonparticipating oilfield operators of valuable

data, Nevertheless, it is possible that a broad

industrywide incentive program could initiate

more research and development than a limited

number of federally funded projects.

General agreement is that testing of a large

number of reservoirs must be pursued. Until a

detailed, workable incentive plan is formulated,

the present R, D&D program undertaken by

ERDA, though insufficient, will yield at least

some of the necessary information. In addition,

because the stimulation of tight gas reserves

involves greater risks than enhanced oil

recovery, direct Federal participation in a

program to develop these reserves is warranted;

ERDA’s program in this area is reasonable.

It should be noted that no significant increase

in production can be expected by 1985, because of

the time required to complete and evaluate

enhanced recovery methods for gas and oil, The

annual increase projected by ERDA of 2.9 Quads

from oil via enhanced recovery is thus unrealistically optimistic.

Similarly, the anticipated increase of 3 Quads

from the enhanced recovery of natural gas is

unrealistic. The Western United States contains

an estimated 600 tcf of natural gas locked in tight

rock formations, but there is no developed,

economically feasible technology to produce the

gas. R, D&D is expensive and too risky for

industry to participate independently on a very

large scale. Massive hydraulic fracturing and

other nonnuclear fracturing methods are currently considered the most promising approaches,

taking into account technical, environmental,

and social factors, If a chance of using these

resources to meet gas fuel demands by 1990

exists, an accelerated research program is

needed, but because of the uncertain prospects of

success such a program is unlikely to be

undertaken by industry. The proposed ERDA

budget includes $5 million for R&D on tight gas

formations in FY 76. A comprehensiv e

accelerated R&D program, however, would

require $20 to $25 million a year. That sum would

provide the necessary funds to perform 15

experiments lasting about 4 years and averaging

about $6 million a piece.

CHAPTER II 57
4. Oil Shale Processing

ERDA’s priorities for oil shale R, D&D lack a sense of urgency in meeting the

Nation’s energy supply needs in the near- and mid-terms.

SUMMARY

ERDA’s programs for oil shale development are concerned exclusively with in

situ processes, but these processes will make no contribution to liquid fuel supplies

in the near-term and have uncertain prospects for the mid-term. The ERDA

conclusion that the above ground processing of oil and shale is not economically

feasible (or has no need for Federal R, D&D support) has no basis in operating

experience. An oil shale demonstration program based on available technologies is

needed.

QUESTIONS

1. Why does ERDA’s oil shale program fail to 4. What basis is there for being optimistic about

include support for demonstrations of sur- the projects for in situ gasification of oil

face retorting technologies? shale?

2. What led to the emphasis by ERDA on the 5. How adequate are waste managemen t

Bureau of Mines horizontal in situ retorting procedures for the disposal of spent shale?

concept rather than modified in sit u

processes or vertical retorting concepts?

3. How serious are the problems of waste

disposal and water consumption for surface

retorting processes?

BACKGROUND

The Administrator of ERDA is mandated, in

Public Law 93-577, Sect. 6(b)(3)(G) to “assign

program elements and activities. . . (which) shall

include. . , research, development, an d

demonstrations designed. . . to demonstrate the

production of syncrude from oil shale by all

promising technologies, including in situ

technologies.” The ERDA Plan include s

programs to develop and demonstrate in situ

recovery to produce shale oil, but no program at

all for above ground research on oil shale

production and retorting to shale oil. The ERDA

document claims that “adequate technology

exists for conventional mining and surface

retorting of shale, but the economics of surface

processing are marginal at best.”

It is appropriate that ERDA should devote

considerable effort to in situ shale oil production

methods, because of the reduced environmental

impacts of this technology, but not to the

exclusion of mining and above ground retorting.

There is no assurance that a satisfactory and

economically competitive in situ technique can

be developed. Even among the range of in situ

extraction concepts, the horizontal technique,

which

ERDA

failure

receives the greatest emphasis in ‘the

budget, appears to carry a higher risk of

than other techniques which are at least

58 CHAPTER II
. . —

as far along in development. ERDA’s proposed

program for producing gas rather than oil from

shale is an even longer term option than producing oil and has potentially serious additional

problems; yet this option is supported in the

budget, while above ground oil retorting alternatives dO not appear in the program. If ERDA has

valid reasons for taking this course of development, then better justification should be given for

the programs that have been proposed and

reasons given for exclusion of other approaches

that many consider more promising.

Presently, no commercial above ground oil

shale is processed in the United States. It appears

that privat e sector investment sources are

unwilling to accept the risks associated with a

pioneer commercial facility. The several private

projects which currently exist are still at the pilot

retort stage. The critical problems associated

with shale oil include mining technology for

shale extraction, the economics of the total

activity, and the management of waste in the

form of spent shale. No commercial activity has

had to cope with the mining and waste management problems at the level which would be

created by a commercially viable shale oil plant,

A commercial-scale facility can provide a broad

range of opportunities to test procedures, prove

technology, and train manpower in the special

skills which must be developed. This is an

appropriate subject for ERDA involvement at the

demonstration level.

5. Synthetic Liquid Fuels From Coal

ISSUE

New and existing projects in coal liquefaction must be carried through the pilot

and demonstration stages in order to determine what technical problems remain

and to establish the oil price levels at which commercial production will occur.

SUMMARY

Justification of the coal liquefaction program rests primarily on the decline in

U.S. oil production and on the need for supplies for those uses of liquid fuels for

which there is no ready substitute. A successful commercialization program in the

1980’s depends on the results of pilot projects, The existing and proposed

development programs of ERDA are judged to be of the proper magnitude and in the

correct direction. However, the constraints to commercialization, such as the

capital investment, construction time, and development of associated mine

facilities imply that the projection by ERDA of 5 Quads per year cannot be

overcome by 1985. Thus, ERDA’s projection that coal liquefaction will significantly affect fuel supplies by 1985 is-unrealistic.

QUESTIONS

1. How did ERDA arrive at a projection of 5 Are the hydrocarbons

Quads per year of energy from coal liquefac- cinogenic? Is chemically

tion by 1985? problem?

3. What has ERDA don e

likely to be carbonded nitrogen a

to determine the

2. How serious are the environmental and economic and commercial viability of the

health problems associated with the use of product ion of methanol as directed by

synthetic liquid fuels from coal likely to be? Congress in Public Law 93-577?

CHAPTER II 59
— —

BACKGROUND

Given the growing disparity between the

ability of the United States to produce oil and our

consumption of this fossil fuel, it is necessary to

consider seriously how either the supply and/or

the consumption of oil can be modified in ways

least likely to do damage to society. Whereas

replacement of oil by another fuel (coal) for direct

heat and electric power generation is relatively

straight forward, in principle, there presently

exists no viable substitute for oil used in

transportation, particularly in automobiles and

aircraft, and chemical feedstock. By restricting

oil to uses for which no other alternatives exist,

the United States could extend its reserves of oil

and provide a longer period to work on possible

long-term solutions to the transportatio n

problem. However, the development of a n

economically competitive synthetic liquid

hydrocarbon derived from coal would introduce

a valuable alternative strategy to counterbalance

the decline of domestic oil supplies.

The technology for coal liquefaction developed

during World War II is not directly applicable to

economic commercialization under present conditions. Several second generation processes for

producing liquid hydrocarbons have been shown

to be technically feasible in small-scale testing.

Data and experience to date, however, are too

rudimentary to permit a prediction as to which, if

any, of the several processes can yield a product

for large-scale use at an attractive cost. The

probability of payoff is sufficiently high, however, to warrant proceeding with a broadly based

program. The orderly progression of this

technology necessitates continuing it through the

pilot and demonstration plant stages. In this

regard, three projects are currently in progress:

the H-Coal and Synthoil Pilot projects involve

direct, high-pressure catalytic hydrogenation,

whereas the Coalcon demonstration project

covers a version of low-temperature carbonization under hydrogen pressure, These programs

should be continued as long as results are

promising.

Existing additional approaches to coal liquefaction should also be funded at a demonstration plant level of sufficient size to permit scaleup to a commercial plant. Two-stage “hybrid”

liquefaction processes involving extraction

followed by hydrogenation are sufficiently well

understood to warrant the step up to this plant

level. Given the large number of variants of this

process being tested on a small scale, two such

projects may be justified. If a viable process is

identified, it should be possible to proceed to

commercial projects at the 50,000 barrels per day

level in the mid-1980’s. Such commercial projects

would have a small impact on fuel supply in 1985.

However, the projection by ERDA of at least 5

Quads per year at that time would require 50

such plants, each involving a capital investment

on the order of $1 billion and a construction time

of 5 years. The time scale of this ERDA projection

is thus totally unrealistic,

Institutional problems do not appear serious in

process development at the pilot stage under the

present cost sharing procedure of 1/3 industry—

2/3 Government, However, on proceeding to

commercialization, all the possible problems

associated with any process requiring the

extraction of large amounts of coal from the

ground appear: mineral rights, minin g

technology, land reclamation, water use, capital

availability, and so forth, These problems are

discussed in Issue 6 in connection with development of technology for high Btu gasification and,

thus, are not repeated here,

60 CHAPTER II
6. High-Btu Gasification of Coal

ISSUE

The construction and operation of a first generation, commercial-sized, highBtu coal

synthetic

gasification plant is a prerequisite to any decision on a coal-based

natural gas industry.

SUMMARY

A pioneer commercial plant, producing 250 million cubic feet per day of highBtu gas from coal, can be constructed immediately using current technology.

Through its construction and operation, the economic, technical, and operating

data necessary to assess the desirability of a coal-based synthetic natural gas

industry can be determined. The objective of this construction is to determine

whether or not high-Btu synthetic natural gas from coal is economically justifiable

as a means of using the Nation’s coal reserves to replace the declining supplies of

natural gas and oil.

While several companies have shown a strong desire to build a commercial

plant, they have not done so because of difficulties in financing such a plant, which

will cost at least $1 billion, Incentives of some form, such as loan guarantees or

regulatory changes, may have to be provided by the Government if the natural gas

industry is to build one of these plants,

QUESTIONS

1. What are the reasons for the uncertainty in 3. Should steps be taken to change th e

the cost estimates regarding high-Btu gas- limitations imposed by the Federal Power

ification projects? Commission in granting certification of high2. Why cannot a consortium of gas companies Btu gasification plants?

provide the necessary financing without

Government assistance?

BACKGROUND

Although the Nation possesses vast coal

reserves, they are not infinite, and the capital

required to convert coal to useful energy is

substantial. Therefore, it is imperative that

utilization of coal be as efficient and economical

as possible. High-Btu gasification of coal is but

one option which must be evaluated. In this

regard the construction of a pioneer commercial

plant is important for the following reasons:

● Cost estimates for energy-related construction have been notoriously bad. The costs of

high-Btu gas, determined from the operation

of a pioneer commercial plant, will furnish a

valuable basis upon which to make decisions

as to whether to proceed with further commercialization.

● The construction and operation of the plant

will provide experience in problems

associated with the production and handling

of massive quantities of coal, with the

development of expertise in fabrication of

CHAPTER II 61
special equipment, and with the training of

personnel to operate and service the plant.

Proven technology, based on the Lurgi gasification process followed by a methanation stage,

exists today to permit construction of a plant

producing 250 million cubic feet per day.

Moreover, since less than 25 percent of the total

construction costs of plant and support systems

is attributable to the gasification process, likely

improvements in gasification technology can

have only a minor impact on overall costs. There

would appear therefore, to be little reason to

delay construction in anticipation of such

technological improvements.

Industry has shown a clear interest in constructing pioneer commercial plants. El Paso

Natural Gas, WESCO (Pacific Lighting Corporation and Texas Eastern Transmission Corporation), and American Natural Gas Corporation

have each filed applications before the Federal

power Commission for certificates to authorize

construction of commercial coal gasification

facilities,

The WESCO plant, which has received certification by the Federal Power Commission, was

scheduled to be built in San Juan County, New

Mexico and deliver 75 percent of its gas to the Los

Angeles area, At oral arguments before the

Commission on March 14, 1975, the cost of this

plant was stated to be in excess of $800 million

and the tailgate price of gas was placed at about

$2.45 per thousand cubic feet. Although the gas is

readily marketable in Los Angeles, several

constraints exist which have prevented WESCO

from proceeding with the project. The principal

problem is that the capital requirements of an

individual plant are more than 50 percent of the

total capitalization of the company proposing the

plant, while the increment added to their gas

supply is only about 10 percent of their total

volume. As a consequence, financial institutions

are unwilling to finance these plants without

some sort of guarantee that the venture will

recover its costs.

Central to this concern is the cost of the

synthetic gas. The estimated cost of a plant with

a daily capacity of 250 million cubic feet has

increased from $300 million (mid-1972 dollars) to

$800 million (January 1975 dollars) and the cost

of coal has increased from approximately 20

cents per million Btu to 40 cents per million Btu.

As a consequence the estimated cost of gas

produced has increased from $1.40 per million

Btu to over $2.40 million Btu.

Under the present energy regulatory structure,

the only way the gas companies appear able to get

financing on the terms they require to build the

plants is to obtain Federal Power Commission

approval of the cost of service guarantee concept,

The Commission, however, has decided that it

cannot grant approval and still maintain its

responsibility to the public interest. In effect, the

FPC has ruled that such a guarantee would allow

an open-ended contract which could “escalate

beyond the zone of reasonableness” should gas

production drop substantially. The Commission

has consistently adopted this view on all

requests for a cost of service guarantee and has

therefore attached a fixed rate to each certificate

subject to filings for rate increase under section 4

of the Natural Gas Act,

The Federal Government can provide industry

with the necessary incentives to build one plant

having a capitalization of approximately $1

billion, in order to be able to determine whether

synthetic high-Btu gas from coal is economically

justifiable as a replacement for the declining

natural gas supply . The best methods of

providing these incentives remain to be determined; the Federal Government might, for

example, guarantee the company a loan for plant

construction as well as recovery of cost of service

plus a reasonable return on investment,

The gas industry advocates construction of

many—perhaps 20 or more—plants at the present

time, on the grounds that the existing investment

in gas transmission and distribution systems

should be fully utilized. However, the cost of coal

gasification may be so high that other options for

supplying this energy demand will prove cheaper

and, hence, more desirable, A commercial plant,

made possible by offering the necessary incentives, would permit development of the data

needed to clarify the relative merit of high-Btu

gas from coal versus the other options.

62 CHAPTER II
7. Low-Btu Coal Gasification for Industrial Use

The ERDA program on low-Btu

ISSUE

coal gasification does not give attention to the

fuel needs of industrial furnaces, kilns, and ovens.

SUMMARY

Many users

nonferrous meta

of natural gas and oil in the industrial sector (ferrous and

llurgy, glass, lime, cement, refractories, stills, etc.) could shift to

low-Btu gas from coal if suitable gas producers were available, This shift would

make an important contribution to the conversion from the use of oil and gas to the

use of coal, and it would help to ensure against production cutbacks due to

curtailments. There is much room for R, D&D supported by ERDA with a focus on

assessment of the potential demand for low-Btu gas by the industrial sector, means

for increasing this potential through modification of equipment or operations, and

the development of gas producers having performance characteristics suitable for

modern industrial use,

QUESTIONS

1. How does the potential demand for low-Btu 3. Would the low-Btu gasifiers being studied by

gas in the industrial sector compare with that ERDA for other applications be suitable for

for use with combined gas turbine/steam use in the nonelectrical industrial sector?

turbine powerplants?

4. What steps are being taken to supply fuel for

2. What fraction of the present use of natural those parts of the industrial sector now

gas and oil in the industrial sector could be facing natural gas curtailments?

shifted in the near-term to low-Btu gas?

BACKGROUND

Gas producers, devices in common use 50 years

ago for making low-Btu nitrogen-diluted gas,

have almost disappeared from use. They were

once used primarily in close coupling to the

furnace to which they supplied fuel, thereby

allowing effective delivery of the sensible heat

content of the hot fuel gas; but they were

sometimes used to produce cleaned cold gas. A

variety of technical and economic factors led to

their disappearance, the most dominant factor of

which was the increasing availability of cheap

natural gas. With our present declining natural

gas reserves and our increasing dependence on

foreign oil this situation has changed, and the

desirability of again being able to make industrial gas from coal arises.

Although many industrial users of natural gas

and oil could shift to low-Btu gas produced from

coal if suitable gasifiers were available, the

ERDA Plan does not address the problem. This

shift to coal by the industrial sector has t h e

potential to make an important contribution to

solving the Nation’s energy problem in the midterm,

Since changes in labor, economics, size, environrnenta1 concern, etc., make the old gas

CHAPTER II 63
producers unacceptable by today’s standards, a tion of industrial fuel, but unless specific

strong R, D&D program is needed now. Much of attention is given to the industrial sector, its

the work being carried out by ERDA on low-Btu special problems and requirements may be

gasification will have application to the produc- overlooked.

4

8. Mining Technology

Research on

ISSUE

underground mining technology is required if coal production is

to double in the next 10 years as projected.

SUMMARY

Government and industry are expecting coal production to double to 1.2 billion

tons annually by 1985. To help assure that these projections can be met, coal

mining R&D will require priority support. The productivity per miner in

underground mines has decreased in recent years, principally because of

improvements in health and safety standards; technological progress has been

unable to offset the decline. Improvements in mining technology have the potential

for making significant contributions sooner than most R&D projects in fossil

energy, Although Federal responsibility for coal mining rests with the Bureau of

Mines in the Department of the Interior, ERDA has a responsibility to ensure that

the research necessary to improve the technology of underground mining of fossil

fuel resources is carried out,

QUESTIONS

1. What importance does ERDA place on R, 3. What does ERDA view as the major priorities

D&D in underground coal mining technology for R&D in mining technology and what are

in meeting its objectives for coal use in 1985? the projected benefits from such R&D?

2. What action is ERDA taking in its role as lead

agency in energy R, D&D to ensure that the

proper programs are in progress on mining

technology?

BACKGROUND

The 1985 coal consumption projections, based capacity will need to be doubled, an increase of

on industry and Government estimates, are in the 600 million tons capacity in 10 years. In addition,

1.1 to 1,2 billion ton range, of which two thirds a minimum of 100 million tons of replacement

are expected to be consumed by electric utilities. capacity will be required to offset mine depletion

To meet 1985 projected demand, coal production or exhaustion, for economic and other reasons.

64 CHAPTER II
These large increases must be contrasted with

the pattern of the past 5 years, over which total

production of all coals remained stable,

Underground coal mining is expected to

increase in actual output but to decline as a

percentage of total production. Traditional room

and pillar mining systems are the most widely

employed methods for underground coal extraction. Equipment used is either conventional

(mechanical loader, undercutting, whee l

mounted shuttle cars, drills, roof bolters) or

continuous miner (which eliminates undercutter

and drill). To a lesser extent, the longwall system

of mining has been introduced as a means of

improving recovery, particularly in deeper

seams. Expansion of this type of mining has

tended to be inhibited by higher capital investment and a degree of inflexibility in layout

introduced by the 1969 safety legislation, as well

as by downtime experienced during transfers of

equipment from panel to panel, Wher e

applicable, the higher production generally

offsets the system limitations.

A relatively new system of mining for pitching

or inclined coal seams has been successfully

introduced in Canada. Hydraulic or jet mining

has been used in Russia and Japan for a number of

years. There is reason to believe that many of the

steeply pitching coal seams in the Western

United States can be mined economically by this

method. The science of hydraulic mining is not

new; however, its application to coal in the

United States would be,

There was a significant increase in the work

force in 1970 following the enactment of the Mine

Health and Safety Act; employment jumped from

124,000 to 140,000 workers. Although production

volume has remained stable during the period

from 1970-74, the number of miners increased by

an additional 10,000 employees to 150,000.

Overall industry productivity declined from

19.9 tons per man day in 1969 to 17.3 tons per man

day in 1974. More pertinent is the decline in

underground mining productivity from 15.6 tons

per man day in 1969 to 11.4 tons per man day in

1974, Strip mine productivity has remained

about the same, at 36 tons per man day.

Research and development in underground

coal mining technology has the potential of

making important contributions to increased

productivity and overall production, Advanced

scientific and technological developments of the

past decade have not yet been transferred to coal

mining but hold considerable promise of being

applicable,

Research is needed on a wide range of

problems:

high speed mine development to decrease the

time necessary to bring new mines into

productivity,

automated longwalling systems to increase

productivity through automation,

machine reliability improvement to reduce

delays,

continuous roof support to reduce the time

required for installation of roof support,

haulage systems to speed the movement of

coal from the operating face to the surface

plant,

methods for full extraction from thick and

multiple seam western coal,

control of mine subsidence and waste discharge, and

preparation techniques for upgrading the

quality of coal,

The Bureau of Mines presently has R&D

programs covering most, if not all, of these

subjects. Assurance is needed, however, that the

level of effort in coal mining research is commensurate with the importance of the increased

production of coal to meet the Nation’s energy

requirements. In reviewing and modifying

overall R&D strategies for problems relating to

fossil energy, ERDA must cooperate to ensure

that improved mining technologies are developed

for underground operations.

CHAPTER II 6 5
9. Direct Coal Utilization

1.

2.

ERDA’s near-term program for direct coal utilization by utilities and Industry is

narrowly oriented toward fluidized bed combustion.

SUMMARY

The use of fluidized-bed combustors with sulfur-absorbing beds to provide

gas cleanup is unlikely to make a significant contribution in the near-term (to

1985), as predicted by ERDA, due to technological barriers to implementation, Two

major coal combustion problems whose resolution would have major near-term

impacts are: * ., , _

1) the technical difficulties of substituting coal for gas and oil in presently

existing utility and industry applications (retrofit), and

2) the direct use of coal in a way which will meet environmental requirements.

Other technologies which hold promise of providing solutions to these problems

are pulverized fuel firing, and precombustion cleanup; both of these need research

and development support in order to enhance their contribution to direct coal

utilization by utilities and industry, There is also a need for more basic research in

coal chemistry. The present division among three Federal agencies of responsibilit y for coal cleanup causes variations in the criteria adopted by the agencies as well

as in the size and effectiveness of their programs. By assigning the funds and

responsibility for managing these programs to one agency, the development of a

balanced coal cleanup program could be facilitated. In all areas, the energy

program could be set back by a failure on the part of ERDA to recognize the needs of

the industrial sector such as the ferrous and nonferrous metal fabrication

industries, the glass and ceramics industries, and manufacturers of cement and

lime.

QUESTIONS

On what grounds does ERDA exclude R, D&D 3. What are the problems to be solved prior to

on improved pulverized coal combustion? commercialization of pressurized fluidized

bed combustion?

What improvements in pulverized coa l 4, How do the projected costs for solving the

technology are necessary in order to make problems in pressurized fluidized bed comthis technique a viable option for future coal bustion compare to the costs of achieving

burning plants? improvements in pulverized coal burning?

BACKGROUND

ERDA’s program in direct coal utilization is firing. The arguments for fluidized bed combusnarrowly focussed on fluidized bed combustion. tion are as follows. The combustion equipment is

Pressurized fluidized bed technology is probably compact, possibly involving a lower capital cost;

at least 15 years away from becoming a commer- the opportunities for cleaning during combustion

cial competitor with present pulverized fuel are great; and the technical understanding of

66 CHAPTER II
fluidized bed operation at atmospheric pressure

will spring-board the development of pressurized fluidized bed combustors. It is postulated that

these later generation equipment, by the inclusion of sulfur-absorbing media in the bed, will be

an ideal method of providing hot gases to drive

gas turbines. The future use of fluidized bed

combustors requires the resolution of several

technical problems. These difficulties include the

product ion of large quantities of waste (up to 300/0

of the amount of coal burned), hot gas cleanup

problems, and materials problems associated

with boiler tubes submerged in the bed. The

emission of sulfur compounds from coal combustion systems must be prevented or reduced in

order to make this source of energy environmentally acceptable. Until now, sulfur emission has

been controlled by post combustion cleaning,

i.e., stack-gas scrubbing. Unfortunately, stackgas scrubbers are expensive to build and operate,

and have been unreliable in use. Alternatives are

being sought and the ERDA plan chooses an

intracombustion method, i.e., the inclusion of a

sulfur-absorbing medium within a fluidized bed

combustor, Because of the technical problems

mentioned previously, additional options should

also be pursued. Precombustion coal cleaning

techniques can make a significant contribution

toward the reduction and control of sulfur

emissions,

Precombustion methods have been in operation since the 1930’s in various parts of the world.

They fall into two groups; physical and chemical.

The former are the most tried and, with some

coals, have proved entirely satisfactory in

service to remove up to 80°/0 of the sulfur present,

although usually less than 500/0 is removed by this

technique,

Research is needed to examine other precombustion cleanup methods and to study th e

fundamental mechanisms of the combustion

process.

The division of Federal responsibility among

three agencies presents an obstacle to the

development of a balanced program in coal

cleanup. Presently the Bureau of Mines oversees

Government support of R&D in precombustion

cleanup, while post combustion cleanup falls

within the jurisdiction of the Environmental

Protection Agency and intracombustion cleanup

has been taken up by ERDA.

Under these circumstances, adequate tradeoff

evaluations or balances among these alternative

approaches may not occur. Furthermore, the

criteria used to evaluate each option vary with

the lead agency, and there is no place where the

entire profile of criteria (environmental,

economic, institutional, efficiency) is applied

across the board to all options. Furthermore, the

size and effectiveness of programs devoted to

each technology by different agencies are likely

to be quite variable with no guarantee that the

most promising approach will be properl y

emphasized, It would appear to be desirable to

have the funds devoted to these various approaches allocated and managed by one agency

even if these funds were then passed to other

agencies.

Finally, ERDA’s program in fossil fuels must

consider the needs of industry, which consumes

40 percent of the Nation’s energy. Failure to

prepare for industrial needs for an acceptable

substitute for oil and gas in existing facilities

could lead to reduced production to the detriment

of the economy and society.

CHAPTER II 67
10. Low-Btu Gasification, Combined Cycle Powerplants

ISSUE

The present ERDA program to develop integrated low-Btu gasifier, combined

cycle powerplants has underestimated their potential.

SUMMARY

In terms of both efficiency and economics, the integrated low-Btu gasifier, gas

turbine/steam turbine, combined cycle electrical generating system promises to

become one of the best methods of using coal in an environmentally acceptable

manner that is likely to be developed, Commercialization of such a system, which

would have an overall efficiency of 37 to 38 percent (coal pile to bus bar), should be

achievable in the mid to late 1980’s if a balanced research and development

program is conducted. The ERDA documents give no indication that planning for

such a program is taking place.

QUESTIONS

1. On what schedule and at what funding level

are pilot and demonstration plants for

integrated low-Btu gasifier, combined cycle

systems included in the ERDA program?

2. What is the schedule and funding level for

development work on high temperature

turbines for improving cycle performance?

3. What plans has ERDA made for research and

development on gas cleanup systems that are

applicable to low-Btu gasification, combined

cycle systems?

4. Of the different types of pressurized low-Btu

gasification, clean gas processes, (e.g., fixed

bed, fluidized bed, and entrained bed):

a. What are the different probabilities of

technical and commercial success?

b. Will the construction of demonstration

plants for all three gasification processes

be funded in order to assess their relative

economics?

c. What are the probabilities of success of hot

gas cleanup versus cold gas cleanup via

scrubbing?

BACKGROUND

The lowest cost, environmentally acceptable,

coal-fired, base load electric powerplant in the

foreseeable future may be an integrated,

pressurized low-Btu gasifier, high temperature

gas turbine, and steam turbine plant. Such a

system could be built today but it would be

limited to particular (noncaking) kinds of coal

and to efficiencies comparable to conventional

coal-fired steam plants. The operating features

and requirements of the gasifier and the combined cycle plant complement one another, the

turbine producing compressed air and steam for

the gasifier and the gasifier producing gas

turbine fuel, This integration offers the possibility of significant gains in overall plant energy

efficiency and reduction in plant costs by the

common use of large major components as

contraste d with freestandin g fuel an d

powerplants. There is a clear technical path by

which such systems could be developed in stages

68 CHAPTER II
so as to use a wide variety of coals and reach

overall efficiencies (coal pile to bus bar) of above

40 percent, One path which appears to have the

least severe technical barriers includes the

following developments: (1) improved pressurized fixed-bed gasifier capable of handling

caking coals and having higher capacities than

today’s units; (2) improved gas cleanup systems;

(3) plant integration to optimize the synergism

between gasifier, gas turbine and steam turbine;

and (4) advanced gas turbines with firing

temperatures well above 2000° F, growing

eventually to near 30 0 0

0 F .

The integrated low-Btu gasifier, combined

cycle system could be developed via no more than

two to four generations of precommercia l

demonstration plants. Each plant would lead to

another round of technical advances; the final

goal would be achievable in the late 1980’s. If the

likely technological developments occur, the

system may generate electricity at a lower cost as

well as more efficiently than conventional coalfired plants with stack-gas scrubbing and, in

addition, would present a minimum of byproduct

problems. The system costs would appear to

compare favorably with those of a nuclear light

water reactor of equivalent size.

A program of the type described above does not

appear as a line item in ERDA’s Plan. Rather, the

technological components of the low-Btu gasifier, combined cycle system are distributed

among sever al o f the proposed ERDA programs.

The turbine portion of the system appears under

“Advanced Power Systems” and “Electric Conversion Efficiency, ” while the low-Btu gasifier

portion is located under “Coal Gasification.” The

low-Btu gasification programs would appear to

be better placed under “Direct Coal Utilization,

Utilities/Industry” since the latter describes

their functional objective—quite a different

objective from those of the high-Btu and 1iquefact ion programs. In addition, the low-Btu gasification program should be carefully watched to take

into account progress in advanced turbin e

development.

11. Advanced Fossil Fuel Combustion Programs

ISSUE

Frequent evaluation of progress in magnetohydrodynamic (MHD) and other

high-efficiency energy R&D programs will be necessary to ensure maximum energy

yield over the long term.

SUMMARY

The ERDA

Combustion (i.e.

programs. MHD

Direct Coal Utilization program contains both the Direct

fluidized bed) and Advanced Power Systems (i.e. gas turbine)

research is a separate program, even though MHD is a direct

combustion process. Fuel cell R&D is not included in the Fossil Fuel Division of

ERDA, though it has more in common with the fossil programs than with the noncombustion Advanced Division in which it is housed. Relative fu ding of these

programs indicates heavy ERDA emphasis on fluidized bed and MHD, much less

emphasis on advanced gas turbine research and an almost total disregard of fuel

cell technology.

A portion of the present ERDA emphasis is well placed, given that fluidized

bed combustors and MHD systems can burn coal directly, while the advanced gas

turbine and fuel-cell technologies require liquid or gaseous fuels which over the

long term will have to come from coal conversion. Thus, while the advanced gas

CHAPTER II 69

60-411 0- ’75 -6
1.

2.

3.

turbine and fuel-cell technologies can probably be brought to commercial

application much sooner than MHD or pressurized fluidized beds, their fuel

deployment will depend on progress in the commercialization of synthetic fuels.

In many applications, these technologies are mutually exclusive. Funding and

program decisions about each will be affected by progress in the other programs.

The MHD program in particular has several major technology hurdles to overcome

prior to commercial application using coal. While the MHD program appears to be

adequately funded and structured, continuous assessment of progress in MHD

development relative to the other technologies will be necessary to ensure that

research expenditures yield the maximum benefit. By comparison, fuel-cell

technology development deserves more support than it is currently receiving in

ERDA. Both recent industrial progress in developing commercially feasible fuelcell technology and the Congressional mandate in Public Law 93-577, Section

6(b) (3] (N) “to commercially demonstrate the use of fuel cells for central station

electric power generation” indicate a need for more ERDA attention to fuel-cell

technology,

,,

QUESTIONS

What is ERDA’s projection of the MHD/com- 4. How does the ERDA program in fuel cells

bined cycle contribution to U.S. electrical relate to the private industry commitment to

energy production as a function of time? this technology?

What are the technical problems which must 5. What will be achieved with the FY 76 budget

be solved before coal-fired open cycle MHD of $500,000 for fuel cells? How would a

power plants can be considered for commer- greater expenditure on fuel-cell technology

cial operation? improve the program. ?

What is ERDA’s view of the relative merits of

MHD, Rankine topping cycles, organi c

bottoming cycles, and fuel cells in terms of

their potential for energy generation efficiencies and fuel savings as a function of time?

BACKGROUND

The MHD generator is a direct energy conversion device which transforms the kinetic energy

of ions entrained in a high-speed gas flow into

electrical energy by passage of the flow of gas

and entrained ionized particles through a strong

magnetic field. There are two basic types of MHD

generators:

. Open-cycle, in which the working fluid is

produced by the combustion of a fossil fuel

and is passed once through the cycle.

● Closed-cycle, in which the working fluid is

recirculated, the heat

via a suitable high

changer.

70 CHAPTER II

input being supplied

temperature heat exSince open-cycle systems utilize the combustion products as the working fluid of the cycle,

they do not need any solid surface interposed

between the heat source and the conversion

device, and the temperature is fundamentally

limited only by the heat source.

The primary utility of the concept lies in its

potential use as a topping cycle for extending the

upper temperature limit on conventional electrical generating systems, thus increasing the

efficiency of energy conversion of the overall

system from the presently achievable 38-40

percent up to 55-60 percent.

The MHD concept has been in development at

the laboratory research level since the late 1950’s.
Primary interest in the United States in MHD is

based on the concept’s projected ability to

operate with direct coal combustion. The Soviet

Union has a working demonstration system, but

the Soviet U-25 facility is fired with natural gas.

There are presently three critical questions

relating to the feasibility of MHD, the answers to

which will determine whether the present

research efforts should be continued. ERDA’s

program is pursuing the answers to thos e

questions, which are described below.

The first problem area relates to the efficiency

of enthalpy extraction, or the transfer of energy

from the moving gas stream to the electrical

circuit. The efficiency of this transfer is dependent on the orderly linear motion of the ionized

gas through the magnetic field created by a

superconducting magnet. What data ar e

available indicate that efficiencies on open-cycle

MHD achieved to date are in the vicinity of 8

percent, rather than the 20 percent which will be

required for feasible application of the MHD

concept. Over 20 percent enthalpy extraction has

been achieved in closed-cycle MHD experiments.

These percentages, however, were not obtained

at the flow conditions and magnetic fields

contemplated for commercial service. The open

cycle enthalpy extraction was obtained in

supersonic flow with a magnetic field of about

two tesla. Commercial open-cycle generators are

expected to operate in subsonic flow with

magnetic field strengths of about six tesla. The

closed cycle extraction was achieved at higher

temperatures and lower magnetic field strength

than are considered appropriate for commercial

equipment.

A second major area of inquiry relates to the

feasibility of preheating the combustor inlet air

by exchange of heat from the gas exhausted from

the MHD duct. The efficient and durable heat

exchanger configuration required to accomplish

this has not been demonstrated. (Such a high

temperature heat exchanger, if successfully

developed, would also be applicable to a wide

range of advanced heat generation and fuel

conversion processes).

The third critical area of inquiry relates to

recovery of the ion “seed”. The entire MHD

process rests on the seeding of the combustion

gases with a potassium salt, which both ionizes

easily and preferentially combines with the

sulfur in the coal to form potassium or cesium

sulfate. The economic feasibility of the MHD

concept requires virtually total recovery of the

seed, which is then chemically processed for

reinfection. The high recovery rate required has

not yet been demonstrated in the slagging

environment of a coal-burning MHD generator.

Assuming successful laboratory scale

demonstration of these three critical processes,

the further development of the MHD process to

the commercial level will require many years.

This fact is reflected in the schedules for the

program in the ERDA documents.

Fluidized bed combustors and advanced gas

turbines are described elsewhere in this chapter

(Issues 9 and 10) and will not be furthe r

discussed here.

Fuel-cell technology holds great promise for

electrical energy generation at efficiencies comparable to those claimed for the MHD/combined

cycle technology. Industry has made significant

contributions in fuel-cell R&D and has advanced

the state of the art to the point where fuel cells

using methane or natural gas are now competitive with standard steam generator systems

in terms of efficiencies, There is need for

continued research to further improve both the

efficiency and the economics of fuel-cell systems.

Fuel-cell technology can be a natural complement

to low-Btu synthetic gas production from coal,

and has further advantages in the potential for

generation of electricity at the neighborhood or

district level. The Congress, in Public Law 93-

577, Section 6(b)(3)(N), directed the Administrator of ERDA to “. . . assign program

elements and activities (including) research,

development and demonstrations designed. . .

(N) to commercially demonstrate the use of fuel

cells for central station electric power generation.” The amount budgeted for fuel cell R&D

($500,000) for FY 76 seems so little as to

represent a token response to this mandate.

CHAPTER II 71
12. Interagency Coordination: Coal Cleanup

Coordination between ERDA and other agencies appears to be inadequate in

activities relating to research and development of fossil energy. This is particularly

evident in coal cleanup.

SUMMARY

The responsibility for many programs important to the successful development of increased fossil fuel supplies lies outside ERDA. While this division of

responsibility acknowledges the scope and expertise of other agencies, ERDA, in

its capacity as lead agency in formulating Federal R, D&D strategy, has a

responsibility to participate in the design, development, and coordination of these

outside activities and to evaluate their progress. This is necessary to ensure that no

serious omissions or delays occur because of problems in non-ERDA programs on

which ERDA programs are dependent either in their development or their

implementation. Further, when policy decisions are made concerning alternative

technologies, it is important that the criteria used in assessing the options do not

vary among the decisionmaking agencies. In some cases, a redefinition of

responsibilities may be desirable, A case in point is the problem of coal cleaning.

Precombustion cleanup research is performed by the Bureau of Mines, during

combustion cleanup by ERDA, and post combustion cleanup by EPA.

QUESTIONS

1. What mechanism is ERDA using to coor- 3. Does ERDA believe the present level of R&D

dinate its programs with those of other techniques matches their potential benefits?

agencies? 4. Is the distribution of R&D responsibilities in

fossil energy among the Federal agencies the

2. How are relative priorities established in most effective for achieving the national

program areas that involve several agencies? energy goals?

BACKGROUND

Important segments of the Nation’s R, D&D

programs in fossil energy are administered by

agencies other than ERDA. For example, mining

technology and ore beneficiation are located in

the Bureau of Mines, fossil resource assessment

in the Geological Survey, stack-gas cleanup in

the Environmental Protection Agency bu t

precombustion cleanup in the Bureau of Mines,

and coal transportation in the Department of

Transportation, This division of responsibility

evolved from the previously existing agency

charges and acknowledges the basic interests

and expertise of the various agencies.

This separation of R&D programs among

different agencies poses problems to successful

implement at ion of overall energy strategy.

ERDA, in its position as the agency directly

responsible for formulating and implementing

72 CHAPTER II
Federal R, D&D policy, is charged by its

legislative mandate with an oversight responsibility relative to energy programs which are not

under its authority. It must participate in the

design and development of important programs

and provide the coordination to insure that no

gaps or wasteful overlaps in programs occur; it

must also continually monitor the progress of

outside activities to avoid unnecessary delays.

The size and effectiveness of programs devoted

to energy-related problems by different agencies

is likely to be quite variable, with no guarantee

that the level of effort will match the needs. The

criteria used to evaluate competing options can

also be expected to vary depending on the agency.

ERDA has a mission in reducing these problems.

One example of a division of responsibility

important to the increased use of coal is the

problem of coal cleaning. Precombustion cleanup

research (e.g., magnetic desulfurization) is performed by Bureau of Mines, during combustion

cleanup (e.g., fluidized bed combustion] by

ERDA and postcombustion cleanup (e.g. ,

stackgas scrubbing) by EPA. Are the relative

levels of effort of these various research

programs adequate in proportion to their potential contributions to the different technologies for

the use of coal in utilities and industry? An

answer to this question cannot be obtained from

the ERDA documents. The present distribution of

research programs must be carefully examined to

determine whether it provides the best approach

to solving environmental problems associated

with coal combustion. Some reassignment of

responsibilities may become desirable.

CHAPTER II 73
13. Environmental, Social, and Political Impacts of

Mining

Even if mining technology is adequate to support an expanded use of coal and

oil shale in the United States, there are potential obstacles associated with

environmental, social, and political impacts of a massive increase in mining.

SUMMARY

A major increase in electricity y generation from the direct combustion of coal or

the conversion of coal to synthetic gas and liquid fuels at a commercial scale will

require a significant expansion of coal extraction, For example, a 250 million cubic

feet per day plant for producing pipeline gas from coal will require a coal mine as

large as any presently operating in the United States. The plant will consume more

coal than is now mined in Utah. An activity of this scope will almost certainly

encounter resistance from groups in society that are especially concerned about

environmental quality; these groups may have considerable influence at State and

local levels. If these concerns are not to become a serious constraint to the use of

improved fossil fuel technologies, ERDA must be sure that necessary programs are

established to reduce uncertainties about environmental and social impacts and to

mitigate serious negative impacts,

d

QUESTIONS

1, Are the research activities of Federal agen- 30 H o w large a community must be established

cies, other than ERDA, sufficient to avoid to build and operate- a commercial-sized

2

future environmental and social constraints synthetic fuel plant and its associated mining

on the application of improved fossil fuel activities?

technologies?

What are the options—and the pros and

cons—for accommodating the concerns of

States about potential negative environmental and social impacts of an expansion of

coal- and oil-shale mining?

BACKGROUND

Coal, as our largest domestic fossil energy technological challenge of mining at such a scale,

source, and oil shale, as a sizable resource for there will be major concerns about mineland

liquid fuels, are certain to increase in importance reclamation, waste disposal, protection against

in the national energy picture; for example, the water pollution, “boom and bust” urban growth,

current goal is to double coal production to 1.2 water consumption, and other environmental

billion tons a year by 1985. Along with the and social impacts of the mining activities.

74 CHAPTER II
Opinions differ as to the seriousness of these

problems. Some believe that they are major

impediments, likely to block a rapid increase in

coal- and oil-shale utilization. Others believe

that they are not serious problems and that the

opposing view is misinformed. But representatives of both points of view agree that a better

base of information about these impacts would

help to reduce delays in applying improved fossil

fuel technologies. Thus broad and detailed

studies are in order on environmental problems

associated with coal and oil shale mining, such as

waste disposal, reclamation and revegetation,

watershed protection, and water supply and

conservation, to increase as rapidly as possible

the range of options for mitigating negative

impacts. Also, improved understanding of the

social and economic impacts of locating new,

large communities in sparsely populated regions

will assist in planning for these communities and

satisfying the legitimate concerns of local

residents,

A special concern of many coal or oil-shale rich

States is that they will have to bear the burden of

negative impacts for the sake of meeting the

energy needs of consumers in unaffected States.

This introduces important questions in FederalState relations. In some respects, the increased

use of coal and oil shale will be a process of

political accommodation, and ERDA ca n

accelerate the process by such activities as the

preparation of regional programmatic impact

statements and the collection of data to buttress

them,

The proposed ERDA budget does not appear to

include sufficient funds for the kind of effort that

is needed,

CHAPTER II 75
14. Manpower

ISSUE

ERDA’s program for massive expansion of the use of coal will require far more

trained personnel at various levels than can naturally be expected to enter those

sectors of the labor market.

SUMMARY

ERDA estimates of increased coal production will require a significant

increase in the number of underground coal miners, including first-line supervisory personnel and coal mining engineers. The fluctuating production levels of

the coal mining industry over the last 25 years has resulted in a current work force

composed principally of miners over 50 or under 30 years of age. Simultaneously,

advanced mining techniques and machinery impose a requirement for more

education and special training. Coal research and mining engineering programs at

the university level are few and thinly staffed. Significantly more faculty are

needed to expand and multiply these programs. The development of gasification

and liquefaction plants will also increase demand for both university-trained

professionals and for subprofessionals with special skills. Failure to support the

development of the necessary manpower pool in these and other areas requiring

critical skills could result in failure to achieve the goals which ERDA has set, even

if the technology and other required inputs are available.

QUESTIONS

1. What special ski lls are critical to the success 3. What impact will o her energy programs

of the proposed fossil fuel programs, and how have on manpower available for the fossil

many ‘trained personnel will be needed? fuel industries?

2. What information is available concerning the 4. What level of ERDA support for educational

ability of existing professional and trade programs is planned to provide the necessary

educational facilities to provide th e manpower, and over what period of time?

necessary trained personnel?

BACKGROUND

The future in fossil fuel production and

consumption envisioned in the ERDA program

consists of a continuing decline in the supply of

petroleum and natural gas from primary sources,

with the difference between supply and demand

being replaced primarily by coal, either in direct

use or via conversion to liquid and gaseous

synthetic fuels. The projected massive increase

in coal extraction and processing will require a

76 CHAPTER II

comparably massive injection of newly trained

manpower into industries which either have

languished for decades or are now in their

infancy.

The manpower supply situation for the required increase in coal production may become

severe. There are certain special skills required

by underground miners which can only be gained

by experience. The recession in the industry that
reduced product ion during the post-war years

curtailed recruitment, so that the average age of

skilled miners is now in the upper 40’s. Young

people are being recruited in increasing numbers,

but there is a missing generation and the

continuity has been broken. The father-to-son

tradition and local community spirit have largely

disappeared, Moreover, there has been a significant increase in the technical training required to

opera t e and main t a in the sophisticated

machinery that is now in use. Supervisory

personnel who would normally be drawn from

the middle generation are not available, and

intensive education and training are necessary to

assure a stable skilled work force.

Strip and auger mines have fewer problems in

recruiting personnel, provided job, wage, and

living conditions are comparable, since they can

draw on general construction skills. Strip mining

is capital intensive; a large dragline or shovel

may cost more than $15 million fully installed,

requiring full utilization and operation by highly

trained personnel.

There was a significant increase in the mine

work force in 1970 following the enactment of the

Mine Enforcement and Safety Act; employment

jumped from 124,000 to 140,000 workers. During

1970-74, manpower increased by an additional

10,000 employees to 150,000.

Because of a decline in underground mining

productivity y, overall industry productivity

declined from 19.9 tons per man in 1969 to 17.3

tons per man in 1974. Strip mine productivity

remained about the same at 36 tons per man, and

auger mining increased from 40 to 45 tons per

man. The effects and the measures required by

the 1969 Mine Health and Safety Act have now

been absorbed by mine operators and may not

cause any major additional impact on future

mining manpower or costs, although their effects

will escalate steadily in step with other mining

costs .

Projections of production, manpower, and

productivity for 1985 are:

Product ion . . . . . . . . . . . . . . . . .

Work Force:

IJnderground mines . . . . . . .

Strip and Auger Mines . . . .

Total Estimated . . . . . . . .

Productivity Per Employee

Shift: 

Underground Mines . . . . . . .

Strip Mines . . . . . . . . . . . . . .

1.0 to 1.2 billion tons

160,000 persons

75,000 persons

235,000 persons

13 to 15 tons

40 to 45 tons

In general, the following developments can be

anticipated:

The labor force will be composed of highly

skilled technicians, electronic and hydraulic

experts able to operat e and maintain

sophisticated and costly equipment.

Underground and strip mine workers will be

more highly skilled, younger, and better paid.

There will be an increasing demand for mining

engineers and other engineering skills to

maximize system performance.

There will be increased need to upgrade the

educational level of the work force through

trade schools and adult education facilities.

The requirement for university-trained personnel raises an additional set of problems. There

are at present only three substantial university

coal research programs and only 5 schools which

teach coal preparation technology. The number

of students in these programs is quite small, The

opening of new college and university programs

and the expansion of existing departments is

likely to distribute more sparsely an already

small faculty base unless special attention is paid

to this area. The support of university training

programs via R&D contracts does not appear to

be an adequate response to the problem for two

reasons. First, universities that are unde r

pressure to produce competitively in R&D

programs often compete for professional manpower and neglect their educational role. Second,

universities may be unwilling to undertake longterm educational programs in support of R&D

because of past experience in which abrupt

cancellations of support left them with unsupported educational programs. Direct support

through fellowship and traineeship programs at

both graduate and undergraduate levels will

probably be required in the educational areas

where a future shortfall of personnel is identified.

CHAPTER II 77
15. Transportation Systems

ISSUE

The application of fossil fuel technology research will require improved

transportation systems in the United States.

SUMMARY

A shift from the use of crude oil and natural gas, imported or domestic, to the

use of coal and synthetic fuel products from coal will make heavy demands on

existing transportation systems. The rail network, which moves most of the

Nation’s coal, will be especially affected. In order to avoid major constraints on the

application of improved fossil fuel. technologies, ERDA needs to anticipate the

commodity movements that may be required and to assure that necessary

additions to or changes in present transportation systems are brought about.

QUESTIONS

1, What are the interregional transportation 3. To what extent are the needed changes in

requirements of ERDA’s scenarios in volume transportation capabilities a problem of

1, and how do they compare with the present Federal regulatory policy rather than a

capacities of transportation networks? problem of technology development?

2. In ERDA’s opinion, what are the prospects for

an increased use of coal slurry pipelines?

BACKGROUND

Whenever an energy product is produced at a

location other than where it is to be consumed, it

must be moved, We are well aware of the

importance of pipelines for oil and natural gas in

the United States today, and we are increasingly

aware of the need to move large quantities of coal

from mines to the locations of electrical generation plants, industrial users, and other consumers.

As a larger portion of the energy in the United

States is made available from domestic resources

other than oil and natural gas, the demands on

our transportation systems will grow rapidly,

and the present systems will certainly prove

inadequate. For example, 44 percent of the

electricity in the United States in 1972 was

generated by burning coal, and 69 percent of the

78 CHAPTER II

coal was moved by rail, If new technologies for

the direct combustion of coal allow the 44 percent

to be increased to 70 percent, replacing most of

the portion now fueled by oil and natural gas (37

percent in 1972), the impact on the Nation’s rail

system will be massive: congested rail lines, a

shortage of coal cars, pressure for revised tariff

structures, etc. This will be especially true if

much of the increase is based on western coal,

because the distances from mine to market will

usually be greater and the rail network in the

West is much less dense, adding to the chance of

bottlenecks and posing a problem of national

security.

Other transportation systems may b e

problematic as well. Demands for barg e

transportation will increase, with the same
dangers of congestion, equipment shortages, and

pressures for price increases. Slurry pipelines, an

alternative to the rail or barge transport of coal,

presently require negotiations for easements

with each State to be traversed, and they are

significant users of water. The production of

synthetic oil and gas will in many cases require

either new pipelines or the reversal of directions

of flow in existing ones. And there are numerous

questions of fuel or energy storage con -

figurations and regulatory responsibility. For

example, coal slurry pipelines are the responsibility of ERDA; natural gas pipelines and

electrical transmission are regulated by the

Federal Power Commission; and rail transportation is overseen by the Department of Transportation and the Interstate Commerce Commission.

If coal utilization and conversion technologies

are to be used to meet national energy needs,

ERDA must assure that transportation systems

will be capable of meeting the new demands on

them. This calls for a wide-range study of the

relative locations of resources and users, the

capacities of transport networks that link them,

and strategies for mitigating anticipated

problems. The effect of tariff structures in

transportation on the development and use of

fossil fuels also needs to be studied.

CHAPTER II 79
16. Water Availability

ERDA has not established a systems-oriented study of water availability related

to its energy program.

SUMMARY

ERDA has defined programs for extensive development of U.S. coal resources,

for oil shale, and for increased electrification as part of its overall strategy for

supply of energy in the United States, These programs all imply a greatly increased

demand for water, in terms of both withdrawal and consumption. When these

programs are viewed in the context of the total ERDA program, including nuclear

and geothermal energy programs, it is apparent that the availability of water to

supply commercial level energy production activities is uncertain, especially in the

fossil fuel area. A large percentage of the fossil fuel development programs relate to

the use of low-grade coal, generation of low-Btu gas, processing of oil shale and

other activities which involve fuel sources or product streams which are not

economically transportable. These activities may be located primarily in the

resource-rich but water-short Northern Great Plains and Colorado River Basins.

There is no evidence in the ERDA Plan of any coordinated water-resource planning

activity to facilitate the implementation of the technologies for fossil energy

production which ERDA has defined as critical to future energy supply.

QUESTIONS

1. Which division of ERDA has primary respon- 3, What is the nature and extent of ERDA’s

sibility for maintaining an overview of water cooperative activities with other Federal and

availability for ERDA’s projected fossil fuel State agencies in the areas of water availabilisupply strategy? ty, allocation of water rights, and regional

2. Which division of ERDA has primary respon- water quality maintenance?

sibility for maintaining an overview of water

availability for ERDA’s total energy supply

strategy?

BACKGROUND

There is widespread concern in the Western

States abou t the water consumption re -

quirements of coal gasification and liquefaction,

oil shale liquefaction, and electrical power

generation from coal. Every comprehensive

energy supply plan for the United States calls for

siting new facilites in the Northern Great Plains

and the Upper Colorado River Basin, and these

are areas where water is considered a precious

commodity, a resource to be allocated with care,

Present water consumption in these areas is well

short of average supply levels, and representatives of the energy industry believe that

adequate water is available for a commercial

fossil fuel-based energy industry. But as long as

there is considerable uncertainty in the minds of

80 CHAPTER II
citizens of States like Montana and Colorado, the wil

water question can be a focus for political

resistance to new commercial facilities. Consequently, it is vital that water resources for

western fossil fuel development be assessed

carefully, clearly, and publicly—and compared

with water consumption requirements for commercial developments that would be the result of

ERDA-supported R&D. An adequate assessment

1 have to include water rights law, the

economics of water resource development and

use, seasonal and annual variations in surface

water availability, interstate compacts for the

downstream delivery of water, preferential

treatment for (and the definition of) “beneficial”

uses of water, and groundwater resources

available for use without long-term depletion of

underground water reservoirs.

CHAPTER II 81
Chapter III

Nuclear Task Group Analysis
A. NUCLEAR TASK GROUP

MEMBERS

Dr. Alvin M. Weinberg, Chairman, Institute for

Energy Analysis

Dr. Ralph H. Brooks, Tennessee Valley Authority

Dr. Thomas B. Cochran, Natural Resources

Defense Council

Dr. Robert J. Creagan, Westinghouse Electric

Dr. Leonard Geller, S.M. Stoner

Prof. John P. Howe, University of California at

San Diego

Prof. Moshe J. Lubin, University of Rochester

Dr. Alfred M. Perry, Institute for Energy

Analysis

Prof. David J. Rose, Massachusetts Institute of

Technology

Prof. O. F. Schuette, University of South Carolina

Prof. John C. Thompson, Jr., Cornell University

Dr. Robert E. Uhrig, Florida Power and Light

CONTRIBUTORS

Prof. James Freim, University of Oklahoma

Prof. Michael Golay, Massachusetts Institute of

Technology

Prof. Alan A. Ware, University of Texas at

Austin

84 CHAPTER Ill
B. NUCLEAR TASK GROUP ISSUES LIST

1. Standardization . . . . . . . . . . . . . . . 91

The present procedure for the design, construct ion and licensing of a nuclea r

powerplant is time-consuming, inefficient,

and costly. An ERDA-supported standardization program could alleviate these difficulties,

2. Performance and Reliability . . . . 93

Problems relating to the performance and

reliability of light-water reactors have

received insufficient attention since the AEC

ceased nonsafety light-water reactor R&D.

3. Floating Nuclear Powerplants . . 95

Floating nuclear powerplants offer potential

improvements in LWR licensing and construction, but implementation is in doubt.

4. Helium - Cooled Reactors —

Converters and Breeders . . . . . . . 97

Helium-cooled reactors have some potential

advantages not offered by water- or sodiumcooled plants, yet have a relatively low

priority in ERDA’s program.

5. Liquid Metal Fast Breeder Reactor 99

The liquid metal fast breeder reactor has

great potential as an “inexhaustible” longterm energy source, but it poses serious

technological and societal problems.

6. Light-Water Breeder Reactor . . 102

The light water breeder reactor concept has

several advantages, but the need for it is

questionable.

7. Molten Salt Breeder Reactor . . 104

Support for the molten salt breeder reactor

development program is small compared to

other reactors and may be insufficient to

permit evaluation within a reasonable time

period.

8. Nuclear Environmental Effects 105

There is a continuing need for the evaluation

of the environmental effects associated with

nuclear energy sources.

9. Plutonium Toxicity . . . . . . . . . . . 107

The toxicity of plutonium may pose a serious

threat to a plutonium-based nuclear option,

such as the LMFBR or plutonium recycle in

light-water reactors.

IO. Waste Disposal . . . . . . . . . . . . . . . 108

Satisfactory handling of nuclear fission

wastes appears to be technologically feasible, although it has yet to be demonstrated.

Other problems exist, mainly societal and

institutional, which greatly influence the

nature of the demonstration required.

11. Safeguards for Nuclear Materials 110

Safeguards must be adequate to prevent the

theft or loss of fission materials, with

subsequent clandestine construction of

nuclear weapons.

12. Siting ● . . . . . . . . . . . . . . . . . ● .*... 112

Nuclear Regulatory Commission policy

changes for siting could influence reactor and

supporting system design.

13. Uranium Resources . . . . . . . . . . . 113

The lack of precision in present uranium

resource estimates and questions as to the

rate of expansion of uranium production

capability make resource-related issues

difficult to address,

14. Uranium Enrichment . . . . . . . . . 115

Expansion of uranium enrichment capacity

is required to meet domestic requirements

and foreign commitments for LWR and

HTGR fuel.

CHAPTER Ill 85
15.

16.

17.

Fuel Recycle . . . . . . . . . . . . . . . . . . 117

Fission fuel recycling capability is needed for

the orderly development of nuclear power.

Public Understanding . . . . . . . . . 119

Public understanding of the energy problem,

and especially of the nuclear option, receives

minor emphasis in the ERDA Program,

Controlled Fusion . . . . . . . . . . . . . 121

Great care must be exercised to ensure that

the ERDA-controlled fusion program does

not expand at a rate so fast that proper

attention is not given to the different physics

problems of controlled fusion and that

development of new concepts is no t

prematurely abandoned.

18. Technologies for Fusion . . . . . . . 123

New technologies, which will be critical to

fusion’s successful development through the

1980’s, require a long time to develop and will

require rapidly increasing effort with time,

86 CHAPTER Ill
C. INTRODUCTION

Under the Atomic Energy Commission, nuclear

power enjoyed substantial funding compared to

that available for alternative energy sources.

Though the existence of ERDA is expected to

bring about a more appropriate balance, the need

for nuclear power has never been greater, and

many problems remain. Research and development to find solutions to these problems may

require expansions in what is still by far the

biggest part of ERDA’s budget. The major issues

in fission, fusion, and supporting technologies

are discussed here. More detailed discussions of

the nuclear program elements are given in the

issue papers,

1. Converter Reactors

Light-Water Reactors. Light-water reactors

(LWR’s) now supply about 8 percent of the

national electric energy needs (or 2 percent of all

energy), and they will almost certainly dominate

the nuclear industry for the next 2 decades. The

reactor technology is well in hand, but many

problems still exist, as evidenced by rapidly

increasing costs and long leadtimes. These, in

conjunction with the capital squeeze and power

demand reduction, have caused the recent plant

deferrals and cancellations. Nevertheless, the

ERDA-48 Scenario 111 goal of 225 reactors by

1985 could be attainable if financing, licensing

and manpower constraints are reduced, since

that number of reactors have already been built

or ordered. The projected plant startup rate in the

remainder of the century, although twice that of

the 1975-85 decade, still averages only to the

number of plants (35) that were ordered in 1973.

The primary obstacles to achieving either goal

appear to be financial and institutional, not

technological.

The cost and leadtime problems could be

substantially alleviated if design, construction,

and licensing techniques were improved. ERDA’s

new program addresses these problems, but the

resources devoted to plant standardization seem

insufficient to fully realize its potential to speed

construction and cut costs. Issue Paper 1 discusses these problems and a possible standardization program.

While the reliability of large LWR’s has been

equivalent to comparable-sized fossil plants, it

has been less than expected, An increase in

nuclear plant availability would have a substantial effect on oil consumption, since utilities often

must replace the missing base load capacity with

oil-burning units. Each large LWR generates heat

at a rate equivalent to more than 40,000 barrels of

oil per day. The ERDA program addresses the

major causes of unreliability; Issue Paper 2

discusses reliability and advanced safety and

efficiency concepts.

The floating nuclear plant (FNP), which would

be factory built on a barge and floated into its

permanent location, offers the possibility of

speeding construction and cutting costs. Utilities

have been reluctant to order these plants,

however, because of the general slowdown in

new plant orders and because of doubts as to the

licensable nature and ultimate performance of

the plants. As a result, the only supplier of FNP’s

is now in a precarious financial condition. A

proposed ERDA program to stimulate introduction of FNP’s is discussed in Issue Paper 3.

High-Temperature Gas Reactor. The only

American competitor to the present LWR which

is near commercialization is the helium cooled

high-temperature gas reactor (HTGR). It offers a

higher efficiency than the LWR, equivalent to the

best fossil units; a possibly more easily managed

safeguards problem; potential use as an industrial process heat source because of its higher

operating temperature; and freedom from

midterm fuel resource worries. It is, however,

more expensive than the LWR, and utilities have

less confidence in its reliability because of very

limited and less than reassuring operating

experience with the Fort St. Vrain demonstration

plant, As a result of these factors, about half of

the HTGR orders have been canceled, and the

manufacturer may have difficulty surviving. The

HTGR concept seems to be worth developing as a

viable option, but the present ERDA program

may be insufficient to accomplish this, ERDA

may soon have to decide whether to provide

CHAPTER Ill 87
greater support or let the concept die, Issue Paper

4 discusses the HTGR potential and program.

Other Converter Reactors. At present, there

seems to be little advantage to foreign converter

reactors. This situation could change in the next

few years if the Canadian deuterium-moderated

reactor (CANDU) continues to show superior

capacity factors. This reactor uses natura l

uranium, thus avoiding the expensive enrichment process, and consumes slightly less fuel

than the LWR over its lifetime. Its lower thermal

efficiency and its need for large quantities of

heavy water, which require large amounts of

energy to produce, tend to offset these advantages. In addition, the licensability of the

CANDU reactor unde r existing Nuclea r

Regulatory Commission (NRC) regulations

appears doubtful. Importation of the reactors

appears undesirable for reasons of energ y

independence and balance of payment considerations. Alternatively, if these reactors were to be

produced domestically under Canadian license,

U.S. industry would have to make a costly

conversion to the manufacture and support of a

very different technology which probably will be

superseded in the near future, The advanced

CANDU is under development and shows

promise of greatly extending resources and

producing power more cheaply than the present

design. ERDA should follow this development

closely.

2. Breeder Reactors

Liquid Metal Fast Breeder Reactor. The liquid

metal fast breeder (LMFBR) is the most

technologically advanced o f the breede r

technologies both here and abroad. It is much

closer to technological and economic success

than the other “inexhaustible” long-term energy

sources and has the potential to produce vast

quantities of power early in the next century at a

competitive price. It could do this in a manner

that is more acceptable environmentally than

any present technology. Nevertheless, it is the

most controversial item in the ERDA program.

Controversy centers around the cost of the

R&D program, especially relative to the funding

of alternative energy sources; the economics of

the LMFBR when fully developed; the quality of

the design; the increased safeguards problem

that will result from the large quantities susceptibility to sabotage. Issue Paper 5 discusses these

issues and the program goals and problems.

The ERDA expectation of 80 commercial

LMFBR units by the year 2000 is optimistic in

view of the recent delay in the Clinch River

demonstration plant, This is probably no t

critical, however, because many of these projected units could be replaced by converter

reactors.

Gas-Cooled Fast Reactor. The gas-cooled fast

reactor (GCFR) is a possible successor or

supplement to the LMFBR, It has a higher

breeding ratio and thermal efficiency and may

entail more easily managed problems of safety

and safeguards than the LMFBR. Technological

development of the GCFR is less well advanced,

however, and substantial development work is

needed in such areas as component development

and fuel-cycle analysis. Issue Paper 4 discusses

the GCFR with the HTGR, since the two are

intimately related technologically.

Light-Water Breeder Reactor. The light-water

breeder reactor (LWBR) is designed to utilize

much of the present pressurized water reactor

(PWR) technology, Ideally, the reactor itself

would fit into a present-generation PWR vessel,

with some derating of thermal output, and

produce as much fuel as it burns. Thus, temporary freedom from fuel resource limitations

might be achieved with a small expenditure for

research and development and a relatively low

capital cost increment. Too few details have been

released for a realistic assessment to be made.

Little is now known of the fuel-cycle cost or

licensing problems, and utilities have shown

little interest in the LWBR concept. Issue Paper 6

covers the project and its potential.

Molten Salt Breeder Reactor. The molten salt

breeder reactor (MSBR) is a totally different

breeder design that has been funded for many

years at a very low level, If successful, it would

simplify the safety and safeguards problems

because of its continuous fuel reprocessing and

use of thorium fuel. The fuel breeding ratio is

much better than that of the LWBR, but is

unimpressive compared to the LMFBR and

GCFR. The lower fuel inventory should mean

that lifetime uranium requirements are no

greater than for the LMFBR. Despite the many

unique technical problems that remain to be

solved, the MSBR offers sufficiently significant

advantages to be funded at a higher level to allow

a realistic determination of its potential. Issue

Paper 7 discusse s the relative merits and

problems of the MSBR.

88 CHAPTER Ill
3. Supporting Technology

Environment and Health (Issue Papers 8 a n d

9). The nuclear environmental hazards during

normal operations are well understood relative to

the hazard s associated with coal-fire d

powerplants and, on balance, appear relatively

small. Much work, however, is still needed,

especially on the question of plutonium toxicity.

Waste Disposal (Issue Paper 10). Several waste

disposal options that appear technologically

feasible are under consideration. Disposal in

carefully selected salt beds or areas in the ocean

floor are both possible. Public acceptance is a less

tractable problem. A strong effort is required to

allay public fears, but it must result in a

technically well supported choice that will not

have to be revoked, as was the plan to use the

Lyons, Kansas, salt bed. Reprocessing of spent

fuel with actinide removal can greatly ease the

waste disposal problem by reducing the time

from 200,000 years to about 500 years that

wastes present a danger (and must be isolated).

The relatively small volume of actinides could be

stored separately in a very safe location or put

back into a reactor to be burned up. With suitable

dilution, the radioactivity diminishes to about

the level of uranium ore in 500 years even without

actinide removal. If reprocessing does not

become widespread, ERDA should have ready a

plan for retrievable storage of fuel elements.

Safeguards (Issue Papers 11 and 12). Nuclear

material diversion by clandestine groups to

construct weapons is a difficult problem which

involves abnormal human behavior and potentially devastating consequences. It seems

probable, however, that technical solutions can

be devised to keep the risk of such diversions at

acceptably low levels. The cost is not expected to

be prohibitive, but a continuing effort will be

required to make the system perform according

to design, A promising possibility is to locate

reactors and their associated fuel reprocessing

plants and fuel fabrication plants together in a

nuclear park. This would eliminate the transportation links and thus reduce the possibility of

diversion. Siting, environmental, and other

problems, however, may be greater than for

present methods.

Resource Base (Issue Paper 13). All estimates

of the Nat ion’s ultimate uranium resources are

still highly uncertain. Critics have claimed that

the ERDA estimate is either too high and

therefore exaggerates the potential importance of

nuclear power, or that it is too low and

overemphasizes the need for the breeder.

Utilities already are worried about ensuring the

supply of fuel for the lifetime of new reactors,

perhaps in part because the price of uranium has

risen sharply recently, Since very important

decisions, such as the breeder timetable, depend

on the estimates of U.S. uranium resources, it is

vital that they be substantially more accurate,

ERDA should consider expediting its National

Uranium Resource Evaluation Program.

Enrichment (Issue Paper 14). The present and

planned capacity of ERDA gaseous diffusion

enrichment facilities is fully subscribed, and new

capacity will be required by about 1985. T h e

Government anticipates that private industry

will provide the needed expansion, but it is

estimated that industry would require 9 or 1 0

years to learn the technology and get their first

plant operating. If industry and Congress do not

take positive action very soon, ERDA itself must

consider building another enrichment plant or

increasing the capacity of existing plants. The

centrifuge separation technique shows great

promise, but it is not as far advanced as gaseous

diffusion; nevertheless, the succeeding generation of commercial enrichment plants may well

be a centrifuge type. Centrifuge technology and,

to an even greater extent, the laser separation

technique, have potential for illicit use because of

their adaptability to small-scale production.

Fuel Recycle (Issue Paper 15). The NRC has

tentatively delayed plutonium recycle until the

safeguards issue is adequately addressed.

Plutonium recycle greatly increases the risk of

diversion of weapons-grade material or accidental release of a highly toxic substance, In

addition, the economics are now only marginally

attractive. Industry, however, expects to proceed

when possible as reprocessing should somewhat

improve the economics of the fuel cycle, facilitate

waste storage, and extend the uranium resources.

Experts are divided on this issue. Some experts

want to aid industry as ERDA proposes to do;

others feel the hidden social costs will be greater

than any possible societal benefit. While the lack

of recycle capability will not become critical until

the breeder is commercialized, the issue should

be resolved soon because LMBFR economy rests

on plutonium recycle, and a significant energy

source is being neglected.

Public Acceptance (Issue Paper 16). There is a

great deal of opposition to the siting of almost

any nuclear plant. While some objections are

CHAPTER Ill 89
irrational, real concerns such as the emergency

core cooling system performance, safeguards,

and waste disposal have not yet been fully

resolved, ERDA should discuss these problems

publicly and candidly while dispelling public

misconceptions, such as the possibility of

nuclear explosions in powerplants.

4. Fusion (Issue Papers 17 and 18)

There is a consensus that if nuclear fusion can

be successfully harnessed to give economic

power, it would be a very attractive means of

supplying much of the Nation’s electrical energy

needs by the next century, The abundance of

cheap fuel, the low level of radioactive waste

products, and nuclear explosive materials are

among the advantages that would accrue from

successful fusion power, The required research

and development deserves favorable funding

within the Nation’s long-term energy program.

However, the scientific demonstration of fusion

feasibility—that is, that the require d

temperatures and containment for thermonuclear burn can be achieved—has yet to be

shown.

Substantial advances have been made in recent

devices (tokamaks and laser experiments), but

there is no certainty that these experiments can

be scaled up in size and power to give the

required conditions, The R&D will necessarily

take many years, will be very expensive, and as

yet carries no guarantee of success. Nevertheless,

the potential is so great that it should be

vigorously pursued.

There is concern, however, as to whether

ERDA has narrowed the focus of its fusion

program too much by its heavy concentration on

the tokamak concept. The ERDA Plan calls for

scaling up the tokamak device to machines in

which scientific feasibility (energy “breakeven”)

can be achieved. Although this scaling up

appears to be a necessary process to achieve

success in the fusion program, the cost and

complexity of these next generation machines

raises questions as to whether options on other

promising fusion concepts can be kept open in

case the tokamak concept is not successful. If

continued assessment of program directions is

not carefully maintained, there is danger of

premature abandonment of other fusion concepts.

The economic harnessing of fusion power will

require several new technologies, including new

materials for the reactor walls, economic storage

of large amounts of energy, large superconducting magnets, and the safe handling of tritium,

Since developing these new technologies will

take many years, adequate R&D programs should

be started now to avoid possible delays in the

overall program, There is evidence that the

ERDA Plan has done this. Continued assessment

is a necessity to ensure a balanced effort.

90 CHAPTER Ill
D. NUCLEAR ISSUE PAPERS

1. Standardization

ISSUE

The present procedure for the design, construction, and licensing of a nuclear

powerplant is time-consuming, inefficient, and costly. An ERDA-supported

standardization program could allieviate these difficulties.

SUMMARY

At present, virtually every nuclear powerplant is custom designed and built by

a combination of suppliers. This procedure leads to very complex interfaces

between the various suppliers, the utility, and the NRC. The incomplete status of

the design at the time the construction permit is issued (conditioned upon the

resolution of incomplete design features) and the changing regulatory requirements result in many design changes, imposition of retrofitted systems,

delays, and cost increases. Standardization is a potential solution that is not

feasible in the present environment of fragmented responsibility and rapidly

changing regulatory requirements.

ERDA could support the development of a standardized design of a complete

nuclear powerplant for which the NRC would issue a “license to manufacture. ”

Participation by all concerned parties would ensure a high-quality design. The

licensing review of the utility’s application would be limited to site-related

and would require only a small fraction of the present licensing time and

issues

cost .

QUESTIONS

1. Is ERDA willing to consider participation in a pumps, valves, control systems, instruments,

program to promote standardized nuclear etc, ?

powerplant design and construction’? 3. What are the advantages of standardization

2. Are there significant antitrust issues in- over present procedures if the latter were

volved in terms of specifying brands of implemented more expeditiously?

BACKGROUND

When a utility decides to build a nuclear architect/engineer [A/E], and a constructor, The

powerplant, it usually selects a nuclear steam NSSS designs are fairly well standardized by

syste m supply (NSSS) vendor, a n each of the four LWR vendors. The balance of the

CHAPTER Ill 91
plant, which costs considerably more than the

NSSS, is designed by the A/E. The A/E generally

starts with a previous design and revises it

depending o n NRC requirements, utility

preferences, and site requirements. The constructor (often the A/E) then builds the plant

according to the NSSS vendor and A/E drawings.

This is basically the same procedure historically

followed for fossil plants. It results in a customdesigned and built plant, which then must be

individually reviewed by NRC,

This fragmented approach leads to a division

of responsibility and contributes to uncoordinated overall systems design. In addition, there

are so many combinations of NSSS vendors and

A/E’s that the A/E may find all his projects quite

dissimilar. If the A/E does have a prior design to

follow, he may copy previous mistakes or

otherwise fail to cut costs as much as possible

because of the pressure of the schedule.

Standardization is a potential solution to these

problems, but it has not happened yet for a

number of reasons. The multiplicity of A/E’s and

NSSS vendors could make each combination a

separate design. Technological advances leave

previous designs outdated, but this process

seems to be slowing, The largest roadblock of all,

however; has been the NRC and its changing

regulatory requirements.

At the time the utility submits an application to

NRC for review, the detailed final design of the

nuclear plant is generally no more than 10

percent complete, and it is usually less than 50

percent complete at the time that the construction

permit is issued, This lack of a completed design

leaves the utility extremely vulnerable to NRCimposed design changes, which all too often

involve ripping out a portion of the plant already

constructed and replacing it at a significant cost

and delay in the schedule.

Some of these changes are the result of

oversight or the analysis of previously unsuspected but creditable ramifications of accidents, These changes should be incorporated

into the designs if they involve a significant risk

to public health and safety. Many changes,

however, are attributed simply to new regulatory

guides and changes in requirements that are

applied retroactively,

Two years ago, the AEC announced a policy of

supporting standardization. There have been a

number of recent attempts to improve the

situation—the SNUPPS group of plants (five

virtually identical plants ordered by four

utilities), the Duke Power Company “six pack”

and the floating nuclear plant being put forth by

Offshore Power Systems (OPS), Indeed, the NRC

regulations were actually modified to provide a

“license to manufacture” to OPS who will

manufacture the FNP in a factory and then

deliver it via water to the utility’s prepared site,

None of these concepts, however, has enjoyed the

full anticipated benefits of standardization,

particularly in regard to the licensing process,

One possible role for ERDA would be to

support the complete design of a land-based

nuclear powerplant through the whole licensing

process, including the issuance of a “license to

manufacture,” and then to offer it to all interested

utilities for a prorated fee, based on the projected

number of users. If the design is carried out with

the input from a number of utilities who are

interested in proceeding with the project, it

should represent an acceptable design, Indeed,

the possibility y of saving up to 3 years in licensing

time (especially if a procedure for preapproving

sites is also implemented) would be so attractive

to a utility that prudence might dictate that it

accept such an approved standardize d

powerplant.

The principal advantage of this arrangement is

that the design, once approved for a period of

time, would be subjected only to those changes

which have a significant impact upon the health

and safety of the public. As a result, the financial

exposure of the utility would be minimized, since

it has only to secure the approval of the site via

the environmental and site suitability hearings.

92 CHAPTER Ill
2. Performance and Reliability

ISSUE

Problems relating to the performance and reliability of light-water reactors have

received insufficient attention since the AEC ceased nonsafety light-water reactor

R&D.

SUMMARY

Until the late 1960’s, substantial governmental research work was carried out

on light-water-cooled nuclear power reactors. At that time, the AEC decided that

LWR’s had reached commercial status area. Following that decision, a number of

problems developed. First, the nuclear industry has been slow to see the need for

and to initiate extensive R&D efforts of its own. Second, increases in reactor power

levels greater than those warranted by existing technology resulted in component

performance and reliability problems. Third, continuous AEC tightening of safetyrelated design criteria and operating restrictions over the past 6 to 8 years has

resulted in economic penalties and reduction of plant operating flexibility. With

respect to the first two problems, it is noted with approval that ERDA is planning

to renew governmental support of R&D aimed at improving LWR performance and

reliability. The third problem would seem to be NRC’s responsibility. However, it

is questionable whether NRC has adequate incentive for doing research to optimize

the balance between costs and safety. Furthermore, it has little incentive to develop

improved safety concepts or systems so long as it considers its primary

responsibilities to the review of proposed systems for adequacy. The ERDA LWR

safety program can serve both to control the costs of safety systems and reduce the

unknown factors in safety-related areas, thereby possibly increasing safety

margins and reducing public fear.

QUESTIONS

1. What is the proposed scope and level of effort 3. Who will ultimately decide the balance

by ERDA on LWR component performance between economies and safety in LWR’s?

and reliability?

Z . What will be the relationship between the

ERDA and NRC programs in LWR safety

research?

BACKGROUND

Over the past 20 years, substantial Govern- a result of an AEC decision that light-water

ment research and development has been carried reactors had reached commercial status and that,

out on light-water-cooled nuclear power reac- except for safety research needed to support the

tors, Most of this work ceased in the late 1960’s as regulatory process, the nuclear industry should

CHAPTER Ill 93
assume the responsibility for further research

efforts. Subsequent to the AEC decision a

number of difficulties have developed.

● The industry has been slow to initiat e

extensive research efforts. For example,

significant research efforts by the Electric

Power Research Institute (EPRI), supported

by the electric utility industry, have only

begun within the past 2 years.

● Over the past 6 to 8 years, there has been a

large increase in the operating power levels

of light-water-cooled nuclear power reactors.

Although efforts are made to accomplish this

power increase in a way which make s

maximum use of previously develope d

technology, a number of performance and

reliability problems have resulted that require substantial R&D in order to be satisfactorily resolved. Such problems include fuel

densification, Zircaloy-clad hydriding,

s t earn-g en era t o r tube failures, an d

premature component failure, The new large

fossil plants exhibit somewhat analogous

behavior, but downtime on nuclear plants is

more costly because of their higher capital

costs, which must be carried regardless of the

output. When the baseload units are inoperative, utilities must make up the missing

power by using higher priced fossil fuels.

This generally means oil, because oil-fired

units are most economical for peak loads or

emergencies.

● Safety-related design criteria and operating

restriction imposed by the AEC (NRC] have

tightened continuously over the past 6 to 8

years. This trend, exemplified most recently

by the decision to adopt new criteria for

evaluation of light-water reactor emergency

core cooling systems, has led to a situation

where a few reactors are operating at power

levels below the power level for which they

were designed and/or are severely limited in

operating flexibility. In addition, new fuel

designs are being pushed in a direction which

significantly reduces economic performance.

That these trends and effects are in the

direction of increased safety and that reactor

safety is important cannot be questioned.

Nevertheless, there is a wide difference of

opinion among qualified engineers and

scientists as to whether this increased level

of safety is either significant or needed and

therefore worth the cost,

With respect to the first two of the above

problems, it seems evident that if light-water

reactors are to continue to be developed and

utilized effectively, additional R&D will be

required in individual component and system

performance and reliability, Moreover, if this is

to be done quickly, a significant increase in the

level and scope of Government support will be

needed. It appears that high payoff will result

from increasing Government support of R&D

relating to these areas of reactor technology. In

addition, more advanced concepts to improve

performance could be investigated. These might

include the production of superheated steam,

either in the core of boiling water reactors or in

advanced steam generators of pressurized water

reactors.

At first glance, it would appear that resolution

of the third problem area is the responsibility of

NRC and/or the nuclear industry, and, indeed, a

number of research programs funded by both

industry and NRC are presently underway.

However, in considering the possible eventual

result of such programs, it is important to note

that, over the 10 years since the AEC began

limiting its R&D efforts to safety R&D in support

of its regulatory role, there have been virtually no

instances where safety regulations have become

less rather than more restrictive, The problem is

that NRC does not have an incentive to do

research needed t o develop and justif y

regulations which provide adequate assurance of

safety at a minimum cost. Also, it has no

incentive to develop improved safety concepts or

systems so long as it considers its role to be

primarily the review of proposed systems for

adequacy. ERDA, on the other hand, having a

responsibility for effective development and use

of nuclear power, does have such an incentive, It

seems likely that industrial efforts will need to be

supported by the Government if they are to be

effective in the near future. Therefore, it is

recommended that ERDA increase its efforts in

areas relating to LWR safety,

94 CHAPTER Ill
3. Floating Nuclear Powerplants

ISSUE

Floating nuclear powerplants (FNP’s) offer potential improvements in LWR

licensing and construction, but implementation is in doubt.

SUMMARY

FNP’s are commercially available, although none have yet

several years of design and sales effort, only four units have

utility, and all four of these units were recently delayed from the

the 1984-90 time period. As a result, the supplier is in financial

been built. After

been sold to one

1979-86 period to

difficulty. If this

company fails, the FNP, which represents a major step forward in standardization,

will be eliminated for the foreseeable future as an option in meeting the Nation’s

energy generation needs.

The FNP is to be built in a factory setting favorable to rapid, high-quality

construction and controlled costs. The plant design is to be approved by NRC prior

to the issuance of a “license to manufacture”; hence, a utility has only to license the

site. Indeed, the concurrent construction of the plant and the licensing and

preparation of the site significantly reduces the time to install FNP’s.

The present reservations about FNP’s among utilities concern the licensability

of the plant and site, and the performance of the plant upon completion. ERDA

should consider aiding utilities in the licensing process and guaranteeing operating

performance if the reactor vessel melt-through problem can be satisfactorily

resolved.

QUESTIONS

1. Are the licensing questions of FNP’s so 2, Are there any reasons that a FNP would not

serious that a utility committed to nuclear be expected to reach rated power or be

power would not accept the risk of delays and restricted to less than rated power by NRC?

additional costs to resolve the issues involved?

BACKGROUND

An innovative concept which has been brought

to the point of commercialization is the FNP, in

which standardized plants are assembled on a

regular schedule in a factory. Each plant would

be installed on a barge and towed to its site,

which might be located offshore or in a more

protected site in a bay or lake. The FNP concept

offers significant financial, schedule, and quality

control advantages, but it does involve some

uncertainty in licensable nature and performance. ERDA could assist in resolving these

questions,

Siting of FNP’s is a unique problem in that a

specially designed protective barrier around the

plant will probably be required, even shorebased units, will require some protection. The

CHAPTER Ill 95
loss of coolant accident protection systems

requires special attention since, according to the

Rasmussen Report (WASH 1400), the chance of

an accident leading to a reactor vesse l

meltthrough could be as high as 1 in 100,000

reactor-years. Some of these in turn could lead

eventually to a containment floor burnthrough.

At a landbased unit, extensive release of radioactive material might still be avoided if the molten

core cooled sufficiently to solidify without

coming into contact with ground water. At an

FNP, however, after burning through the containment floor, the molten core would drop into

the ocean or lake where the plant is located. The

special problems associated with fission

products in the water present a unique type of

licensing issue. Resolving such uniquely

different licensing questions is a task ERDA

could undertake with NRC.

Certain other technological questions still are

being examined by NRC. Some of these issues—

such as turbine/generator alignment on a floating

barge—could result in a restriction of the plant

power level or operational difficulties, The only

existing plant using a containment ice condenser

pressure suppression system similar to that

planned for FNP’s is presently operating at less

than rated power due to licensing restrictions,

ERDA could assist the utilities by undertaking

R&D to resolve any problems that impose power

restrictions. Since the first few utilities to install

FNP’s will bear the brunt of any technological

problems, it may be advisable for ERDA to

guarantee the performance of the first plants.

96 CHAPTER Ill
4. Helium-Cooled Reactors—Converters and Breeders

ISSUE

Helium-cooled reactors have some potential advantages not offered by wateror sodium-cooled plants, yet have a relatively low priority in ERDA’s program.

SUMMARY

The HTGR has never been accorded the degree of AEC support enjoyed by

LWR’s, but private and foreign development have brought it to the point where it

could become a significant factor. The HTGR and its potential successor, the very

high temperature reactor (VHTR), can be used to generate electricity at much

higher efficiencies (up to 50 percent) than LWR’s, but they may have even greater

potential for producing industrial process heat. In addition, they would extend

uranium resources and possibly present more easily managed safety and

safeguards problems, although the spent fuel safeguards advantage is somewhat

counterbalanced by the need to protect the clean fuel. The HTGR, however, is less

developed than LWR’s, thus presenting cost, performance, and licensing uncertainties.

The GCFR has been viewed as a backup to the LMFBR. It may, however, have

sufficient advantages to warrant concurrent development. The breeding ratio is

about 1.4, somewhat better than the LMFBR. The thermal efficiency is higher than

the LMFBR, and the capital cost could turn out to be lower since the system is

inherently simpler. There exists, however, serious uncertainties regarding the loss

of coolant accident, since the power density is higher than the HTGR and the core

heat capacity is lower, resulting in a faster temperature rise.

QUESTIONS

1. What is the potential of helium-cooled 2. What is the relative importance of the

reactors for industrial process heat, both in inherent safety features of the GCFR comthe medium term as an alternative to coal and pared to those of the LMFBR?

in the long term with breeder technology?

BACKGROUND

The HTGR is conceptually similar to the PWR.

In current designs of the HTGR, helium at

approximately 700

0 C (130 00 F) circulates from

the reactor core to steam generators, compared to

water at about 330

0 C (600°F) in PWR’s. The gas

temperature can be much higher than the water in

a PWR because helium remains an inert, singlephase fluid, while water presents corrosion and

hydrodynamic problems at high temperatures.

The efficiency of the HTGR powerplant is limited

by the maximum temperatures and pressures

allowed in the steam system, as are fossil units. It

should be relatively easy to add a toppi ng cycl e

gas turbine and achieve efficiencies of up to 5 0

percent. It would then be advantageous to raise

the helium temperature even higher, and 1000° C

(1800° F) appears to be feasible.

Industry now consumes about 40 percent of the

CHAPTER Ill 97
Nation’s energy, much of this in the form of hightemperature process heat, The HTGR and VHTR

appear well suited to provide such heat, and their

use could replace the consumption of large

quantities of fossil fuel. One potential use is in

steam-methane reforming to produce hydrogen

for use in coal gasification and liquefaction.

Other possible applications are in petroleum

refining and chemical industry processing, A

process heat reactor would be the first major use

of nuclear energy for nonpower use, and many

new problems would have to be solved, For

instance, an entirely new type of industrial

organization would have to learn how to cope

with nuclear reactors, and the load-following

characteristics in some applications could be

much more demanding than in central station

power generation.

The HTGR uses mainly uranium-233 as fuel,

although the initial core contains highly enriched

U-235, The fertile material is thorium-232, which

is converted into U-233, corresponding to the

conversion of U-238 to plutonium-239 in LWR’s

and LMFBR’s. With appropriate fuel management, as many as eight U-233 atoms can be

produced for each ten consumed, Thus, the

HTGR utilizes fuel much more efficiently than

does the LWR, and this fuel cycle demands much

less uranium than that of the LWR, Thorium

resources are several times uranium resources,

so the use of HTGR’s could somewhat postpone

the time when breeders are needed, On the other

hand, fuel reprocessing facilities are vital to the

HTGR, but not the LWR.

The HTGR fuel has significant safeguards

advantages over the LWR fuel. The fissile

material produced is U-233 rather than Pu-239,

Both are suitable for weapons manufacture, but

U-233 is much more easily detected than Pu-239

because of its higher gamma ray production,

Thus, surveillance and recovery is greatly eased.

In addition, U-233 is far less toxic, so accidental

or intentional dispersion is a lesser problem,

Some proposed fuel designs, however, leave the

fresh fuel in a form that could easily be converted

to weapons. This fuel would have to b e

safeguarded, unlike that of the LWR.

Loss-of-coolant accidents are less severe in an

HTGR than in the LWR. The coolant loss rate is

slower for the same size pipe break, since the

fluid has a lower density, and core heatup is

delayed by the graphite in which the fuel is

interspersed. Thus a core meltdown is even more

improbable,

The HTGR has been commercially available

for several years, Several orders were taken for

it, but most were deferred or canceled in recent

years either because of the general slowdown in

the nuclear industry or because of special

concerns about the HTGR on the part of the

utilities, The Fort St. Vrain demonstration plant

(330 MWe) has suffered from a rash of operating

problems which have greatly delayed its power

rise. There are also many licensing uncertainties,

since HTGR’s have not been subjected to the

same scrutiny by NRC as LWR’s. Initial costs also

are high, though there are indications that this

problem can be eliminated.

The GCFR is being funded at a much lower

level than the LMFBR or LWBR. Much of the

technology of the HTGR and the LMFBR will be

usable in the GCFR, but the program could be

pursued more energetically.

The core of the GCFR is more like that of an

LMFBR than an HTGR. The fuel is enclosed in

fuel rods, and no moderator, such as graphite, is

present, This eliminates the HTGR advantage of

slow-heatin g following a loss of coolant. Helium

is a less effective cooling medium than liquid

sodium. Hence, the loss-of-coolant accident must

be a central design parameter as in the LMFBR.

The GCFR is a natural adjunct to the HTGR,

since one GCFR can keep several HTGR’s fueled.

The breeding ratio of 1.4 results in a doubling

time of about 10 years, better than is forecast for

the LMFBR with oxide fuels.

The capital costs of the GCFR might turn out to

be lower than the LMFBR because the system is

inherentl y simpler. There is still a great deal of

uncertain y over this, however, since the

technology is not as advanced.

98 CHAPTER Ill
5. Liquid Metal Fast Breeder Reactor

ISSUE

The liquid metal fast breeder reactor (LMFBR) has great potential as an

“inexhaustible” long-term energy source, but it poses serious technological and

societal problems.

SUMMARY

A successful LMFBR could provide the bulk of the electricity for the United

States for millenia at a competitive price. The U-238 which would be used in the

LMFBR is readily available and is otherwise useless, Much of the technology has

already been demonstrated here and abroad during the past 25 years. Advocates

believe that the LMFBR will be an attractive energy source, both economically and

environmentally, and that a delay in the present schedule would cause the

dissipation of expertise in the development program and probably would lead to a

stronger ultimate demand for fossil fuel. In addition, some form of a breeder will be

vital if fusion is to be a major source of energy in the twenty-first century, and the

LMFBR is the most advanced and promising of the various alternatives.

Opponents of the present plan argue that a year or two delay would make

possible a better design, that electric forecasts and uranium reserves do not require

the LMFBR on an expedited schedule, that proper safeguards for plutonium will be

impossible to design and implement, that plutonium toxicity is not well enough

understood, that 1arge technological and economic uncertainties remain, that there

will be preferable alternatives, and that proceeding with the Clinch River

demonstration will commit the United States so strongly to the LMFBR that it

would be commercialized even if it turned out to be a bad choice.

QUESTIONS

1. What steps will ERDA take to resolve the 2.

principal safety issues relating to the LMFBR? On what time scale are these issues

expected to be resolved, if proposed facilities

and programs are completed satisfactorily 3.

and on schedule? Does this schedule mesh

with ERDA’s proposed schedule for developing designs for commercial LMFBR’s and for

initiating construction of near-commercial

4. plants?

How much and what kinds of assistance to

industry does ERDA foresee will be required

in order to achieve commercial deployment of

LMFBR’s?

To what extent and in what ways does ERDA

propose to reduce the cost of LMFBR development in the United States by taking advantage of foreign experience and technology?

Why does the U.S. LMFBR program seem to

be so much more costly than the very

successful French program?

BACKGROUND

The major attraction of the breeder reactor is consumes, In the I.MFBR this is accomplished by

that it produces more fissionable fuel then it placing a blanket of Uranium-238 around the

CHAPTER Ill 99
core, When struck by a neutron, U-238 generally

does not fission as does U-235 or plutonium-239.

Instead, it absorbs the neutron and eventually

emits two electrons from the nucleus to

transmute itself into Pu-239. The core itself

consists of fuel rods containing uranium enriched

in U-235 or Pu-239 as in an LWR. The familiar

chain reaction takes place in the core. On the

average, more than two neutrons are produced

per fission. One of these is required to produce

another fission, and the rest are available for

absorption, The LMFBR is designed so that for

every atom fissioned, about 1.2 atom of Pu-239 is

created. This plutonium can be removed by fuel

reprocessing and used to refuel the core, while

the excess can be used to fuel an LWR or another

LMFBR.

Large quantities of U-238, essentially a waste

product of uranium enrichment plants, are now

available. When this is exhausted, only small

quantities of ore will have to be mined. Since it is

worthwhile to mine our vast reserves of lowgrade ore for a breeder (but not for the LWR), the

LMFBR is for millenia an “inexhaustible” energy

source.

There is already substantial experience with

LMFBR’s. EBR-I produced the first electricity

ever obtained from a nuclear powerplant in 1952.

Both EBR-II and the Enrico Fermi demonstration

plant started up in 1963. The Fast Flux Test

Facility (FFTF) is currently under construction at

Hanford, Washington, and is scheduled for

operation by 1977, The basic purpose of this 400-

MW reactor will be the testing of a variety of

materials and fuels that can be used in a

commercial breeder, The LMFBR has the highest

energy priority abroad and plants are being

operated successfully in France, England, and the

Union of Soviet Socialist Republic,

The prime impetus for developing the commercial breeder is the limited availability of

uranium. LWR’s require large amounts of

uranium, but can only fission about 1 percent of it

compared to the LMFBR’s 70 percent. Present

estimates of high and medium quality domestic

uranium reserves and LWR demand show consumption exceeding supply early next century.

Some time before then, the fuel price for LWR’s

will have risen enough so that the higher capital

cost of the- LMFBR will be justified by its lower

fuel cost. The economics of the transition,

however, are hard to predict, The capital cost

differential will not really be known until a

commercial-sized plant is built, but so far none

has ever been designed in this country. The fuelcycle cost of the LMFBR is expected to be

extremely low, depending on the actual amount

of plutonium produced, but the ultimate breeding

ratio (and the future price of plutonium) can still

only be estimated. Uranium prices have recently

risen sharply, possibly giving credence to fears of

a short supply; however, a great deal more could

still be discovered, thus delaying the necessity

for commercialization of the LMFBR. This topic

is discussed in Issue Paper 13. Many cost-benefit

studies and discounted cash flows for costs and

benefits of the LMFBR program have been made

with net benefits varying from over $100 billion

to zero, depending upon the choice of parameters

with improbable parameters at the extremes.

The growth rate of LWR’s is also a critical

economic parameter. Critics of the LMFBR

program argue that the energy growth rate in

general and the electric and nuclear segments in

particular must be brought down drastically

because of increasingly serious social and

environmental impacts, They also point to other

industrial nations such as West Germany, where

the ratio of per capita consumption of energy to

income is much lower than here—thus indicating

that the United States should be able to reduce

consumption. This would stretch out uranium

resources. Advocates of the LMFBR, however,

point out that it is by no means clear that the

United States can decouple economic growth

from energy growth; that large segments of the

population still lack energy consuming but

desirable amenities; that socially attractive

developments, such as electric automobiles and

mass transit, will increase demand substantially;

and that the imminent shortages of petroleum

and natural gas must to some extent be compensated for by electricity.

Emphasis on other types of reactors could slow

the consumption of uranium. The HTGR and

CANDU can be operated so as to use uranium

more efficiently than present LWR’s. Their

probable rate of penetration into the market,

however, is too low to greatly influence the price

of uranium. Plutonium recycle in LWR’S would

also extend resources about 25 percent as would

lowering the U-235 component of the depleted

uranium tails at enrichment plants, though this

would decrease enrichment output. Both these

options would be available later if the need for

more LWR fuel appears to be critical and both are

discussed in other issue papers.

Some critics also question the quality of the

100 CHAPTER Ill
design for the Clinch River (CRBR) demonstration plant. The breeding ratio and reactor safety

are specific points mentioned by critics. This

350-MWe plant is designed to demonstrate the

licensable nature, operability y, and maintainability of a LMFBR in a utility system. Site

preparations for the CRBR has been delayed from

1975 to 1976, to reflect the additional time

required to address key licensing and environmental concerns.

Concern over safety has been expresse d

because the LMFBR, unlike water reactors, is not

dependent on moderation by the coolant; hence, a

loss of coolant would not directly shut down the

LMFBR but would in fact increase reactivity. For

this reason, the so-called “core disruptive accident” has been analyzed for the LMFBR in which

it is assumed a nuclear transient mechanically

disrupts the fuel elements. Energy releases for

such incidents have been calculated to be from

100 to a few hundred megawatt seconds for the

FFTF, which is equivalent to the energy released

by burning 1 gallon of oil or exploding 2 pounds

of TNT. Both European and American program

experts believe that the chain of events that must

be hypothesized for a core disruptive accident to

occur is so unlikely that such accidents are not

credible. Nevertheless, the reactors are constructed with the capability to contain a wide

range of very improbable events, The lack of an

inherent shutdown mechanism, however, is

troublesome to NRC, which is considering

mandating a core catcher for the CRBR. This

device would hold the molten fuel in a noncritical

configuration if there were a core meltdown.

Another strong objection to the LMFBR is the

danger of diversion by terrorists of some of the

plutonium it produces, Only a very small fraction

of the plutonium produced yearly in a breeder

economy would be sufficient to construct a crude

nuclear bomb capable of releasing energy

equivalent to approximately 100 tons of high

explosives. It seems impossible to some critics

that a safeguards system sufficiently effective to

prevent this can be designed and implemented at

a reasonable cost and without intruding on the

privacy of other citizens. Advocates disagree,

saying that the safeguards system which will add

only 1 to 2 percent to the cost of power will be

reasonably unobstrusive, and will hold the

public risks to much lower levels than for other

catastrophic accidents. Nuclear parks are a

possible partial solution in that the most

vulnerable transportation links are eliminated.

The intentional or accidental release of

plutonium possibly from a preprocessing of fuel

fabrication plant is also a controversial topic.

While plutonium is an extremely carcinogenic

substance, it is an unlikely terrorist weapon

since no effects other than psychological are felt

for 25 years, but very tight controls will have to

be maintained over all equipment handling it.

Safeguards and plutonium toxicity are discussed

in other issue papers.

Under normal operation, the LMFBR economy

should be environmentally more acceptable than

LWR’s or fossil plants, The plant itself will have a

thermodynamic efficiency approaching 40 percent, equivalent to the best units today. Mining

and milling will be virtually eliminated. The

environmental objections center mainly around

the safety and safeguards problems already

discussed.

CHAPTER Ill 101

60-411 0 -75 - 8
6. Light-Water Breeder Reactor

ISSUE

The light-water breeder reactor (LWBR) concept has several advantages, but

the need for it is questionable.

SUMMARY

The LWBR is the only breeder reactor now being seriously pursued by the

United States that uses thorium rather than uranium as its primary fuel. The

technology of the LWBR is based on that of the main line light-water reactor; the

original idea of the LWBR is that it would afford an all but inexhaustible source of

.

energy yet would require relatively little development, About $25 million per year

has been spent on this concept for the past 9 years, and a demonstration LWBR is

expected to operate in the pressurized water reactor vessel at Shippingport, Pa., by

1976. If a 1,000 MWe LWBR over 30 years requires as little as 1,500 tons of uranium,

rather than the 3,000 to 5,000 required of other reactors, it could become a serious

contributor to the nuclear energy programs, yet in the ERDA nuclear program there

seems to be no mention of LWBR actually carrying some of the nuclear load at any

time, and utilities have shown little interest in the concept.

QUESTIONS

1. Why is LWBR not mentioned in ERDA 3 . At what uranium price and rate of deployprojections of future nuclear mixes? ment does the LWBR look attractive?

2. What measures does ERDA intend to take to 4. Does ERDA intend to make a detailed

make LWBR technology more accessible to economic assessment of the LWBR fuel cycle?

possible users of this reactor type?

BACKGROUND

The LWBR was conceived in 1965 as a simple,

inexpensive way of breeding in the thorium cycle

that did not require new and unprove n

technology, The fundamental idea was to replace

the slightly enriched U-235-U-238 fuel elements

in a PWR with “seed blanket” fuel modules: each

module consists of thorium-U-233 fuel rods

(seeds) surrounded by thorium rods (blankets).

The normal fissioning process takes place in the

seed rods, Neutrons produced in the seed are

caught in each blanket and thorium there is

converted into U-233. It is estimated that

breeding ratios of around unity can be achieved

with this arrangement.

When the LWBR was first proposed in 1965, it

seemed to defy most of the precepts set forth for a

good breeder: high breeding ratio; low inventory

of fissile material; high thermal efficiency;

simple fuel recycle. The one countervailing

advantage was that the LWBR largely used

standard pressurized water technology, and

therefore it could be developed for a fraction of

102 CHAPTER Ill
the cost of any other breeder, such as the LMFBR.

The AEC, in weighing the matter, decided that

the simplicity of the technology outweighed all

other considerations, and it assigned the task of

developing the LWBR to the Naval Reactor

Branch under Admiral Rickover. The LWBR is

now at a point where a demonstration of the

principle is about to be made in the Shippingport,

Pa. reactor facility.

Originally, it was hoped that utilities would

find the concept interesting as a means of

transferring easily from the standard PWR to a

breeder without having to switch to a completely

different technology. Thus far, utilities have

shown little interest in LWBR, primarily because

LWBR fuel-cycle costs were estimated to be much

higher than PWR fuel cycle costs; and, second,

because so little hard information has been made

available about the LWBR.

The rapid rise of capital costs and the approaching shortage of uranium may have improved the commercial outlook for the LWBR.

Because of the higher capital costs, fuel cycle

costs (which are probably high in LWBR) are no

longer so important; and the shortage of uranium

may make even the fuel-cycle cost of LWBR’s

competitive, especially if prorated over 30 years,

during which time the uranium shortage may

become acute.

There still remain a number of technical

uncertainties. For example, the LWBR has a more

tightly packed lattice than PWR’s which may

cause some difficulty with the emergency core

cooling system; there will probably be less power

output for a given core size compared to a LWR;

the breeding ratio is so close to unity that LWBR

may turn out not to breed at all. The initial

loading of uranium in a LWBR is much higher

than in a PWR; hence, an expanding LWBR

economy may place even heavier demands on

total uranium resources during the first several

decades. The purpose of the Shippingport test is

to prove the feasibility of light-water breeding.

Full technological development and economic

development will require a substantial R&D

program.

However, the situation since the LWBR was

first proposed has changed sufficiently that it

seems prudent to consider LWBR to be a more

serious contender than has previously been the

case, Information on LWBR will soon be available

in the Environmental Impact Statement so that

potential buyers of LWBR’s can assess the system

more realistically.

CHAPTER Ill 103
7. Molten Salt Breeder Reactor

Support for the molten salt breeder reactor (MSBR) development program is

small compared to other reactors and maybe insufficient to permit evaluation within

a reasonable time period.

SUMMARY

The MSBR program is presented by ERDA as a potential backup for solid fuel

breeder reactors. It uses an inherently different nuclear technology, and hence

provides technological insurance, Even if fast breeder reactors prove to be

commercially successful and environmentally acceptable, the MSBR, based on

thorium rather than uranium, would enlarge the options available for future energy

systems and offer substantial advantages such as more easily managed safety and

safeguards problems, There are unique problems associated with the development

of the MSBR, however, which must be solved.

QUESTIONS

1. What are the major milestones seen by ERDA

in the MSBR program?

2. What criteria will ERDA use in deciding

whether or not to continue the program?

3. Is the funding level proposed by ERDA ($3.5

million adequate to reach a meaningful

decision point in FY 77, as suggested by

ERDA?

4. What level of funding would be required to

maintain the MSBR program as a realistic

alternative to the fast breeder reactor

program, so that commercial deployment of

MSBR’s could be undertaken by the end of the

century, if needed?

5. Would the MSBR be more secure than solidfueled reactors against diversion o f

fissionable material for unlawful purposes?

BACKGROUND

The MSBR offers the possibility of a significant breeding gain in a thermal-neutron reactor

using thorium rather than uranium as the basic

fertile material. To reach self-sufficiency (ability

to fuel its own growth), an economy based on the

MSBR would probably require no more natural

uranium than a fast breeder reactor economy if

deployed at a comparable rate. Its advantages are

a short fuel cycle, fast reprocessing, low fuel

product ion, chemical complexity, and more

extensive requirements for remote maintenance

of radio active components, since contamination

is heavy throughout the entire reactor system.

Fuel reprocessing is done by continually

withdrawing a small amount of the molten fuel,

removing the fission products and excess

uranium-233 and reinfecting the clean fuel, Thus,

the fuel in the reactor at all times has a low

inventory, and high

disadvantages of the

104 CHAPTER Ill

thermal efficiency. The inventory of fission products, which are the

MSBR are high tritium major potential source of safety problems in solid
fuel reactors. The safeguards problem may be

reduced because the fissionable fuel produced by

the MSBR is much less toxic and more easily

detected than plutonium. The fuel recycl e

process would be part of the reactor plant;

successful development of equipment for this is

an essential part of the MSBR program.

Molten salt breeder reactor technology has

been under development for more than 20 years.

Two reactor experiments have been operated

successfully: the Aircraft Reactor Experiment

(ARE) in 1954, and the Molten Salt Reactor

Experiment (MSRE) in 1965-69. Key areas in

which further development is needed are listed

below:

● Graphite moderator (reduced sensitivity to

irradiation )

● Structural metal (reduced sensitivity to

chemical attack by fission products such as

tellurium)

● Retention and control of tritium

• Chemical processing (materials for equipment and processing)

● Component development, including equipment for removal of fission-product gases

from the fuel salt.

Recent funding has been at $3.5 million per year,

This is far less than any other reactor concept

currently funded by ERDA. Problems are being

addressed, but at such a low level that even

determining the potential for solutions is far off.

8. Nuclear Environmental Effects

ISSUE

There is a continuing need for the evaluation of the

associated with nuclear energy sources.

SUMMARY

environmental effects

In the establishment of biomedical and environmental research priorities,

ERDA has not identified clearly the continuing efforts needed in the assessment of

environmental issues associated with nuclear-based technology. These efforts

must be maintained on long-term studies of radionuclide accumulations and

recycling in the aquatic and terrestrial environments, Other programs that should

receive increased attention are concerned with reprocessing facility releases and

impact/recovery studies of accidental releases from reprocessing facilities and

reactors to local or regional areas.

QUESTIONS

1. In order of priority, what are the remaining radionuclide concentration factors in aquatic

questions connected with the environmental environments?

impact of nuclear energy? 3. How does ERDA evaluate the economi c

2. To what extent is ERDA investigating the consequence of accidental releases that

range and historica l relationships of would restrict agricultural operations?

CHAPTER Ill 105
BACKGROUND

The use of nuclear fuel sources, as well as other

energy sources, is associated with environmental

interactions, most of which are either well known

or predictable. Both aquatic and terrestrial

ecosystems are affected to various degrees.

Relatively large volumes of water are required

for cooling purposes. Depending upon cooling

water intake structural design and location, the

effects upon entrained aquatic life are highly

variable, with mortalities ranging from 10

percent for well designed and sited once-through

systems to as much as 100 percent for low

consumption closed systems. In addition, heated

water, metallic corrosion products, low-level

radioactive wastes, and wate r treatment

chemicals may be discharged to surface water

ecosystems. Where evaporative cooling is

employed, the same pollutants are discharged at

lower volumes and temperatures but at greater

concentrations than with once-through cooling.

The use of large, evaporative cooling towers

results in the atmospheric dispersion of large

volumes of heat, moisture, salts, and a variety of

chemicals which interact with the terrestrial

environment as well as the atmosphere. This is

true for both nuclear and fossil plants, but

nuclear requires more cooling for the same power

and, also results in the release of low levels of

radioactivity y. Released either to receiving waters

or atmosphere, these interact with man and

either directly with terrestrial or aquati c

ecosystem components or indirectly through a

synergism with other plant releases, such as

heated plumes (aquatic or atmospheric) metals,

and chlorine. Depending upon the type o f

meteorologic or hydrologic transport of these

low-level radioactive products, they are

available for uptake, cycling, and concentration

within biological food chains which include man.

Since ERDA’s Plan envisions many new

nuclear energy sources, adequate resources must

be devoted to the associated environmental

problems. The environmental study program,

however, appears to shift emphasis from nuclear

to fossil power. This is reasonable because

nuclear environmental and health hazards are

probably better understood than those from

other sources, although many uncertainties

remain even here.

Specific data deficiencies also exist, such as

the biological cycling of low-level ionizing

radiation within various aquatic ecosystems,

Studies are needed to assess the patterns of

accumulation and resultant effects on the aquatic

community, as well as any resultant hazards to

man.

Another area for research concerns localized

accidental releases around operating nuclear

reactors and reprocessing facilities. Insufficient

effort has been devoted to the specific economic,

sociological, and radiological impacts that apply

to the population groups involved. In particular,

there is need for a better understanding of

remedial measures available and their resultant

cost/value relationships.

106 CHAPTER Ill
—

9. Plutonium Toxicity

ISSUE

The toxicity of plutonium may pose a serious threat to a plutonium-based

nuclear option, such as the LMFBR or plutonium recycle in light-water reactors.

SUMMARY

Suggestions have been made recently that plutonium may be much more

hazardous than had been previously believed to be the case. Though these claims

have been specifically denied by the British Medical Council, to ERDA scientists,

and many other scientists and scientific groups, the issue remains a lively one

requiring a more definitive resolution than exists at present.

QUESTIONS

1. How much effort is ERDA planning to devote 2. What is the evidence that land contaminated

to resolution of the question of toxicity of by plutonium can be restored to a usable

plutonium? condition?

BACKGROUND

Plutonium is a very hazardous material; for

example, the maximum permissible concentration of the isotope Pu-239 in the air, when the

plutonium is in the form of insoluble plutonium

oxide, is about 6 x 10-14 microcuries per ml or 100

x 10-20 gin/ml. Nevertheless, other materials

(such as the botulism virus) are much more toxic

per gram than plutonium. Fortunately,

plutonium is not readily absorbed by the gastrointestinal tract or by the food chain.

Inhalation of radioactive discharges from

nuclear facilities is the more likely mode of

significant plutonium ingestion. This results in

deposition in sensitive lung tissues with possible

ultimate development of lung cancer. The maximum permissible lung body burden is 1 6

nanocuries; however, various critics of the

nuclear energy program have argued that this

body burden is too high by a large factor.

The position of the nuclear energy community

and of the majority of qualified experts in the

biomedical community is that currently allowed

levels are safe. Primary evidence for this conclusion is that, despite man having dealt with

plutonium on a large scale for over 30 years, no

case of lung cancer in man can be attributed to

plutonium. In particular, some 25 workers at Los

Alamos received as much as 10 times the

occupational dose limit to the bone, yet some 30

years later none of these people has suffered ill

effects. Critics claim that these findings are not in

conflict with their position because the doses

were not received in the most dangerous manner,

CHAPTER Ill 107
10. Waste Disposal

ISSUE

Satisfactory handling of nuclear fission wastes appears to be technologically

feasible, although it has yet to be demonstrated. Other problems exist, mainly

societal and institutional, which greatly influence the nature of the demonstration

required.

SUMMARY

Spend fuel discharged from a reactor contains radioactive fission products

which must be isolated from the biosphere for approximately 700 years as well as

actinide elements (uranium, plutonium, americium, curium, and other heavier

elements) which are radioactive for hundreds of thousands of years. Because there

are no chemical reprocessing plants currently operating in the United States, spent

fuel elements from nuclear powerplants are stored temporarily in water basins at

the powerplants. Commercial facilities are being designed and constructed,

however, to receive the spent elements and remove almost all of the uranium and

plutonium, which can be recycled into new fuel, while the residue must be disposed

of in solidified form. Several options for this exist, each with different short and

long-term economic and societal costs and benefits, If the wastes are sequestered

without further separation, the long-term radioactivity between 700 and about

1,000,000 years of the approximately 1 meter3 per reactor-year is several times that

of natural pitchblend ore; but if diluted to the original volume of mined uranium

ore, the radioactivity is less than that of the ore. If the actinide elements are also

removed during reprocessing and recycled and “burned out” in the reactor itself,

1.

2.

3.

the

the

toxicity after 700 years is essentially negligible thereafter.

Projected costs for almost all the water disposal options are small compared to

total value of associated power produced.

QUESTIONS

What program exists to evaluate the hazards

and options associated with nuclear wastes

and at what level is this program funded?

What are the expected total hazards from the

various main options for nuclear waste

disposal?

What reservations does ERDA have concerning the disposal of solid waste in salt

formations (as at Carlsbad, N. Mex.)?

4. How does the scheme for burning out the

long-lived transuranic elements in a reactor

compare with other options?

5. What is to be done about the so-called alpha

wastes (e.g., plutonium-contaminated tools,

gloves, etc. ) where the activity per unit

volume is low, but the volume is so large that

total activity is comparable to the high-level

wastes?

BACKGROUND

For permanent disposal of wastes, present . Disposal of wastes as presently envisaged to

options are as follows: be processed in sites with very high integrity

108 CHAPTER Ill
up to 700 years or so, with integrity at longer

times striven for, but not essential to

guarantee, The presen t disposal-in-salt

schemes seem satisfactory provided obvious

mistakes such as susceptibility to intrusion

of ground water are avoided.

● Better removal of the long-lived radioactive

wastes; specifically, the 0.50/0 remaining

plutonium, plus the bulk of americium,

curium, etc., which are now normally left in

the wastes, The impact of such extra separation on the total fuel cycle cost is uncertain,

but quite possibly modest, The separated

long-lived wastes would then have to be

burned out by reinsertion into operating

nuclear reactors (fast reactors would be

best). If this option were developed, the longterm storage problem would be virtually

eliminated, and the shorter-term storage

problem would become even more straightforward.

● Disposal of untreated wastes in hitherto

relatively unconsidered locations: for example, burial in ocean floors, Many of these

geologic regions have been stable for many

millions of years, and modern deep ocean

drilling techniques have improved substantially in the last several years.

Presently contemplated chemical reprocessing

methods for spent fuel elements are expected to

remove 99,50/0 of the plutonium and uranium and

little of anything else; this procedure represents

the best macroeconomic profitability because of

the value of these materials for recycling.

Substantial quantities of radioactive heavy

elements americium and curium with half-lives

of 10,000 to 25,000 years would remain with the

fission products, whose half-lives are less than

50 years. Since ten half-lives reduce the original

activity by a factor of a thousand, which is

usually a safe level, 700 years’ isolation is

adequate for the fission products as contrasted

with 200,000 years for the heavy elements,

Inclusion of a further reprocessing step, which

would remove these heavy elements from the

fission products, appears feasible, Because the

heavy elements are small in volume, they can

probably be returned to a fast reactor to be

fissioned, at which point they become normal

fission products. Thus arises the question of

present costs versus far future benefits.

In any event, the wastes must have low

leachability y. This can be assured via well

developed waste technology. Evidence that such

low leachability can be achieved, even without

any processing or conversion to solid form, is

provided by some ancient “natural reactors” in

Gabon which have been under study by French

scientists. Neither plutonium nor other longlived wastes were found to have migrated

appreciable distances since ancient geologic

times, as evidenced by the fact that their final

decay products are spatially coincident with the

remaining uranium.

CHAPTER Ill 109
11. Safeguards for Nuclear Materials

ISSUE

Safeguards must be adequate to prevent the theft or loss of

with subsequent clandestine construction of nuclear weapons.

SUMMARY

fission materials,

Only about 20 pounds of reactor grade plutonium oxide, or comparably small

quantities of other fissionable materials, are required to make a crude nuclear

bomb. Furthermore, the information needed to design and construct nuclear

weapons is readily available. Preventing diversion of small amounts is difficult

because fissionable material must be processed and handled in multiton quantities

annually. Plutonium, which is already produced in large quantities in light-water

reactors, is an even larger component of the LMFBR fuel cycle, While it is widely

agreed that pas t safeguards practices have been inadequate, a number of measures

are under consideration to improve the safeguarding of nuclear materials in the

United States. There are important international aspects to the problem, however,

since, once diverted, the materials are rather easily concealed and transported.

QUESTIONS

1. What extra safeguards are needed to protect 3. To what extent would the safeguar d

plutonium from being stolen from fuel problems be eased if the entire nuclear power

fabrication and reprocessing plants by heavi- program were shifted from uraniumly armed gangs? plutonium to thorium-uranium?

2. Is ERDA studying or developing new

safeguard techniques?

BACKGROUND

The information needed to design and construct crude nuclear weapons is available, as are

the associated nonnuclear materials required.

Dozens of nations have the skills and facilities

necessary to build reliable atomic bombs. Some,

but not all, nuclear weapons experts assert that

small groups of people, conceivably even individuals, could construct a crude bomb which,

although inefficient, could be transported in an

automobile and would be highly destructive.

Furthermore, modest workshop facilities would

suffice. Such a crude bomb might have the power

of 100 tons of TNT and, if exploded in a densely

populated city area, might kill more than 100,000

people under some circumstances.

The only ingredient not readily available for

such weapo n construction is the nuclea r

fissionable material required. A few tens of

pounds of plutonium or highly enriched uranium

are needed, the exact amounts depending on the

chemical form and the degree of dilution of the

fissionable isotope with nonfissionable isotopes.

Such plutonium or enriched uranium is used or

produced in most fission power reactors.

Plutonium is also a potentially toxic material.

If dispersed in the form of small particles in the

110 CHAPTER Ill
atmosphere with sufficient concentration, inhalation might lead to many eventual deaths

from cancer. The potential threat in populated

areas should be compared with the corresponding threat of dispersal of highly poisonous

chemical or biological agents, except tha t

physical effects are not generally visible for

several decades. Thus, the primary threat as a

terrorist weapon is psychological.

In addition to the countries which already have

nuclear weapons, 15 others operate power

reactors which produce plutonium. By 1985, the

number will be at least 50. The plutonium

produced will be in the irradiated fuel rods and,

therefore, will be in too dilute a form for a bomb.

These rods will also contain highly radioactive

and dangerous fission products whose radiation

will play an effective “self protecting” role so that

clandestine theft and handling would be very

difficult. This situation changes when the fuel

elements are reprocessed and the plutonium is

separated from the other elements; several

countries have or are constructing nuclear fuel

reprocessing plants,

The International Atomic Energy Agency

(IAEA) in Vienna has the responsibility for

safeguards to detect the diversion of nuclear

materials from peaceful purposes in nations that

are parties to the Treaty of Non-Proliferation of

Nuclear Weapons or have otherwise agreed to

have their civilian nuclear materials under

international safeguards. The responsibility for

applying physical security safeguards to prevent

theft or diversion of nuclear material by

clandestine groups belongs to the individual

countries involved.

In the United States, the present physical

security for civilian nuclear materials, though

strengthened substantially during the last 2

years, may still be inadequate to prevent theft by

heavily armed groups with adequate resources

and motivation comparable to the Brinks gang,

NRC is presently studying new regulatory

actions which involve “the principle of containmerit, ” in that all potentially explosiv e

fissionable material will be handled in areas

circumscribed by well-defined barriers. A

limited number of channels for the flow of

materials through the barriers and othe r

channels would be continuously monitored.

Some of the new safeguard measures under

consideration are:

Collocation of fuel reprocessing and fuel

fabrication plants.

Dilution of the separated plutonium by

uranium at the output stages of reprocessing

plants. To produce explosive fissile material

chemical separation would then be required,

and the weight of the material which must be

stolen would be increased by a factor of about

100,

“Spiking” of the plutonium with dangerous

radioactive materials. Massive shielding

would be required for all subsequent handling.

Limited “spiking” of the plutonium with

radioactive materials to make detection

easier by monitoring systems.

Use of specially designed vehicles or heavy

containers for shipment.

Establishment of a Federal protective service

to safeguard nuclear materials in transit,

It is estimated that the cost of implementing

these extra safeguards, although high, would

increase the cost of the nuclear electric power by

no more than 15 percent,

CHAPTER Ill 111
12. Siting

Nuclear Regulatory Commission policy

reactor and supporting system design.

changes for siting could influence

SUMMARY

The Energy Reorganization Act (ERA) of 1974 calls for the Nuclear Regulatory

Commission (NRC) to report to the Congress on the clustering of nuclear reactors

and supporting facilities in “nuclear parks. ” Nuclear parks offer several

advantages: easier safeguarding of fissionable material, lower unit construction

cost, probably increased safety, and less disruptive construction (since the work

force is stable), Disadvantages include higher vulnerability in the event of war,

creation of heat islands, and increased expense of transmitting power from the

remote site. If nuclear park siting becomes a general practice, certain technical

problems would require more serious study and resolution: electrical transmission

of extremely large blocks of power; the simplification of transport systems

between reactor and chemical plant; the incorporation of interim waste disposal

facilities on the nuclear park site; and the design of different reactor systems that

are better suited to park siting, Though siting policy and the possibility of nuclear

parks is largely the responsibility of NRC, the matter is so vital to the entire future

of the nuclear energy enterprises that ERDA should be strongly involved in the

development of the concept from the beginning.

QUESTIONS

1. If nuclear parks siting is required, how would 2. Is ERDA planning to examine the social and

this affect (a) the ERDA safeguards program; institutional implications of nuclear parks?

(b) the types of reactors ERDA develops; (c)

the transport systems ERDA develops; and 3. Does ERDA believe that breeder reactors and

(d) the climatological effects program of their subsystems should be confined to

ERDA? nuclear parks?

BACKGROUND

When large-scale nuclear energy began in the

United States during World War II, nuclear

reactors and their chemical plants were confined

mainly to nuclear parks: Hanford, Wash,; Savannah River, S, C,; Oak Ridge, Term,; and Idaho

Falls, Idaho, In the ensuing 30 years, this original

practice has been replaced by scatter-siting, The

reactor has not been viewed as part of a system,

but as a replacement for the boiler in a conventional steam plant.

With increasing popular concern about nuclear

energy, the idea of nuclear park siting has

received increasing attention as a means of

answering some of the objections to nuclear

energy. The feasibility of nuclear parks is now

being studied under the auspices of NRC, and it is

112 CHAPTER Ill
not clear what role ERDA ought to play

clarification of the problem. There are

n the cooperate to support such large enterprises; the

some generation of electricity would tend to be

react or configurations— MSBR, the coupled separate from its distribution; and land use

HTGR-GCFR, ‘and possibly the LMFBR—that planning over a very longtime would be required.

might better be located in parks than in isolation. The impact on reactor design and selection is

Nuclear park siting would carry with it many such that the possibility should be considered in

institutional implications: utilities might have to present nuclear R&D programs and planning.

13. Uranium Resources

The lack of precision in present uranium resource estimates and questions as to

the rate of expansion of uranium production capability make resource-related

issues difficult to address.

SUMMARY

Since the adequacy of the domestic uranium resource base has an important

bearing on ERDA’s and utilities’ nuclear strategy, and especially on the timetable

for breeder reactor development, a much more precise evaluation is needed then is

presently available or anticipated. To keep pace with the Nation’s energy needs as

projected by ERDA, substantial expansion of domestic uranium production over

the next 25 years will be required. This entails long leadtimes, major capital

expenditures, and in the relatively near term, large exploration effort and ore-body

development. The long time, perhaps 10 years, required for the development of a

new mine-mill complex, together with the existence of competing investment

opportunities, may require the creation of a relatively low-risk investment climate

through loan guarantees, accelerated depreciation regulations, and assured

uranium markets. Market prices have increased dramatically during the 1973-75

period from $7 per pound of U3O8 to about $30, and there is no reason to expect an

early end to the seller’s market,

QUESTIONS

1. Is the National Uranium Resource Evaluation (NURE) adequately funded to meet the

need for the identification of assured

reserves for the next 30 years?

2, What is ERDA’s program for obtaining

uranium resource information for its data

base which is held in the private sector?

3. What incentives are needed, if any, to

stimulate substantially greater exploration

and development of mining and milling

operations to insure the future availability y of

fuel supplies?

4. How does ERDA evaluate the impacts of

dependence on foreign sources of uranium,

exportation of domestic uranium, and the

participation of foreign interests in domestic

resource development.

CHAPTER Ill 113
BACKGROUND

The adequacy of the domestic resource base

has an important bearing on ERDA R, D&D

strategy—in particular, the timetable for breeder

reactor development and application. Also,

utility perception of the resource base may

condition the pace of utility commitments to

nuclear power in the prebreeder era, As matters

now stand, information needed for a definitive

assessment of the domestic resource base is

lacking, and expert opinion on the question of its

extent is divided. ERDA’s NURE program,

initiated in 1973 and targeted to be completed by

1980, represents the first attempt to develop a

comprehensive analysis of domestic uranium

resources and hopefully will bring the question

of adequacy into clearer focus. Work being

carried out by the U.S. Geological Survey

(USGS) will contribute additional insights, but

is by no means clear that the sum of the ERDA,

NURE, and USGS activities can or will provide

all of the answers needed.

To keep pace with ERDA requirements projections, the domestic uranium production industry

will have to expand at a very substantial rate, For

example, ERDA’s so-called “medium low” projection defines the growth in annual requirements

as follows:

Year Tons of U3O8

1975 . . . . . . . . . . . . . 10,000

1980 . . . . . . . . . . . . . 19,00 0

1985 . . . . . . . . . . . . . 37,00 0

1990 . . . . . . . . . . . . . 61,00 0

These figures assume recycle of uranium and plutonium,

starting in the late 1970’s. Requirements would be about 25

percent higher than indicated here without recycle.

In 1974, the domestic industry produced 13,000

tons of U3O8

. It is estimated that a 25,00()-ton per

year production level could be realized if the

domestic industry were to proceed wit h

mine/mill ventures to exploit ore bodies already

largely developed. Significant expansion beyond

that level hinges on the results of exploration

effort and ore-body development in the years

immediately ahead, The leadtimes entailed are

appreciable, and the capital requirements are

substantial.

An appreciable part of the upward price

movement of uranium since 1973 is a necessary

and long overdue adjustment from an artificial

uranium price economy to one that provides a

reasonable incentive for supply industry expansion. At the same time, some portion doubtless

reflects the existence, since mid-1973, of a strong

sellers’ market atmosphere, in which the quantities of low-cost reserves which suppliers have

placed on the market are limited in relation to the

quantities utilities would like to purchase.

During the interval to the end of the century,

the typically projected annual ore production

requirements will increase by a factor of roughly

10, which is more than twice as fast as the most

rapid growth phases of other significantly large

mining industries (such as copper) in the United

States. The general resource shortages in the next

few decades should provoke caution in the

expectations that the required exploration crews,

drill rigs, mine-mill investment capital, miners,

and geologists will become available as needed,

The following factors are also potentially

significant in affecting whether adequate fuel

supplies will be available, and they merit

attention in any coordinated national energy

strategy:

The recent occurrence of increased delays

and costs in exploration and development

activities because of new State and Federal

environmental protection requirements

[such as the NEPA statement).

The need for improved geological models and

exploration equipment (such as more sensitive, lightweight, airborne gammadetectors).

The abandonment of mines depleted of

currently economical ore.

The increased ore requirements which will be

imposed if the ERDA-announced plan to

increase the tails assay of the U.S. enrichment plants is implemented, if Pu-recycle is

indefinitely delayed, or if the HTGR is not

eventually commercially successful,

114 CHAPTER Ill
14. Uranium Enrichment

ISSUE

Expansion of uranium enrichment capacity is required to meet domestic

requirements

Enriched

and foreign commitments for LWR

SUMMARY

and HTGR fuel.

uranium fuel is needed in light-water reactors (LWR) and high

temperature gas-cooled reactors (HTGR). The existing ERDA diffusion plants are

.

being upgraded and expanded, but their capacity will be exceeded within a decade

if presently contemplated nuclear powerplant construction occurs. ERDA policy

calls for development of new production facilities by the private sector, but the

financial risks may be too great without some form of Federal economic assurance.

Among the risks involved in the financing of new plants is the possibility that new

technology, such as the gas ultra-centrifuge or laser separation, might render a new

diffusion plant obsolete. A related management question concerns the proposal to

allow the U-235 content of the enrichment plant by-products material (“tails”) to

increase, thereby producing increased enriched uranium output at the expense of

greater natural uranium input.

QUESTIONS

1. What financial and technical arrangements 3. What are the implications for nuclea r

are required to bring a private enrichment weapons proliferation in the advanced

plant on line at an early date? enrichment technologies?

2. How and when will ERDA make its centrifuge and laser isotope separatio n

technology available to industry, and what

effect will this have on the development of a

centrifuge enrichment industry?

BACKGROUND

Before the mid-1980’s, ERDA will have upgraded U.S. enrichment capacity to support the

generation of approximately 320,000 megawatts

of electricity (MWe) if other fuel-cycle factors

develop favorably. This capacity has already

been unconditionally committed (208,000 MWe

domestic and 107,000 foreign), and there are

conditional foreign contracts already in hand

that could increase the load by another 14,000

MWe. There is a clear need, therefore, for

additional enrichment capacity to be completed

by 1985, and perhaps earlier if other fuel-cycle

factors develop less favorably than presently

anticipated. These factors include delayed

plutonium recycle, lower U3O 8 productio n

capability and higher LWR capacity factors.

Enrichment capacity can be easily expanded by

increasing the tails assay. This means that a

given batch of uranium is not wrung out as hard

as possible, but is replaced by new richer feed

sooner.

The proposed change of enrichment tails from

CHAPTER III 115
0.2 to 0.3 percent U-235 would increase the

existing enrichment capacity by 20 percent. The

drawback is that the incoming feed of uranium

must be increased by a similar factor, The

enrichment cost would decrease, while the

increased feed requirement would stimulate

increased exploration and ore production. Opponents of this proposal argue that it represents

false economy, in that it effectively reduces the

long-term uranium supply for the LWR and

HTGR, and that uranium production capacity

already will be strained in the period when

enrichment capacity will become critical.

The need to begin construction of a new

enrichment plant is urgent, since construction

time is estimated (by the National Petroleum

Council) at 9 years for private construction, 6 to 7

years for the Government. Financial backing for

an additional diffusion plant has so far been

unavailable to industry because of several

factors: high cost, about $3,5 billion for a $9-

million separative work unit per year plant; the

presently low pricing by existing ERD A

facilities; and the threat of early obsolescence

induced by the gas ultra-centrifuge and laser

isotope separation. Possible Governmen t

assurances to induce industrial participation are

guaranteed price for the product, guaranteed

construction loans, and a change in pricing policy

for enriched uranium from existing plants.

Of the new technologies, laser isotope separation is a promising concept but not yet even at the

pilot-plant stage and there is no assurance of

increases. Both this and the centrifuge process

promise such substantial reductions in costs, as

well as in the minimum scale for economical

operation, that they represent a potential international threat through the clandestine production of nuclear weapons materials, As with

gaseous diffusions, much of the information

related to both processes is classified.

Gas centrifuge technology is well advanced,

but a large-scale commercial plant has not yet

been constructed. A major advantage to this

process is its substantially lower electric power

consumption, about 10 percent of that by a

comparable diffusion plant. A Western European

consortium has developed the process, and

plants have been built in the Netherlands and the

United Kingdom, Although classified, this

technology is presumably available to the United

States under bilateral agreements. In addition,

the United States has a classified centrifuge

program which is generally believed to be

superior to the European technology and may be

at the stage to support production plant construct ion.

116 CHAPTER Ill
15. Fuel Recycle

Fission fuel

nuclear power.

.

ISSUE

recycling capability is needed for the orderly development of

SUMMARY

Spent nuclear fuel assemblies still contain much valuable fuel material, The

discharged fuel can be reprocessed to recover the usable fuel material, which can

then be recycled through a reactor, There are four basic reasons for recycling the

fuel: (a) the recycled fuel reduces the demand for new uranium that would have to

be mined and refined; (b) recycling, desirable for LWR’s, is an economic necessity

for HTGR’s, LMFBR’s, and other advanced reactor designs; (c) lower powergenerating costs should result; (d) the chemical processing which is part of

recycling is also an integral part of some of the more promising waste disposal

schemes,

Recycling is, however, beset by several problems. First, a reprocessing, a

refabrication, and a radioactive waste disposal industry must be constructed and

operated. Second, safeguards and transportation must be developed to protect the

material adequately. Third, the economic advantage of recycling in LWR’s is small

at best although the spend fuel still contains material that can produce a large

amount of energy.

The central point is whether ERDA’s budget is adequate to develop the

necessary recycling capability or whether adequate incentives can be provided to

industry to provide this capacity,

QUESTIONS

1. What are the implications for resourc e 2. What safeguards programs will ERDA supeconomics and safeguards if recycle is port for reprocessing plants, plutonium

further delayed? shipment, and mixed-oxide fuel fabrication?

BACKGROUND

During the last decade, major emphasis in the

nuclear field has been in reactor development and

in the “front-end” of the fuel cycle. This emphasis

was necessary to transform raw uranium ore into

fuel that could be used in the reactors. The “backend, ” consisting of reprocessing, refabrication,

and radioactive waste disposal, was not stressed;

the AEC may have felt that these operations

should be developed by private industry or that

there was no urgency involved.

The arguments for recycling center on the

conservation of uranium resources, the anticipated economic savings, radioactive waste

handling, and the economic necessity for recycling in HTGR’s, LMFBR’s, and other advanced

reactor designs, The lifetime 1,000 MWe LWR

requirement for yellowcake (U3O8

) is 5,400 short

tons with no recycling, or 3,800 short tons with

recycling. This results in a uranium savings of 30

percent over the reactor lifetime, For reactors

CHAPTER III 117

60-411 0 -75 - 9
other than LWR’s, the economic savings are

substantial; even for the LWR, recycling fuel is

expected to offer an economic advantage. A

recycle industry will definitely be needed in the

future if a reactor concept other than the LWR is

deployed, since the economic advantage of these

advanced reactors hinges on the ability to recycle

fuel.

Three companies—Nuclear Fuel Services,

Allied-Gulf Nuclear Services, and General

Electric—entered the reprocessing business, but

presently no plant is operating, even though all

three companies have contracts for reprocessing

spent nuclear fuel in the 1970’s. General Electric

practically completed their plant at Morris,

Illinois, but found that certain advanced design

features limited the throughput to noneconomic

levels; they are now evaluating possible courses

of action and hope to make a decision by the end

of 1975.

The Nuclear Fuel Services plant operated from

1966-72 and reprocessed about 600 metric tons of

fuel. Since 1972, the plant has been shut down to

upgrade its radioactivity control systems and t o

consider designs to increase throughput, An

application for a construction permit to carry out

this expansion has been submitted, and the plant

could be operational in the 1980’s if the licensing

process is continued. The Allied-Gulf Nuclear

Services plant, which is 95 percent complete in

its basic structures, is now awaiting its operating

license. Similarly, large-scale commercia l

refabrication plants are not operating, although

several private pilot plants are in operation.

Because of substantial cost increases

associated with newly implemented regulations,

high construction cost escalation, and risk

allowances to cover future uncertainties, the

recycle of LWR fuel has lost much of its economic

attractiveness. However, spiraling costs for raw

uranium and for enrichment may change the

economic picture.

ERDA, in a report (ERDA-33) on the problems

of the fuel cycle, reviews this situation. They are

concerned that a number of key process steps in

the reprocessing plants are still undemonstrated,

such as conversion of plutonium nitrate to solid

form accept able for shipment, increased

safeguards, waste solidification and packaging

for shipment to storage/disposal facilities, and

the removal and packaging of certai n

radionuclides from process streams to meet site

effluent limits,

118 CHAPTER Ill
16. Public Understanding

Public understanding

ISSUE

of the energy problem, and especially of the nuclear

option, receives minor emphasis in the ERDA Program.

SUMMARY

The energy problem is complex, and increased efforts must be directed toward

better public information programs. Within the past several years, public anxiety,

confusion, and doubts have increased, and the energy problem is widely perceived

as a “contrived situation. ” More effort must be directed toward better understanding of energy options so that well-informed energy decisions can be made by the

public. One of ERDA’s tasks is to create and encourage “. . . the development of

general information to the public on all energy conservation technologies and

energy sources. . ." In addition, the ERDA Administrator, in conjunction with the

FEA Administrator, is directed to disseminate such information through the use of

mass communications. (Section 103. i’ of Public Law 93-577.)

QUESTIONS

1. What type of program, with what budget 2. How does ERDA envision the promotions of

level, will ERDA use to increase the public nuclear power being handled in the Governunderstanding of energy options? ment as compared to the development, and

how will the agencies involved coordinate

their roles?

BACKGROUND

There is great uncertainty among the public

about the energy options that are being selected,

but little effort seems to be directed toward the

development and dissemination of information

on energy issues. The nuclear field is poorly

understood, even by otherwise well-educated

people, and nuclear technology is widely mistrusted among the public. The task of providing

adequate information for informed choices is

formidable.

Another source of public concern may be the

outgrowth of military needs. Although the

nuclear industry has matured and has largely

divorced itself from its military origin, the

problem of safeguarding fissionable material to

prevent illicit weapons production retains

military implications. This subject is treated in

more detail in Issue Paper 11 on “Safeguards. ”

In addition, past practices of the AEC may be

partially responsible for public mistrust. The

former agency tended to be secretive and did not

always respond fully to public requests for

information. Reports and internal memoranda

were suppressed, and the Commission’s dual role

of promoter and regulator resulted in criticism of

the agency’s objectivity. Understandably, the

public is suspicious when a topic is surrounded

by secrecy. A more basic problem is that the very

CHAPTER Ill 119
technical, complex nature of nuclear science and

technology prohibits easy explanations to

seemingly simple questions.

Although most people who are knowledgeable

in the nuclear field favor the continued development of commercial reactors and believe that

both reactor safety and nuclear safeguards

questions are resolvable, there are some experts

who disagree and who advocate a slowdown or

cessation of reactor procurement. The controversy is complicated by the fact that most pronuclear experts, of necessity, are employed in the

industry, by ERDA, or in university programs

partially dependent on ERDA. As a result of the

lack of scientific consensus, the concerned

layman may be at a loss for an informed

judgment. The advantages and problems of

nuclear power compared to other options must be

thoroughly aired for the public to make rational

choices,

120 CHAPTER Ill
17. Controlled Fusion

ISSUE

1.

2.

3.

Great care must be exercised to ensure that the ERDA-controlled fusion

program does not expand at a rate so fast that proper attention is not given to the

different physics probIems of controlled fusion and that development of new

concepts is not prematurely abandoned.

SUMMARY

The advantages of successful fusion power are great; fusion research needs

should receive high priority, but success is not yet assured by any future date. For

example, it appears necessary to scale present experiments up to larger machines

in order to maintain an effective program. While these next generation devices are

being conservatively designed, they are still experimental. In addition, even

though the science may scale to larger sizes, technological, engineering and

economic considerations may or may not permit exploitation of a given concept for

practical fusion power.

This uncertainty has two practical consequences. First, since no clear or

complete path to fusion power now exists for any fusion concept, and since fusion

is one of the few major long-term energy options, no fusion scheme should

presently be abandoned unless it can be shown fairly convincingly to be

unproductive. Second, in order to establish proper priorities in the face of this

uncertainty, a more or less continual assessment of fusion concepts and prospects

must be maintained; otherwise the program may evolve into either uncritical

support of unfeasible concepts or unwarranted and premature concentration on a

single concept.

QUESTIONS

What program does ERDA have to assess

prospects for fusion and to readjust the

program priorities?

What are ERDA’s present views about the

prospects for successful fusion via tokamak,

magnetic mirrors, theta pinches?

Will ERDA be prepared in due course to

request funding for “test reactors” for more

than the one promising concept, or does it

plan to weed the prospects down to only one

before that time?

4,

5.

6.

What is the present support for tokamak,

mirror and theta pinches, laser fusion, and

less-advertised schemes?

In the light of our past experience in building

“big-machine” facilities, are the schedules

realistic?

In view of the lack of assurance as to

laboratory success, how does ERDA rate

fusion as an option to either the breeder or

solar energy’?

BACKGROUND

Wit hint he next century controlled fusion could manageable impact on the environment, but the

provide the world with an abundant, essentially scientific demonstration that controlled fusion

inexhaustible supply o f energy with a can provide an economical source of power is

CHAPTER Ill 121
expected to require a series of large and costly

devices.

The successful development of commercial

electric power by controlled fusion requires the

solution of extremely difficult scientific and

engineering problems. In the magnetic confinement concept, the principal scientific problems

concern confining and heating a deuterium and

tritium plasma to reach conditions of net energy

release, There are several potential difficulties

which may limit the ability to achieve a stable

configuration of the plasma and to effectively

supply energy to bring the plasma to thermonuclear temperatures. Many of thes e

problems have been identified on the present

generation of experimental devices,

Among the magnetic systems which have been

studied experimentally over the past 2 decades,

the tokamak concept has been the most

successful, Because of this, the ERDA fusion plan

is based primarily on rapidly developing this

approach. The program calls for scaling up the

tokamak device in a series of progressively larger

machines leading to the construction of an

experimental device which can demonstrate that

significant energy can be produced by controlled

fusion. The latter device, the Tokamak Fusion

Test Reactor (TFTR), is projected to cost $21 5

million.

Although tokamaks have not displayed any

behavior which would definite ly preclud e

successful fusion power reactors, there is still

uncertainty as to whether these devices can be

scaled up to the required size and powe r

generation conditions. There is considerable

feeling, however, that larger machines ar e

considered in light of the need to keep several

options open for development of controlled

fusion. The major difficulties will arise when

deciding how to proceed beyond the TFTR stage,

to the Experimental Power Reactor (EPR) phase.

The ERDA fusion plan is pursuing two other

lower priority magnetic confinement schemes

besides the tokamak, and it is not reasonable to

assume that a separate EPR could or should be

financed for all three. This is to say nothing, of

course, of other concepts which may develop as a

result of unforeseen breakthroughs. Therefore,

ERDA must take extreme care in the coming few

years to ensure that they have not abandoned

other paths to controlled fusion prior to a

complete evaluation of their potential.

122 CHAPTER Ill
18. Technologies for Fusion

ISSUE

New technologies, which will be critical to fusion’s successful development

through the 1980’s, requires a long time to develop and will require rapidly

increasing effort with time.

SUMMARY

Many critical technological problems relate to more than one fusion concept.

Some typical critical areas where much work needs to be done are:

(a) Materials and material combinations resistant to high energy neutron

bombardment from the fusion reaction.

(b) Economical storage of large amounts of electrical energy to operate pulsed

fusion devices.

(c) Very large superconducting magnetic systems needed for all but laser fusion

schemes.

(d) Diffusion of tritium fuel into and out of reactor materials.

QUESTIONS

1. How are energy storage requirements likely 2. How do requirements for new materials

to affect the range of fusion concepts that can compare with previous programs, such as

be developed? fission reactor development and rocket

propulsion?

BACKGROUND

Present materials with high-temperatur e

strength need to be perhaps 10 times as resistant

to radiation damage by high-energy neutrons for

use in a fusion reactor. Experience shows that

new exotic materials require many years to bring

to the application stage, even when substantial

development funds and intellectual effort are

applied; 10 to 20 years is not uncommon. The long

time is required not only because the basic

metallurgical research depends on new ideas, but

because tests may require several years under

simulated operating conditions. Fission reactor

technology will not provide much support,

because fusion requirements are more severe.

The energy storage devices are large by

electrical standards (10 to 100 megajoules), but

small by chemical standards (1/2 to 5 pounds of

gasoline). However, the output is required

rapidly in electric form, so conventional storage

schemes do not suffice: capacitors are too

expensive except in a few critical applications;

superconducting magnetic energy storage is

untried, and means of coupling out the energy are

presently unsatisfactory; a n d rotating

machinery is generally slow. This energy storage

problem may limit the options for fusion, and the

limits are uncertain.

The problem of large superconductin g

magnetic systems can be well illustrated by

considering a conceptual design for a large

CHAPTER III 123
tokamak reactor. It may have a magnetic field of

100,000 gauss (10 tesla), in a doughnut-shaped

device whose outer diameter will be at least 15

meters. This is like a subway tunnel made into a

tight loop; the force from the magnetic field is

about 6,000 pounds per square inch, 3 times that

in present pressurized water reactor pressure

vessels. Furthermore, this huge doughnut has

inlet and outlet pipes which also give magnetic

perturbations that increase the local stress. All

this stress must be carried by reinforcing

material a t superconducting temperatures

(perhaps 4 degrees above absolute zero) where

most materials are brittle, not ductile. Practical

structures in this size and magnetic field range

will require years to develop, and the cost cannot

yet be estimated.

Tritium, and deuterium and lithium are the

fusion fuels for the first generation of reactors.

The tritium must all be generated by interaction

of high energy (14 MeV) neutrons in a surrounding breeding blanket of lithium, which would be

about 1 meter thick. For each fusion reaction, one

hopes to generate about 1.25 new tritium atoms (a

fusion reactor is in this sense a breeder). But of

the fusion fuel put into the reactor, only a small

fraction, perhaps 5 percent, is expected to react

per pass, while the rest escapes via an “exhaust”

(yet to be realistically designed for any fusion

concept) where it must be captured and returned

to fuel storage with virtually no loss.

A major difficulty is that tritium is a hydrogen

isotope, and like ordinary hydrogen diffuses very

readily into and through materials, gets trapped

in the metallurgical structure (grain boundaries),

and is difficult to recover.

124 CHAPTER Ill
Chapter IV

Solar, Geothermal,

and Advanced Technologies

Task Group Analysis

125
A. SOLAR, GEOTHERMAL, AND

ADVANCED SYSTEMS TASK GROUP

MEMBERS

Dr. Jerry Grey, Chairman, Independent Consultant

Mr. Sheldon H. Butt, Solar Energy Industries

Association

Prof. James B. Combs, University of Texas at

Dallas

Dr. John C. Fisher, General Electric

Mr. Albert J. Fritsch, Center for Science in the

Public Interest

Prof. George O.G. Löf, Colorado State University

Mr. Michael Lotker, Northeast Utilities

Dr. Larry T. Papay, Southern California Edison

Mr. William A. Thomas, American Bar Foundation

Mr. Arthur D. Watt, Watt Engineering, Ltd.

CONTRIBUTORS

Prof. Karl Bergey, University of Oklahoma

Prof. Richard Deller, University of Texas at

Austin

Dr. John Goodenough, Massachusetts Institute of

Technology

Prof. Gary C. Vliet, University of Texas at Austin

126 CHAPTER IV
—

1.

2.

3.

4.

5.

B. SOLAR, GEOTHERMAL, AND ADVANCED

SYSTEMS TASK GROUP ISSUES LIST

Setting Criteria for Program

Priorities . . . . . . . . . . . . . . . . . . . . ..133

Decision-point criteria defining measures for

evaluating success within a given solar

energy program, choices among programs,

and readiness for commercialization need to

be estaiblished, quantified, and justified.

Rationale for Funding of High-Risk

Projects . . . . . . . . . . . . . . . . . . . . .. .135

It is important that effective mechanisms be

developed by which ERDA can make rational

decisions on solar energy projects having

great potential as future energy sources, but

involing large cost outlays, and being

subject to major uncertainties in projected

costs and/ or technologies.

Resource Availability . .........137

The ERDA Plan lacks adequate emphasis on

the role that critical resources play in

selecting energy alternatives.

Organization of ERDA’s Research

Program . . . . . . . . . . . . . . . . . . . . .. .139

A major concern with ERDA’s research effort

is that the management distinction between

basic and supporting research formerly used

in the AEC continues to polarize the sciences

from engineering.

ERDA Program Management .. .141

The use of outside organizations and Federal

laboratories by ERDA for some of its

program management functions, particularly

in the solar area, could produce an ineffective

organization.

6.

7.

Support for Study of Decentralized

Solar Electrical Generation .. ...143

The study of the decentralized production of

Electricity has received 1imited attention,

especia11y as it involves the potentia1 utilization of waste heat.

Emphasis on Electric Energy

Systems . . . . . . . . . . . . . . . . . . . . .. .144

The program goals of the ERDA Plan appear

to emphasize development of electric power

systems to the point where the fu1l potentia1

of solar heating is not recognized and the

possibility of obtaining synthetic fuels from

solar energy is 1argely ignored,

8. Emphasis on Solar Heating and

Cooling of Buildings . ..........146

The importance of solar heating and cooling

relative to other programs is not recognized

in the ERDA Plan.

9. Purposes of the Solar Heating and

Cooing Demonstration program l 148

The size, scope, and purposes of the solar

heating and cooling demonstration program

need specific definition.

10. Role of User Incentives in Solar

Heating and Cooling of

Buildings . . . . . . . . . . . . . . . . . . . 150

A well-structured user incentive program

would accelerate the solar heating and

cooling of buildings (SHACOB) an d

accelerate dcvelopment of the infrastructure

to support large-scale applications.

CHAPTER IV 127
11.

12.

13.

14.

Standards for the Measurement of

Solar Heating and Cooling Equipment Performance . ............152

For consumer protection, standards are

needed to provide comparative performance

ratings, to allow comparison of durabilitity,

and assure proper installation of solar equipment.

Impact of Solar Energy on Utility

Peak Demand . .................154

Onsite solar energy sources (most immediately solar heating and cooling), unlcss

developed properly, will cause a significant

utility peak demand problem,

Biomass Energy and Food .. ....155

Biomass energy generation may conflict with

food production.

Legal and Institutional Constraints in

Geothermal Energy . ...........157

Geothermal energy irnplementation is not so

much constrained by technology as by legal

and institutional restraints.

15.

16.

17.

Environmental Constraints on

Geothermal Energy

Development . .................159

Environmental problems, which have been

inadequately stressed by ERDA, can plaice

constraints on thc potential development of 

geothermal resources .

Nonelectric

Energy and

Uses of

Geothermal

Geothermal

Goals ..161

The ability to approach ERDA’s presently

unrea1istic 1985 goal for geothermal utiliza -

tion will require a substantial increase in

emphasis on nonelectric use.

Variability y

Reservoirs

of Geothermal

. . . . . . . . . . . . . . . . . . . . . 163

Each geothermal reservoir has its own

unique character sties, which affect the

rcsearch strategy and demonstration portion

of the ERDA program.

128 CHAPTER IV
.

The review of ERDA’s Plan for solar and

geothermal technology is an attempt to examine

the plan with as balanced a view as possible, in

order to identify and summarize for the Congress

those areas of the plan in which Congressional

interest might be both appropriate and useful in

the national interest. These areas are discussed

in a series of issues, some of which cut across all

aspects of geothermal, solar, and others which

pertain to a specific technology.

There is unanimous appreciation of the

problems and difficulties faced by ERDA in

preparing the first National Plan for Energy, R,

D&D in so short a timespan. In view of these

difficulties, most observers feel that the plan is

generally well done. There are important shortcomings, however, and it is hoped that the issues

raised in this report will help the Congress and

ERDA to refine the plan more effectively.

1. General Issues

In establishing a program that involves choices

among several technologies of varying degrees of

cost uncertainty, careful attention must be paid

to the decision process to ensure not only that the

most promising technologies are rapidl y

developed and commercialized, but also that

marginal or high-risk technologies are not

prematurely pushed into engineering development and demonstration phases (Issue Papers 1

and 2). Without these decision criteria much time,

effort, and money can be wasted on unproductive

projects.

A lack of adequate emphasis on resource

assessment can lead to development o f

technologies which are counterproductive in that

their use of other valuable resources (such as

water, land, and materials) is excessive compared to the energy produced. The question of

available manpower must also be considered in

any resource assessment because of its potential

for limiting program development (Issue Paper

3).

A final set of general issues deal with ERDA

organization and program emphasis. If ERDA

C. INTRODUCTION

staffing is adequate, program management and

assessment can be carried out centrally. This

eliminates problems brought about by th e

multilayered management which occurs when

out side organizations and/ or Federa l

laboratories are extensively used (Issue Paper 5).

The separation between science, engineering,

and marketing research which appears in the

ERDA structure can reduce efficient flow from

basic research to commercial application, This is

critical when the nontechnical aspects of energy

R, D&D are considered, but even more so for the

development of high-risk technologies (Issue

Paper 4), With regard to program emphasis, there

is concern that ERDA has given inadequate

attention to decentralized solar electric generation systems, Their ability to take advantage of

the distributed nature of solar energy and to

utilize waste heat is reason for giving them high

priority (Issue Paper 6). Finally, a heav y

emphasis on development of electric energy

systems fails to address important possibilities

for synthetic-fuel production and could preclude

widespread direct use of solar and geothermal

heat which may be more efficient both technically and economically (Issue Paper 7),

2. Solar Electric

Solar-generated electric energy is considered

as one principal option for an inexhaustible

energy source in the long term, Although no

technical barriers exist which could preclude

development of solar-generated electricity, the

uncertain costs of these plants necessitate a

careful development program if they are to be

economically competitive. It appears that a c -

curate full scale estimates, necessary for intelligent national energy planning, may only

follow full scale prototype testing, regardless of

whether these plants are themselves cost effective.

The large cost uncertainties of different solar

electric concepts (ocean thermal energy conversion, solar satellite, solar thermal) necessitate

development of precise decision criteria for

.

CHAPTER IV 129
.

alternative energy technologies (Issue Papers 1

and 2). Consideration of resource availability is

critical due to the extensive use of land and, in

some cases, water by solar electric systems

(Issue Paper 3), Finally, the emphasis placed by

ERDA on developing electric systems of all types,

affects the priority placed on solar electric. If this

emphasis is reconsidered, it could affect the rate

at which solar electric is pursued (Issue Paper 7),

There should be a reassessment of the

programs which call for pursuing four parallel

efforts on a single concept—the central tower,

Concern is also express that the ERDA approach

to solar total energy systems may be too narrow

in that photovoltaic systems were not included.

Finally, there is the need to ensure that a full

range of photovoltaic cell candidates is investigated (Commentary),

3. Solar Heating and Cooling

of Buildings

Approximately 25 percent of the total energy

used in the United States is for domestic water

heating (4 percent) and for heating and cooling of

buildings (2 I percent). In addition, approximately 29 percent of our total energy is used for

industrial process steam and direct heat, Thus, in

excess of 50 percent of total energy demand is the

direct use of thermal energy. Solar energy is best

suited to man y of these direct therma l

applications and it is in these areas that it can

have its most immediate impact on our energy

economy and can contribute substantially as a

long-term, inexhaustible energy source,

The technology and economics for solar water

and space heating are available now. Greater

near-term emphasis should be placed in this area,

relative to solar electric, along with acceleration

of the Solar Heating and Cooling of Buildings

(SHACOB) demonstration program. This is

proposed as a more effective way to develop solar

energy (Issue Papers 8 and 9). User and manufacturer incentives, as well as the educational and

market development value of an effective

demonstration program are necessary for effectively introducing solar heating and cooling into

the economy (Issue Paper 10). Furthermore, to

protect the consumer and maintain a high

industry standard, it will be highly desirable to

require manufacturers of solar equipment to

provide valid performance information on their

products (Issue Paper 11]. Although many of the

legal and institutional issues will be resolved

easily as the technology advances, some, such as

guaranteeing access to sunlight, require attention now. Finally, as the solar energy industry

develops, plans should be made to minimize the

impact on-utility peak demand

4. Biomass

Synthetic fuel from biomass

(Issue Paper 12).

is considered by

ERDA as a lower priority technology which could

contribute in the long term, The uncertainty as to

the economic and technological requirements for

large-scale bioconversion systems make s

premature any definite estimate as to the

eventual contribution of biomass to the energy

system, but support of genetic studies for the

development of better energy crops is warranted.

The potential conflict with food requirements for

arable land is probably the most severe limitation on large-scale fuel production from biomass,

Unless strategies can be developed to resolve

both the perception and the fact of this competition, biomass energy will necessarily have

limited impact (Issue Paper 13), Use of organic

wastes, both urban and agricultural, offers

another potential source of synthetic fuels from

the bioconversion process, It is not clear to what

extent ERDA has considered this, Finally, a

careful assessment of the land availability and

net energy gain per acre for marine biomass are

needed for a sound decision on how to proceed

with this technology (see Commentary, pages

165-167).

5. Geothermal

Geothermal energy is derived from the abundant thermal energy of the earth’s core and

usually is available for use as hot water or steam.

“There is a substantial, but limited, number of

individual geothermal reservoirs in whic h

recovery of geothermal energy is deemed practical,” Depending on the temperature and

characteristics of the reservoir, geothermal

fluids can be used for electric generation,

industrial process heat, space heating, and air

conditioning. Geothermal energy has a large midto long-term potential to contribute to the

Nation’s energy supply.

The main impediments to rapid utilization of

geothermal resources are the legal and institutional constraints which could effectively

130 CHAPTER IV
prevent utilization of this resource (Issue Paper

14). The resolution of these legal and institutional problems is critical to the success of

any geothermal energy development programs.

Other potentially severe impediments relate to

environmental considerations. Disposal of

geothermal pollutants and avoidance o f

geological disturbances need to be given greater

emphasis to ensure acceptable development of

geothermal energy (Issue Paper 15).

An estimate of the exact rate at which

geothermal energy sources will be developed is

difficult to make and perhaps the ERDA nearterm predictions are optimistic. Even though

geothermal resources have the potential to meet

the ERDA goals, they will probably not be

achieved as soon as predicted unless there is a

substantial increase in emphasis on nonelectric

use. Since a major portion of the geothermal

resources is low temperature, the most important

use of geothermal energy in the United States

may be for nonelectric uses as is presently the

case throughout the world. The ERDA Plan may

not assign enough significance to the development of the nonelectric uses of geothermal energy

(Issue Paper 16). Each geothermal reservoir is

unique in its characteristics, and, if the maximum

amount of energy is to be extracted from any

reservoir, the applications and the equipment

technology must be optimum and must match the

characteristics of the reservoir, Thus, the equipment and power conversion research strategy

will have to be designed for a wide variety of

possible utilization systems in order to minimize

resource waste (Issue Paper 17).

CHAPTER IV 131
D. SOLAR, GEOTHERMAL, AND ADVANCED

SYSTEMS ISSUE PAPERS

1. Setting Criteria for Program Priorities

ISSUE

Decision-point criteria defining measures for evaluating success within a given

solar energy program, choices among programs, and readiness for commercialization need to be established, quantified, and justified.

SUMMARY

The ERDA Plan does not treat the important question of how decisions will be

made between solar energy technologies, and between solar and other energy

options. Criteria are necessary to evaluate, for each program: (1) the projected

rewards upon success, (2) the total costs to the public and private sectors, (3) the

relative risks of economic or technical failure, and (4) the potential and projected

readiness for commercialization. The decision-point criteria, to be applied at

regular intervals in this process, must be predetermined by making a number of

specific assumptions concerning the potential of all forms of energy generation,

whether conventional or advanced. These assumptions need to be continuously

evaluated and revised in the light of changing conditions during the course of the

program.

QUESTIONS

1. What specific goals will be set (and when]

against which to measure your solar and

geothermal programs; that is, how will ERDA

define success?

2. In the ERDA estimates of the penetration of

solar and geothermal technologies into use by

the private sector, what costs and cost

relationships were assumed for capital,

interest rate , discount rate, fuel, and

operations and maintenance for the solar and

geothermal systems and the conventional

systems that they are to replace?

3.

4.

How does ERDA make evaluations of various

energy technologies which may have to

compete for limited developmental funds,

such as solar electric and fusion?

Has ERDA conducted cost-benefit and risk

analyses which might help implement the

decisions to accelerate, abandon or delay

available or near-term options, in the expectation that we can make it to the point where

the more advanced technologies can adequately supply our needs?

CHAPTER IV 133

60-411 0-75 -10
BACKGROUND

The lack of definitive program goals in the

ERDA Plan can have two important consequences: It can distort projections of commercial

acceptance of a technology, and it can increase

the probability that an unsuccessful program

will be drawn out longer than necessary. Criteria

are needed to evaluate the relative rewards and

costs of a research program in order to determine

whether it should be continued, accelerated, or

terminated,

Specific criteria, which may vary from project

to project, are also needed in order to define the

appropriate points at which paper studies move

into component testing, component testing into

pilot plant testing, pilot plant testing into

demonstration projects; and demonstration projects into full commercialization.

An important criterion is the cost goal. For the

different energy technologies treated in the

ERDA planning documents these goals are

represented by vague references to achieving

economic viability (such as ocean thermal energy

conversion), cost-cutting by given multiples

where no present-day costs exist (solar thermal

electric and wind), or specific cost goals in

dollars per kilowatt (photovoltaics). Such goals

have little meaning unless the assumptions and

criteria that went into their formulation are

available for comment by potential users.

Furthermore, there is little indication that ERDA

has conducted an analysis of the relative cost and

performance risks, or of the costs associated with

each of its programs in the light of future rewards

of success.

134 CHAPTER IV
2. Rationale for Funding of High-Risk Projects

It is important that effective mechanisms be developed by which ERDA can

make rational decisions on solar energy projects having great potential as future

energy sources, but involving large cost outlays, and being subject to major

uncertainties in projected costs and/or technologies.

SUMMARY

The

research

promise

Energy Research and Development Administration is undertaking

and development of long-range solar energy projects which offer much

in the future, but which, because they involve new and relatively

unknown technology, suffer high levels of uncertainty,

Examples of such projects are the ocean thermal energy conversion and

satellite solar power station programs in solar energy utilization. Although earlyphase funding levels are not necessarily very large for these projects prior to

reaching the demonstration phase, it is nevertheless very important that a rational

method be established to decide: [a) whether or not to initiate the program (b) at

which level to maintain or accelerate it, and (c) when to implement major and

costly undertakings such as demonstration projects. There appears to be no

effective mechanism now being used to make these decisions.

QUESTIONS

1. How does ERDA determine the relative 2. Does ERDA have a definit e “plan” for

funding levels for long-term, high-risk pro- continual review of these technologies and

jects? appropriate mechanisms to factor these

analyses into its program plan?

BACKGROUND

Evaluation and decisionmaking on large projects which involve major uncertainties are

currently performed by one of several methods,

The most common is that where an in-house

decision is made to proceed, requests for

proposals on a “zerophase” study program are

issued, and one or more contracts are granted to

the winning bidder or bidders, In projects where

some degree or prior experience is available, even

though the system applications are new (such as

photovoltaic converters o r solar heating

systems), it is possible for ERDA to obtain

competent reviews of early studies and analyses

and make reasonably accurate system performance and cost estimates, However, when the

prior technology is in its very early stages, even if

technical feasibility has been demonstrated,

there is no obvious mechanism by which ERDA

can test the conclusions of its study contractor.

No matter how objective he may be, if there is

little or no prior body of knowledge, the contractor’s estimates are necessarily uncertain, performance estimates tend to be optimistic, and cost

estimates are almost always too low. Hence,

some method for evaluation involving both

technology and cost uncertainty forecasting is

CHAPTER IV 135
necessary. At the very least, study results must

be subjected to careful and extensive (probably

contracted) review by other sectors of the field.

If uncertainties cannot be narrowed by such

reviews, proceeding to costly demonstrations

could be questionable. Prematur e

demonstrations can have a far more severe effect

than the simple wasting of funds, Often a project

having great potential can be “turned off” by an

unsuccessful demonstration; whereas a more

measured approach, which allows a somewhat

greater development of the basic technology for

the project, might have led to success and

subsequent benefits to society. However, it may

be necessary to proceed to a demonstration even

where the uncertainties remain excessive, simply

because there is no other way to reduce them.

This decision clearly can constitute a major

gamble and should be reached only after the

broadest possible interdisciplinary review.

An example of such a project which is

currently under ERDA’s jurisdiction is the ocean

temperature energy conversion program. It has

been subjected to “phase zero” studies, and its

cost/benefit projections appear quite promising.

However, there still remain major cost uncertainties (both capital and operating/maintenance)

because of the lack of experience with the largescale specialized equipment needed, biofouling,

and corrosion in long-life metallic marine structures, and powerplant operations associated

with offshore locations. Whether these uncertainties should be resolved by further studies and

limited testing, or by an early demonstration

project, is a difficult and vital decision, which

probably is best approached (although not

necessarily successfully) by extensive multisector review of study results.

A second example is the satellite solar power

station, a concept which could offer significant

long-range potential but does not appea r

anywhere in the plan, despite its identification

by other Federal agencies as a highly promising

future option. The decision processes needed to

initiate the low-cost but essential early studies

and experimental research efforts for such

concepts apparently have not yet been properly

formulated or implemented.

The Congress does retain the ability to critically review the decisions with which ERDA will be

confronted in the future since all demonstration

projects requiring funding in excess of a specified

amount must be brought to the Congress for

approval. Consequently, the Congress can ask

the appropriate ERDA personnel at that time if

the required cost-benefit-risk analyses have been

made. Furthermore, the Congress can ask that

independent reviews/assessments be made prior

to proceeding with an authorization.

136 CHAPTER IV
——

3. Resource Availability

ISSUE

1.

2.

3.

The ERDA Plan lacks adequate emphasis on the role that critical resources play

in selecting energy alternatives.

SUMMARY

The following major resources are likely to be affected by the various solar

energy technologies:

,. . Water ● Land ● Materials ● Energ y

● Capita l ● Manpowe r ● Air quality,

The ERDA Plan does not appear to have addressed adequately the problem of

resource requirements of the various solar energy alternatives. It is essential that

in our preoccupation with our current energy shortage we do not divert excessive

amounts of our critical resources into energy production. Therefore, it is clear that

integration of these impacts across disciplinary lines within ERDA will minimize

the chance for oversight.

QUESTIONS

What steps is ERDA taking to evaluate, on a 4. Are potential multiple uses of land and water

per-unit output of energy basis, the demands being considered for the alternative energy

of their proposed energy alternatives on systems?

water, land, materials, energy, capital, man- 5. What manpower projections, by category, power, and air quality? have been made in connection with the

How are the potential environmental impacts Nation’s total energy program?

for the various energy alternatives being

assessed?

What input/output (1/0] balances, including

time-to-repay, have been or will be prepared

for the energy and capital 1/0 of the alternative energy systems?

BACKGROUND

In our last environmental crisis, the United The switch

States took several steps to improve air quality represents a

without adequate concern for our limited manpower. It

back to coal now in progress

waste of energy, capital, and

is important that we not make

domestic supplies of certain types of energy similar mistakes in t-he future.

resources. For example, the air pollution stand- We are well aware of the limitations on

ards that mandated a switch from coal-burning available energy and capital. The potentially

to gas or oil-burning in some electric powerplants large demands on our supplies of other critical

were established without an adequate apprecia- resources should be of equal concern. There are

t ion of the limited national supplies of oil and gas. many competing demands for water which may

CHAPTER IV 137
well be the next critical factor in limiting our

choices of life style. Opportunities for multiple

use of water must be explored actively, and

careful planning is needed to avoid exceeding

safe consumption rates in any one region. Land

use, also, must be assigned only after careful

evaluations of all multiuse opportunities and

priorities have been determined,

The reduction of engineering graduates in the

last few years has placed us in a position where

we cannot mount simultaneously an effective,

large development effort on all new energy

alternatives. Fortunately, a turnaround i n

enrollments has occurred; however, there will be

a shortage of engineers and scientists skilled in

solar energy technology for some years to come if

other energy technologies are also expanded

more rapidly. Fortunately, many energy

technologies are supportive and many of the

required personnel will be drawn from existing

manufacturing concerns. A more serious problem

may occur in the skilled trades required for

installation and maintenance of the sola r

systems. The environmental impact of various

solar energy sources and conversion systems is

an important factor which must be considered.

For example, atmospheric disturbance caused by

local heating near large solar collectors could be

significant as solar energy use increases.

Although the subject of materials is touched

upon in the ERDA Plan, it has received inadequate attention. A case in point is in the collector

part of the solar heating and cooling program,

where the amounts of materials required to meet

the projected energy contribution do not appear

to have been considered.

The energy required to produce these and other

materials must also be accounted for in the

calculation of the net energy consumed to

produce 1 Quad of output. For example, the

production and fabrication of each ton o f

aluminum requires from 20,000 to 90,000 kWh of

energy. Therefore, the 4.3 million tons of

aluminum needed to ha; e an installed annual

collection capacity of 1 Quad by 1985, requires

from 0.35 Quad to nearly 1.5 Quads, Thus, the

aluminum alone could cost as much as 7,5 percent

of the energy produced over a 20-year equipment

life. These figures emphasize the importance of

programs to reduce the amounts of critical

materials in collectors when large-scale implementation is contemplated,

138 CHAPTER IV
4. Organization of ERDA’s Research Program

1.

2.

3.

A major concern with ERDA’s research effort is that the management

distinction between basic and supporting research formerly used in the AEC

continues to polarize the sciences from engineering.

SUMMARY

It appears (ERDA-48, volume I, p. VIII-11) that the polarized research

management policy is being carried over from the AEC into ERDA. The problem

with this management policy is that its tendency to isolate scientific and

engineering research has not produced innovative advances in technology

comparable to those, for example, produced by the pacesetting electronics

laboratories where a continuous spectrum of applied and fundamental research

has been carried out under the cooperative leadership of scientists and engineers.

Energy-oriented research is even more complex since it involves social and

institutional problems in addition to the scientific and engineering aspects of

advanced-hardware development. Thus, a nonpolarized institutional mechanism

is needed if rapid solutions are to be found for these complex energy problems.

Creation of a Solar Energy Research Institute (SERI) represents one of several

institutional mechanisms that can be utilized for this purpose, but there is as yet no

indication that it will take the necessary interdisciplinary science/engineering

form.

QUESTIONS

What are some of the specific programs of

basic materials research that ERDA is

supporting? How do they relate to ERDA’s

mid-term or long-term goals?

Is engineering work toward these goals being

done in the same laboratory? If so, are the

engineering and scientifi c programs

monitored by the same ERDA manager? Do

they have a common laboratory leader? If

not, what mechanisms have been established

to insure dialogue between the two managers

as well as between the engineering and

scientific efforts?

How is ERDA addressing the social, legal,

and institutional problems associated with

solar and geothermal energy?

4. How many dollars have been allocated to the

ERDA laboratories for basic research in

nonnuclear energy? How large a fraction of

the total budget for such research does this

represent? How many engineers and how

many scientists are involved? Is this a typical

program? Is ERDA supporting simila r

research at other institutions? If so, how are

these programs coordinated?

5. Do you think SERI should be established as a

central managerial and assessment office

having regional technical laboratories? A S a

central research laboratory having regional

demonstration projects? What function

would ERDA like to see it exercise? What

relationship does ERDA think it should have

to existing facilities.

CHAPTER IV 139
BACKGROUND

The distinction between basic and supporting

research is motivated by the need to preserve

scientific freedom in the research aimed at

developing the conceptual context within which

innovative technology operates. Experience has

shown that those charged with engineering

responsibilities and constrained by timetables

are not effective managers of this type of

research. However, experience has also shown

that scientists do not generally apply their

insights to the solution of practical problems if

they are isolated from engineers and a participation in the mission orientation that engineering

provides. Therefore, the optimum solution to

innovation i n advanced technology is

cooperative leadership between scientists and

engineers and other individuals and groups

responsible for commercialization. Effective

implementation of mid- and long-term programs

in energy-oriented research requires a continuing

dialogue not onl y between scientists and

engineers, but also between design, materials

development, materials processing, and system

engineers, and marketing people. This dialogue

can be effectively carried on within interdisciplinary teams sharing a common sense of

responsibility. The following elements appear

essential to

development:

●

●

•

●

●

●

A larg e

autonomy

successful advanced-technology

measure of local management

A definite, though broadly defined, mission

Full-time, interdisciplinary technical staff

selected by management to implement an

engineering objective having a mul -

tidisciplinary dimension

Adequate support that allows for program

continuity by committing a full-time staff

engaged in high-risk, high-payoff technical

development

A high degree of interaction with individuals

responsible for commercialization

Intelligence and

for performance

tion.

strong personal motivation

at all levels of the organizaNeither management practices nor funding

decisions by ERDA have yet taken adequate

advantage of existing organizations that have

interdisciplinary capabilities.

140 CHAPTER IV
5. ERDA Program Management

ISSUE

The use of outside organizations and Federal laboratories by ERDA for some of

its program management functions, particularly in the solar area, could produce an

ineffective organization.

SUMMARY

Interposing an additional management level in the development of solar

energy technology is not likely to be efficient because some of the organizations

used by ERDA for this function have not been constrained by cost considerations.

Their management and contractual procedures are highly structural and extremely

detailed, an approach which may not be appropriate—or cost effective—for the

development of new solar energy forms.

Since the new energy technologies are very sensitive to costs, require

innovation, and must interface with commercial energy producers (the utilities),

ERDA’s current reliance on outside management organizations may cause serious

problems with program costs and the cost effectiveness of end-products.

Furthermore, when ERDA delegates complete control of an entire program or a

large part of a program to one of these organizations, it may be too far removed from

the actual research planning to maintain its mandated responsibility for the

Nation’s energy research and development.

QUESTIONS

1. What is the cost in time and money of

interposing an additional management level

in the energy development program?

2. Is a highly structured management style

consistent with the goals of ERDA? What

alternative management systems has ERDA

investigated?

3. What portion of the ERDA budget is used to

support program management and program

planning by outside organizations an d

Federal laboratories?

4. What new responsibilities have the National

laboratories undertaken in the last year?

What staffing levels have these required? To

what extent have the new staffing re -

quirements been met by new hires? By

internal reassignment?

5. What are the existing guidelines for number

of contracts monitored by each program

manager?

BACKGROUND

The rapid expansion of the Federal agency provide a n intermediate level of program

budget has forced ERDA to contract with management which has responsibility for the

organizations which have immediately available success of a large research area within which it

management capability. Their function is to selects, contracts for, and monitors specific

CHAPTER IV 141
research and development projects. In such a not been a major constraint and in which highly

program, all communication with ERDA by structured crash programs have been frequent.

individual researchers is through these in- Such approaches may not be appropriate for R&D

termediate agencies. programs which are aimed ultimately at commerTo a large extent, the past experience of these cialization.

organizations has been in fields in which cost has

142 CHAPTER IV
6. Support for Study of Decentralized Solar Electrical

Generation

.- -

ISSUE

The study of the decentralized production of electricity has received limited

attention, especially because it involves the potential utilization of waste heat.

SUMMARY

One chief advantage of solar energy is its relatively uniform distribution.

Extensive electrical distribution systems are thereby rendered unnecessary, or at

least can be appreciably smaller. The small distances between generator and user,

which are possible with decentralized production, make utilization of the waste

heat more feasible than with central station plants. Since future principal energy

shortages are predicted mainly in the oil and gas supply areas, which have recently

supplied the bulk of the country’s thermal energy needs, there is added reason for

extensive study of onsite production. The technology for solar onsite systems is at

least as well in hand as central station technologies. Fossil-fired total energy

systems are in use in many European countries. With photovoltaics especially

there are no major economies of scale as larger electrical generating stations are

contemplated.

The present ERDA organization establishes the study of decentralized

electrical production as a small part of the central station solar thermal branch. A

recent (and first) total energy symposium had almost no discussion of photovoltaic

total energy systems, and very little on the problems of distributing the waste heat.

The major issue of electric utility acceptance has received little attention.

The first major U.S. solar electrical system has recently been installed at

Sandia, following an extensive survey under AEC sponsorship. No other electricalgenerating facility will be ready for several years according to present ERDA

plans, despite the relative simplicity of the technology and the availability of all

components. The reason for this delay in construction is not clear.

QUESTIONS

1. Is present ERDA solar organization (which

separates electrical and thermal areas)

appropriate for undertaking a project which

combines several technologies in a system?

Z. What coordination is now occuring with the

ERDA Conservation Division which is

responsible for fossil-fired total energy

systems?

,

3. Why is no further immediate solar thermal

hardware deployment planned, in light of the

successful Sandia work, and the rapid cost

improvements already obtained?

4. Why has the photovoltaic program not been

more active in placing experimental total

energy systems into the field (the only one is

the very early “Solar One” at the University

of Delaware, which was in large part funded

locally)?

CHAPTER IV 143
BACKGROUND

This topic is the subject of an extensive quently, little more detail will be provided here,

assessment by the Office of Technology Assess- The interested reader is urged to contact OTA for

ment which will be released at approximately the the report from this additional solar energy

same time as this ERDA Plan review. Conse- assessment.

7. Emphasis on Electric Energy Systems

ISSUE

The program goals of the ERDA Plan appear to emphasize development of

electric power systems to the point where the full potential of solar heating is not

recognized, and the possibility of obtaining synthetic fuels from solar energy is

largely ignored.

SUMMARY

Preoccupation with coal, solar, and nuclear energy for electric power

generation has produced too narrow a view of the alternatives for utilization of our

energy sources and, in selected areas, would commit the Nation—perhaps

prematurely—to a massive change in the infrastructure for energy delivery and

utilization, Much of the Nation’s thermal end-use energy requirements over the

long term may be met by those energy sources, particularly solar and geothermal,

that are well suited to supplying thermal energy directly.

QUESTIONS

1. Since the production of heat from electricity Z. What are ERDA’s plans for the development

is expensive and about half of the end-use of technologies which produce synthetic

energy consumption in the United States is in fuels from solar and nuclear energies? How

the form of heat, why hasn’t more emphasis does ERDA’s basic research program reflect

been placed on utilizing solar energy sources these plans?

for direct thermal end-use requirements?

BACKGROUND

The ERDA Plan is apparently guided by the to be gained by

logic that: (a) because mid-term energy demands sources, and (c)

will be met increasingly by coal and nuclear tion is the best

having interchangeable energy

because electric power genera-

“common denominator” for all

energy (both best suited to electric power sources (including geothermal, fusion, and

generation), (b) because maximum advantage is solar), it is necessary to begin changing our

144 CHAPTER IV
infrastructure for energy conversion, delivery,

a n d consumption to a massive dependence upon

electrification. Thus, top priority in the ERDA

Plan is given to systems that convert primary

energy (coal, nuclear, solar, geothermal) to

electricity. Lower priority is given to the direct

utilization of thermal sources, whether from

solar energy (a distributed source) or from

geothermal and nuclear energy (centralized

sources ).

The use of biomass for fuel is regarded as a

possible long-term energy supplement, but no

explicit considerate ion is given to the production

of alternative fuels, such as hydrogen, methane,

and methanol. However, high-temperature electrolysis, photolysis, and pyrolysis for alternatefuel product ion from solar or nuclear energy are

attractive options awaiting technical development,

These priorities are not consistent with the

present patterns of energy consumption. Approximately 25 percent of the present energy

demand is for industrial process heating and

direct heat. Moreover, about 25 percent of the

energy demand will probably continue to be for

transportation which is at present totally dependent on fossil fuels. There will be a continuing

need for fuels for heating and cooling as a

supplement to solar energy utilization systems.

CHAPTER IV 145
8. Emphasis on Solar Heating and Cooling of Buildings

The importance of solar heating and cooling relative to other programs is not

recognized in the ERDA Plan.

SUMMARY

There is abundant evidence that solar heating and cooling applications offer a

larger potential for energy savings in the immediate and near term (to 1985), and

beyond this to 2000, than any other solar applications, Indeed, ERDA’s figures

(ERDA-48, volume I, table 6-1) verify this statement; yet, solar heating and cooling

is categorized at the third level of priorities as an “under-used mid-term

technology“ and one which may “provide an energy ‘margin’ in the event of R, D&D

failure in other areas.” These statements in the ERDA document project a

significant potential for solar heating and cooling, yet underemphasize the

development and actual impact of solar heating and cooling on our energy

economy.

QUESTIONS

1. How does ERDA reconcile the inconsisten- 2. How

cies between the statements made concerning than

does ERDA justify lower 1985 goals

those put forward by FEA in Project

priorities and emphasis on solar heating and Independence as being attainable witha n

cooling in ERDA-48 and the projected fuel “accelerated government program?”

savings shown in ERDA-48? 3. How does ERDA define the interface between

solar “demonstration” and solar “commercialization”?

BACKGROUND

Solar water heaters are used extensively

abroad (Israel, Japan, and Australia) and to a

lesser extent in the United States (Florida and

California). In excess of 100 solar space heating

systems have been installed in the United States,

most of which were not Federally funded. There

is no similar foundation of existing technology

in use to serve as a point of departure for other

solar technologies,

The existing base for solar heating and cooling

provides an opportunity for rapidly accelerating

its growth through governmental action, including: (a) government-funded demonstration

program intended to accelerate consumer acceptance; (b) more government-funded R&D to

accelerate development of more efficient and

lower cost systems; and (c) an incentive program,

needed temporarily to enhance production and to

bring down costs. The ERDA priorities in

funding do not appear to recognize adequately

this opportunity,

ERDA-48 (volume II, p. 40) projects energy

saving objectives for solar heating and cooling at

0.2 to 0.6 Quad in 1985, The maximum objectives

146 CHAPTER IV
projected in 1985 for other individual solar

technologies are small compared to the 0.2 to 0.6

Quad range projected for solar heating and

cooling. Further, the 1985 goals may be too low.

The accelerated program of FEA’s Project Independence projects 1.5 to 2.0 Quads per year in

1985. Although the 2-Quad level may seem large,

it is only 2 percent of anticipated total energy use

projected by FEA in 1985 compared to almost 25

percent of total energy use for heating and

cooling of buildings.

In view of the above, it seems reasonable to

anticipate that ERDA would assign high priority

to solar heating and cooling programs needed to

capture this potential. The statements quoted in

the Summary to ERDA-48 suggest otherwise.

CHAPTER IV 147
9. Purposes of the Solar Heating and Cooling

Demonstration Program

ISSUE

The size, scope, and purposes of the solar heating and cooling demonstration

program need specific definition.

SUMMARY

The prime objective of the demonstration program should be to accelerate

consumer acceptance of solar energy as a heat source so that substantial fuel

savings can be achieved at a considerable earlier date than would otherwise result,

The plans set forth in ERDA-48 do not appear to be oriented to achieve these

purposes. In particular they do not appear to place as much emphasis on

demonstration programs as (Public Law 93-409), The Solar Heating and Cooling

Demonstration Act, does.

The manufacture and sale of solar energy systems for heating buildings and hot

water has commenced on a small scale, while solar cooling is still in the

development stage. Principal immediate emphasis in solar cooling should be

research, development, and testing, whereas the thrust in the solar space and water

heating effort should be demonstration.

QUESTIONS

1. Does ERDA agree that acceptable solar water

and space heating systems are now commercially available?

2. Does ERDA agree that there is a disparity

between the emphasis placed on demonstrat ion of solar heating and cooling in ERDA-48

and in (Public Law 93-409), the Solar Heating

and Cooling Demonstration Act?

3. What should be the principal purpose of the

demonstration program in the solar heating

of buildings?

4.

5.

6.

Is the suggested 400 solar-heated residential

installations over a 4-year period sufficient

for a vigorous demonstration program? If

not, how many should there be?

Should solar-heating demonstrations be

concentrated in the present year and next

year, or should they be approximately evenly

distributed over a 4- to 5-year period?

If solar heating is expected to grow in the

privat e sect o r withou t governmen t

demonstration, is there justification for a

demonstration program?

BACKGROUND

Commerci ally acceptable equipment for solar in several sections of the country. The primary

space and water heating is available in today’s objective of the solar heating demonstration

market and has already experienced limited sale program is to stimulate a large increase in the

148 CHAPTER IV
rate of application of the technology and thereby

a reduction in fuel consumption. By providing

funds for a significant number of solar-heated

buildings, ERDA’s Plan could stimulate additional solar installations. The solar-heating

demonstrate ion program is designed to show to

the public at large (users; designers; builders;

financiers; and tax, insurance, and regulatory

a u t h or i t i es ) t h e e x tent t o w hich solar heating can

be applied successfully and economically to a

variety of buildings in wide areas of the country.

Legal, institutional, environmental, and social

deterrents to adoption should be assessed and

dealt with as part of the demonstration.

Another purpose o f the solar-heating

demonstration program is the integration of

various available components and subsystems

into effective heating systems, and the determination of performance and cost of such

systems, This program should demonstrate the

benefits attainable by use of various subsystem

and system improvements resulting from

research and development.

The overall goal of the program should not be

the development of technology or of hardware,

but rather the development of consumer markets.

Research on and development of solar cooling

and advanced solar-heating components an d

systems are important activities which should be

conducted under a well-funded R&D effort, but

this should be dissociated from the demonstration programs. Whenever such developments

reach the stage at which available solar-heating

systems have now reached, they should be

included in the demonstration program a s

outlined above.

CHAPTER IV 149

60-411 0-75 -11
10. Role of User Incentives in Solar Heating and Cooling

of Buildings

A well-structured user incentive program would accelerate the solar heating

and cooling of buildings (SHACOB) and accelerate development of the infrastructure to support large-scale applications.

SUMMARY

Properly structured user incentives are perceived as having the potential to

substantially accelerate the growth of solar energy utilization. Although incentive

programs should probably not be developed nor administered by ERDA, they have

potential impact on ERDA’s program. The important interfaces and distinctions

between the various Federal agencies with regard to solar incentive responsibilities, have not been delineated in ERDA-48,

Incentives may be looked upon as temporary. Economics are less favorable for

solar heating and cooling systems now than they will be in the long term because:

(a) mass production savings in producing solar equipment have not yet been

attained, (b) cost reduction engineering accompanying volume production remains

to be done, and (c) it is probable that costs of competing fossil-based energy forms

will be higher relative to solar in the near future.

However, there is a clear need for equitable treatment of the solar energy user.

The individual user, turned energy producer, does not now receive the benefits of

investment tax credits, depreciation allowances, depletion allowances, and other

incentives provided to corporate producers of fossil energy forms. No incentive

recognizes his contribution to society in reducing pollution, preserving fossil

resources or reduci ng the Nation’s dependence upon imported oil,

QUESTIONS

1. Why, as stated in ERDA-23, does ERDA 2. What agency, or agencies, should develop a

propose to delay study of incentive programs structured incentive program, and what

until 1979?

The development of

solar ener gy for th e

buildings requires that

should be the nature of ERDA’s interaction

with it?

BACKGROUND

large-scale application of decisions is the economics of the choice as

heating and cooling of perceived by the potential user, Each has his own

a very large number of perception of the relationshi p between first cost

individua1 favorable decisions be made. In the and annual savings required-to elicit a favorable

majority of cases these decisions will be made by decision, and the rate at which conventional

individua1 consumers, and a major factor in these energy costs will escalate, Thus, a properly

150 CHAPTER IV
structured incentive program which reduces the

users first cost and operating cost will increase

the number of individual favorable decisions. By

subs id i zing equipment cost to the user, the cost

savings effected by increased production can be

made available to the consumer. On the basis of

present equipment costs, the current payout time

on solar systems, resulting from savings in

conventional energy costs, is satisfactory to a

significant but moderate number of consumers,

mainly if the user’s current alternative is electric

energy. Because heating oil and gas prices are

lower than electricity prices, for home heating,

present costs of solar equipment currently

represent an attractive investment only to a

minority of consumers.

In a very real sense, the user of solar energy

becomes an energy producer. His costs, which are

largely investment related, must be competitive

with those of producers of competitive forms of

energy. Many of these are also capital-intensive.

The corporate producer of competing energy is

assisted in recovering his investment by investment tax credits which provide for immediate

recovery of a portion of the investment from

pretax income. Also, he can recover the balance

of his fixed investment over time with pre-tax

income through depreciation allowances. In

addition, in some cases he also receives tax-free

depletion allowances. If the solar energ y

producer is an individual homeowner, h e

receives none of these tax benefits, and must pay

for his productive facilities with after-tax

income, As an owner of commercial or rental

property, he receive s only depreciation

allowances, Therefore, under present tax laws,

the individual (noncorporate) producer of solar

energy is subjected to discrimination and faces a

disincentive to use solar energy.

CHAPTER IV 151
11. Standards for the Measurement of Solar Heating and

Cooling Equipment Performance

ISSUE

For consumer protection, standards are needed to provide comparative

performance ratings, to allow comparison of durability, and assure proper

installation of solar equipment.

SUMMARY

In order for the consumer or builder to intelligently compare solar equipment

produced by competing manufacturers, it is necessary that all equipment be rated

according to realistic and consistent standards. In order for the owner, builder, or

architect to properly size equipment to the load, the equipment performance as

determined from a standard measurement procedure must be specified. At present,

many equipment manufacturers omit rating data or rate their own equipment in

different terms so that it is very difficult to make comparisons or to size

installations. Thus, it appears that standards are required not to protect the

consumer. It is particularly appropriate that proposed incentive programs be tied

to standards so as to discourage fraudulent or mistaken practices.

QUESTIONS

1. What are ERDA and/or other agencies doing 3. Will future standards be so written as to

to accelerate development of adequate stan- enable the consumer to make his own

dards? comparisons on life cycle cost effectiveness

2. Is it intended that standards be written so

and energy conservation potential?

that they consciously avoid stifling innovation?

BACKGROUND

It is generally true in the development of an

industry that some of those who enter it seek to

capitalize on the consumer’s lack of knowledge

by marketing products which are either unsuitable for their intended purpose or which do

not perform as claimed. Significant commercial

sale of solar heating equipment is now emerging

and volume will grow, particularly if sales are

stimulated by the governmen t throug h

demonstration programs and user incentives.

There is evidence that unscrupulous suppliers

have already entered the market.

For the consumer to intelligently compare the

solar equipment of different manufacturers,

realistic and consistent ratings are necessary. To

select equipment for a particular application,

valid performance data are also required. At

present, the performance of much equipment is

unspecified or is presented in a manner unique to

the particular manufacturer, and it is difficult to

152 CHAPTER IV
. —

make comparisons or to size installations, This is

true even of manufacturers whose reputation is

such that there is no serious question of

fraudulent claims. There are others whos e

performance claims are at least suspect.

Standards intended to establish equipment

durability and life are also required to protect the

user’s investment, Although manufacturers’

warranties are important, they are not a substitute for standards at this stage in industry

development. Many equipment producers do not

have the financial strength required to back up

meaningful warranties, and therefore valid

equipment ratings are essential.

Standards intended to assure adequate installation practices are also needed in lieu of

nonexistent local codes and regulations. It should

be expected that in time, such standards will be

replaced by local codes and regulations.

It appears that the industry is still in a

formative stage of development and that Government assistance is required to accelerate

development of standards, It is paramount to

rapid consumer acceptance of solar energy that

the credibility of this industry be guaranteed by

industry self-regulation and government

vigilance.

CHAPTER IV 153
12. Impact of Solar Energy on Utility Peak Demand

ISSUE

Onsite solar energy sources (most immediately solar heating and cooling),

unless developed properly, will cause a significant utility peak demand problem.

SUMMARY

The economics of solar heating and cooling show that much of a building’s

energy requirements can be met by solar energy, The remainder must be supplied

from an auxiliary source—for example, electricity or natural gas from a public

utility or a stored onsite source, such as fuel oil. As the use of solar energy becomes

more extensive, it may contribute to an increased peak demand problem for the

utilities (particularly the electric utilities), because such energy supply systems

could need auxiliary power simultaneously. Expensive standby electricity rates

for solar energy uses could result, If auxiliary energy is supplied by a public utility,

the solar energy systems should be carefully designed to minimize regional

standby capacity. An alternative is onsite, self contained auxiliary energy storage

(such as fuel oil], which makes the consumer independent of the utility or which

will ensure his utilization of auxiliary sources at offpeak times.

QUESTIONS

1. At what levels of implementation (percentage of solar homes) will a peak demand

problem for utilities become serious?

2. What standby energy and/or capacity (peak

or off peak) rate structuring can be anticipated or recommended in the future for

buildings using onsite solar energy?

3. What methods appear attractive for selfcontained onsite supplementary energy

storage?

4. How best can an onsite solar energy system

be designed to minimize the impact on the

utility system while simultaneously maximizing the benefit to the solar consumer?

5. What coordination is planned with the

Conservation Division of ERDA for storage

schemes uniquely applicable to sola r

systems?

BACKGROUND

At present, solar energy represents a negligible utility standby capacity is used, then the solar

contribution to any region’s energy economy and energy system should be designed to demand

therefore has little effect on a utility’s load supplementary energy at off peak hours and store

distribution. As onsite solar energy use makes a it until needed, thereby minimizing the peak

greater impact, it in itself will cause an in- demand problem and possibly even enhancing

creasing peak demand problem for utilities the relation between peak and baseload for the

unless these systems are designed wisely. If the utility. Another option is onsite, self-contained

154 CHAPTER IV
auxiliary energy storage (such as fuel oil, seriousness of this problem should be studied by

replenished as needed). This makes the user FEA in conjunction with the utility industry,

independent of a utility, but provides a long-term FPC, and citizen energy groups.

demand for onsite fuel (fuel oil). The extent and

13. Biomass Energy and Food

ISSUE

Biomass energy generation may conflict with food production.

SUMMARY

In a world in which hunger is an ever-present concern, the use of arable land in

the U.S. explicitly for energy production may be seen as irresponsible and may

conflict with out own capacity to produce food. For this reason, it is important that

the biomass program should not have an adverse effect on the production of food,

either in fact or perception.

A variety of development strategies are available to satisfy this requirement,

including:

 Improved plant genetics to emphasize biomass production with low water and

fertilizer demands

● Changes in cattle-feeding methods and a reduction in the United States

demand for beef

• Development of lands unsuitable for food crops

● Integrated food and energy production systems.

Unless such approaches are successful (and are also perceived as being

successful), a large-scale biomass energy program will probably be unacceptable.

QUESTIONS

1.

2.

Have studies been made of the comparable

economic value of organic materials when

used for food, lumber, and energy?

What support is ERDA giving to genetic

studies for the improvement or development

of plants with high energy yield—and with

low water and nutrient demands?

3. Is ERDA undertaking

ensure the long-term

used for intensiv e

farming?

studies or research to

productivity of land

agriculture or treeCHAPTER IV 155
BACKGROUND

Biomass energy production has a number of

attractive features. Aside from being en -

vironmentally benign, the organic products may

be burned for energy or converted to liquid,

gaseous, and solid fuel forms, They may be used

for either peak- or baseload electric-generating

capacity in central power systems, or may be

used as transportable fuels.

This flexibility y of end-use extends to construct ion (lumber), food (cellulose), and the farms

themselves (green belts and recreation), The

specific way in which the organic farm product is

used will depend on need and economics rather

than on rhetorical choices between food and

energy. Food and biomass energy are not mutually

exclusive, and such implications may foreclose

an attractive option, unless viable development

strategies are pursued which do not seriously

affect food production,

In addition the relatively low conversion

efficiencies may mean that single-purpos e

energy plantations are not economically competitive. Energy biomass as a by-product from

food production, however, may be economically

a t tract iv e. Reorientation is needed i n

agricultural R&D to maximize food/energy

production cost effectiveness,

*

156 CHAPTER IV
14. Legal and Institutional Constraints in Geothermal

Energy

ISSUE

Geothermal energy implementation is not so much constrained by technology

as by legal and institutional restraints.

SUMMARY

Federal, State, and local agencies are inexperienced and inconsistent in dealing

wit h leasing, exploration permits, and licensing of geothermal resources. For

example, geothermal resources are variously classified as water, minerals, or fossil

fuels by regulatory agencies. Furthermore, unlike oil and gas exploration,

extensive licensing and environmental analyses are required prior to exploratory

drilling,

ERDA sponsorship of innovative legal and institutional studies may

determine the best methods of resolving these and similar problems to ensure the

orderly development of the resource.

QUESTIONS

1. What can ERDA do to expedite the leasing 3. What steps can be taken to ensure the

and exploration of potential geothermal efficient development of the total geothermal

resources? resource ?

2. Can the Environmental Impact Statement

(EIS) requirements be modified to stimulate

exploration without damage to the environment?

BACKGROUND

Current exploration for and development of

geothermal reservoirs is being slowed by

problems with the licensing, permitting, and

leasing process. The present pace and re -

quirements of the Bureau of Land Management’s

(BLM) procedures for leasing Federal lands,

which con t a in much of the Nation’s resources,

hinder exploration. Experience shows that leasing without exploration will not encourage the

resource industries to expand the data base

required for valid resource evaluation.

Requirements for a complete Environmental

Impact Statement prior to exploratory drilling

may be an unnecessary burden. A complete EIS is

not required for exploratory oil and gas drilling.

Perhaps a better plan would be to allow exploratory activities to be initiated with limited

initial environmental analysis, but subject to

minimum standards. Upon discovery and con firmat ion of a resource, a master plan, including a

complete EIS, would then be filed for approval

before development of the field,

CHAPTER IV 157
The various states with geothermal resources

define the material in different ways—that is, as

water, as a mineral, as a fossil fuel, or not at all—

and no ownership is defined for the dissolved

minerals and gases, These ownership quest ions

can only hinder development, since the problems

of leasing large areas with multiple ownership of

water and mineral rights are sufficient in

themselves to prevent utilization of the resource,

To encourage geothermal development, the

resource will have to be uniformly defined as

water, as a mineral, or as a unique resource. It

may be in the interest of rapid utilization to

cons icier innovative solutions, such as defining

geothermal fluids and all associated minerals,

gases (methane, carbon dioxide, etc.), and thermal

energy, as a unique resource. Furthermore, to

conserve the available resources, it may be

necessary in some cases to consider legislation

which would prevent exploit a t ion of the resource

solely for the recovery of the mineral or methane

content while wasting the thermal energy (heat)

which is also available. A situation could develop

similar to the one which existed when it was

considered uneconomical to recover natural gas

and it was wasted (flared),

Jurisdiction of regulatory agencies often

overlaps and, in many cases, results in conflicts

which can almost totally prevent utilization of

the resource. An elimination of multiple permits

for the same steps and unnecessary multitiered

regulation may be one approach to the solution of

this problem.

The use of water from geothermal reservoirs

presents similar problems. In most cases, it will

be necessary to reinject the spent fluids into

either the reservoir or some adjacent geological

formation to prevent subsidence and to dispose

of any undesirable fluids. In some cases, water

usable for irrigation must be wasted because

current regulation may prevent its use simply

because the composition of the geothermal fluid

is different than that of the underlying fresh

water aquifiers. Such restraints may be unnecessary in many areas,

CHAPTER IV
15. Environmental Constraints on Geothermal Energy

Development

ISSUE

Environmental problems, which have been inadequately stressed by ERDA, can

place constraints on the potential development of geothermal energy resources.

SUMMARY

Geothermal energy development will have environmental constraints because

of the disposal of gaseous and liquid pollutants, the potential for large-scale

subsidence, and the potential for fault movement and earthquake generation. The

implementation document of ERDA’s Energy Plan does not adequately define the

necessary environmental evaluation problem for geothermal development.

QUESTIONS

1. To what extent is land subsidence a potential

problem with geothermal energy development, and how large a geographical area will

be affected?

Z . What types and degrees of exhaust gas

treatment will be required to minimize

potential air pollutant emissions from

geothermal energy development, and what

will be the resultant costs?

3. What chemicals can be economicall y

recovered from geothermal brine streams

prior to reinfection, and what additional

effluent treatment may be required for

above-ground disposal?

4. What magnitudes of earthquake intensities

may occur from varying levels of geothermal

energy development, and how might this

constraint affect future utilization?

BACKGROUND

Geothermal energy results from the heating of

ground water in the Earth’s crust by proximity to

its molten core, The four basic types of geothermal energy developments are the hydrothermal

brine, geopressurized water, geothermal steam,

and molten magma systems. Potential environmental impacts from major producing fields and

potential major fields are as follows:

● The Geysers, California. Geothermal steam

production for electric-power generation at

the Geysers releases hydrogen sulfide to the

atmosphere in small quantities with the

noncondensable gases, whereas the major

portions are precipitated as a sulfide sludge

to constitute a potential solid waste problem.

Mercury vapor is also released in trace

quantities from the exhaust gases from the

geothermal steam fields.

● Imperial Valley, California. Hydrothermal

brine development in the Imperial Valley

necessitates the disposal of highly saline

brine streams through either deepwell reinjection or surface disposal. The potential for

land subsidence and the activation of earthquakes are environmental constraints that

can deter future development. The release of

hydrogen sulfide in significant quantities

constitutes a potential odor problem, while

trace element releases of arsenic, boron, and

CHAPTER IV 159
mercury also pose possibl

problems.

● Gulf Coast, Texas, Th e

e environmental tion, but also provide for potential natural

gas recovery, This energy source is still in the

geopressurized- developmental stage where technical and

geothermal water sources along the Gulf economic feasibility has not yet been fully

Coasts of Texas and Louisiana pos e established. There is an additional need to

problems, relating to water quality, land provide for a detailed environmental assesssubsidence, fault activation, and air pollu- ment of this energy resource.

160 CHAPTER IV
16. Nonelectric Uses of Geothermal Energy and Geothermal Goals

ISSUE

The ability to approach ERDA’s presently unrealistic 1985 goal for geothermal

utilization will require a substantial increase in emphasis on nonelectric use.

SUMMARY

A realistic maximum prediction for electric generation by 1985 is 4,000

Megawatts of Electric Power (MWe). To reach the objective of 10,000 to 15,000

Megawatts (MW) stated by ERDA, however, will require a large amount of

nonelectrical uses. Since a significant portion of the resource base is low

temperature, the most important use of geothermal resources in the United States

may be for nonelectric applications. Indeed, the principal impact of geothermal

resources on worldwide energy needs, to date, has been through nonelectric

utilization.

The thermal energy from a geothermal reservoir can be used to replace

electricity or fossil fuels in low-grade industrial heat applications and space

heating. Geothermal water, because of its temperature, can also be used for

solution mining, agricultural enhancement, and mariculture.

Of additional consideration in reaching the ERDA goal is the development of

the number of wells needed for production and reinfection of 10,000 MW of

geothermal fluids. This will require a significant fraction of the drilling rigs,

material, and manpower presently being used for oil and gas exploration.

The ERDA Plan may not have assigned enough significance to the potentially

important nonelectric uses of geothermal energy, By doing so, ERDA could much

more realistically expect to reach their 1985 goals of geothermal utilization.

QUESTIONS

1.

2.

3.

What portion of the 10,000 to 15,000 MW of

geothermal energy projected by ERDA for

1985 is expected to come from nonelectric

uses?

Is a process heat survey being planned to

determine what fraction of the total industrial heat could be supplied by geothermal sources?

Would a person or firm who was interested in

using geothermal process heat be eligible for

the Federal Geothermal Loan Guarantee

Program?

4. Does ERDA feel that as part of its dissemination and implementation function it should

encourage the location or relocation of

industries using low-grade heat nea r

geothermal resources? Would the loan

program apply?

5. Does ERDA plan to use geothermal resources

to develop central systems for the space

heating and cooling of buildings in populated

areas?

CHAPTER IV 161
BACKGROUND

A problem in interpretation of the ERDA

document arises since it does not specify what

fraction of the total utilization is, to be electric.

By 1985, the Geyser’s vapor-dominated

geothermal field may be producing l,550 MWe.

The moderate temperature , low salinit y

hydrothermal demonstration plants (100 MWe

total capacity] will not be operational until 1979-

82. Pilot plant programs to test other geothermal

sources are not scheduled to be operational until

1978-80. When the time required to advance from

operation of a pilot plant through completion of a

significant number of commercial plants (greater

than or equal to 50

difficult to conceive

be on line by 1985.

Where geothermal

MWe) is considered, it is

that over 4,000 MWe could

energy is available, however, it can readily be used to replace electric or

fossil fuels as sources of heat, Much of the energy

expended in this country is used to provide heat

for industrial processes, space heating, and for

processes which depend on a supply of moderate

temperature fluids. These include control of

chemical reactions in petrochemical an d

chemical plants, drying of agricultural products,

processing of foods, paper production, and

mineral extraction and purification. Geothermal

water could be used for food production enhancement processes that use temperature control to

generate maximum crop yield, such as field and

greenhouse heating. Protein supplies could be

expanded by algae growth in ponds heated yearround by geothermal sources.

Geothermal fluids may contain valuabl e

minerals that are recoverable. In many cases, the

thermal energy in the fluids is sufficient to effect

this recovery.

These nonelectric uses of geothermal resources

can expand the definition of a geothermal

resource because a low-temperature reservoir,

which is not usable for electric generation, can be

used for some of these nonelectric applications.

Note, however, that nonelectric uses will, in

general, probably be site specific. The ERDA

Plan includes a pilot plant to investigate “multiple nonelectric uses of thermal waters.” It is

difficult to determine whether or not multiple

uses will be practical at a given geothermal

reservoir. Support for “demonstrations” at

different locations for different purposes may

prove to be more desirable.

To achieve the goal of extensive nonelectric

use, a greater emphasis is needed, especially in

the area of dissemination of information and in

the technology of conversion of existing industrial heat processes from fossil fuels to

geothermal heat.

162 CHAPTER IV
17. Variability of Geothermal Reservoirs

ISSUE

Each geothermal reservoir has its own unique characteristics, which affect the

research strategy and demonstration portion of the ERDA program.

SUMMARY

Each geothermal reservoir has unique parameters, such as size, fluid

characteristics, and location. Furthermore, the nature of its energy source (heat)

requires that it be used at or near where it is found. Thus, the design of equipment

and energy conversion technology must be tailored to the characteristics of the

fluid in each reservoir; consequently, different power cycles may be used. If the

ERDA pilot/demonstration program were to concentrate on a single type of power

cycle, multiple demonstrations of the same cycle would not aid the expansion and

use of this resource. Furthermore, the most useful cycle for a given reservoir may be

determined by the availability of cooling water near the well site. Thus, the

equipment and power conversion research strategy will have to consider a wide

variety of possible utilization systems to ensure high efficiency.

QUESTIONS

1. What cycles has ERDA identified for its 3. To what extent will the pilot/demonstration

pilot/demonstration program in geothermal program be concerned with problems

energy? associated with integrating a geothermal

How will advanced power cycles be demonsource with an existing power grid?

2.

strated?

BACKGROUND

The Energy Research and Development Administration has identified two

temperature (about 20 0

0 C), low-sal

voirs for demonstration and may

binary cycle (or a version thereof)

these reservoirs, A variety of canal:

moderateinity reserchoose the

for both of

date power

cycles are possible, but they have not been

included in the current demonstration program.

The ERDA program also includes pilot power

plants for a high-temperature, high-salinity

reservoir, a geopressured reservoir, and a dry

hot-rock reservoir. The best choice of power

cycle for these pilot plants may be other than

binary.

tempera

Since most of the know n highure reservoirs are located in the South

and Southwest where water is scarce the most

appropriate cycle for a given reservoir should be

determined by both the reservoir characteristics

and the availability of cooling water.

The demonstration of power cycles will not

solve all the potential operational problems

associated with widespread utilization of

geothermal energy for electricity. Dynamic

control o f the production/power/injection

system is important, particularly if the electric

load is lost, Any interruption of electric load on

the generator creates control problems for the

well since

conversion

the system.

the fluid must bypass the power

equipment until load is returned to

With a steam geothermal reservoir, it

CHAPTER IV 163
is safe and environmentally acceptable to vent the hot fluids would have to bypass the power

the steam. However, with saline hot water conversion equipment and be immediately reinsystems, the fluid can not be dumped because of jected. All of these control, grid interaction, and

environmental considerate ions. Thus, an artificial switching problems need to be considered when

load (storage system) might have to be applied or optimizing a geothermal electric installation,

.

164 CHAPTER IV
E. COMMENTARY ON ERDA PLAN

This sect ion is devoted to several comments or

short issue statements concerning the ERDA

solar and geothermal programs. The nature of the

issues addressed by these comments is such that

a short exposition is all that is required to

adequately express them. They should not be

considered to be less important than the several

issues developed in length in Section D.

1.

2.

3.

Has proper attention been given to the

necessary intraagency coordination

mechanisms to ensure the cross-fertilization

of information and technology between solar

programs and necessary auxiliary efforts in

other divisions?

There are many aspects of the ERDA

program which cut across divisional boundaries, and which, although assigned to one

division, are of vital concern to the solargeothermal programs. Examples of such

areas are:

●

●

●

●

●

●

●

Energy storage

Hydrogen generation, distribution ,

storage, and utilization

Advanced power conversion cycles

Combined storage/conversion systems;

e.g., fuel cells or thermal “batteries .“

Superconductivity y

Electric power conditioning (e.g., d.c, to

a.c, conversion)

Resource availability, particularly fresh

water.

Which research programs in the solar and

geothermal areas are budget limited? If more

funds were provided, what would be done

with them, and how would they assist the

research effort?

What are the differences between a test bed

facility, a pilot plant, and a demonstration

plant?

In ERDA language, a test bed is a facility

used to test components of and ideas for a

total system. A pilot plant is a complete

system assembled t () show technical

feasibility and to gain construction and

operating experience. A demonstrate ion plant

4.

5.

6.

7.

8.

9.

10.

is a near commercial scale facility used to

show economic feasibility y although the plant

itself may not be economically competitive at

that time. Another but totally different

concept of “demonstrations” is illustrated in

connection with solar heating and cooling of

buildings (see Issue Paper 9), where the

objectives are to generate a user market.

Does ERDA’s patent policy enhance or

impede development and application of solar

and/or geothermal energy?

Should ERDA research funding include

requirements that access to background

proprietary information and patent positions

be granted to the Federal Government?

How does withholding of “proprietary information” by industry affect ERDA’s state-ofthe-art reviews and data-bank usefulness’?

What should be the nature of incentives to

use windpower systems and geothermal

heating systems?

The issue of incentives related to solar

heating and cooling has been discussed

previously (see Issue Paper 10). Many of the

same points also apply to wind power and

geothermal heat utilization,

Would it be appropriate for ERDA to fund

traineeships in solar and geotherma l

technology?

The discipline requirements for the utilization of these resources is such that some

incentive, similar to the former NASA

traineeships, may be required to encourage

pursuit of these specialized educational

backgrounds. The need for these hybrid

scientists/engineers is immediate,

What is the reason for the apparent emphasis

on the central tower solar electric concept to

the exclusion of solar electric approaches?

Should the Plan make a specific commitment

of allocating a portion of the solar heating

and cooling demonstration projects to the

retrofitting of existing residential and commercial buildings?

CHAPTER IV 165

60-411 0-75 - ]2
11.

12.

13.

14.

15.

‘ 16.

Although solar heating and coolin g

systems will be more cost effective in new

buildings designed with the systems, the

approximately 65 million existing buildings

present an immense potential for solar

heating and cooling, with a subsequent

significant potential fuel savings. This is

particularly true in the case of solar-heated

domestic water.

What is the status of the Guaranteed

Geothermal Loan Program?

The Geothermal Guaranteed Loan Program

will be impossible to implement without

appropriate ions available to back up the

guarantee.

Why does a sola r thermal total-energy

system demonstration appear in the plan, but

no photovoltaic total energy system?

Photovoltaics (at least onsite) would

appear to be at least as well suited for total

energy systems.

How does ERDA plan to verify and supplement the estimate of geothermal resources

indicated in the USGS Assessment Program?

USGS cannot drill exploratory geothermal

wells, but in order to determine the potential

reserves, geothermal exploratory wells must

be drilled. Such exploratory drilling will

allow for better planning of resource utilization and determine the resource for which

conservation technolog y should b e

developed.

Why is little emphasis placed on alternative

solar-cell materials (other than silicon)

considered in the ERDA Plan?

A number of other materials (such as

gallium arsenide, cadmium sulfide, and

iridium phosphide) are receiving con -

siderable attention from the private sector,

and some of them appear quite interesting.

Does the potential for the export of solar,

wind, and geothermal technology and equipment have any impact on R&D strategies?

Will geothermal resources benefit only certain segments of the country?

Even though geothermal resources are

regional in occurrence and nontransportable,

this does not make it a regional resource

166 CHAPTER IV

17.

18.

19.

20.

21.

which will benefit only a small segment of the

population. Because of the nature of the

resource (heat), it must be used near the well

site. However, when geothermal energy is

used in one portion of the country to replace

fossil fuel heat sources, the fossil fuel saved

is available to the country as a whole in the

form of high value liquid fuel,

What is the role of ERDA in the development

of geothermal exploration methods?

The development of advanced geophysical

exploration techniques is needed to ensure

full and rapid development of geothermal

resources, If ERDA agrees that it is within the

scope of their mandate to do this type of

work, such a statement should be made with

details provided.

Has ERDA given adequate attention to the

use of international research efforts to solve

common energy problems?

The solar energy field is a particularly

attractive area for cooperation.

Why hasn’t the use of wind energy for

nonelectric applications been considered;

e.g., water-pumping, with pumped-storage

capability?

It is possible that significant capital cost

and energy savings might be realized by

exploiting all possible avenues for these

applications.

Has ERDA considered establishing test

facilities, pilot plants, and demonstration

plants on Federally controlled rather than

privately controlled lands?

This approach, with the assistance of

private industry, would allow the rapid

testing of technology without many of the

long delays associated with licensing and

restraints on private land. This approach

should be considered for cases where early

testing of a resource or technology is mandatory.

What is the nature of ERDA’s interaction

with the EPA program in urban wast e

disposal? How do you integrate the use of

agricultural and forest wastes with your

program of energy from biomass?

The use of’ organic wastes: urban ,

agricultural, and tree farming, can make a
22.

modest contribution to the fuel supply while marine biomass cultivation? Is this area large

reducing an adverse environmental problem. enough to allow a significant impact? What is

What ocean areas have you identified that your estimate of the net energy-gain per acre

have suitable upwelling conditions for

of marine biomass and the cost to harvest?

! 1’

CHAPTER IV 167
Chapter V

Conservation

Task Group Analysis
MEMBERS

Prof. John Gibbons, Chairman,

Tennessee

A. CONSERVATION TASK GROUP

University of

Prof. Dean E. Abrahamson, University of

Minnesota

Mr. Michael B. Barker, American Institute of

Architects

Dr. Paul F. Chenea, General Motors Corp.

Mr. Donald Hallman, E.I. DuPont de Nemours,

Inc.

Dr. Fred H. Kant, EXXON Research

Mr. Simon K. Mencher, Gordian Associates

Prof. Herbert H. Woodson, University of Texas at

Austin

CONTRIBUTORS ,

Prof. William H. Cunningham, University of

Texas at Austin

Mr. Tim Hall, University of Oklahoma

Dr. Robert D. Huntoon, Consultant

Prof. Jerold W. Jones, University of Texas at

Austin

Prof. Philip S. Schmidt, University of Texas at

Austin

170 CHAPTER V
1.

2.

3.

4.

5.

6.

B. CONSERVATION TASK GROUP ISSUES LIST

Importance of Conservation . . . 175

The ERDA Plan should better reflect the

urgency and importance of conservation in

responding to the national energy problem.

Program Management and

Coordination . . . . . . . . . . . . . . . . . 177

ERDA’s Plan for the program management

and coordination within the agency,

other involved Federal agencies, with

and local governments, and with

nations, needs additional attention.

Interaction with the Private

Sector . . . . . . . . . . . . . . . . . . . . . . . .

with

State

other

179

A comprehensive plan is needed for interaction between ERDA and the private sector in

energy conservation.

Use of the Term

“Conservation” . . . . . . . . . . . . . . . 181

ERDA’s operational definition of energy

conservation is too broad.

Need for Nontechnological

Research . . . . . . . . . . . . . . . . . . . . . 183

ERDA’s role needs clearer definition with

respect to research on nontechnological

issues associated with energy conservation.

Demand Modeling and Conservation

Planning . . . . . . . . . . . . . . . . . . . . . 185

The basic assumptions underlying ERDA’s

projections of future demand are unrealistic;

as a resu1t, the ERDA P1an has not accorded

sufficient attention to conservation as a

means of reducing energy demand, environment al impact, and financia1 stress.

7.

8.

9.

10.

11.

12.

Design Methods and

Standards . . . . . . . . . . . . . . . . . . . . 187

Energy conservation efforts in the building

and consumer product sector require the

development and dissemination of analytic

design met hods and the adoption of

reasonable energy standards.

Development and

Demonstration . . . . . . . . . . . . . . . . 189

ERDA’s plans for R, D&D of energy conservat ion technologies in buildings and consumer

products should be accelerated and expanded,

Constraints in Building

Construction . . ● . . . . . . . . . . . . . . 191

ERDA does not appear to be devotin g

sufficient effort to overcoming the nontechnological barriers to energy conservation in building construction.

Need for Thermodynamic

Analysis . . . . . . . . . . . . . . . . . . . . . 193

The ERDA Plan does not describe how the

agency plans to identify areas with the

highest theoretical potential for industrial

energy conservation and to assess the practical feasibility y of implementing programs in

those areas.

Oil and Gas Substitution . . . . . 195

ERDA’s plans for the substitution of other

energy forms for oil and gas as part of the

industrial conservation program are not

well-defined.

Use of Foreign Technology . . . . 197

The ERDA program should consider the

uti1ization of foreign technology as an

alternative to new conservation research.

CHAPTER V 171
13.

14.

15.

Transmission and Distribution

Priorities . . . . . . . . . . . . ..0...... 2 00

The economic, environmental, and reliability

criteria underlying ERDA’s choice of projects

and their relative priorities in the electrical

transmission and distribution program need

clarification.

Active Load Management . . . ... 202

Active load management is not addressed as

a cost-effective way to save energy.

Orientation of Automotive

Programs . . . . . . . . . . . . . . . . . . . . . .204

ERDA’s program on highway vehicles is

directed more towards prototype development than toward the technologica l

breakthroughs necessary for successful commercialization.

16.

17.

18.

Cooperation With the Transportation

Industry ... **.*0** 206

Successful commercialization of ERDAsponsored technology in the transportation

industry will be difficult to achieve without

close cooperation between ERDA and industry.

Nonhighway Vehicle Transportation Programs . . . . . . . . . . . . . . . . 208

ERDA presently has no program for energy

conservation in the non-highway vehicle

transportation sector.

Energy Recovery From Waste .. .209

ERDA has formulated no plans or programs

in the productive use of waste, although

specifically directed to do so by Congress.

172 CHAPTER V
ERDA’s programs under the purview of the

Assistant Administrator for Conservation are

among the newest and least developed of any

within the Agency, With the exception of the

projects in the division of transportation which

derived from the Alternative Automotive Power

Systems (AAPS) program within EPA, the

Division of Electrical Energy Systems in the

Department of the Interior, and the Atomic

Energy Commission’s storage work, all areas had

to be created and assembled in the past 6 months

without benefit of antecedents. The staff responsible for this planning is to be credited for a

successful beginning, but much further analysis

and program development is still required. The

effort of the staff is all the more noteworthy in

view of an apparent lack of appreciation within

the Government of the role that conservation can

provide in helping to meet the Nation’s energy

goals. The far greater emphasis given to energy

supplies in comparison to energy demands in the

ERDA Plan has roots in the thinking which

informed the national policy goal stated by

ERDA as “to provide for future needs so that life

styles remain a matter of choice and are not

limited by unavailability of energy.” This statement makes no mention of the total cost of the

energy made available. It appears to focus on the

necessity of supply at any price and does not

acknowledge that life styles can be maintained

and improved with more cost-effective use of

energy. To provide a better balance between

energy supply and demand, the goal might be

better stated as “to provide the opportunity for

present and future generations to enjoy those

amenities which they deem worthy at minimal

total cost to themselves and society.”

The main issues upon which the conservation

panel reached a consensus are summarized b y the

following statements:

● The ERDA Plan could advantageously take a

more vigorous approach to energy conservation,

both in its objectives and in its level of effort.

The energy conservation targets presented in

the ERDA Plan project only minimal gains over

those which are already broadly recognized as

C. INTRODUCTION

attainable with existing technology, In part, this

is due to the ERDA scenario which ignores price

elasticity of demand.

The lack of an aggressive conservation

program is also reflected in ERDA’s budget

requests, which allocate less than 2 percent of its

total budget for conservation. The conservation

program is too narrowly focused in the transportation and electrical sectors. These problems are

addressed principally in Issue 1 and are a

recurring theme in others.

● ERDA'S plans for program management and

coordination within the agency, with other

Federal agencies, with State and loca l

governments, and with foreign governments are

not clearly delineated.

Most of ERDA’s conservation efforts will be

highly complex, involving jurisdictional

questions between programmatic divisions

within the agency, and between various agencies

of Federal, State, and local government. Use of

foreign technology will require cooperative

arrangements with other governments. Fo r

example, it is imperative to closely link Buildings

to solar thermal utilization. The mechanisms for

interaction must be resolved quickly to eliminate

unnecessary duplication of effort and to assure

that projects flow smoothly through the various

governmental entities responsible for research,

development, demonstration, assessment, and

implementation. Issues 2 and 12 consider this

problem in greater detail,

. ERDA has not yet developed a comprehensive plan for interaction with the private sector.

In energy conservation, interaction with the

private sector is especially crucial, since the

consumers of conservation technology are

diverse and numerous.

Energy conservation is as much a matter of

private enterprise interest as governmental

concern. Many valuable innovations have been

developed in the private sector. Many others can

be developed and commercialized through

Federal/private partnerships. Some programs

reflect lack of knowledge of current industrial

CHAPTER V 173
know-how. There can be no assurance that ERDA

R, D&D results will be commercialized unless the

corporate and individual consumers actively

participate in the planning, execution, evaluation, and implementation of the research.

ERDA must make a serious commitment to

establishing constructive relationships among

Government, industry, and private citizens to

ensure the success of its energy conservation

efforts, Various aspects of this problem are

treated in Issues 3 and i’.

● ERDA’s use of the term “conservation” is too

broad. As a result, the program plan for conservation is incomplete in some areas and overextensive in others.

ERDA’s interpretation of the term “energy

conservation” is important because it defines the

boundaries of the conservation program. Its

definition of the term is sufficiently broad that

not only fuel shifts but even financial savings,

can be rationalized as “conservation, ” This is far

different from the more generally accepted

definition of conservation (saving energy in a

cost-effective way). Irrespective of the importance of the various ERDA programs under

“conservation, ” there is a danger in their inclus ion as “energy conservation, ” One consequence

is a loss of focus on the role of the energy

consumer in conservation, Another is the potential diversion of funding from true conservation

projects to others better justified on grounds

other than energy conservation, such as the

ERDA electric energy systems program, The

specifics of the problem are discussed in Issue 4.

. ERDA does not adequately address the

social, political, economic, and environmental

issues associated with implementation of both

existing and new energy conservation

technologies and systems.

Certain programs proposed by ERDA may

ultimately be very successful technically, yet

have no real impact on society because of

inherent nontechnological problems. In the

energy conservation sector, the task of implementation is made more difficult by the fact

that the ultimate beneficiaries, consumers, are

subject to a multitude of constraints,

A meaningful R, D&D program must consider

these nontechnological barriers at the earliest

stages of planning. This is done well in the

programs for “Buildings” and “Industry”, but in

general the ERDA document is basically a

technological plan, with little evidence of societal

assessment in its proposed projects. Almost total

attention is given to creation of technologies and

not enough to analysis and evaluation of alternatives. ERDA is charged with this responsibility (Public Law 93-577 Sec. 5(a)); its plans and

programs must consider these nontechnological

factors, Issues 5 and 9 describe the implications

of this problem in specific areas of concern,

. ERDA has not adequately established

priorities within its conservation program or of

the conservation program relative to energy

supply programs.

Extensive data on energy usage have been

collected within the past several years by

Government and private researchers; improved

methodologies have been developed for assessing

the potential savings which might be realized by

the implementation of various conservation

innovations. With the exception of its program in

the Building sector, it is not evident that ERDA

has made effective use of existing quantitative

tools and data in establishing priorities for the

the conservation program, or that it has plans to

develop improved assessment tools for use in

future program planning and evaluation, Issue 6

addresses this problem in general terms, whereas

Issues 10, 13, 15, and 17 consider priority

questions in specific areas.

In addition, several topics which do not fall

naturally into the general grouping of issues

outlined above are discussed in the following

papers: specific programs on demonstration and

research on buildings (Issue 8); substitution of

fuels in industry (Issue 11); electrical load

management [Issue 14); and wastes (Issue 18).

174 CHAPTER V
D. CONSERVATION ISSUE PAPERS

1. Importance of Conservation

The ERDA Plan should better reflect the urgency and importance of

conservation in responding to the national energy problem.

SUMMARY

ERDA-48 states that energy conservation is of “crucial” importance,

particularly in the next decade. However, its program priorities and funding

requests are inconsistent with the stated importance of conservation. There is little

evidence that cost-effectiveness or environmental/economic impacts have been

considered in establishing program priorities; moreover, programs to address

nontechnological but none-the-less vital issues in developing and implementing

conservation activities seem to be missing. A sense of urgency to achieve results

(saved energy) seems wanting.

QUESTIONS

1. How does ERDA expect the importance and 3. What is ERDA doing to ensure that its

probable cost-effectiveness of conservation program can be rapidly implemented through

to be reflected in its programs, especially in an adequate, highly responsive procurement

compariso n with supply technolog y system?

programs?

2. What guidelines are used to decide whether

an energy conservation activity should

receive ERDA funding rather than funding

from some other Federal agency or the

private sector?

BACKGROUND

Studies of ways to respond productively to the energy conservation shall be a primary conproblem of energy price and scarcity conclude sideration in the design and implementation of

that most cost-effective options available to us the . . . program . . .“ Opinions differ regarding

relate to improved utilization rather than to the extent and rate at which price effects alone

accelerated supply growth. The ERDA enabling will induce “the market” to shift to more efficient

act, Public Law 93-577 Sec. 5(a), states that”. . . energy use. Many observers feel that because of a

CHAPTER V 175
variety of market imperfections and Government

regulations in the energy area, the price response

will be far less complete and less rapid than

needed to meet national needs.

Most observers feel that the energy problem is

so urgent for both economic and national security

reasons, that an aggressive campaign must be

mounted to:

Ž Accelerate the rate at which end-use efficiencies are improved;

. Extend improvements from those that have

sufficiently fast payoff to attract private

investment to those that self-amortize more

slowly but are still attractive in terms of

public benefit.

In addition, the public benefit of reduced

vulnerability to embargoes and price cartels

provides justification for Federal incentives that

help induce otherwise “no profit” shifts to higher

efficiency.

The urgency and cost-effectiveness of a major

effort to improve energy utilization is recognized

in the general pronouncements of the ERDA

Program Plan, but a closer review shows that the

pronouncements do not translate into actual

program emphasis and budgetary priority:

● Despite the high priority and cost-effectiveness of conservation the propose d

budgetary allocation to conservation versus

supply development is only about 2 percent.

Clearly the ERDA budget decisions accord

little weight to relative cost-effectiveness.

● Approximately half of this 2 percent actually

is only indirectly related to end-use conservation; rather, it pertains to miscellaneous

programs (e.g., electric transmission a n d

distribution) assigned to the Assistant Administrator for Conservation that, however

worthy for other reasons, carry low priority

in terms of conservation potential, per se.

. Many of ERDA’s conservation programs are

overly cautious and conservative (e.g., the

electrical sector); they are not comprehensive

(e.g., the transportation sector), they display

little aggressiveness or sense of urgency as

well as an unwillingness to make high-risk

but promising, high-leverage investments.

● The old Atomic Energy Commission procurement procedures must be modified to match

ERDA’s new requirements, especially in the

area of conservation. In this area, ERDA must

deal with a very diverse set of constituents

rather than with a small number of large

industrial concerns. There is little evidence

that these modifications are being made.

176 CHAPTER V
2. Program Management and Coordination

ISSUE

ERDA’s plans for conservation program management and coordination within

the agency, with other involved Federal agencies, with State and local governments,

and with other nations need additional attention.

SUMMARY

ERDA has been mandated (Public Law 93-577) as the primary agency in energy

R, D&D with responsibility y to integrate and coordinate national efforts. Its mission

is to assure that existing ancillary resources (e.g., capital) manpower, materialist

and expertise) are utilized to the maximum extent, thereby making available the

most promising energy alternatives.

It is not evident in ERDA’s plans whether a comprehensive framework is being

established to permit ERDA to perform adequately its required coordination/integration role. Insufficient attention is given in the Plan to the

implementation of formal mechanisms or operating relationships to assure:

. location of programs within ERDA to maximize chances for an integrated

systems approach to solving problems;

● coordination of programs with the various Federal agencies, and State and

local governments involved in energy conservation work; and

● integration of foreign energy conservation R, D&D into domestic planning.

Lack of programmatic elements to deal with the above responsibilities could

seriously impede the effort to achieve the stated objectives within the conservation

program.

1. As specific examples

QUESTIONS

of problems in definition of responsibilities:

. What is ERDA’s role in the development

and implementation of technologies to

recover resources and the energy content

of municipal garbage? This would appear

to bean important function of ERDA and is

so stated in the legislations, yet ERDA’s

budgetary commitment is of a token

nature, and other Federal agencies are

involved in this area.

● How ar e

programs

building

both are

design?

the solar heating and cooling

to be coordinated with the

conservation programs, since

intimately related to building

2.

3.

● Why is work in Electric Conversion,

Electric Power Transmission and Distribution, and large-scale (powerplant)

Energy Storage under the purview of the

Assistant Administrator for Conservation?

What specific management mechanism,

technique(s) or coordination controls will

ERDA use to integrate and coordinate its

conservation activities with other Federal

agencies?

In the near term, where direct Government

influence and incentives can create energy

savings, how is the responsibility for energy

conservation divided between ERDA and

FEA?

CHAPTER V 177
4. How does one separate the policy implemen- 6. What provisions have been made in the

tation role of FEA’s energy conservation ERDA Plan to assure that the agency will

program from the R, D&D activities of ERDA? utilize, to the fullest possible extent, in5. How does the ERDA Plan to integrate and

coordinate its activities with State and local

authorities assure that overlap, duplication,

novations for energy conservation developed

in other countries? Who will be responsible

for these cooperative arrangements?

and inefficiency in ancillary resource utilization are avoided?

BACKGROUND

ERDA has been mandated (Public Law 93-577)

as the primary agency in energy R, D&D with

responsibility for coordination and integration of

national efforts and for cooperation with other

nations. Programs to develop energy supplies

have existed for many years. However, only in

the recent past with the rise in energy prices and

uncertainties in availability, have significant

efforts been focused upon energy conservation.

As a result, responsibility for energy savings

programs is divided within ERDA, among other

Federal agencies, and among State and local

governments. Although there are varying perceptions about appropriate division of responsibility, there is general agreement that operating

relationships must be established in order to

coordinate ongoing efforts at all levels. It is not

clear from the ERDA Plan that a comprehensive

framework has been established which will

permit ERDA to adequately perform its required

coordination/integration role. These mechanisms need to be resolved early in ERDA’s

development.

Within ERDA itself, there are questions

regarding the assignment of programmati c

responsibilities, For example, on the one hand,

responsibility for Solar Heating and Cooling of

Buildings is located under a different ERDA

Assistant Administrator than programs for

minimizing energy required to operate buildings

even though the two program areas are closely

interrelated, More attention needs to be given to

the location of programs within ERDA in order to

maximize chances for an integrated systems

approach to solving conservation problems,

In a similar vein, some means of formal

management control must be developed to assure

coordination of related programs in various

Federal agencies and departments (e.g., the

Federal Energy Administration, Environmental

Protection Agency, Federal Power Commission,

Department of Transportation, Department of

Commerce, Housing and Urban Affairs Department, U.S. Department of Agriculture) that

impact on energy demand. In many cases ERDA

has a program goal that is either identical or

implicitly related to some other agency area of

concern. Of critical concern is the relationship

between ERDA and the Federal Energy Administration in their efforts to coordinat e

analysis and policy input in R, D&D program

design, The lack of a clear statement regarding

the way in which the implementation measures

managed by the Federal Energy Administration

will be integrated with the R, D&D programs of

ERDA requires serious attention, An implementation strategy must be initiated at the earliest

stage of research planning and setting of

priorities and goals, It is encouraging to note that

such coordination seems to be alread y

operational in the Buildings and Industrial sectors,

Likewise, an effective link needs to be made

between the Federal system and State and local

authorities, since they are responsible for some of

the most important policies regarding energy use,

The integration of State and local activities into

the overall process is important since such

activities reflect various regional perspectives. It

is also essential in providing an effective channel

for information transfer and technical assistance

to these groups.

Finally, an equally important consideration is

the manner in which ERDA intends to participate

in international cooperative R, D&D programs, It

is important that the agency define more precisely how it will assure that foreign energy

conservation work is integrated into domestic

planning.

Although it is reasonable that energy conser178 CHAPTER V
vat ion efforts are ongoing in more than one ment controls and effective leadership, the result

agency, i t is necessary that these efforts be wil1 be duplication and inefficient t use of public

complementary. The “lead agency” role is at best resources.

difficult, but without clearly defined manage3. Interaction With the Private Sector

ISSUE

A comprehensive plan is needed for interaction between ERDA and the private

sector in energy conservation.

SUMMARY

Without close coordination with industry and other private organizations,

widespread implement at ion of research results cannot be attained. The problem is

complex since various areas of the private sector are organized quite differently

and each (e. g., encrgy consuming industry, energy producing industry, the Electric

Power Research Institute (EPRI), individuals, public institutions], will require a

unique approach to constructive interaction. The ERDA Plan provides few details

as to how this interaction is to be accomplished,

QUESTIONS

1. What specific organizational structures has 3. How does ERDA plan to collect, distribute,

ERDA devised to obtain and utilize input and implement both public and private

from the industrial, labor and consumer conservation research results?

sectors in its basic program planning effort? 4. What are the criteria used for deciding

whether, and to what extent, energy conser2. By what mechanism are ERDA and EPRI vat ion activities should be supported with

program planning activities coordinated? Federal funds?

BACKGROUND

In the area of energy conservation, close The detailed mechanisms for interact ion will

coordination between government and private vary great1y from one industry to another, and .

organ i zations, such as industry, professional will even vary somewhat within industries, For

societies, anti consumer groups, is crucial. While e x am ple, the building industr y is highly

governmcnt may initiate much of the research, fragmented, involving standards organizations,

u1timate implementation is largely dependent on professional societies, manufacturers, trade

the privatc sector. groups, and labor organizations, each of which

CHAPTER V 179
will have a different role to play in utilizing new

conservation technology. Many components of

this sector have no research capability of their

own, and will depend heavily on government for

hardware development and policy direction.

Others have excellent research and development

resources and can be vital contributors to the

national program at the planning and development level. The detailed format for ERDA

coordination with such diverse components of

the private sector must be carefully designed to

be effective,

The electric utilities industry is a special case,

both because of its central role in energy

conversion and distribution and because of its

cooperative sponsorship of a wide variety of

research and development projects through

EPRI. Because of its close connection with the

utilities industry and its industry advisory

committees, EPRI is both aware of the problems

of the industry and well-situated to lead in

technology transfer, ERDA, on the other hand,

should take the lead on projects with excessively

low profit potential, high risk, or high capital

requirement.

It is vital that ERDA take affirmative steps to

involve all elements of the private sector in the

earliest possible stages of program planning.

Advisory boards with representatives from

industry as well as private citizens can provide

important viewpoints to aid in the decisionmaking process and to support alternative

courses of action. Since many energy conservation initiatives may have significant impact on

relative competitive positions within industry,

government’s role must be carefully defined.

Budgeting for research by ERDA should take

account, wherever possible, of private expenditures for related efforts. Cooperative programs

involving cost-sharing contracts must consider

patent and proprietary rights. Even in the

development and demonstration stages, ERDA

must appreciate and work to eliminate problems

that might impede the eventual commercialization of new processes and products,

180 CHAPTER V
4. Use of the Term “Conservation”

1.

2.

3.

ISSUE

ERDA’s operational definition of energy conservation is too broad.

SUMMARY

ERDA uses the term conservation so broadly hat almost any effort to improve

efficiency or cost in either energy supply or energy demand can be subsumed

with in it. This has the possible consequence of shifting the emphasis on

responsibility for conservation actions away from the consumer toward the

suppliers and distributors of energy.

As an example, the Electric Conversion, Energy Storage, and Power

Transmission programs can produce large cost savings but, in most instances,

their energy savings potential is small in comparison with efforts in the energy

demand sector. As important as they are, these cost savings could distort the

contribution of these programs in terms of the objective of reducing energy use.

This could cause a shift away from end-use conservation priorities to those on the

supply side within the overall conservation program. Also to increase their chance

of success these programs should be coordinated with research on other

components of the electric power system with which they are related

synergistically.

QUESTIONS

What is ERDA’s opera

conservation ?

tional definition of programs in electric conversion,

transmission and distribution, and

electric

energy

How can ERDA better structure the diverse storage? How does this compare, in terms of

cost, with savings achievable through load activities under its Assistant Administrator

for Conservation in order to distinguish their management ?

goals more clearly? 4. How does ERDA propose to integrate the

What level of energy savings can be realized various component programs of the electric

as a result of success in the proposed power system?

BACKGROUND

The operational definition of conservation is of accomplish a given end. Another definition also

critical importance, particularly during the includes lifestyle and institutional changes

period in which the ERDA energy conservation which result in a reduced demand for energy

program is being established. Conventional consumption.

usage defines energy conservation as that array ERDA’s program plan includes the first of

of technologies, techniques, and strategies which these definitions, i.e., more efficient means to

results in more “efficient” utilization of fuels to achieve given ends, and in some areas, goes

CHAPTER V 181

60-411 0 - 75 - 13
beyond the latter to include interfuel shifts and

measures which might more correctly be termed

“economic efficiency” rather than energy efficiency improvements. Too little attention is

given, however, to efficiency increases in enduse. This results in an operational definition of

energy conservation which permits the

rationalization of virtually any efficiency change

in the energy supply or demand systems as a

conservation measure and can shift the emphasis

on responsibility for conservation actions from

the consumer to the producer of energy.

The program areas of Electric Conversion,

Energy Storage, and Electric Power Transmission and Distribution are examples which meet

the “economic efficiency” criteria and are not

principally energy efficiency measures.

Although these programs are quite worthwhile,

there is a very real danger that by their inclusion

under the generic term of conservation they could

mask a low level of commitment to programs

more directly focused on the important task of

eliminating wasteful expenditures of energy.

In addition, these programs are principally

concerned with various components of electric

power systems and should be investigated in

coordination with each other and with the other

system components rather than as conservation

measures. This, too, provides incentive for

administrative relocation of these programs.

182 CHAPTER V
5. Need for Nontechnological Research

ISSUE

ERDA’s role needs clearer definition with respect to research on nontechnological issues associated with energy conservation.

SUMMARY

present inefficient patterns of energy use, characterized by inefficiencies in

buildings and consumer products, in transportation, in industrial processes, and in

the generation and transmission of electricity, are to a large degree caused by a

combination of historical, institutional, governmental, economic, and social forces.

Implementation of known methods and technologies to improve energy use

efficiency requires an understanding of how these forces operate and how changes

in these forces will influence energy consumption patterns and fuel use. The

regulatory policies and programs of various agencies need to be critically

reexamined to see how they can be modified to promote greater energy efficiency.

To accomplish this, identification of a lead agency which will decide on the tradeoffs among separate agency interests and establish an overall government posture

is a key requirement. Guidelines in (Public Law 93-577, Sec. 5(a), imply a strong

ERDA role.

QUESTIONS

1. Has ERDA developed programs to analyze 3. What efforts does ERDA anticipate to

nontechnological issues related to energy evaluate the energy impacts of Federal

use? regulatory programs? Will the efforts involve

Z . What fraction of its energy budget will be the cooperation and participation of other

Federal agencies? If so, how? assigned to analyses of economic, social,

institutional, and behavioral issues? 4. How can the administrative costs of regulation to the taxpayer, the manufacturer, the

businessman, and the consumer be assessed?

BACKGROUND

Energy conservation analysis which focuses

solely on the technological issues and neglects

the many nontechnological considerations is

incomplete and undesirable. Research on the

effect of Government regulatory agencies, as well

as studies of the social factors which influence

energy use patterns, would be particularly

timely. For example, the Interstate Commerce

Commission regulates all rail and much truck

freight traffic in addition to intercity bus travel,

The Civil Aeronautics Board regulates commercial aviation, The Federal Highway Administration and the National Highway Traffic Safety

Administration regulate truck weight and safety

features. The Urban Mass Transit Administration, and a bewildering array of local regulations,

control the operation and labor practices of urban

transit systems. Almost none of these emphasize

CHAPTER V 183
energy conservation. Similar examples can be

cited for the other areas of concern.

R, D&D required to carry out programs in

conservation is strongly sector-specific, whether

it be in technology, social science, or behavioral

science. It is encouraging to note that conservation work is organized along sector lines.

The policies, programs, and regulations of

these agencies need to be reexamined to see if

recent and projected changes in fuel prices and

availability warrant modifications to promote

greater energy efficiency, It is likely that these

analyses can best be conducted in cooperation

with other interested Federal agencies, such as

the Federal Energy Administration and the

regulatory agencies.

184 CHAPTER V
6. Demand Modeling and Conservation Planning

ISSUE

The basic assumptions underlying ERDA’s projections of future demands are

unrealistic; as a result, the ERDA Plan has not accorded sufficient attention to

conservation as a means of reducing energy demand, environmental impact, and

financial stress.

SUMMARY

Investment in energy conservation can yield a high rate of return. In addition

to lower total cost for a given standard of living, major benefits which result from

conservation efforts include:

● Lower energy and natural resource consumption

● Lower capital investment requirements

● Reduced environmental impact,

The Reference Energy System model used in the ERDA Plan as a “baseline”

reference for future energy demand growth is unrealistic in that it does not

recognize the impact of even current price increases on future demand. As a result,

an artificially high demand is projected for 1985 and 2000, and this inflated figure

is the basis from which plans for new supply are developed,

Program emphasis and funding may thus be seriously biased toward the

supply options. Such an overstatement of need is damaging to future efforts

toward energy development in both the supply and demand areas. Since the ERDA

Plan is closely tied to numbers generated in the model, we must be careful to keep in

mind the assumptions that went into the ERDA calculations.

QUESTIONS

1. ERDA depends rather heavily on th e

Reference Energy System model to provide

estimates of oil and gas imports required

under varying assumptions about supply and

conservation actions. It is realistic to project

that no increases in end-use efficiency will

occur (other than with respect to the

automobile) over the next 25 years unless the

government takes additional actions? In

other words, is Scenario 1 more likely to be

the “no-action” response?

2. Some industries have already reported gains

in energy efficiency (energy use per unit

output) that approach the figures projected

by the ERDA Plan for 1985. Given present

prices plus an (assumed) active Federal

program to accelerate conservation, would

ERDA expect significantly greater gains in

end-use efficiency than assumed in Scenario

1?

3. What plans exist to refine demand projections? How are they related to projected

population growth and composition, individual income, and other demographic

factors? Is the data available sufficient to

describe present energy consumptio n

patterns, let alone project future demand?

4. Has ERDA based its planning and establishment of priorities on consideration of the

economic and environmental implications of

reduced demand (conservation)?

CHAPTER V 185
5. Does the ERDA Plan place too much 6. There are several national energy models at

emphasis on “creating” energy choices and several Federal agencies, notably ERDA and

not enough on evaluation of energy options FEA. What continuing coordinatio n

for “trade-off” between options? arrangements should be made to ensure

maximum productivity y and minimum

duplication of effort?

BACKGROUND

The ERDA Plan uses a “scenario” approach to

calculate national consumption and associated

demands for oil and gas imports under various

assumptions. Five scenarios are examined, plus a

baseline called “no new initiatives” (Scenario O).

In Scenario O, ERDA assumes that current

consumption patterns continue to the end of the

century in all end-use areas with the single

exception of a 40-percent improvement in

average new car efficiency by 1980, The resulting

total energy demand in 1985 and 2000 lies

comfortably in the middle between results of

“predictions” by others.

Even if current real energy prices remain

constant (a very optimistic assumption], consumption patterns will surely continue in the

years ahead to shift toward lower demand

growth, This is largely due to “lagged response,”

which means that a consumer’s ultimat e

response to changes in real energy price occurs

over a period of up to 10 to 15 years, and that only

a small percent of the total response is evident in

the first year following a price shift. Therefore,

Scenario O does not provide a realistic baseline. If

the baseline demand scenario is unrealistically

high, the importance of reducing imports and,

therefore, the urgency of the need is to increase

supplies and reduce demand is inflated.

Conservation Scenario 1 (Improved Efficiencies of End-Use) assumes only very moderate

improvements in use. For instance, an average

10-percent improvement in appliance efficiency

is assumed by 1985. Such levels of improvement

are sufficiently conservative that a very modest

national effort can probably achieve the scenario,

In fact, it is not unlikely that the shift to higher

efficiency assumed in Scenario 1 will occur

simply in response to price increases which have

already occurred. Similarly, the effect of the high

“baseline” in Scenario O is to overstress the

urgency of the need to expand domestic supplies

in order to hold down imports. Therefore, ERDA

should use more realistic parameters for the

baseline and conservation scenarios on which to

base future program plans and priorities,

In addition, ERDA’s projections are based on

insufficient data and exclude such factors as the

inherent economic and environmental advantages of improved efficiency, The Brookhaven

National Laboratories models were used to

evaluate the supply/demand picture for 1985 and

2000. Inputs to these models include end-use

demands. The model then estimates energy

conversation and supply technologies to

minimize cost . End-use behavioral an d

technological changes are not adequately included in the model. For example, the demand

assumptions in the conservation scenario of the

ERDA Plan project changes in the efficiency of

end-use devices but do not consider the effects of

design, control, and operational changes, or the

influence of the price mechanism. These are

significant omissions, particularly in th e

building sector.

A more useful approach would include the use

of a predictive demand model to evaluate the

related economic and environmental benefits

associated with reduced consumption. These

have a significant multiplier effect in reducing

supply requirements; a barrel of oil saved will

often reduce supply requirements by more than a

barrel. A similar situation exists for economic

considerations. For example, as conservation is

applied to building heating and cooling, capacity

requirements are reduced, providing dollar

savings. The latter are further increased by

operating energy cost savings over the lifetime of

the buildings. The direct reduction of environmental impact also provides energy savings.

The development of a data base on energy use

patterns as well as improved predictive models is

essential to energy demand projections, future

program planning, and conservation evaluation,

ERDA, in conjunction with other Federal agencies, should undertake the development and

refinement of these data and methods.

186 CHAPTER V
—

7. Design Methods and Standards

ISSUE

Energy conservation efforts in the building and consumer products sector

require the development and dissemination of analytic design methods and the

adoption of reasonable energy standards.

SUMMARY

In order to realize the full potential of energy conservation in the building and

consumer product sector, two major tasks must be accomplished. First, the design

profession must be provided with improved design methodologies, as traditional

design procedures do not place adequate emphasis upon energy considerations. A

fundamental reorganization of the design process and the development of new

energy-sensitive analytic tools is required. Second, realistic energy standards

and/or energy budgets must be established as design guidelines. Data on existing

energy use patterns in the buildings and consumer products sector must be

analyzed in order to develop a rational basis for new standards. Finally,

fundamental questions as to the form energy standards should take must be

resolved, The ERDA Plan does not give sufficient emphasis to this need.

QUESTIONS

1. What methods will ERDA employ to establish 4. What role does ERDA intend to play in the

standards and/or energy budgets and t o educational effort necessary to reorient design

determine conformance to established stan- toward energy efficiency and conservation?

dards?

5. How does ERDA plan to assure a reasonable

2, Is there a constructive role for ERDA in level of energy accounting in the building and

improving performance evaluation techni- consumer products sector?

ques?

3. How will standards be applied to diverse

climatic areas and energy use patterns?

BACKGROUND

In most instances, energy use data, improved

methods of analysis and design, and the basic

elements of realistic standards do exist. However, as the building and consumer products

industries are fragmented and have very diverse

needs, the data are scattered, and the energysensitive methods of analysis and design are

frequently not well understood. While many

professional societies and manufacturing

associations have already adopted standards

which, if applied uniformly, would contribute

significantly to energy conservation, these efforts have not, in many cases, been coordinated;

thus, standards and design procedures within the

industries are not consistent, Some standards are

prescriptive or specify component performance.

Some standards have been proposed for “energy

budgets.” The General Services Administration

CHAPTER V 187
has developed a target budget for new office

buildings. Standards and guidelines for existing

buildings have received even less attention,

A definite role for ERDA exists in this area of

concern. Without the development and dissemination of reliable methods of analysis, as

well as the adoption of reasonable and uniform

standards, energy conservation efforts will be

frustrated. Moreover, architects, engineers, and

many of the small industrial concerns in this

sector are unable to support the major research

efforts necessary; thus, a strong lead by ERDA is

required.

Development of standards should be approached with great care, Prescriptive standards

that specify components and systems will tend to

freeze the state-of-the-art of the then existing,

energy-using mechanical and electrical systems,

On the other hand, performance standards which

establish broad energy goals within a framework

of human needs for comfortable working and

living environments will allow desig n

professionals and the building industry the

latitude needed to develop innovative and

efficient solutions.

The issues relating to the establishment and

implementation of energy standards are as

follows:

Are the data on the energy requirements of

buildings and various consumer products

sufficient to provide a realistic basis for

establishing standards?

What form should such standards take ?

Should they be prescriptive or performance

standards? Will voluntary standards suffice?

How should these standards be promulgated?

They must become an integral part of building

codes, conditions for mortgage loans, and so

forth, or they will not be effective,

Once promulgated, how will architects,

engineers, and inspectors be trained? What

manuals need to be developed to aid implementation?

Do designers have the analytical tools

necessary to assure that their designs meet the

intent of energy standards, or is an educational

effort required?

188 CHAPTER V
8. Development and Demonstration

ISSUE

ERDA’s plans for R, D&D of energy conservation technologies in buildings and

consumer products should be accelerated and expanded.

SUMMARY

In order to introduce the current technology into society as fast as justifiable

by market economics and national need, demonstration projects must be developed

for use in all sections of the Nation, ERDA’s plans for the implementation of

existing technology for energy conservation in buildings and consumer products

appear inadequate: in addition, i t is evident that ERDA is not spending a sufficient

portion of its resources on the research of new energy conservation technology

which holds great promise for the future.

QUESTIONS

1.

2.

3.

What plans does ERDA have to ensure that the 4. What potential exists for the application of

planned major solar heating and cooling energy storage to conventional heating and air

demons t ration programs place sufficient conditioning systems?

stress upon insulation and other energy- 5. If current refrigerants prove to have adverse conserving instruments that must compete for

the same capita 1? environmenta l effects, wha t are th e

possibilities for the development of new,

What plans does ERDA have to study existing effective substitutes’?

buildings for effective energy use?

Does ERDA plan any basic research on human

factors in order to reevaluate the thermal and

visual requirements for comfort, health, and

safety ?

BACKGROUND

The ERDA Plan does not appear to give

sufficient attention to the need to develop

programs designed to demonstrate curren t

energy conservation technology to the public.

Congress has legislated a demonstratio n

program for solar heating and cooling, Perhaps

that program could be modified to include more

explicitly architectural design and thermal

engineering, so essential to the economic viabilit y of solar utilization.

Many of the technologies required to enable

major conservation in the building and consumer

products sector now exist and can be

demonstrated and brought into the marketplace

more rapidly than solar power systems.

In the near term, the barriers to implementat ion are primarily nontechnical. However, future

national energy goals can best be met only by a

program that includes sustained conservation

efforts. Great long-term gains may be achieved

through an appropriate investment in basic

research, The present ERDA plan gives little

CHAPTER V 189
consideration to basic research relevant to

conservation technologies. Examples of areas

where new technologies may provide additional

energy savings in the building and consumer

product sector are (some of them are in ERDA’s

Plan):

Thermal energy storage systems compatible

with conventional heating and air conditioning equipment.

Development of more thermally efficient

building materials: improved insulation; glass

product-s; and selective surf

solar radiation control.

Research on human factors,

adaptability to their thermal

ace materials for

such as people’s

environment.

New approaches to high efficiency appliances,

including lighting.

Chemically stable fluids for heating and air

conditioning applications, having useful thermal properties.

Until recently, efficiency of energy consumption in buildings was of little concern to the

architect, builder, or consumer. The ineffective

use of buildings contributes to their inefficient

use of energy-based systems. The redesign and

replanning of existing buildings (especially the

24 billion square feet of commercial and institutional buildings) poses a major challenge to

the Nation’s design professionals. R, D&D must

be done for both new buildings and retrofitting

existing buildings. It is likely that the research

which permits the new building contractor to

install energy efficient systems will not be

directly transferable to the retrofitting of old

structures. Therefore, it is good to note that

ERDA will initiate research in FY 76 designed to

determine how buildings can be retrofitted in a

cost-effective manner.

In terms of the specific programs in the ERDA

Plan the following observations are made:

Demonstrations of energy conservatio n

technology in buildings and solar heating and

cooling demonstrations, should be more closely coordinated; demonstrations should

emphasize the total building system.

The delay of construction and evaluation of

minimum energy buildings until 1978 and

novel building design until 1980 seems unnecessary.

Research into new building materials and

systems should be accelerated.

More emphasis should be placed on research of

lighting systems and cost-effective ways to

reduce energy use in present lighting systems.

A program for the evaluation and demonstration of energy storage in buildings as an

adjunct to conventional heating and cooling

should be developed in the near term as a way

to respond to time-of-day electrical rates,

Research on the energy efficiency of energyintensive consumer products should be intensified in this fiscal year if possible.

190 CHAPTER V
9. Constraints in Building Construction

ISSUE

ERDA does not appear to be devoting sufficient effort to overcoming the

nontechnological barriers to energy conservation in building construction.

SUMMARY

The technology to permit substantial reductions in energy expenditures on

commercial and residential buildings is currently available. New technologies and

designs promise cost-effective reductions of energy to operate buildings of 60

percent or more. However, five primary nontechnological barriers impede this

objective and require R, D&D to provide ways to overcome them:

● The minimum first-cost syndrome. . Industry and consumer resistance.

● Antiquated local building codes. . ERDA’s budget control procedures.

● Poor system design.

QUESTIONS

1.

2.

3.

4.

What are the barriers to more rapid implementation of existing technologies in buildings?

What is the role of ERDA relative to:

Ž Industrial acceptance of technologies

designed to foster energy conservation.

. Financial incentives for design and construct ion of more energy-efficient structures (e.g., life-cycle cost rather than firstcost analyses)?

How can building codes be modified to

promote energy conservation?

How can the design processes be redefined to

optimize the building and its energy system as

a whole?

What research has been done, or is planned, to

identify barriers to consumer and industrial

acceptance of minimum life-cycle cost

decisions in housing and appliances?

5. What incentives will be most effective in

gaining consumer acceptance?

●

●

●

Must incentives vary with socioeconomic

factors?

What meaningful incentives can be identified for the commercial sector?

Would incentives vary with type and size of

commercial organization?

6. What steps are being taken to assure the

Nation that the research results of ERDA

programs for energy conservation in buildings

and community systems can be promptly and

effectively utilized by design professionals?

BACKGROUND

The technology which can save substantial (20 ●

to 30 percent) energy in commercial and residential buildings in a cost-effective way is already

available. Five major factors are presently

inhibiting conservation in buildings:

First-cost Syndrome, There is still a feeling

among many builders that buyers are not

willing to pay for the extras that will save

them substantial amounts of money in the long

run. Under present financing conditions,

CHAPTER V 191
buyers effectively use a very high discount

rate in home purchase decisions regarding

mortgage versus operating costs. In th e

commercial sector, most financial considerations have the net effect of encouraging the

landlord to make the lowest possible capital

investment. As a result, builders in both the

residential and commercial areas tend to use

materials and building techniques that cost

least in the short run and to ignore operating

costs. Therefore, a major ERDA effort should

be directed toward undertaking the research

and educating the public, lending institutions,

and building owners with regard to th e

opportunities to make cost savings through

retrofitting or special measure s in ne w

building construction which save energy.

Where possible, new construction should be

life-cycle costed; that is based on minimum

total cost of mortgage plus operations and

maintenance. Research should also be done to

determine how both builders and buyers can

be made aware of the advantages of life-cycle

costing.

● Building Codes and Standards. There are two

problems with existing building codes in the

United States. First, they are inconsistent

from community to community, thereby making the introduction of new concepts on a

national level difficult. Second, many building

codes and construction standards were not

developed with energy conservation in mind.

ERDA should study this “constraint” upon

energy-efficient buildings so that strategies to

overcome this problem can be developed,

● System Design. Designers should regar d

energy conservation as an integral part of the

overall buildin g design, While som e

professional architectural and engineering

firms are already active in energy conservation design programs, the great majority have

not yet been adequately prepared to undertake

the challenges posed by energy conservation

in designing new communities and buildings,

or redesigning existing communities and

buildings. A major program is required to

promote the effective utilization of the

research results which Federal agencies and

ERDA, in particular, will produce.

● lndustrial and Consumer Acceptance, Very

little research has been done to determine the

barriers to industry (producers, builders, and

professionals] and consumer acceptance of

new conservation techniques and to devise

incentives which could be used to overcome

these barriers. Some of the barriers to industry

acceptance may include: lack of knowledge,

lack of proper retraining, capital constraints

and improper regulations. In addition, in order

for new energy conservation in buildings and

consumer products to be fully integrated into

society, an effort must be made to understand

the barriers to acceptance of these items by the

final consumers. It is important that the final

consumer understand the implications of

energy conservation in the home. In order to

overcome these barriers, incentives which

should be considered would include retraining

programs for industry personnel, tax credits,

tax writeoffs, accelerated depreciation, and

guaranteed loans. Research is necessary in

order to determine precisely which incentives

are most effective for the different sectors of

the building industry and the variou s

socioeconomic segments of our society.

● ERDA’s Budget Control. The review of ERDA’s

program generated a concern regarding the

adequacy of AEC-type budget control and

contracting procedure when applied to the

fragmented, small business components of the

building industry. AEC’s control procedures

were designed to deal with large corporations

capable of carrying the capital outlays required. AEC then reimbursed the firm involved when the equipment, construction, and

so forth were completed. Those problems can

be overcome by establishing alternat e

procedures applicable to the segmented

building industry, ERDA may wish to establish procedures which would help t o

eliminate the need for short-term capital as

one of the major non-technological barriers to

demonstration of energy conservation,

192 CHAPTER V
10. Need for Thermodynamic Analysis

The ERDA Plan does not describe how the agency plans to identify areas with

the highest theoretical potential for industrial energy conservation and to assess the

practical feasibility of implementing programs in these areas.

SUMMARY

Prior to establishing research priorities in industrial energy conservation, a

detailed assessment must be made of the amount and form of energy used in

industry and the efficiency of industrial energy use. Thermodynamic analysis,

which determines the theoretical minimum energy required for a given process,

may be used to identify areas having a high theoretical potential for energy

savings. Once promising areas have been identified, however, the feasibility of

these improvements must be evaluated to determine whether economic, political,

or social restraints might render a proposed solution useless, even if it is

technologically possible. Such considerations must enter ERDA’s program

planning activities early in the cycle to assure ultimate utilization of research

results.

QUESTIONS

1. What efforts are planned by ERDA to establish

priorities for R, D&D programs in industrial

processes?

2. What procedures will ERDA establish to

evaluate the nontechnical (economic, environmental, etc. ) aspects of energy conservation

technologies identified by a theoretica l

minimum energy consumption analysis?

3. How does ERDA propose to utilize existing

“minimum energy” analyses (e.g., the FEA

studies of Energy Use Data for Nine Industries]?

4. Do adequate methods presently exist to

predict accurately the effects that a proposed

change in some industrial plant might have on,

say, jobs or air quality?

BACKGROUND

For any industrial process, well-established

energy accounting procedures can show at what

point in the manufacturing sequence energy is

consumed, how much is consumed, and in what

form. However, such procedures will not indicate

the theoretical minimum energy consumption

required, thermodynamically, to carry out the

process. In evaluating the energy conservation

potential of a process, it is therefore necessary to

distinguish between the conventional energy

losses which occur in process operations and the

theoretical energy losses inherent in any process

involving thermal energy. For example, conventional energy losses are due to mechanical or

fluid friction, to heat losses through the walls of

equipment, or to waste steam being exhausted to

ambient air or process cooling water. Theoretical

losses, on the other hand, are those which are

inescapable in any given process even with the

best engineering and operating practices. These

CHAPTER V 193
losses are imposed on the process by the Second

Law of Thermodynamics, which deals with the

impossibility of the total conversion of heat to

work, Thus there is a definable theoretical

minimum energy requirement for performing a

given process. The potential for energy conservation for that process is a function of that

theoretical minimum energy requirement and the

energy actually required in manufacturing

plants,

In performing a “minimum energy” analysis it

must also be recognized that energy loses

“quality” or capacity for performing work as it

passes from stage to stage in a manufacturing

plant. The usefulness of the energy in 30000 F

flame is greater than that in a stream of waste

cooling water at 100° F, even though the energy

release, in terms of Btu per hour, may be the same.

The concept of “cascading” energy from stages

requiring high grade energy to those requiring

lower grade energy is very valuable as a

conservation option i n many industrial

processes.

Once the theoretical potential for energy

conservation is established, the problem of

implemental ion of energ y conservation

strategies must then be addressed. While the

ERDA Plan cites the identification of energy

savings opportunities as a major ERDA role,

little is said about the problem of feasibility

analysis to determine the acceptability of a

proposed solution, For example, “cascading” of

heat uses may save a lot of energy but could

require a capital investment too large to be

economically feasible.

In the near term, energy conservation goals in

industry may be met by what might be termed

“housekeeping” measures, that is, relatively

simple fixes to energy-wasteful equipment and

operating procedures, Such measures hav e

already accounted for energy reductions of 10 to

15 percent below levels of a year ago, by many

companies, with some companies reporting even

better results. In the longer term, however, major

process revisions and equipment replacement

will be required. These changes will, in most

cases, necessitate large capital expenditures,

which must be justified in economic as well as

energy terms. In some cases, environmental and

social factors will also influence these decisions,

ERDA should include the development of tools

for feasibility y analysis as a part of its comprehensive plan; these should encompass economic

modeling of industrial processes under varying

energy cost assumptions, and environmental and

social impact assessment methodologies. These

tools will be of value not only to industry but also

to ERDA itself in the selection of projects with a

high probability of success. Furthermore, such

models would be useful as policymaking tools,

since they would permit policymaking agencies

(such as Federal Energy Adminstration, for

example) to study possible alternative incentive

measures for industrial investment.

194 CHAPTER V
11. Oil and Gas Substitution

ISSUE

ERDA’s plans for the substitution of other energy sources for oil and gas as part

of the industrial conservation “program are not well defined.

SUMMARY

Conservation strategies as defined by ERDA can take two forms:

● Conservation of energy by increasing efficiency of end use.

● Conservation of scarce resources, such as oil and gas, by substituting other

energy sources, such as coal, nuclear, or organic wastes. Although ERDA is

obviously aware of both of these options, the plans spelled out in the industrial

sector do not clearly distinguish between them. ERDA should examine the

potential and the impacts of fuel substitution in various key industries, and

formulate the specific R, D&D strategies required, Possibilities exist for the

production of process heat for industrial users by nuclear- and coal-fired plants.

Also the use of synthetic fuels derived from coal, such as low-Btu gas, may prove

to be an economical substitute for oil and natural gas in many applications. In

the mid-to-long term, as advanced electric generating technologies reach

commercialization, industries may shift to electricity for process heat and steam

generation. With research and development, high-capacity high-temperature

heat pumps may be able to provide process heat with an efficiency comparable to

that of direct fuel firing,

Questions

1. What potential does ERDA project for the use 3. How will ERDA assess the potential of direct

of coal as a substitute for oil or gas in the nuclear heat and steam generation as a valid

industrial sector? What programs are propos- option for conserving limited fossil fuels?

ed to achieve this potential?

Z. How will the research being performed under

the Assistant Administrator for Fossil Fuels

be coordinated with the work in conservation?

BACKGROUND

Over 80 percent of the energy in the industrial environmental standards can be maintained.

sector is derived from oil and gas. Various Conceivably, coal could also be used in process

possibilities for substitution exist. Coal, for furnaces but not without considerable R, D&D.

example, can be used to generate process steam, The use of synthetic fuels from coal for industrial

although new technologies, such as fluidized bed boilers or furnaces is another importan t

combustion, would greatly aid in assuring that possibility as discussed in the fossil section. This

CHAPTER V 195
option depends on the economics of the various

coal conversion processes, such as the production of low-Btu gas for industrial furnaces. While

much R, D&D is underway in this general area,

specific applications in the industrial sector

should be investigated, with appropriate participation by the industries concerned,

A number of studies have been carried out to

determine the feasibility of direct use of nuclear

heat for process applications. The operating

temperature limit of light water reactors restricts

their area of potential use to process steam

generation. Because of the economic advantage of

large scale operation in nuclear plants, it would

be necessary to site a number of large customers

in close proximity to the nuclear plant, This is the

scheme pursued by Consumer’s Power and Dow

Chemical in Midland, Mich.

Technology is available to utilize organic

wastes to generate steam; this, in fact, has been

done in the pulp and paper industry, the chemical

industry, and others, The principal barriers to

further implementation are socioeconomic and

should be studied.

Another long-range opportunity for efficient

provision of process heat will be the development

of high-capacity high-temperature heat pumps to

absorb heat from low-temperature process

streams and deliver it to higher temperature

sections of the process. This concept will require

a program of research in thermodynamic properties of potential working fluids, materia l

physical properties, and process optimization, to

be carried out via a coordinated government

industry effort. The potential gains are significant. For example, a heat pump designed to

absorb heat from one stream at 3000 F and deliver

it to a stream at 6000 F could theoretically

transfer more than three times as much heat as

the electric energy required to drive it.

Realistically, if 60 percent of this theoretical

performance were achieved in practice, the heat

pump would still provide over twice as much

heat input to the process as direct electric

heating. With advanced electrical generation

systems offering efficiencies in excess of 50

percent, heat pump systems could thus be

competitive with direct fossil or nuclear heat

sources on an energy-used basis.

196 CHAPTER V
12. Use of Foreign Technology

ISSUE

The ERDA program should consider the utilization of foreign technology as an

alternative to new conservation research.

SUMMARY

The ERDA Program proposes new research in a number of areas in which

technological innovations are already either under development or in operation in

foreign countries. The adoption of such innovations should normally take priority

over new research initiatives, since the former are cheaper and can impact faster o n

industry. Successful utilization of certain technologies may eliminate the necessity

for research in peripheral areas which bear on the same basic problems.

While adoption of technology developed abroad may simplify th e

technological research problem, a number of institutional barriers may have to be

overcome before successful implementation can be accomplished.

QUESTIONS

1. What provisions have been made in the 3. What provisions will ERDA make for the

ERDA Plan to assure that we utilize, to the funding of cooperative R, D&D programs

fullest possible extent, energy conservation with government agencies of foreign couninnovations developed in other countries? tries? What value does ERDA place on such

2. What sorts of institutional restraints might

impede the use of foreign technology in

attacking some of our own problems? Does

the ERDA’s Plan include provisions for

seeking to ease these restraints?

*

cooperative ventures?

BACKGROUND

While the need for energy conservation may

seem new to the United States, where domestic

resources have been relatively abundant, conservation in many areas of the world, in particular,

Western Europe, has been a way of life for

decades, The need to preserve scarce resources

has fostered many innovations in energy conservation, and a wealth of experience is available

(see Appendix). For example, Germany and

France have used municipal refuse as a

supplementary fuel source in industrial heating

for many years; these installations provided the

primary basis for much of the design of the wellknown Union Electric/St. Louis project. It is

noteworthy that this project has proceeded

immediately to commercial scale without requiring expensive and time-consuming pilot

operations.

Another example is a system of active load

control used by electric utilities in West Germany, in which high-demand appliances may be

remotely controlled by signals sent out over the

distribution network. If the system is shown to

be attractive for use in this country, the imCHAPTER V 197

60-411 0 - 75 - 14
—

plementation of such an existing technology involve exploratory assessment, investigation of

might be assigned a higher priority than research legal factors, and dissemination of th e

on new systems designed to fulfill similar objec- technology, These functions might be carried out

tives. either within each ERDA division or in a separate

A vigorous effort to use foreign technology will group devoted exclusively to foreign technology.

198 CHAPTER V
1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

. —

Some Examples of Foreign Technology Opportunities*

Item Examples of Applications

(Companies, Locations, etc.)

Cement kiln preheater technology

Use of blended cements (with fly ash,

blast furnace slags, etc. )

Ceramic recuperators for steel industry

applications (soaking pits, etc. )

Oxygen enrichment of copper smelter

combustion air

Dry coke quenching for integrated steel

plants

Energy recovery from blast furnace gases

by use of turbines

Use of noncoking coals in blast furnaces

Higher efficiency slab reheating furnaces

in steel plants

Ore pelletizing processes for preparation

of blast furnace feed

Agricultural, aquacultural, and district

heating applications using industrial

waste heat

Cement plant roller mill developments

Improved solvent recovery processes for

synthetic rubber precursors and

synthetic fiber intermediates

Use of cold in LNG for freezedrying, cold

storage, and air separation plants

Use of electrical induction heating to

replace gas-fired furnaces in heat

treating applications

Techniques for electric utility plant load

leveling

Recovery of low-grade waste heat using

freon turbine cycles*

Japan (developed by Mitsubishi, IHI, etc.)

Europe (developed by Polysius, Humboldt,

Krupp, F. L. Smidth)

Europe in general (e.g., new blended cement

specifications recently introduced by France)

Developed by British Steel Corporation and

installed at Llanwern Steel Works

Canada

Australia (Wagner-Biro), Switzerland (Sulzer),

Russia [through Machine-export)

Japan (IHI)

British Steel Corporation

British Steel Corporation

Sweden (COBO process, Glangcold process of the

Granges Company)

.

Germany and U.K.

Lotsche (Germany), Morgardshammer (Sweden)

Japan (paraxylene recovery, Japan Gas Co.)

Japan (Tokyo Gas Co., Japan

Switzerland (Brown-Boveri)

Super Freeze Co.)

Europe in general, such as compressed air storage

(Nordwest deutsche Kraftwerke, Germany) and

use of offpeak power for cement clinker grinding

Japan (Ishikawajima Harima Heavy Industries]

* Many of these technologies are also being used in American industry.

CHAPTER V 199
13. Transmission and Distribution Priorities

1.

2.

ISSUE

The economic, environmental, and reliability criteria underlying ERDA’s choice

of projects and their relative priorities in the electrical transmission and distribution

program need clarification.

SUMMARY

As the demand for electricity increases, and the shift from oil and gas to coal

and nuclear fuels proceeds, additional electric transmission and distribution

capacities will be needed. This increased capacity must be economically justifiable

and environmentally acceptable, The ERDA transmission program does not

address directly the relative benefits and difficulties of the successful development

of various candidate technologies.

QUESTIONS

Do the priorities in the ERDA program take 3. If superconductin g systems prov e

into account the relative probabilities of technologically feasible, has ERDA detersuccess of the various transmission alter- mined how they may be practically intenatives? grated into the power systems?

Has ERDA assessed the economic, reliability y, 4. What is the justification for Federal expenand maintenance problems associated with ditures in electrical transmission and discommercial utilization of cryogenic and tribution research? Is this area not adequatesuperconducting transmission lines in com- ly covered by research in the private domain?

parison with less complex alternatives?

BACKGROUND

As increased transmission capacity is needed

within the Nation’s electric systems, existing

technologies may be unsuitable for satisfying the

demands. Additional overhead lines may be

unacceptable for environmental and land use

reasons. ERDA has, therefore, begun programs

on overhead a.c. and d.c. transmission, and

underground transmission including superconducting technology, However, the relative

emphasis and the likelihood of success of various

approaches being pursued are not made clear in

the ERDA plan.

A.c. overhead transmission is the method in

general use today for delivering large blocks of

power over long distances. The expected trend

toward large generation parks, large distances

from loads, will require higher transmission

voltages to accomplish this energy transfer

economically using a minimum number of lines.

Overhead d.c, transmission has proved a

viable alternate to a.c, in many situations and it is

generally more efficient and ecologically more

accept able, in that, large ambients electromagnetic fields in the vicinity of the lines do not

exist. To take full advantage of d.c, transmission,

technology must be advanced beyond the present

point-to-point transmission to allow full

network advantages as well as transmission at

higher voltages,

Underground transmission at higher voltage

200 CHAPTER V
and capacity levels is virtually nonexistent

because of the high cost. Systems must be

developed so underground transmission can

provide efficient transmission at a reasonable

cost from rura1 to urban and city areas in a

continuous pattern.

The possibilities now evident for these advances are (1) conventional cables with improved cooling, (z) compressed gas insulated

cables, (3) resistive cryogenic cables, and (4)

superconducting cables. While several of these

possibilities appear very attractive, the cost of

research and prototype construction an d

demonstration is very high, hence this is an

important ERDA responsibility,

In general, overhead a.c. transmissio n

technology holds the highest promise for cost

effective transmission, but environmental and

other constraints, such as land use, demand that

new alternatives be developed to provide options

for the future.

CHAPTER V 201
14. Active Load Management

1.

2.

3.

ISSUE

Active load management in electric power systems is not addressed as a costeffective way to save energy.

SUMMARY

The problem of meeting large peak demands in electric power systems affects

both the fuel consumption and the total capital investment required for generating

plants. Energy consumption is affected because peak demands are met with a

utility’s least efficient generating units (i. e., those units kept off-line until needed

for peaking), or by units such as gas turbines which have a low capital cost and low

efficiency. Furthermore, large coal and nuclear units are not well-suited for

peaking service; hence, peaking service is most commonly accomplished with gas

and oil consuming equipment. Equally important, capital, materials, and

manpower of the very kind needed for energy resource development, are conserved

when the addition of new generating equipment can be slowed down by means of

improved load management.

Several options exist for reducing peak load growth. Electrical demand at the

end-u se point may be controlled through the use of utility-operated remote controls

on large consumption devices, by thermal storage at the use point, and by electrical

storage in substations. Peak demand, which is more costly than average demand,

may also be controlled through the use of rate incentives to encourage more

uniform energy consumption, While some relevant experience exists in the United

States and abroad, further technological, economic, and social evaluation is needed

to achieve widespread implementation.

QUESTIONS

Have alternatives to central station energy

storage been considered in the ERDA Plan to

reduce power generation requirements in

electric power systems?

How soon might active load control systems

be made available in the United States and

when implemented, what impact might such

systems have on system load factors, gas and

oil demand, and capital requirements for new

electric peak power generations?

What technological, economic, social, and

legal barriers exist which would impede the

institution of rate structures designed to

encourage better load management by conCHAPTER V 202

sumers? What incentives do utilities have to

improve efficiency through load management?

4. Does ERDA have a well-defined role in

studying the feasibility of time-of-day pricing?

5. What are the implications of time-of-day and

seasonal pricing on various sectors of the

economy?

6. Have public awareness schemes, such as

prominent electric meters in homes, been

investigated as possible incentive programs

for load leveling?
BACKGROUND

Load leveling or “peak shaving” has

in the United States only for very large

been used

industrial

customers, while it is practiced on a broader scale

in Western Europe, Australia, and some other

countries. Because the load characteristics of

other countries are sometimes quite different

from those in the United States, it is difficult to

estimate without careful analysis the tota l

potential savings due to load control. It is clear,

however, that present use patterns are costly, in

terms of both energy and capital; and furthermore, the form of energy used for peaking is

usually gas or oil, our scarcest resources. One

approach to the problem is to provide some

means of storage, such as batteries, which can be

charged during off-peak hours and used as a

supplemental power source during peak hours.

The alternative approach, and one for which

much of the basic knowledge is either available

or near at hand, is to control load at the end-use

point rather than simply providing the means to

meet an uncontrolled load. This may be done by

fitting on-off controls t o major en erg y consuming

devices, such as large air conditioning compressors and electric water heaters, which can be

remotely activated for short periods by the

generating utility or by automatic timing devices

when total system loads exceed desired levels.

This may usually be accomplished with almost

negligible effect on the service delivered by such

devices.

Another approach to load control is to devise a

time-dependent rate structure which encourages

users to spread their utilization of energy out

over the day (e.g., to avoid use of clothes driers

during the afternoon). This can be accomplished

by time-of-day pricing to motivate off-peak

energy use and flattening of the load curve.

In addition to direct savings in energy, time-ofday and seasonal pricing would save substantial

capital cost outlays for the electrical companies.

As demand is leveled around the day and year the

utility companies will be able to operate with a

higher capacity factor. It has been estimated that

as much as $50 billion could be saved in the

United States over the next decade through

active load management* or by reducing the rate

of new construction required to meet growing

peak loads; but this projection lacks substantive

economic analysis.

Both active and passive control strategies need

research, testing, and evaluation before broadscale implementation can be realized. Encoding,

metering, and signaling devices must b e

developed and evaluated; incentives for passive

controls will need evaluation through the use of

econometric models, which also need further

development. Technologies that will enable

customers to respond productively to such

changes in rates need to be developed.

* Projections of FEA’s Task Force on Electric Utilities,

1975.

CHAPTER V 203
15. Orientation of Automotive Programs

ISSUE

ERDA’s program on highway vehicles is directed more toward prototype

development than toward the technological breakthroughs necessary for

successful commercialization.

SUMMARY

ERDA’s program in automobile, truck, and bus research emphasizes the

development and demonstration of major hardware systems (e.g., gas turbine and

Stirling engine-powered automobiles, flywheel prototype car, hybrid bus

powerplant, 60-mile range electric car, etc. ) using state-of-the-art technology. The

ERDA Plan gives no indication that payoff is likely to result from such R, D&D

through the commercial introduction of more energy efficient vehicles, Obstacles

which blocked the commercialization of the proposed systems in the past are not

addressed, and therefore, it seems doubtful that these technical, economic, or

environmental impediments will be removed by the proposed R, D&D programs.

ERDA should focus its attention less on production prototypes and more on longterm, basic supporr ting technologies.

QUESTIONS

1. How does ERDA establish its priorities in 3. What is the likelihood that these programs

advanced automobile technology?

—

will lead to the successful commercialization

of alternatives

2. Why does ERDA concentrate so much of its engine?

effort on the development and demonstration 4. What impac t

of prototype vehicles? programs have

BACKGROUND

The major thrust of ERDA’s conservation

program on highway vehicles appears directed

towards the development and demonstration of

hardware. The list of projects on the development

of powerplants as possible alternatives to the

spark-ignited engine is broad: gas turbine,

lightweight diesel, Stirling cycle, battery and

flywheel powered vehicles, Most, if not all, of

these technologies have been extensively studied

in the past, either in this country or abroad, and

have been found to possess serious problems that

blocked their commercial introduction in this

to the internal combustion

will ERDA’s automotive

on the energy problem?

country. While the cost of energy and the

seriousness of the present energy problem can

change the importance of various options, ERDA

has not shown why the likelihood of successful

commercialization of any of the projects proposed is appreciably greater now than in the past.

The ERDA program does not identify th e

obstacles which continue to impede their introduction, nor how they propose to address

these factors.

Most experts in automobile technology feel

that at the present level of funding, ERDA is

CHAPTER V 204
destined to cover much of the same ground that

has already been studied by industry. The

market conditions have not changed sufficiently,

nor is the depth of research and development

sufficient to create a serious competitor to the

internal combustion engine.

While a Federal R, D&D program in advanced

automobile technology can make a valuable

contribution to meeting national objectives in

energy conservation, it appears unwise for the

program to focus on production prototypes

having to compete in the marketplace against the

present, highly optimized automobile. A more

realistic and useful approach would be to engage

in a stable long-term program with an emphasis

on supporting, supplementing, and stimulating

R, D&D efforts in the private sector. While this is

a less glamorous strategy than prototyp e

development, it is more likely to yield significant

results in the future, The programs should focus

on the early stages of development and on those

areas where technological advances could make

an important impact on future automotive

systems. ERDA is presently engaged in some of

these types of projects, such as those on ceramic

materials for gas turbines and the sodium-sulfur

battery, but, overall, the program lacks the

appropriate emphasis and balance.

CHAPTER V 205
16. Cooperation With the Transportation Industry

ISSUE

Successful commercialization of ERDA-sponsored technology in the transportation sector will be achieved more readily with close cooperation between

and industry.

SUMMARY

ERDA

Industry involvement in the commercialization of ERDA-sponsored

technology, such as new and improved automotive powerplants, is critical. While

technology transfer within a given organization is difficult, transfer between two

different organizations, such as ERDA and the automotive industry, is vastly more

difficult. To alleviate this problem, ERDA should solicit industry advice and input

during the program planning stage; this input might consist of ERDA contracts

with industry in the areas of feasibility, assessment, and systems planning, or of

joint 13 RDA/industry advisory groups. Various constraints upon joint interaction

exist, such as antitrust considerations in the automotive industry. Nevertheless,

early industry commitment to commercialization is essential to the successful

transfer of ERDA-sponsored technology to industry,

QUESTIONS

1. How can ERDA encourage private industry Z. Should industry have a financial interest in

to become intimately involved with its those ERDA programs which may yield

energy conservation programs, thereby en- commercially applicable technology?

suring maximum utilization of the program’s 3. At what point should ERDA funding on a results? program be stopped and commercialization

of the findings left to industry?

BACKGROUND

For ERDA-developed energy conservation

technology to receive maximum attention by

private industry, ERDA’s programs must be

planned, monitored, and evaluated with a maximum of industry input. ERDA and private

industry have to achieve a mutually satisfactory

partnership that recognizes each other’s needs

and makes the best possible use of the taxpayer’s

investment. Costly ERDA demonstration projects may not be necessary if industry is given the

opportunity to evaluate the commercial viability

of newly developed energy conservatio n

technology,

In order to maximize the chances for commercial success, both ERDA and private industry

should consider changing some of their past

practices. For instance, ERDA must involve

industry in the early stages of its major energy

conservation research and development program

planning. Industry should be asked to outline its

major energy conservation research and development needs, to assign priorities and commercialization potential estimates to each of the

needs outlined, and to recommend basic research

areas that could find widespread utility. In

addition, industry should identify programs that

206 CHAPTER V
it can carry out without ERDA’s assistance. Some

of ERDA’s currently planned demonstration

programs can and are being done by industry

because they are close to or at the commercialization stage.

In those instances where ERDA’s programs are

similar to programs previously carried out by

industry, ERDA should provide industry with

incentives to divulge its previously unreported

findings without having to relinquish any vested

patent rights. Many industry programs are not

carried through to commercialization because of

technological difficulties or unrewarding

economics. Now that the cost of energy has risen

drastically and energy efficiency has become a

more important criterion, these programs are

receiving renewed attention. However, the

originally developed information regarding these

programs may not be available in the technical

literature because of the stigma associated with

negative results and unsuccessful programs,

This information may now prove extremely

useful to an organization starting a “new”

program in one of these areas.

Specific examples of industrial programs

which were not commercial successes and were

not extensively reported in the technica l

literature include the continuously variable

transmission, heat storage devices, and rotary

engines. There are probably many other examples obtainable via careful inquiry into prior

industry knowledge of areas now receiving

renewed attention because of their energy

conservation potential.

Excellent examples of technology transfer

from government to industry exist, such as the

NACA program, predecessor of the National

Aeronautics and Space Administration. The key

organizational features of this program were the

joint committees, which helped to define the

program, and the steering committees, which

monitored the progress and output, thereby

facilitating rapid technology transfer where

appropriate.

The present ERDA program in the transportation sector represents, in effect, the transfer of an

existing program from the Environmenta l

Protection Agency (the American Association for

the Promotion of Science program), When the

program was in the Environmental Protection

Agency, industry reviewed its output and

concluded that the program had not yielded

significant results.

CHAPTER V 207
17. Nonhighway Vehicle Transportation Program

ISSUE

ERDA presently has no program for energy conservation in the nonhighway

vehicle transportation sector.

SUMMARY

Although railroads, pipelines, waterways, and airplanes carry many of the

passengers and much of the freight in this country and use a substantial quantity of

petroleum fuel, the ERDA conservation program virtually ignores this sector.

There is immediate need for the assembly of an adequate data base and for systems

studies to identify the areas of greatest potential fuel savings. In addition to

performing this analysis, ERDA must possess the capability to cooperate with and,

in some instances, coordinate the efforts of other Federal agencies toward energy

conservation in this sector.

QUESTIONS

10 What plans does ERDA have for the assembly Z. What specific systems studies are under way

of a data base for nonhighway transportation or contemplated for the evaluation of fuel

systems? savings potential in this sector?

BACKGROUND

It is estimated that some 25 percent of the fuel

consumed in the United States for transportation

is in the form of petroleum used for nonhighway

systems, These uses include oil, gas, and slurry

pipelines as well as rail, water, and air transport

systems, In addition to direct fuel savings from

improved efficiency, modal shifts and improved

load factors offer economically feasible improvements in energy usage.

In order to identify areas in which substantial

fuel savings are possible and to develop implementation strategies, research should begin

immediately toward the establishment of an

adequate data base and toward the systems

analysis of existing transportation networks,

Both a cross-sectional and a time-series data base

are required to delineate present fuel consumption patterns and to give baseline information

against which improvements can be measured.

208 CHAPTER V

Systems studies are needed to identify opportunities for significant improvements and to

evaluate proposals such as:

Modal shifts, for example, from highway to

water transport for bulk materials, and from

highway to rail for passengers

Advance d technology, for example ,

highspeed ground transportation for both

passengers and freight

Multimodal terminals for both passengers

and freight

Federal transportation grant programs and

other proposed schemes for Federal participation in nonhighway transport R, D&D

Modifications in transportation regulations

to give higher load factors, for example, in

passenger airlines and other improvements,
It is important that ERDA avoid duplicating necessary that ERDA develop the capability to

the work of industry and of other agencies, such assess fuel usage, determine opportunities for

as industrial locomotive development and the improvement, coordinate its conservation efforts

National Aeronautics and Space Administration with other programs in industry and governor the Department of Transportation research ment, and stimulate the development of new

and development in air transport. Because of the technology where needed.

huge potential for savings, however, it is

18. Energy Recovery From Waste

ISSUE

ERDA has formulated no plans or programs in the productive use of waste

although specifically directed to do so by Congress.

SUMMARY

ERDA is mandated by law (PL 93-577, Sec. 6(b)(3)) “to assign program

elements. . . to advance energy conservation technologies including but not limited

to productive use of waste, including garbage, sewage, agricultural wastes, and

industrial waste heat; reuse and recycling of materials and consumer product s,”

The ERDA programs in ERDA-48 vol. II make no mention of any such activities.

QUESTIONS

1. Why has ERDA no plans in the productive Z . In relation to other Federal agencies, what is

use of wastes? the appropriate ERDA role in the area of

R, D&D in energy and resource recovery from

municipal solid wastes?

BACKGROUND

ERDA has a statutory requirement to conduct

R, D&D for solid waste energy and resource

recovery. Principal waste energy sources are

municipal solid wastes, biomass waste, and

organic sludge. Currently, municipal wastes are

being burned with coal to make electricity in one

city; in another, these are burned to produce

steam and to chill water for district heating and

cooling. Authoritative projections indicate that

the annual contributions to national energy

supply from the burning of municipal wastes

.

could be about 0.5 Quad in 1985 (maximum 0.8

Quad). Although the amount seems relatively

small, it equals that of geothermal potential for

the near term, Indirect but nonetheless significant additional energy savings can be made from

recovery of materials (e.g., aluminum, iron) from

the nonfuel fraction.

There exists a question of whether ERDA is

giving sufficient attention to solid waste energy

and resource recovery R, D&D. While the ERDA

FY 76 budget shows token consideration ($300 K)

CHAPTER V 209
for these activities, ERDA-48, vol. II does not improving reuse and recycling systems, producdiscuss them. Successful R, D&D in this area will ing further savings of energy, and reducing

expand the amount of resources available for environmental impact, since the collection and

energy production; cause less pollution of land, separation process for municipal wastes would

air, and water; and as an added benefit, help facilitate aggregation of various kinds of

diminish the volume of waste to be discarded, In materials. ERDA’s program should reflect a

addition, such a program can also be helpful in higher degree of concern for this area,

CHAPTER V 210
Chapter VI

Environmental and Health

Task Group Analysis

211
A. ENVIRONMENTAL AND HEALTH TASK GROUP

MEMBERS

Prof. Stanford S. Penner, Chairman, University

of California at San Diego

Mr. Frederick R. Anderson, Environmental Law

Institute

Dr. Ralph H. Brooks, Tennessee Valley Authority

Prof. Helen M. Ingram, University of Arizona

Mr. Robert M. Lundberg, Commonwealth Edison

Dr. Carl M. Shy, University of North Carolina

Dr. John C. Thompson, Jr., Cornell University

CONTRIBUTORS

Dr. Michael Chartock, University of Oklahoma

Dr. Hal B. H. Cooper, University of Texas at

Austin

Dr. E. Linn Draper, University of Texas at Aust in

Dr. James Gruhl, Massachusetts Institute of

Technology

Dr. Charles Kreitler, University of Texas at

Austin

Dr. William Thilly, Massachusetts Institute of

Technology

CHAPTER VI 212
B ●

1.

2.

3.

4.

5.

6.

ENVIRONMENTAL AND HEALTH TASK GROUP

ISSUES LIST

Environmental Impacts of High

Voltage Transmission Lines . . . 217

The environmental and safety impacts of

high voltage electrical transmission lines are

not sufficiently known.

Ground and Surface Water Contamination From Surface Mining . . 218

Research on the potential environmental

problems from surface mining is inadequate,

particularly in terms of impacts on ground

and surface water quality.

Energy

l

Consumption and Inadvertent Cimate Modification . . . . . 220

More needs to be known as to whether longterm environmental impacts of increasing

worldwide energy use can lead to detrimental or irreversible climate modification.

Variance on Environmental Standards During Development . . . . 221

present environmental regulations with

regard to the functioning of environmental

control equipment are inappropriate to

effective technology development at the pilot

plant level.

Energy Modeling and Data Bank

Requirements . . . . . . . . . . . . . . . . . 223

It is not clear from the ERDA Plan and

Program that critical needs in energy modeling procedures and the associated data

requirements are fully recognized and

accepted by ERDA,

Site and Technology-Specific Nature

of Cause-Effect Relationships In

Environmental and Health

Impacts .*. **** **** *.** .**. e** 225

Simple extension of energy systems modeling capabilities to the regional discrimination level wit h expanded emissions

categories will not yield a valid impact

profile for energy technology decisionmaking.

7.

8.

9*

10.

11.

12.

Integration of Environmental,

Health, Social, and Institutional

Research Into Technology

Programs . . . . . . . . . . . . . . . . . . . . . 227

ERDA’s presentation and discussion of

environmental, health, social, and in -

stitutional research indicates a lack of

integration of this research into ERDA’s

technology program,

Energy Impacts of Air and Water

Pollution Control Regulations . 229

The interactions between the energy, environmental, and economic effects of Federal,

State, and local air and water quality

standards are not sufficiently understood.

Competing Demands for Water in

Western River Basins . . . . . . . . . 231

The limited availability of water in areas

such as the Colorado and Missouri River

basins will force systems evaluation of net

benefit from energy and non-energy activities which depend on water,

Need for Social Research in Offshore

Energy Programs . . . . . . . . . . . . . 233

Social and institutional research is needed to

identify potential constraints on the deployment of offshore energy facilities,

Effect of Public Attitudes on Program

Implementation . . . . . . . . . . . . . . . 234

ERDA’s plan for energy research, development and demonstration does not include

research on the effect of public attitudes and

values o n implementation of ERDA’s

programs.

Pro ram Focus in Fossil Fuel

Health Effects Research . . . . . . . 236

The ERDA Program of research on the health

effects of fossil fuels covers a broad range of

biological responses and pollutant ex -

posures. Some research areas do not appear

to be relevant to ERDA’s mission,

CHAPTER VI 213
13. Inadequate Inventory of Skills and

Techniques in Health Effects

Research . . . . . . . . . . . . . . . . . . . . . 239

A broad-based research effort is critically

required in both university and Federal

facilities to develop improved techniques for

evaluation of health impacts from coal

CO mbustion and conversion.

14. Atmospheric Sulfates as a Potential

Constraint on ERDA’s Fossil Fuel

program . . . . . . . . . . . . . ..........241

Suspected health hazards of atmospheric

sulfates may result in air quality standards

which would constrain ERDA’s programs

based on coal.

214 CHAPTER VI
C. INTRODUCTION

The Environment, Health and Safety section of

this report contains discussions of issues in the

title categories which relate to more than one of

the energy research and development areas in the

ERDA organization or which are general to the

whole topic of energy research and development

from the purview of environmental, health or

safety considerations. Environmental and health

issues specific to individual technologies or

energy resources are discussed in those sections

of the report, with cross reference as appropriate

to this section.

The issues identified in this section fall into

four major topical areas: environmental impacts

of alternative technologies; systems aspects of

environmental impact assessment; institutional

problems relating to environmental, economic

and social issues; and health factors relating to

energy resource development and applications of

energy systems. The principal conclusions derived from this work are briefly summarized in the

following paragraphs.

Technology Issues

The ERDA Plan is heavily weighted toward

electrification of energy-consuming activities.

Implied in this emphasis on electrification is a

requirement for extensive additions to the

electrical transmission network and a shift to

ultra high voltage transmission to reduce”

transmission losses. While interest and program

objectives concerning biological, health and

environmental impacts of high voltage transmission technology are stated in the ERDA program,

no explicit scheduling or resource information

appears in the ERDA documents to relate those

programs to the schedules and decision points in

the high voltage transmission technology

programs (Issue 1).

In resource recovery and mining, only limited

attention is being paid to mining and associated

ground-water pollution, with inadequate effort

devoted to the definition of hydrological baseline

data (Issue 2). Potentially irreversible climate

modification on a global scale is a risk of

continued efforts to meet increases in energy

demand. ERDA has not developed a program to

examine the relative heat rejection and atmospheric pollutant emission consequences of

new technologies, especially the “inexhaustible”

but highly inefficient processes, and their potential impact on global climate balance (Issue 3).

Environmental quality regulations in their

present form are designed to protect the environment and the public health by limiting the

emission of pollutants from potential sources.

The necessary programs to develop new energy

technologies and the environmental control

technologies associated with them could be

severely hampered by inflexible application of

the current environmental regulations (Issue 4].

Systems Aspects of Environmental

Assessment

It is not clear from the ERDA Plan and Program

that critical needs in energy modeling procedures

and the associated data requirements are fully

recognized and accepted by ERDA (Issue 5),

There are serious questions concerning the

impact on air quality of the addition of new

energy facilities to the existing field of air

pollution sources. Simple extension of energy

systems modeling to the regional level will not

yield a valid assessment of potential environmental impacts (Issue 6).

The ERDA Program document contains an

extensive description of proposed activity in

environmental, health, social and institutional

topics. Almost all of this description occurs in the

sections of the report devoted to Environment

and Safety and Systems Studies. Discussion of

these topics in the sections of the report devoted

to technology development generally consisted of

one-line statements recognizing the existence of a

potential constraint. There was no reference to

the environmental or health research programs in

the schedules appended to technology-oriented

sections. Interviews with ERDA personnel

CHAPTER VI 215
yielded the strong impression that the stated

objective of integrating the environmental control research into the technology development is

at present illusory. Given that environmental,

health, social and institutional problems are

likely to impose serious constraints on implementation of ERDA’s programs, much better

integration of these concerns into the pursuit of

the technology programs themselves is indicated

(Issue 7).

Existing regulations concerning air and water

quality and some which will become effective in

the next few years may impose significant energy

costs or environmental impacts in categories

which are not encompassed by the regulating

agency. There has been no systems evaluation of

the interact ions between environmental

regulations and their total effect. This is a valid

and important area of inquiry for ERDA which

has not been addressed (Issue 8).

The problems of water availability for coal

conversion to liquid or gaseous fuels, shale oil

retorting, electrical generation by any means and

other energy oriented activities will have to

compete with other uses for water in water-short

areas (Issue 9). These same activities and

associated mining and waste management

operations may impact water quality in the same

areas, thus potentially affecting agriculture and

domestic and municipal water supplies.

Social and Institutional Issues

The entire discussion of interagency activities

in the Program document indicates poor coordination between ERDA and other agencies and

equally poor definition of jurisdictional responsibility in critical areas of cooperative effort on

potential environmental, social and institutional

problems. These problem areas will probably

pose the most serious constraints to implementation of ERDA’s programs in several technology

areas and may jeopardize the achievement of

ERDA’s goals if not properly addressed in a

timely manner (Issues 8, 10, and 11),

Health Effects Issues

At this time, the adequacy of air quality

regulations concerning sulfur dioxide is being

questioned [Issue 14). The complex interaction

between sulfur oxides and other constituents in

the atmosphere, natural and man-induced, is the

subject of extensive study by EPA, ERDA and

others. The outcome in terms of sulfate standards

for protection of public health and environmental

quality is unknown, but could have a serious

constraining effect on achievement of ERDA’s

Plan, which relies heavily on coal in the near and

intermediate term. The health programs relating

to potential new chemical intrusions from coal

conversion and oil shale programs, some of

which may be potent carcinogens, were also

questioned (Issue 13). In the general area of

health studies, there is little evidence of a serious

effort to define the relative priority between

programs. There are also indications that ERDA

is involved in programs which do not relate to its

energy mission and needs to reassess the

usefulness of other programs in terms of the

validity of the results these programs will yield

(Issue 12).

216 CHAPTER VI
D. ENVIRONMENTAL AND HEALTH ISSUE PAPERS

1. Environmental Impacts of High Voltage Transmission

Lines

ISSUE

More explicit program planning is needed to relate High Voltage Transmission

Line Program objectives and decisions to related research and decisions on

biological and environmental impacts.

SUMMARY

While the ERDA Plan states program objectives on the biological, environmental, and health impacts of high voltage transmission technology, it does “not

present explicit scheduling or resource information to relate such programs or

findings to the schedules on decision processes of its high voltage transmission

technology programs.

QUESTIONS

1. What potential effect could the ERDA Z . At what level, in what facilities, with what

biological, environmental and health in- manpower, and under which ERDA division

vestigations have on the contracting and will the environmental, biological, and health

implementation milestones shown in ERDA’s research on high voltage transmission be

technology program schedule for hig h performed?

voltage transmission?

BACKGROUND

Along with the possibility of developing the nearby environment may induce internal

electrical power transmission lines operating at currents which can affect the vital functions of

voltages as high as 1,500 KV comes the possibili- the plant or animal organism. While knowledge is

ty of related adverse impacts on human health incomplete about the threshold and magnitude of

and on other biosystems. Sufficiently strong such effects in humans, it is suspected these

electromagnetic field gradients imposed by the produce impacts on the nervous system,

transmission lines on plants and animal life in digestive system and heart. The environmental

CHAPTER VI 217
effects of possible corona discharge and ozone Integration of the necessary environmental

gas production are not adequately known. Con- research results into the technology program is

sideration of such effects is a vital element in the essential for valid program evaluation and

design, construction and installation of high decisionmaking.

voltage electrical power transmission systems.

2. Ground and Surface Water Contamination From

Surface Mining

ISSUE

Research is inadequate on the potential environmental problems arising from

surface mining, particularly in terms of its impacts on ground and surface water

quality.

SUMMARY

Large-scale surface mining of fuels to the extent necessary to meet ERDA’s

energy plans presents the potential for generating large amounts of a variety of

pollutants that will be difficult to control by point-source control technology.

Examples of this type of pollution are the leaching into ground and surface waters

of sulfates, nitrates, ammonium, acids, and trace metals from strip mines and

reclaimed areas.

The type of pollutants generated can vary from area to area depending upon

geology, topography, and climate. The development of predictive models to

evaluate the types and amounts of potential pollutants will ease the development

of the technology needed to control and minimize these discharges.

QUESTIONS

1.. What is the effect of large-scale surface

mining operations in the West on ground and

surface water quality in the Missouri and

Colorado River basins?

2. What impacts will changes in ground and

surface water quality from large scal e

surface mining operations have on farming

and ranching in the West, and on forestry,

agriculture, and municipal water supplies in

the East?

3. In what geographic areas is it necessary to

replace topsoil to insure the productivity of

218 CHAPTER VI

the land, and in what areas will replacement

of topsoil be unnecessary?

4. To what extent and in which areas will

mining-induced water pollution limit energy

development?

5. Which agency should take the leadership role

in research relating to environmental impacts of surface mining operations, and what

should be its relationship to other Federal

and State agencies?
BACKGROUND

The ERDA plan to increase the production of

coal, lignite, and shale oil fossil fuels will require

extensive increases in surface mining operations

in both the East and the West. These strip mining

operations can significantly alter, through exposure to the atmosphere and rainfall, the

geochemical environment of the overburden

material that remains after the coal is extracted,

Chemical changes which can occur include the

oxidation of pyrites to sulfuric acid, ferrous iron,

and sulfate ion; oxidation of ammonium ion to

nitrite and nitrate ions; leaching of trace metals

from the overburden; and the dissolving of

cationic and anionic constituents from coal and

soil, which increases salinity levels. The possible

release of radioactive isotopes and trace metal

constituents from uranium surface mining

operations poses an additional problem in South

Texas and the Rocky Mountains.

The problems to be faced vary with

geographical regions, acid mine drainage bring a

greater problem in the East and salt leaching a

greater problem in the West. Environmental

concerns so far have primarily centered on acid

mine drainage in the East. There has been

inadequate concern for the effect of large-scale

surface mining on groundwater quality and the

potential pollutants that can be leached from

reclaimed areas. The large scale centamination of

ground and surface waters from surface mining

operations is a problem which is not easily

amenable to existing control technology. The

adverse effects on ground and surface water

quality can impair subsequent use of the water

for farming and ranching, forest productivity,

and municipal and domestic drinking water

supplies.

Predictive techniques need to be developed to

assess, prior to their initiation, the potential for

generating pollutants from specific surface

mining locations. Extensive data are available on

background levels of groundwater and surface

water quality and geochemical make-up of

overburden material, Some data are available on

the impact of reclamation and surface mining,

but these data sources are widely distributed

through numerous State and Federal agencies

and universities, The collection of these dispersed data, plus the collection of necessary

additional information, will permit a nationwide

determination of additional impact study needs.

CHAPTER VI 219
3. Energy Consumption and Inadvertent Climate

Modification

ISSUE

Not enough is known about the potential for detrimental or irreversible climate

modification caused by increasing worldwide energy use over the long term.

SUMMARY

Changes

consumption

potential for

in rainfall and temperature associated with increased energy

have been observed in specific localized areas. Evaluation of the

large scale changes in climate caused by escalating energy use

requires a better understanding of the Earth’s ultimate capacity to assimilate manmade heat, While the ERDA plan paid some attention to the relation between

energy use and local meteorological changes, it does not address the larger question

of the ultimately sustainable level of thermal loading.

QUESTION

1. Considering the difficulty of the problem and initiated a program to study the problem of

its potential importance, why has ERDA not ultimately tolerable thermal loadings?

BACKGROUND

The current and anticipated thermal loadings

associated with worldwide energy use represent

potentially significant influences on local,

regional, and worldwide meteorological conditions. Although every energy production

method ERDA is considering could add to this

loading, large scale climate change processes are

not now sufficiently well understood to make

quantitative predictions, The need for better

understanding of these processes, however, is

emphasized by the relatively short time periods

(one to two centuries) which may be

characteristic of the initiation or termination of

ice ages.

During 1970, average worldwide, man-made

power densities amounted to only 0.054 w/sq.m.

By contrast, solar-energy input into the outer

atmosphere is 340 w/sq. m of which about 158

220 CHAPTER VI

w/sq.m is initially retained in the atmosphere or

initially absorbed on the surface of the earth.

Power release densities associated with human

energy use have exceeded the average normal

solar power input in some metropolitan areas for

more than a decade, in some cases by substantial

margins (Moscow by about a factor of 3 and in

Manhattan by more than a factor of 6 during the

1965-68 period). By the year 2000, such heavily

industrialized areas as the Ruhr Valley in

Western Germany will produce thermal loads

over a wide region which exceed the normal solar

input by about a factor of 10, while new power

generation from nuclear farms, currently being

considered for implementation, will generate

thermal loads that are 100 times larger than

“normal. ”
4. Variance on Environmental Standards During

Development

ISSUE

Present environmental regulations on the functioning of environmental control

equipment may tend to deter the development of new energy technologies at the

pilot plant level.

SUMMARY

Development of necessary environmental control equipment can be as difficult

and uncertain as the development of any other technology. The present regulatory

climate in the United States does not provide for pilot plant development programs

as special cases. Coupling the development of new energy technologies with that of

their associated environmental protection technologies, as regulations now

require, may seriously hamper ERDA efforts to bring new energy sources to

commercial use. This presents a risk of abandoning potentially viable energy

technologies because faulty performance of experimental environmental control

equipment compromises (the proof-of-process) results obtained in pilot plant

testing of the basic energy technology. ERDA should address the question of the

environmental risks and ad hoc mitigating measures which may be appropriate in

pilot level development. With the Congress and the regulatory agencies, ERDA

should explore the advisability of special regulations for pilot and demonstration

facilities.

QUESTIONS

1. What consideration has ERDA given to pilot 2. Have the possibilities for flexible environplant development problems which could menta1 re g u 1 a t i ons a n d n ecessary

result from the parallel operation of ex- precautions for experimental facilities been

perimental energy-associated and environ- explored by ERDA with other agencies such

mental control equipment? as EPA?

BACKGROUND

The development history of flue ga s

desulfurization methods shows that development of ancillary environmental control equipment can be as difficult and traumatic as the

development of the basic process itself. It is

almost axiomatic that the scaling up of a process

from the typical laboratory experimental level to

a facility size which can begin to demonstrate the

commercial economics of the process involves

significant further development effort,

Shale oil retorting facilities, coal liquefaction

and gasification processes and other major

energy facilities of the sort contemplated in

ERDA’s programs commonly exhibit problems of

process stability or equipment durability, Such

problems do not emerge in laboratory-scale

CHAPTER VI 221
experiments. These must be overcome before the

process can be applied at the very large scales

required t o make production facilities commercially feasible.

Beyond encountering development problems in

experimental large-scale energy facilities, there

is the equal probability of coming upon similar

problems in associated environmental control

equipment. By definition, this equipment will

have to be tested on the same scale as those

experimental energy facilities. The parallel

operation of all the equipment together is likely

to exhibit further problems. It makes sense to be

sure that the primary processes in the technology

are technically viable, whether or not the

pollutant control equipment has been perfected

or its integration into the overall operation has

been achieved. The construction of demonstration plants with all environmental control

equipment installed, but with the capability to

decouple the control equipment, will provide the

option to continue testing the technical process

should problems be encountered with the control

equipment. Pilot plant operation with and

without the environmental control equipment

will also demonstrate more clearly the true effect

of such equipment on the total process. This

information would be valuable in later research

and development activities.

Any plan to operate a demonstration-level

facility in the manner described above would

require careful analysis of the level of environmental insult which uncontrolled operation

would produce. Also required would be the

provision of auxiliary equipment to protect

against significant or irreversible environmental

damage, risk to health or impact on activities

surrounding the facility. Operation with substandard environmental controls would further

require special provisions in environmental

regulations to permit temporary non-compliance

with emissions standards. Such provisions are

not presently available to ERDA. The responsible

formulation of flexible environmental standards

for experimental facilities would assist ERDA in

achieving its goals.

222 CHAPTER VI
5. Energy Modeling and Data Bank Requirements

ISSUE

It is not clear from the ERDA Plan and Program that ERDA fully recognizes and

accepts critical needs in energy modeling procedures and in the associated data

requirements.

SUMMARY

Linear models, such as the Brookhaven Reference Energy System, used for

projecting the ERDA scenarios can easily incorporate probabilistic measures of the

accuracy of environmental information. Probabilistic calculations would give a

more meaningful projection of future demand as well as pinpoint data which are

important but highly uncertain,

A large increase in the number of categories of effluents measured and used in

environmental impact modeling is also needed. Using the proposed Brook haven

techniques, grouping of compounds results in, for example, the collection of all

hydrocarbons in a single category. This procedure facilitates the collection and

manipulation of data, but makes conclusions based on such data suspect, because

of the substantial variation in environmental effects among the hydrocarbons.

The whole field of energy system modeling is in an early stage of development.

ERDA’s discussion of modeling recognizes a need for much more sophisticated

techniques than those currently at hand. Several energy models are being

developed around the country. It would be desirable for ERDA to interface on a

continuing basis with these other activities so as to compare the sensitivity of

modeling results to alternative techniques and data bases. Consistency of

projections from alternative models does not guarantee accuracy. However, in the

absence of an existing real basis for calibration, a consensus between independent

efforts can increase confidence in the validity of the results obtained.

QUESTIONS

1. Are the energy demand projections in the

ERDA Plan based on the best estimate of

these values, or is there some conservatism

factored in to reflect the Administration’s

aversion to the risk of energy shortfall?

2. What are ERDA’s plans to incorporate in

their modeling efforts information on the

levels of uncertainty associated with environmental data?

3. The postulating of alternative scenarios is

only one of several methods of treating the

uncertainties associated with the development of new technologies. What methods will

ERDA use to display the sensitivity of their

results to changes in the assumptions used

and to uncertainties in the environmental

data?

4. In view of the number of independent energy

system models that are being developed,

what plans does ERDA have for making

alternative projections?

CHAPTER VI 223
BACKGROUND

The availability of assured supplies of energy

in the future is important to environmental

quality. If there is an energy shortfall, there will

be pressure to relax environmental controls to

alleviate the shortage. In order to avert such

energy shortfalls, it is necessary to know in

advance the level of energy demand.

One way to bracket future demand is to

construct several scenarios for future events,

such as those presented in ERDA-48. This is

useful in that it shows common features of future

activity even when the assumptions about future

behavior are quite different. The difficulty with

the alternative scenario approach is that it is

difficult for decision-makers to assess the most

likely conditions from the several scenarios. By

estimating the probability of commercial success

of various technologies, and using estimates of

accuracy of various data, it should be possible

not only to develop the environmental consequences of the several scenarios but also to

predict the likelihood of occurrence of the

situation the scenario projects.

The development of probabilistic scenarios of

future energy demand will give decision-makers

a view of alternative future effects and their

probability y of occurrence. This will be useful for

choosing among alternative courses of action.

The construction of the scenarios will also point

out shortcomings in the data required for

forecasting and will serve as a guide for data

acquisition.

As the ERDA health effects research programs

advance to the point of yielding usable doseeffect information, it will be necessary to

continually improve the quality and quantity of

the residual materials data used in th e

Brookhaven environmental data base, The

effluent categories will eventually have to be

disaggregated to the point where data on

different compounds are collected separately. In

some cases the necessary information is

available; in other cases this disaggregation

exercise will point out important gaps in existing

information,

Adverse environmental impacts stemming

from future energy generation strategies can be

minimized if demand levels as a function of time

are accurately known. To predict most accurately, one should make energy system projections

with a variety of types of available models. The

ERDA Plan relies solely on the Brookhaven

Reference Energy System, This energy model is a

good, national, static model, but it cannot

contend with situations that are dynamic. There

are regional and dynamic models that can be

applied to yield other ideas about the future of the

energy system and its environmental consequences.

224 CHAPTER VI
6. Site and Technology-Specific Nature of Cause-Effect

Relationships in Environmental and Health Impacts

1.

2.

Simple extension of energy systems modeling capabilities to the regional

discrimination level with expanded emissions categories will not yield a valid impact

profile for energy technology decisionmaking.

SUMMARY

Considerable effort has been devoted to determining the rates of emission of

various materials from energy conversion devices. These data are by no means

complete, but in many cases they are adequate. Much less is known about the

actual amounts of environmental degradation resulting from a given emission rate.

The prediction of dose is complicated by site specific factors such as population

density, climatology and ambient air quality. The further translation from

pollutant dose to effect is known only for a very small number of pollutants (SO,

ozone, PAN, lead, CO, etc. ) and only in terms of their major effects on agricultural

products and selected animal species. However, the effects of even these pollutants

is not known for low dose levels. Chronic exposure conditions or possible

synergistic relationships have seldom been explored. Expanded studies are needed

to assess the impact, in quantifiable terms, of the many energy related pollutants at

varying emission or release rates, Such studies will improve the effectiveness of

modeling approaches and ultimately improve our capability to optimize energy

choice/use patterns.

QUESTIONS

What new methodologies are being pursued 3. What efforts are planned to identify the

that will lead to effective assessments of the potential environmental and health effects of

environmental impacts of various scenarios? typical mixes of pollutants associated with

What type of program is envisioned for advanced technologies (including all the

determining the extent of the impact on the variants of types and control possibilities)?

public of the “new” pollutants deriving from 4. How will data on the many diverse environadvanced fossil fuel technologies? mental effects of fossil fuels be displayed to

al1ow meaningfu l comparisons in

cost/benefit/risk analyses?

BACKGROUND

Many benefits could result from early, consis- provide early feedback for design and control

tent, systematic analyses of the environmental options, provide a rational framework for the

effects of energy conversion. The analyses can formulation of regu lations, and be used to initiate

CHAPTER VI 225
—

well-aimed health effects studies. To be useful,

however, the systematic analyses must model the

real environmental degradation and not just

national or even regional totals for tons of

emissions.

It is, unfortunately, extremely difficult to make

systematic environmental impact assessments.

Reducing impacts to a common denominator,

such as dollars, results in the loss of much

necessary decision information. A possible

format for the presentation of information is a

matrix of options and effects.

The Matrix of Environmental Residuals for

Energy Systems (MERES) system is a good first

step toward the use of the matrix modeling

concept. However, it deals only with the total

emissions of the scenarios modeled. Simple

modeling can grossly mislead any attempt to set

emission standards for the protection of the

environment or the public health. A serious

inadequacy of the MERES effort is its failure to

factor in the variations between regions and

localities in terms of dispersive potentials,

a tmospheric chemica l transformations,

background concentrations of pollutant species,

or the nature and density of populations exposed

to pollutants. While it is possible in principle to

perform a scale-up of regional experience in

pollutant loading to obtain better indications of

total environmental degradation, such an extrapolation from existing regional conditions

presents serious difficulties, The addition of new

technologies and new facility sites will change

both the configuration of pollutant sources and

the mix of pollutants input to the environment. It

will therefore be necessary to include sitespecific characteristics in any model to be used

for predictive analyses in the interest of energy

decisionmaking processes.

Definition of alternative specific site types for

energy facilities will make it possible to more

realistically treat siting constraints such as

climatological and demographic characteristics

of powerplant environs. Attention to th e

characteristics of specific potential sites will

facilitate the development of an inventory of

potential sites for energy facilities. It would then

be possible to develop sites in the inventory as

the need arises with minimal adverse environmental effect.

226 CHAPTER VI
7. Integration of Environmental, Health, Social, and

Institutional Research Into Technology Programs

ERDA’s presentation and discussion of environmental, health, social and

institutional research indicates a lack of integration of this research into its R, D&D

program.

SUMMARY

To maximize the effectiveness of research on environmental, health, social and

institutional constraints, the results of that research should be available before the

widespread implementation of the technology. The ERDA implementation

schedules do not present environmental and health research timelines in parallel

with the technical milestones. Further, the specific plans for environmental and

health-related research, tailored to the individual technologies which will be

promoted, are not detailed and discussed in the technology program statements

provided in volume II.

The failure of volume II to define environmental, health, social and

institutional problems which could constrain specific technology programs is a

significant oversight. The oversight is emphasized by the established obligation of

Federal agencies to consider potential environmental impacts at the earliest time in

their planning processes. Explicit priority is given to analysis of environmental

and social consequences of energy technology deployment in Section 5 (a) (z) of the

Federal Nonnuclear Energy Research and Development Act of 1974. Because of the

lack of specificity of the environmental activities defined in ERDA’s technology

program descriptions, there is no guarantee that the necessary environmental

research and assessment will be conducted simultaneously with energy

technology development.

QUESTIONS

1. How does ERDA plan to integrate environmental analyses into the development of a

technology so that they are incorporated in

decisionmaking as each discrete step is taken

toward commercialization of the technology?

2. Although the National Environmental Policy

Act and the Federal Nonnuclear Energy

Research an d Development Act bot h

emphasize timely analysis of environmental

and social consequences, why is there little

3.

4.

detailed discussion of either in volume II’s

technology program statements?

What proportio n of ERDA’s propose d

budgets for technology programs will be

spent on environmental, social economic, and

institutional analyses?

What rationale was used to schedule the

environmental and health research required

for assessing the suitability of emerging

technologies?

CHAPTER VI 227
BACKGROUND

Whenever a potential environmental problem

related to a developing technology is identified,

the maximum integration of environmental

control technology into engineering design is

required throughout the long process of bringing

an energy technology to commercially proven

levels. Otherwise, costly “add-on” modifications

may be necessary as regulatory action or

negative public reactions begin to constrain the

development process. Adequate continual environmental research, beginning at the earliest

time in ERDA’s planning process (as detailed in

volume II), is necessary through specifically

tailored and detailed projects in order to achieve

this goal,

‘l’he NEPA environmental impact statement

process already calls on Federal agencies to take

environmental factors into account at the earliest

possible time in decisionmaking. Federal court

decisions, foremost among them being the

Scientists’ Institute case, have required that

energy research and development programs be

covered by impact statements. But the issue

raised here goes beyond the impact statement

preparation process (although not beyond the

NEPA mandate to agencies) to recognition that

the environmental research components of

overall technology development should actually

be writte n into planning and budgetin g

documents as integrated and systematically

developed items.

The present structure of ERDA does not

provide sufficient incentive for the technology

divisions to incorporate at a meaningful level

environmental control technology into their total

development activities. The Environment and

Safety Division (AES) is ERDA’s reservoir of

expertise in environment and health research,

and is responsible for coordinating these activities with other agencies. However, the links

between AES and the technology divisions

within ERDA appear to be inadequate to ensure

the necessary integration of its concerns into the

activities of other ERDA divisions.

The discussion of program strategy in the

Environmental Control Technology section of

ERDA-48 makes the point that “most of the

controls technology development funding as well

as the manpower resources will be provided by

program units under the Assistant Ad -

ministrator for Conservation, Nuclear Energy,

Fossil Energy, and Solar, Geothermal and Advanced Energy. ” However, a careful reading of

the various sections of the program volume

shows very clearly that the only substantive

discussion of needs for environmental, health,

social and institutional research is housed in the

Environment and Health, Safety and Systems

sections of the report. In the discussions of

technology programs, the references to these

topics are generally restricted to single sentences

which state the potential existence of an (uncharacterized) problem or the need to develop

“environmentally acceptable” technology.

Further, the schedules attached to the technology

sections show only the technology development

timelines and milestones. Finally, the interviews

with ERDA personnel which took place in the

course of the OTA review of the ERDA Plan and

Program yielded the information that allocation

of funds, staff assignments, and program definition by the technology-oriented divisions in the

areas of environmental, health, safety, social,

and institutional research were ill-defined at best

and apparently nonexistent at worst.

A possible solution for this apparent dereliction by ERDA lies in reorganization of the

relationship between the Environment and

Health Division and the technology-oriented

divisions. The technology divisions should be

required to discuss in detail—and schedule—the

necessary research on items which may constrain the technology development t for which

they are responsible. Since it is apparent that the

technology divisions do not now have th e

necessary staff capabilities to satisfactorily

accomplish such an integral program definition,

the y will e it her have to develop that capability or

turn to the Environment and Health Division to

provide it. The latter course may be preferable, as

it could lead to a more integrated organizational

structure in ERDA. The cross-linking of project

organizations and specialty staffs has worked

well in private industrial corporations and may,

if undertaken in ERDA, enhance ERDA’s

capability to achieve its goals.

228 CHAPTER VI
8. Energy Impacts of Air and Water Pollution Control

Regulations

ISSUE

The interactions between energy, environmental and economic effects of

Federal, State, and local air and water quality standards are not sufficiently

understood.

SUMMARY

The enactment and enforcement of air and water pollution control regulations

can have substantial impacts upon energy consumption requirements and solid

waste generation. These potential impacts will become increasingly important in

the future with the decreasing availability and increasing cost of fuel supplies

and/or disposal sites. These complex interactions are not presently recognized by

existing regulations, which tend to treat air pollution, water pollution, and solid

wastes as separate problems unrelated to potential energy consumption requirements. Environmental protection and energy consumption optimization

trade-offs are needed,

QUESTIONS

1. What changes need to be made in existing protection and energ y consumption a t

Federal, State, and local air and wate r specific sites, and by whom should they be

pollution regulations regarding the trade- explored?

offs between environmental protection and 3. What improvements are needed in existing energy con sump t ion? air pollution and water pollution control

2. What are the proper criteria for obtaining technologies to minimize potential energy

optimum balance between environmental cons u m p t i on ?

BACKGROUND

At present, policies which regulate discrete

discharges of effluents are based on applications

o f ultimate control technology at or prior to point

o f discharge, Such stringent controls of both

atmospheric and aquatic discharges ar e

necessary in some cases, but no technical basis

exists for their wholesale application as presently administered. These effluent controls may

requires significant energy penalties, which result

in not only additional fuel consumption but also

added air pollutant and solid waste generation,

Requirements for controls are better established

on a technically-based optimization of environmental protect ion and energy consumption requirements,

Comp1iance with both the Federal Wate r

Pollution Control Act Amendments of 197 2

(Public Law 92-500] and the Clean Air Act

Amendments of 1970 can have significant

impacts on energy consumption. Public Law 9 2-

CHAPTER VI 229

60-411 0 - 75 - 16
500 established the requirement that closed cycle

cooling technology be applied in all thermal

power installations prior to 1985, a goal based

upon the best available technology. This law

would eliminate thermal input to the aquatic

environment where aquatic systems could not

tolerate additional thermal increases over all or

part of an annual cycle, In such cases, the only

presently available alternative is the installation

of cooling towers. In the majority of existing

facilities extensive study has failed to

demonstrate adverse changes as a result of

thermal discharges. Most important environmental results, such as biocide effects and

entrainment and impingement of aquati c

organisms associated with the recommended and

presently applied control technologies, can be

minimized by proper modification of facility

design.

Cooling towers function by transferring heat to

the atmosphere through evaporative transport.

Associated with this process is the potential for

climatic changes and the concentration of solids

which ultimately require disposal.

It is important to recognize that cooling towers

possess associated environmental disbenefits

and do not always have demonstrable benefits,

and that they further impose a significant energy

penalty (5 to 20 percent) on power generation

facilities,

The proposed zero discharge requirements on

wastewater treatment facilities can also cause

substantial increases in the energy consumption

necessary for water pollution control, resulting

in increases in air pollutant emissions and solid

waste generation. The dewatering and disposal

of large quantities of solid waste sludges

generated by air and water pollution control

devices impose similar secondary environmental

and energy penalties. Existing nonregenerative

flue gas desulfurization systems at coal-fired

power plants also impose energy penalties and

generate large amounts of solid waste sludges.

Energy penalties of 5 to 20 percent can result

from lime or limestone sulfur dioxide scrubbing

systems in terms of increased gas pressure drops

and stack reheating, liquid pumping, sludge

dewatering and transportation. Large quantities

of sludge require major nearby land areas for

disposal or transportation to distant landfill

sties,

The need exists for analytical tools to provide

for optimization of environmental

processes to minimize overall adverse

mental impacts,

control

environ230 CHAPTER VI
9. Competing Demands for Water in Western River Basins

ISSUE

The limited availability of water in areas such as the Colorado and Missouri

River basins will force systems evaluation of net benefit from energy and nonenergy activities which depend on water.

SUMMARY

1.

2.

3.

Large amounts of water wil 1 be required from available ground and surface

water supplies in the arid Rocky Mountain states for energy production operations

such as coal and oil shale mining, slurry pipeline coal transportation, minemouth

electric power generation, coal and oil shale conversion to gaseous and liquid fuels,

and environmental management of strip-mined areas and spent shale disposal

areas. Extensive implementation of these projected energy production activities

may adversely affect water quantity and quality for agricultural use in the same

river basins. Development of geothermal energy resources, e.g., in the Imperial

Valley, could result in either further water demand and water quality impact or in

the production from saline water of a supplementary source of freshwater for

agricultural use. Extensive analysis of the total system activity in these river

basins will be required to ensure that the proposed energy development activities

which are actually implemented will result in a net benefit to the country.

QUESTIONS

What is the maximum amount of water which

can be made available for energy production

in the Missouri and Colorado River basins

without jeopardizing agricultural operations

and other industrial or public demands for

water?

What impacts upon water quantity and water

quality will occur in the Rocky Mountain

states from varying levels of energy production, and what impacts will these have on

agricultural production and resultant food

prices?

What are the relative environmental, energy

and economic trade-offs of minemouth

4.

5.

processing of coal to electrical energy or

synthetic fuels in the arid Rocky Mountain

states as compared to alternative transportation to water-abundant areas along the

Mississippi River or Gulf of Mexico for

subsequent processing?

What is your estimate for the potential

production of desalinated wate r from

geothermal resources in the Imperial Valley

of California by the year 2000?

What plans does ERDA have for the construction of integrated regional development plans

linking seemingly disparate energ y

technologies?

BACKGROUND

To meet the Nation’s energy requirements, the extensive coal, shale oil, and uranium resources

Federal Government plans major use of the in the arid regions of the Rocky Mountain States

CHAPTER VI 231
between 1975 and 2000. Projections call for the

possible construction of a significant number of

coal-fired electric power plants, coal gasification

and liquefaction plants, water slurry pipelines,

and shale oil processing facilities. Thes e

facilities will have significant impacts upon

available supplies of acceptable quality water for

farming and ranching unless steps are taken to

provide for proper development. Possible alternatives include the transportation of coal to

water abundant areas for subsequent processing

and extensive in-place water treatment and

recycling.

Geothermal resource development in the

Imperial Valley of California is currently receiving considerable attention from a number of

industrial, governmental, and university groups.

The importance of integrated regional development for the Imperial Valley is now recognized b y

a number of people. But the close connection

between the potential for water desalination,

using geothermal energy, and proposed energy

resource development in the Upper Colorado

River Basin has not only not been emphasized, it

has not even been mentioned in the ERDA plans,

Similar arguments apply to other river basins in

which major energy development programs are

contemplated, Integrated regional planning by

ERDA is necessary to ensure that its energy

programs actually yield a net benefit.

232 CHAPTER VI
10. Need for Social Research in Offshore Energy

Programs

Social research is needed on institutional problems arising from the

deployment of offshore energy technologies.

SUMMARY

Major problems in new offshore development are presented by the social and

institutional constraints to developing offshore oil and gas production, nuclear,

and fuels transportation facilities. One current major research need is to examine

new institutional mechanisms in order to further understand the problems of

government management and public acceptability. This research needs to be

conducted on national, regional, and local levels.

QUESTIONS

I, What institutionally related research 2. What research is being conducted on new

programs does ERDA have for evaluating plans or arrangements for oil spill clean-up?

offshore oil development?

BACKGROUND

The presen t environmental research implementation program does identify research on

offshore technologies in five areas: (1)

collaborative efforts on hyperbaric medicine for

diver safety, (2) new environmental programs to

deal with oil well drilling, (3) criteria for offshore

power plant siting, (4) aquatic chemistry of

pollutants and (5) oil spill prevention and cleanup procedures and techniques. Although the

above areas are important, a specific effort is

needed which would focus on the social and

institutional constraints to developing offshore

oil, gas, nuclear, and fuels transportation

facilities. Such a research effort requires an

interdisciplinary group study of the full range of

potential impacts and effects and alternative

social and institutional arrangements.

Because this problem deals with both the

means by which offshore areas are mad e

available and the way in which technologies are

deployed and standards are developed and

enforced, the funding and oversight for this

research would be an interagency effort. This

research would be directly applicable to considerations of innovative siting, leasing, standardssetting, and enforcement procedures, some of

which are subjects of current legislation.

CHAPTER VI 233
11. Effect of Public Attitudes on Program Implementation

ISSUE

ERDA’s plan for Energy Research, Development and Demonstration does not

include research on how public attitudes and values affect implementation of

Government energy plans and controls.

SUMMARY

Public attitudes about the proper role of Government, what constitutes quality

of life, and what characterizes important threats to the human environment,

greatly affect what Government actions people will support as well as the

incentives and disincentives to which they will be willing to respond. ERDA’s plan

does not appear to include study of energy-related attitudes, their formation,

la

2.

intensity , a-n-d stability, and the impact of information upon attitude changes.

QUESTIONS

Since ERDA recognizes the need to maintain in terms of energy development, conservafreedom of choice of lifestyles, how does

ERDA propose to do research on the effect

that different levels and kinds of energy

consumption will have on lifestyles?

How will ERDA present the necessary

results of research on public attitudes so that

agencies and other policy makers can make

judgments about what the public will accept

tion regulations, and environmental controls?

3. How well do the environmental impacts

which ERDA proposes to predict for various

technologies reflect the concerns that people

actually have about their environment? What

research is planned to discern public attitudes on environmental issues?

BACKGROUND

The desires and values of the public are as

fundamental to energy development as is the

availability y of fuel resources, capital, manpower,

etc. Yet, ERDA’s research plan and implementation program anticipate few studies of attitudes

which will affect energy choice, For example:

1. The ERDA Plan recognizes as a national goal

a need to maintain choice among life styles.

To relate energy technology to life styles, it

will be necessary to know what levels of

energy consumption are essential for quality

of life for people of different regions, with

234 CHAPTER VI

different backgrounds, incomes

size. Much more must be known

and family

about those

energy use activities which are simply a

matter of habit and superficial convenience,

Similarly, attitude research would help to

identify the energy consuming activities

which are important to certain ways of life.

Z. The implementation of ERDA’s Energy Plan

and environmental controls implies an

altered relationship of the Federal Government to private industry and to State and

local governments. Attitudes held

different publics about the proper role

by

of
Government may serve to impede the growth vironmental impacts of energy development

of Federa1 Govern men t functions or channel are poorly related to the attributes of their

Federal Government action into certain setting to which people are sensitive .

acceptable implementation techniques. Ef- Research in this area is necessary,

ficient implementation of the plan requires 4. ERDA’s mission includes prom

research in this area. understanding of science. This

3. Environmental quality is a function of be performed adequately only

people’s perceptions and values. It may be attitudes about energ y tec

that the quantifiabie and measurable en- researched.

oting public

function can

when public

hnology are

‘I) r

CHAPTER VI 235
12. Program Focus in Fossil Fuel Health Effects Research

ISSUE

The ERDA program of research on the health effects of fossil fuels covers a

broad range of biological responses and pollutant exposures. Some research areas

do not appear to be relevant to ERDA’s missions.

SUMMARY

ERDA’s overall program of research into the effects of fossil fuel use on health

places great emphasis on basic biological mechanisms of response, Certain

important areas, such as biological screening, carcinogenesis and mutagenesis,

and epidemiological studies, appear to be inadequately emphasized, while other

areas, such as research on recovery, treatment, and development of radiopharmaceuticals, may well be unnecessary under the primary mission of ERDA’s

health research program. The program description gives little detail as to which

pollutants will be given highest priority, or on how the results of health effects

research will be integrated into the decision process as to which alternative energy

technologies to develop. To meet these research demands, there is a critical need for

the training of additional cell- and tissue-culture experts, toxicologists and

epidemiologists.

QUESTIONS

1.

2.

3.

Which pollutants will be given highest

priority for evaluation under the various

categories of fossil fuel health effects

research and by what criteria does ERDA

assign these priorities?

What is the purpose in ERDA’s mission of

research on treatment of and recovery from

health effects?

How will ERDA’s health research program,

which is largely directed toward animal

models, evaluate known adverse effects on

human health which cannot yet be modeled

with animal experiments?

4.

5.

6.

What plans does ERDA have for training

programs to provide the additional manpower needed for their proposed health

effects research programs?

If ERDA obtains positive results on screening

for detrimental effects of a fossil fuel

product, how will the results be validated

with respect to human populations?

What plans does ERDA have to evaluate the

safety of substances in humans, once they

have successfully passed through the animal

screening system?

BACKGROUND

ERDA’s FY 1976 program plan for research on million (including pass-through funds) to be

the health effects of fossil fuels provides for $32.5 nearly evenly divided between research directly

236 CHAPTER VI
applied to the health effects of fossil fuel

technologies ($16 million). These funds were

programmed as follows:

I.

(1)

(2)

(3)

(4)

(5)

(6)

[7)

(8)

II.

(1)

(2)

(3)

(4)

Technology-Oriented

Objectives Million $

Screening for hazardous

agents . . . . . . . . . . . . . . . . . . . . .

Fate metabolism of

hazardous agents . . . . . . . . . .

Pathophysiological effects

including respiratory

taxicology . . . . . . . . . . . . . . . . .

Carcinogenesis . . . . . . . . . . . . . .

Mutagenesis and developmental effects . . . . . . . . . . . . .

Molecular and cellular

mechanisms . . . . . . . . . . . . . . .

Recovery from and treatment

of pollutant-induced health

effects . . . . . . . . . . . . . . . . . . . . .

Epidemiological studies . . . . . .

SUBTOTAL OF I . . . . . . . . . . . .

Supporting Research

Research on critical

organ systems of response .

Improved bioassay

screening system . . . . . . . . . .

Genetic research . . . . . . . . . . . . .

Molecular and

1.9

0.9

3.3

1.3

1.5

4,0

1,0

2.0

15.9

Million $

3.0

2.4

1.3

cellular studies . . . . . . . . . . . . 9.9

SUBTOTAL OF 11 . . . . . . . . . . . 16.6

From the program description, the following

issues have been identified:

(1) Selection of Pollutants: It is not clear which

pollutants will be evaluated under the

various research approaches listed above.

High temperature combustion processes

using most fess i 1 fuels result in widespread

population exposure to sulfur and nitrogen

oxides, while exposure t o polycyclic

hydrocarbons, generally associated with

cancer induction will be more 1 i m i ted to

relatively small occupational groups, Low

temperature combustion reverses this

pattern. In general, emissions of heavy and

trace metals from energy sources tend to add

(2)

(3)

(4)

relatively small increments to population

exposures, whereas food chains and water

present much larger avenues of exposure.

Research on medical treatment: The ERDA

health program includes research on medical

treatment, that is, methods to remove metals

from the body or to detoxify chemicals in the

body. The rat ion ale forth is research program

in an agency whose mission is the development of energy technology is unclear.

Recovery and treatment may be inherently

outside the scope of ERDA’s health research

responsibilities.

Epidemiological studies: Animal models

have been notoriously ineffective in predicting human response to long-term low levels

of hazardous agents, particularly thos e

associated with chronic degenerative noncancerous diseases such as coronary heart

disease, emphysema, bronchi t is, and

arthritis. Air pollution studies have shown

tha t elderly person s which chroni c

degenerative diseases are among the most

succeptible segments of the population with

respect to community levels of air pollutants.

These findings were derived through extensive epidemiological investigations; primary

air quality standards are largely based on

epidemiological information. Since animal

models of chronic degenerative diseases will

probably not be developed in the near-term, it

appears that ERDA’s health program would

be enhanced by placing considerable y greater

emphasis on systematic epidemiological

research on population and occupational

exposure to fossil fuel pollutants.

Screening for hazardous agents: ERDA has

programmed $1.9 million for systematic

biological screening of hazardous agents in

process streams and effluents from various

fossil fuel energy technologies, and another

$2.4 million to improve methods of detection

and monitoring for damage to human populations. A large portion of the $1.9 million

systematic screening effort is devoted to

screening for mutagenic and carcinogenic

agents. This program is smal1 relative to the

number of pollutants associated with fossil

fuel technologies. TO date, most of the

recognized adverse human responses t o

fossil fuel pollutants have been noncancerous. Many more insidious potential

CHAPTER VI 237
hazards are known to exist. Sulfur and

nitrogen oxides have exerted their primary

effects on respiratory airways and lung

tissue in the form of causing or contributing

to the development of acute and chronic

respiratory diseases, including asthma,

bronchitis, and emphysema. How ERDA

proposes to incorporate these known and

potential adverse health effects into its

systematic screening program is unclear.

(5) Pathophysiological Effects Includin g

Respiratory Toxicology: This program is

largely designed to obtain dose-effec t

relationships from toxicological studies on

animals. Inhalation studies will be emphasized. How the dose-effect data obtained from

animal studies will be extrapolated to man,

so that the information can be used to control

or restrict emissions from a given fossil fuel

technology, is unclear,

238 CHAPTER VI
13. Inadequate Inventory of Skills and Techniques in

Health Effects Research

ISSUE

Means are not available to estimate effects of coal combustion and conversion

on human health. A broad-based research effort, in both university and Federal

facilities, is critically required to develop improved techniques for evaluation of

health impacts from coal combustion and conversion.

SUMMARY

The Health Studies Section of ERDA-48, volume II, emphasizes research in the

area of longterm effects of coal-related pollutants. This emphasis on cancer and

birth defects is most appropriate, since coal-related pollutants are known

carcinogens and mutagens. The program, however, appears to stress traditional

long-term animal experimentation. This approach cannot yield relevant data in

time for decisions about national energy prerogatives. The program also suggests

the use of recent research developments in the field of animal cell genetic assays.

These show great promise as relevant bioassay systems and should receive greater

emphasis. An intensive broad-based effort should be used in both data acquisition

and innovative fundamental research. A significant increase in both the scope of

the related ERDA research organization and the university production of trained

researchers will be needed to meet the research program requirements.

QUESTION

What plans does ERDA have to stimulate the activities; especially in the fields of mamavailability of trained researchers with skills malian genetics and cell biology?

other than those represented by former AEC

BACKGROUND

The primary public health justification

presented in ERDA-48 for research in the area of

coal-related pollutants is damage to skin and

respiratory systems. The probability of “secondary site for damage” for latent diseases, such as

cancer and birth defects, is mentioned but not “

emphasized. Emissions from all steps of coal

processing release known lipid-soluble cancerproducing substances which are readily diffused

across membrane barriers.

No data is available regarding the effects of

coal-related pollution on human cancer and birth

defects. There is in the public health research

area a strong historical preoccupation with

respiratory dysfunction. However, if the appropriate criteria for establishing priorities

encompass severity and magnitude of effects and

the urgency of information acquisition, the

strong emphasis on respiratory disease over the

more insidious (but later appearing) effects, such

CHAPTER VI 239
——

as cancer and congenital disorders, is difficult to

understand. The reorientation of preexisting

AEC programs to the study of coal-related

pollutants implies that this step will give ERDA

the technical competency required. No misconception could be more damaging to ERDA’s

health research effort than to assume the

presence of adequate scientific manpower in preexisting facilities. The most careful scientific

review of the “reorientation” process should be

carried out by non-ERDA oncologists (cancer

researchers) and geneticists to identify areas of

competence and suggest which areas must be

implemented by university or other Federal

laboratories. This point is doubly important

because the “retraining” process may delay the

necessary health assessments and will certainly

prevent the rapid entry of young researchers

because of the priority accorded to existing

laboratories. In addition to the redirection of

current research personnel, a significant increase

in the training of new researchers through the

university systems would appea r to be

necessary. The training process using current

university facilities will require the better part of

a decade to implement and will take a realistic

specification by ERDA of the manpower needs

and the desired university response through the

1980’s.

As an example, the study of enzymatic react ions involved i n metabolizing aromatic

polycyclic hydrocarbons to powerful cancercausing species is not represented in present

ERDA facilities. However, strong programs in

this area exist a t McArdle Laboratory,

Rockefeller University, MIT, and La Roche

Laboratories, which could contribute to the

necessary studies. The pattern of this example is

repeated in other specific research areas.

The Health Studies Section of volume II shows

a strong emphasis on animal studies in t ox -

ecological research on the effects of exposure to

pollutants. The statement that “no mammal is a

sufficient model for man” is a well-documented

toxicological fact won by decades of comparative

studies in drug metabolism and DNA repair. The

stated intent in the ERDA program to add several

admittedly inappropriate studies of nonhuman

species in order to gain data relevant to man is

clearly illogical as well as expensive.

This traditional toxicological emphasis is

inappropriate in a program demanding relevant

data for a large number of coal-linked pollutants

acting singly and in concert. The data from whole

animal studies simply would not be available in

time to guide decisionmaking in choosing among

the various energy scenarios. Several years are

required for evaluation of single substances

using present FDA procedures. This part of the

proposal seems to be planning research to fit

existing facilities rather than fitting the public

health needs,

To circumvent this difficulty, the encouragement of research in human genetics using the

techniques of cell biology may offer a realistic

solution. This approach is proposed by ERDA,

and reflects well on the breadth of their proposed

research, but its relative importance could be

strengthened in the proposed program.

240 CHAPTER VI
14. Atmospheric Sulfates as a Potential Constraint on

ERDA’s Fossil Fuel Program

ISSUE

Suspected health hazards of atmospheric sulfates may result in air quality

standards which would constrain ERDA’s programs based on coal.

SUMMARY

Questions have been raised concerning whether sulfate concentrations (as an

index of SO2 transformation products) throughout the mid-west and northeast

may presently exceed threshold concentrations for adverse health effects. If

substantiated, this finding would raise serious questions as to the advisability of

introducing any new sources of sulfur oxide emissions into the atmosphere. There

are considerable uncertainties about the concentration and chemical nature of

atmospheric sulfates which are hazardous to health. Improved information on the

relation of toxicity to sulfate concentrations is required to set ambient air quality

standards. If the present fears are supported by scientific findings, standards

could be set which would severely limit further energy development programs

based on coal as a primary fuel, on direct utilization of geothermal resources, and

on approaches to reduce automotive emissions. Immediate and concentrated

attention to this area would help to resolve the existing uncertainties. Some of the

energy goals set by ERDA, if pursued in the absence of the necessary health effects

information on atmospheric transport and transformation of sulfates, may not

represent an achievable objective.

QUESTIONS

1. What priority has ERDA set on resolution of 3. What is the perceived need for funds to

the unanswered questions concerning sulfate achieve the earliest possible resolution of

reactions and transport in the atmosphere unanswered questions concerning sulfates,

and consequent levels of health hazards? relative to the present funding level in ERDA

2. What is the status of cooperative efforts and elsewhere?

between ERDA, EPA, and other agencies 4. How would a moratorium on additional input

involved in sulfates research? of sulfur-bearing compounds to the atmosphere from new facilities affect the

ERDA Plan?

BACKGROUND

Sulfur dioxide has long been recognized as a be controlled nationwide. Sulfur dioxide was one

pollutant of major concern, and has been singled of the first pollutants for which national ambient

out as one of the air pollutants most necessary to air quality standards were established, A conCHAPTER VI 241
certed effort was carried on from 1970 to the

present to substitute low sulfur fuels for high

sulfur coal and fuel oil. Significant reductions in

sulfur dioxide emissions were achieved.

When the air quality standard for sulfur

dioxide was established, it was generally

recognized that SO2 was an index for the class of

pollutants emitted largely by fossil fueled power

plants. Particularly in the animal toxicological

e

ffects area, SO2 gas alone did not appear to have

great toxic potential at ambient or near-ambient

levels. Yet epidemiological studies revealed

significant correlations between ambient SO2

levels and adverse health effects.

The resolution of this contradictory evidence

was first suggested in the toxicological studies of

Dr. Mary Amdur, who showed that sulfuric acid,

ferric sulfate, zinc ammonium sulfate, and other

oxidation products of S02 caused an irritant

response in guinea pig lungs at much lower

concentrations (20 to 100-fold” lower) than SO2

gas alone. Further, the irritant potency of SO2 gas

was increased 3- to 4-fold in the presence of high

humidity, suggesting that the conversion of SO2

to sulfuric acid aerosol greatly enhanced the

biological reactivity of the sulfur oxides. These

experimental findings have been confirmed by

others.

These animal studies are supported b y

preliminary epidemiological results obtained

from EPA’s CHESS program. Among the various

air pollutants measured, including SO2

, total

particulate, NO2 and suspended sulfates, concentrate ions of the latter group of atmospheric

pollutants were associated with daily aggravat ion of asthma and of cardiopulmonary disease in

the various study areas. Daily concentration of

S O2 and total particulate did not reveal a

pattern of increased symptoms with higher

atmospheric concentrations of these substances.

The association of adverse health effects with

suspended sulfates was tentatively shown even

in communities where existing primary air

quality standards for SO2 and total particulate

were met,

There is growing recognition that the existing

air quality standard for sulfur dioxide is inadequate, What is needed is formulation of air

quality standards for the atmospheric transformation products of SO2

. As a scientific basis for

this standard, a better understanding of the

atmospheric chemistry of S0 2 transformation

products is necessary, as is the ability to measure

these specific products in the ambient air.

Further, the relative toxicities of these transformation products will have to be assessed in order

to determine which are more hazardous to health.

These findings should be substantiated in

systematic human epidemiological studies.

These investigations require the ability to

generate specific sulfur oxide compounds for

study and the ability to measure their concentrations in the ambient air. Finally, it is necessary

to elucidate the atmospheric factors that affect

the rate of transformation of SO2 into mor e

biologically reactive compounds.

A concerted research program of health and

environmental studies of atmospheric sulfur

oxides could produce the basic, though minimum,

amount o f health information within three years.

The National Academy of Sciences pointed out

that “improving the available information about

these aspects of sulfur emissions has an expected

value on the order of hundreds of millions of

dollars a year” (Air Quality and Stationary

Source Emission Control, a report by the Commission o n Natural Resources, National

Academy of Sciences, prepared for the Committee on Public Works, U.S. Senate, Serial No. 94-4,

March, 1975, p. xxxvii).

242 CHAPTER VI
To gain a broader concensus than is achievable

by physical panel participation alone, OTA

contacted a group of organizations with a request

that appropriate personnel review and critique

the ERDA-48 volumes I and 11. The list of

organizations as shown in Table 1 was chosen to

represent both a spectrum of interests and a

ATTACHMENT I

OUTSIDE CRITIQUES

variety of expertise in the broad subject area, and

to complement those capabilities presented on

the working panels.

Of those contacted, the organizations marked

by asterisk were able to participate. Their

contributions follow in alphabetical order by

organization, without OTA comment.

TABLE 1

Organizations Contacted for Review of ERDA-48, Volumes I and II

*American Gas Association

1515 Wilson Boulevard

Arlington, Virginia 22209

American Petroleum Institute

1801 K Street, NW.

Washington, D.C. 20006

*American Public Power Assoc.

2500 Virginia Avenue, N.W.

Washington, D.C. 20037

Babcock & Wilcox

Post Office Box 1260

Lynchburg, Virginia 24505

*Building and Construction Trades Dept.

AFL-CIO

815 16th Street, N.W.

Washington, D.C. 20006

Coal Research Bureau

University o! West Virginia

Morgan town. West Virginia 26505

Coal Research Program

Garrett Research & Development Co.

1855 Cassion Road

La Verne, California 91750

(Combustion Engineering, Inc.

1000 Prospect Hill Road

Windsor, Connecticut 06095

*Consumer Federation of America

1012 14th Street, N.W.

Washington, D.C. 20004

*Edison Electric Institute

90 Park Avenue

New York, New York 10016

*Environmental Defense Fund

1525 18th Street, N.W.

Washington, D.C. 20036

Environmental Quality Laboratory

California Institute of Technology

Pasadena, California 91109

Geological Society of America

3300 Penrose Place

Boulder. Colorado 80302

Institute for Government Research

University of Arizona

Tucson, Arizona 85721

*Institute of Gas Technology

3423 S. State Street

Chicago, Illinois 60616

Lake Powell Research Project

Dept. of Planetary & Space Sciences

University of California

Los Angeles, California 90024

*National Association of Electric Companies

1140 Connecticut Avenue, N.W.

Suite 1010

Washington, D.C. 20036

National Gas Association

1130 17th Street, N.W.

Washington, D.C. 20036

Scientists’ Institute for Public Information

30 East 68th Street

New York, New York 10021

*Sierra Club

Mills Tower

San Francisco, California 94104

United Mine Workers

900 15th Street, N.W.

Washington, D.C. 20005

United Nations Association of the USA

345 E 46th Street

New York, New York 10003

Union of Concerned Scientists

P. C). BOX 289

MIT Branch Station

Cambridge, Massachusetts 02139

ATTACHMENT I 243
AGA American Gas

Association

F. Donald Hart

President

1515 Wilson Boulevard , Arlington. Va 22209

Telephone (703) 5242000

July 21, 197 5

Mr. Emilio Q. Daddario

Directo r

Office of Technology Assessment

Congress of the United States

Washington, D. C. 20510

Dear Mr. Daddario:

The American Gas Association, representing over 300

natural gas pipeline and utility companies which serves

the public with one-third of its energy needs, appreciates that it was offered the opportunity to review

and comment on the first National Energy Plan developed

by ERDA. Volumes I and II are very comprehensive documents which reflect the major effort required for their

complication.

In view of the thorough treatment given electric and

nuclear-electric in Volume I, the Plan, and the draft

of Volume II, Program Implementation, we were extremely

disappointed that a major energy source like natural gas,

upon which this country depends so heavily, has essentially

been written off in the long-term. Certainly, enhanced

recovery of oil and gas, conversion of coal and oil shale

to oil and gas, conversion of waste materials to oil and

gas, improving efficiencies in the residential, commercial,

and industrial areas, and the use of the fuel cell and

solar heating and cooling will provide natural gas and

synthetic natural gas for the near and mid-term and extend

gaseous fuels into the long-term.

There are two major opportunities to develop gaseous fuels

which could easily provide all of the gaseous fuel requirements in the long term and offer a choice of fuels to the

American people. In addition to offering a fuel choice,

ATTACHMENT I 245

60-411 0 - 75 - 17
Page 2

Mr. Emilio Q. Daddario

July 21, 1975

these developments would prevent the wasting of billions

of dollars in capital equipment now in place as well as

saving the tremendous quantity of energy that would be

required to provide other equipment for its replacement.

The first of these opportunities is the production of

methane from marine and terrestrial biomass. This can be

accomplished by the production of seaweeds, trees, and

grasses (which are the most efficient solar converters

known) , harvesting and bioconversion of these raw materials

to methane. The feasibility of these processes has already

been proven. Engineering details must be worked out a n d

proven on the pilot and demonstration plant scales. With

the proper effort, this can be accomplished by 1990.

The second major opportunity for gaseous fuel is the

hydrogen energy system. Hydrogen can have a major impact

as a special purpose fuel, which could lead to a base

load energy form in the future. Research is needed in the

large scale production (both electrolytic and thermochemical)

transmission, storage, distribution and utilization of

hydrogen. ERDA should play a major role in this development.

The American Gas Association and its member companies stand

ready to cooperate with and assist ERDA in developing and

implementing this Energy Plan which is so vital to the well

being of this country.

Sincerely,

F. Donald Hart

FDH/sls ,

246 ATTACHMENT
REVIEW OF

A National Plan for Energy Research,

Development and Demonstration

GENERAL COMMENTS

Volume I, The Plan , and the draft of Volume II ,

Program Implementation , are comprehensive documents

which form a good basis for critical review . At th e

outset , the major criticism and problem with the over –

all plan is that it clearly focuses long term wise

on electric and nuclear-electric as the only source

of energy. This is contradictory to the statement on

Page one of the Summary, which states “To overcome this

(the energy) problem and to achieve our National policy

goals, the Nation must have the flexibility of a broad

range of energy choices.”

Natural gas and synthetic natural gas are addressed

in the near and mid-term priorities, but not comprehensively and clearly not to the extent that electric and

nuclear are considered. The production of methane from

biomass and hydrogen from water by electrolysis have both

been proven feasible. A well–planned, high priority

research program could demonstrate both of these technol–

ogies in the mid-term and insure all of our gaseous fuel

needs for the long-term. Hydrogen is a near perfect fuel

which can have a major impact as a special purpose fuel

and, in the future, it has the possibility of becoming a

base load energy commodity. The Plan should address hydro–

gen as a separate major subject with the title, “A Hydrogen

Energy System.” This hydrogen system would include pro–

duction, storage, transmission, distribution and utilization.

We certainly hope that the first revision of the Plan will

place natural gas, gas from coal and oil shale, methane from

marine and terrestrial biomass and hydrogen from seawater

in the proper perspective. The heavy dependence of this

Nation on natural gas (provides one-third of all the energy

used, over one–half of all industrial energy, and is over

40% of all energy produced in this country) demands that it

be placed on the highest priority in all categories.

ATTACHMENT I 247

The Government has done little, if any, research in

gaseous fuels (except gas from coal) , particularly in the

transmission, distribution and utilization areas. The draft

of Volume II of the Plan attempts to address these subjects,

but it is obvious that little is known about the problems,
. .

research needs, and technical approach. The gas industry

would welcome support from ERDA, either separately or cooperatively, in solving these problems. We would also be

pleased to discuss the overall situation and to provide

recommendations for revision of the Plan and its Implementation.

The American Gas Association and/or its member

companies are currently working cooperatively with ERDA

on high–Btu gas from coal, hydrogen from coal, methane

from marine biomass, enhanced gas recovery, and clean

‘boiler fuel. These research areas need expanding and

accelerating. Additional research areas for cooperative

research between the gas industry and ERDA include, but

are not limited to, gas from oil shale; methane from

terrestrial biomass; hydrogen from seawater by both electrolysis and thermochemistry; storage, transmission and

distribution of gas; improved efficiencies of residential

and commercial appliances; improved efficiency of industrial processes; the fuel cell; solar heat and cool; waste

heat utilization, etc.

The following are specific comments on Volumes I and

II in the order of their presentation.

-2-

248 ATTACHMENT I
Volume I

SUMMARY

\

1. Figure 2, Page S-2, shows the Remaining Recoverable

Projected Domestic Natural Gas Production to be 750 TCF

after 1974. The U. S. Geological Survey referred to in

the first sentence on Page S–2, states the following:

237 TCF Proved

202 TCF Inferred

Range 322 – 655 TCF Undiscovered Recoverable Resources

761 -1094 TCF Total Range

If the mean of the Undiscovered Recoverable Resource s

is calculated , then the above figures become :

237 TCF Proved

686 TCF Mean of Undiscovered + Inferred

923 TCF Remaining Recoverable After 1974

The report should use the Total Range 761 - 1094 TCF

or the Mean 923 TCF instead of 750 TCF.

If the Mean is used, then the figures in Figure 2,

Page s-2, become:

Old New

750 TCF 923 TCF

250 TCF 250 TCF

1000 TCF 1173 TCF

2. In Figure 3, Page S-3, shows the Available Energy in

1015Btu) for Gas to be 1030 quads. This is based on

the 1000 TCF shown in Figure 2, Page S-2. If the new Mean

of 1173 is used instead of 1000, then 1030 quads in Figure

3 becomes 1208 quads.

3 . On Page s-4 unde r “ALL THE NATIONAL ENERGY TECHNOLOGY

GOALS MUST BE PURSUED TOGETHER. CONCENTRATION ON ONLY ONE

OR A FEW TECHNOLOGICAL AVENUES IS NOT LIKELY TO SOLVE THE

ENERGY PROBLEM” a number of strategies are advanced with

primary national emphasis in three areas.

We agree that the first primary interest should be

reduction of energy waste and inefficiencies.

-3-

ATTACHMENT I 249
We agree that the second primary interest should be on

the production of synthetic gas from coal and oil shale .

We .do not— agree that the third should be shifting from

gas and petroleum to electricity. We believe that from the

Gas Industry point of view the third emphasis should be on

the production of methane from marine and land biomass and

on the production of hydrogen from seawater by both electrolysis and thermochemical means. The gas industry and its

customers have billions of dollars invested in capital plant

equipment which must not be wasted. In order to provide the

gas industry’s customers and the nation with energy at the

lowest possible cost demands the development of the inexhaustible resources of methane from biomass and hydrogen from

seawater. Therefore, Scenario II on Page S–4 should read,

synthetics from coal, oil shale, and biomass consistent with

Table 4-3 on Page IV 5, and Scenario III on Page S–5 should

be methane from biomass, hydrogen from water, and Improved

electrification and Figure 5, Page 3–5 should be changed to

be consistent with above.

4. On Page S–6, for the long-term (past 2000), the total

emphasis is on nuclear and electricity. The obvious technologies which should be pursued vigorously and which could

be demonstrated in the 1985-1990 period, become commercial

1990-2000 and supply huge quantities of energy beyond 2000

are methane produced from both marine and land biomass and

hydrogen produced from seawater by electrolysis and/or

thermochemical process using nuclear or solar heat. These

should also be stated along with the solar electric approach

in the “inexhaustible” resource technologies to be given high

priority in the fourth item under major changes on Page s-7.

5. Near term efficiency (conservation) technologies in

Table 3 should include the Fuel Cell.

6. On Page S-7, Table 5 should include the following:

1. Materials Research - (Materials (both metals and

ceramics) testing, evaluation, data accumulation,

and alloy development is urgently needed for

construction of coal gasification and liquefaction

plants.)

2. Component Development - (Many components required

in commercial scale coal conversion plants have

never been designed, built and tested in the very

large sizes required.)

-4-

250 ATTACHMENT I
7. Page S–8, Implementation of the National Plan, states

that, “As a given technology approaches commercialization, the

role of the private sector will be paramount” and “Play the

major role (financially and technically) in large demon–

stration and near-commercial projects.” Certain segments of

industry, such as a regulated industry, cannot raise the

required funds or assume the financial risks in the high–

risk demonstration and near–commercial plants . The Federa l

Government must play the lead role and assume the financial

risks to demonstrate and prove to industry and the financial

community that the very large, high temperature, high pressure

systems for the conversion of coal to synthetic natural gas

can be built and will operate as designed and produce synthetic

gas, interchangeable with natural gas, on a consistent, reli–

able basis.

8. Figure 2–2, Page II–2, Remaining Recoverable After 1974

should be changed from 750 TCF to 923 TCF and from 1000 TCF

to 1173 TCF consistent with 1. above.

9. Table 2–1, Page II–3, Resource Natural Gas, to be consistent with 1. above, change 750 TCF to 923 TCF and 775

quads to 950 quads.

10. Figure 2-3, Page II–4, change 1030 quads of gas to 1208

quads consistent with 2. above.

11. On Page IV-1, change Scenario III to read, methane from

biomass, hydrogen from water, and improved electrification,

consistent with 3. above.

12. Scenario III, should read methane from biomass, hydrogen

from water, and improved electrification consistent with 3.

above.

13. Figure 5–1, Page v–2, and Figures 5-2 and 5–3, Page V-3,

Figure 5–4, Page V-4, and Figure 5-5, Page v-5, should be

changed consistent with 3. above. Also, the text in Chapter

V does not include importance of methane from biomass and

hydrogen from seawater.

14. Text on Page VI-1, under important near–term areas for

I conservation should include the fuel cell.

ATTACHMENT 251

15. Page VI-2, Table 6–1, Goal VI, should include the fuel

cell.

-5-
16. Page VI–2, Table 6–1, Goal V, Hydrogen in Energy Systems,

R, D&D status, should read Lab instead of study. The American

Gas Association and others are actively engaged in laboratory

investigations of thermochemical cycles for the production

of hydrogen, and others are actively engaged in improving

electrolytic decomposition of water.

17. Table 6-2, Page VI–3, should be changed consistent with

4. above. Also, text concerning biomass and hydrogen, last

paragraph under Developing Other Important Technologies, Page

VI-3, should be moved to Page VI–2, Inexhaustible Energy

Sources. The production, harvesting and bio–conversion of

marine biomass to methane is being actively pursued in both

laboratory and deep ocean experiments by the American Gas

Association and ERDA. Hydrogen status as in 16. above.

18. Table 6-3, Page VI-4, should include Materials Researc h

and Component Development consistent with 6. above .

19. Page VII-1, Rationale for a Federal Role in R, D&D,

should appropriately include the statement that the huge

amounts of funds required and the high-risks involved in

the development and demonstration of these new technologies

involved go far beyond what industry has ever conducted on

its own or is capable of doing now and demands major Federal

Government support to solve the energy crisis.

20. Page 20, The Private Sector Role, should be changed

consistent with 7. above.

21. Page VIII-2, Oil Shale. Limiting oil shale research

to In-Situ is not consistent with the major changes described

on Page S-7, “Acceleration of commercial capability to extract

gaseous and liquid fuels from coal and shale.” The development, demonstration, and commercialization of the Hydrogasification of Oil Shale to Oil and Gas can be initiated and

completed much more rapidly than In-Situ.

22. Gaseous and Liquid Fuels from Coal. The objective and

approach is not consistent with the two–pronged effort

described under “Acceleration of Commercial Capability to

Extract Gaseous and Liquid Fuels from Coal and Shale,” i.e.,

“Existing technology must be implemented as soon as possible

to gain needed experience with large scale synthetic fuel

production.” Existing commercial coal gasification technology

requires design modifications which must be tested and demonstrated in this country on American Coals. This is the

-6-

252 ATTACHMENT I
fastest way of obtaining commercial quantities of synthetic

gas from coal.

23. Chapter VIII – Summary of Federal Program Implementation

does not, and should, include the production of hydrogen by

electrolytic or thermochemical process using nuclear or

solar heat. This is a major technology which is not addressed

in the Plan and is not consistent with, “... the Nation must

have the flexibility of a broad range of energy choices.”

-7-

ATTACHMENT I 253
Volume II

The following comments are addressed to the Items

indicated and are in the order of presentation in Volume

II.

Advanced Research and Supportinq Technology

A research program on testing and evaluation of metals

and ceramics is underway. This program should be expanded

as rapidly as possible. Special alloy development programs

should be initiated as soon as possible.

Second generation commercial coal gasification plants

requiring large size, high pressure, high temperature

components cannot be built today because these components

do not exist. A program must begin immediately to design,

build, and test such components.

Demonstration Plant s

A goal of one high-Btu gas demonstration plant is insufficient and shortsighted. Every effort should be made

to demonstrate on a commercial-size scale all processes

that are competitive and successful on the pilot plant scale.

The demonstration plant schedule is far too long

based on the critical need for supplemental gas. If the

preliminary design step were eliminated and an all-out effort

made in detail design and construction, the 10-11 year

schedule could be cut to 6-7 years. If internal procedures

within ERDA were changed, the time required for proposal

evaluation and contracting could be cut from 1-2 years to

3 months.

Competitive proposal procedures is not the optimum

proper technique to make this country energy independent in

the fastest possible time. Major Government funding of

acceptable technical proposals would greatly speed up the

process.

Enhanced Oil and Gas Recovery

We are pleased that recognition has been given to stimulation of tight natural gas formations, however, greatly

increased levels of expenditures are entirely in order, in

view of the natural gas shortage. The Benonian shale forma-

–8-

254 ATTACHMENT I
tion covering bare sections of Appalachia contain reserves

surpassing present proven U. S. reserves, however, stimu–

lation techniques must be developed and demonstrated to

produce this gas. ERDA support is particularly important

as the preponderance of drilling activity in that region

is conducted by small companies with limited technology

and financial resources. In view of the cost, chance of

success, total potential, and time required for commercial

adaptation, this is one of the most attractive alternatives

available to ERDA.

Pipeline Gas

An excellent program which should continue to receive

the highest priority. The technological problems are greater

than shown in the report. The C F Braun & Co, Technical

Evaluation Contractor for the Joint ERDA/A.G.A. Coal Gasification Pilot Plant Research Program issued a report entitled,

“Mechanical Development Recommendations for Commercial Scale

Coal Gasification Plants” on October 15, 1973 which recommends

research required to insure the availability of components and

processes for commercial scale coal gasification plants. We

recommend that ERDA review and implement this report.

Low Btu Gas

The low Btu gas program appears to be limited to less

than 200 Btu/cubic foot for boiler feed. One very large

segment requiring tremendous quantities of gas is the lndus–

trial market which requires gas in the 300-500 Btu/CF range.

This subject should be addressed as a separate and distinct

problem.

In-Situ Gasification

We recommend that ERDA fund the Lawrence Livermore

Laboratory in-situ coal gasification process to determine the

technical and economic feasibility of the process and to

demonstrate it on a commercial scale if successful. This

process can produce pipeline quality gas which is so urgently

needed.

Oil Shale

Limiting oil shale research in the plan to In-Situ is

-9-

ATTACHMENT 1 255
not consistent with the major changes described on Page 3-7

in the plan Summary, “Acceleration of commercial capability

to extract gaseous and liquid fuels from coal and shale.”

Above ground retorting needs research. The development,

demonstration, and commercialization of the Hydrogasification

of Oil Shale to Oil and Gas can be completed within the

near term. In-Situ, if ever successful, will require many

years.

Fuels From Biomass

The marine biomass, which is the most efficient solar

converter, can proceed at least as rapidly, if not faster,

than terrestrial biomass with the proper support from ERDA.

A 7-acre experimental farm just off San Clemente Island

60 miles west of San Diego has already proven that giant

California kelp can be transplanted, grown, and reproduced

on an anchored structure made of polypropylene rope at a

depth of 40 feet in 350 feet of water. In addition, juvenile

kelp has been successfully grown in the laboratory in water

obtained from 1000 feet in the deep ocean. The California

kelp is harvested commercially by specially designed ships,

such as the Kelco Co. in San Diego. The kelp will produce

methane naturally when out of water, and methane has been

successfully produced in the laboratory from this kelp.

With proper ERDA support, this process can be engineered

through the pilot and demonstration phases very rapidly.

Given appropriate attention and priority, we believe that

the marine farm concept can fulfill all of our gaseous energy

requirements in the future.

Solar Heating and Cooling

Since low cost, high reliability and long life solar

components do not exist, the major emphasis should be placed

on their development in the shortest period of time instead

of demonstration of components which will not fulfill the

need.

Technology Utilization and Information Dissemination

One of the problems associated with information dissem–

ination which was not mentioned is inherently associated with

the development of hardware by potential solar energy-related

-1o256 ATTACHMENT I
equipment suppliers. Proprietary positions will be sought

which will delay dissemination of new information. Elimination of the proprietary positions will slow the development of hardware.

Conservation in Buildings and Consumer Products

Objectives

Under near term to 1985, a 20% reduction in energy

consumption in existing buildings is the goal, and a 30%

reduction in new buildings. There is no base structure

defined which is to be modified for the consumption

reduction. One might assume that the base case is the

“state–of-the-art” building envelope .

A major effort has been made by ASHRAE in development

of Standard 90. If this Standard is implemented by legisla -

tive action , the 30% reduction in energy consumption migh t

be demonstrated daily . This amplifies the need for a

typical base case. The magnitude of the technological

challenge is not apparent in the objectives due to rapidly

changing building practices.

Community Systems

Problems

The first technological problem listed is the development of more efficient components, subsystems, and total

systems which utilize fuels other than natural gas and fuel

oil. While this may represent specific fuel preservation,

it might not necessarily promote energy conservation.

Consumer Products

The American Gas Association has been conducting research

in improving the efficiencies of all types of residential

and commercial appliances for many years. We would appreciate

the opportunity to discuss this entire subject with ERDA

personnel and assist by providing material for preparation

of the next Plan and cooperate in the Plan’s implementation.

Energy Storaqe

For some mysterious reason under Wind Energy Conversion,

the plan suggests electrolyzing water to produce hydrogen for

ATTACHMENT I 257

-11-

60-411 0 -75 - 18
on-site fertilizer manufacturing. In this Energy Storage

section, the plan is to develop hydride and other hydrogen

storage devices. In another section a Hydrogen Energy

System is mentioned but not defined and implemented.

Hydrogen is a near perfect fuel which can have a

major impact as a special purpose fuel and in the future

it has the possibility of becoming a base load energy

commodity. The first major problem is the economical production of hydrogen on a large scale. Two methods for this

production, electrolysis and thermochemical, have been proposed. Hydrogen production by these technologies could

utilize either nuclear or solar heat or electricity. Both

should be vigorously pursued. The plan does not address

this problem. Further, the plan does not consider a

hydrogen energy system of the future involving production,

transmission, storage, distribution, and utilization. This

should be a major section in the next plan.

Industrial Energy Efficiency

The American Gas Association has been making studies

and performing experimental projects on a commercial scale

for several years on improving industrial process efficiencies.

We would welcome the cooperative support of ERDA. We urge

cooperative implementation of projects in the next Plan.

-12-

258 ATTACHMENT I
ROBERT A. GEORGINE, president

PETER FOSCO, Ist Vice President

JOHN H. LYONS, 2nd Vice President

HUNTER P. WHARTON, 3rd Vice President

THOMAS F. MURPHY, 4th Vice President

S. FRANK RAFTERY, 5th Vice President

CHARLES H. PILLARD, 6th Vice President

JOSEPH T. POWER, 7th Vice President

HAROLD J. BUOY, 8th Vice Presiden t

MARTIN J. WARD, 9th Vice President

WILLIAM SIDELL, 10th Vice President

AMERICAN FEDERATION OF LABOR — CONGRESS OF INDUSTRIAL ORGANIZATIONS

815 SIXTEENTH ST., N. W., Suite 603 ● WASHINGTON, D. C. 20006

(202) Dlstrict 7-1461

~D— --- . . . . .

August 12, 1975 — .—- .

—. —-... — —-._— ~

Mr. Emilio Q. Daddario

Director

Off ice of Technology Assessment

u. S. Congress

Washington, D. C. 20510

Dear Mr. Daddario:

In response to your invitation of June 23, I would like to

.

take this opportunity to convey the views of the Building and

Construction Trades Department, AFL-CIO regarding ERDA’ s National

Plan for Energy Research, Development and Demonstrate ion.

The Building Trades Department, representing 17 affiliated

international unions and 3 1/2 million workers, has taken a vital

interest in energy-related matters. The energy crisis is not

only a crisis for our members in their roles as consumers, but

it is also a crisis for them as workers. It is for this reason

that the Building Trades is pleased to have this opportunity to

offer its comments on ERDA’s comprehensive assessment of this

country’s energy situation.

From the standpoint of the Building Trades, ERDA’s mixed

strategy of necessary options is a realistic and practical evaluation of our worsening energy situation. We have long been on record

in support of increasing our energy supplies, particularly through

the increased utilization of coal and nuclear energy, while at

the same time conserving our energy resources. ERDA’s national

plan presents a balanced strategy encompassing this approach.

At the suggestion of your office, the Building Trades would

like to briefly comment on one of several potential constraints

of implementation identified in your report, namely, manpower.

It is true that the proportion of construction labor presently

employed for the erection of energy-related facilities is a small

fraction of the total work force. It is also true that over the

next decade this proportion will rise only slightly. Nevertheless,

we must insure against manpower difficulties arising in the course

of providing badly needed energy-supply facilities.

As stated in ERDA’s report, reliance upon natural market

forces to balance the demand and supply of labor is generally a

ATTACHMENT I
safe strategy. We can count among our 17 affiliated internationals

some of this country’s best manpower training programs. This factor,

coupled with “the dynamic character and mobility of the labor force . . .

[A]nd the lead time anticipated by the Plan” should minimize largescale problems.

However, it is conceivable that regional and local labor force

imbalances might develop. The labor requirements for energy facilities are rapidly escalating. Our estimates now show that each

1000 megawatt nuclear plant alone requires a peak construction site

work force of 2,000 to 3,000 workers. Because of the large componen t

of skilled labor required of these projects, certain areas of th e

country might have labor shortfalls .

The trend towards energy parks and more isolated sites in

power plant siting will only compound these difficulties.

We view these shortages as unnecessary. With the proper

planning and forecasting, the industry and the building trades

in particular, would be more than able to supply any manpower

needs. We would like to suggest that the possibility be explored

of developing regional information systems on impending construction.

Knowledge of a region’s construction schedule would enable local

unions to gauge their apprenticeship programs to expected demand.

We don’t want to see our unions involved in training programs

created in the wake of energy hysteria which are unnecessary and

superfluous.

The chief obstacle to compiling such a system will be the

fact that manpower demand in a region will not simply be a function

of upcoming energy projects; it will be a function of all construction. Any information system will have to take account of the

region’s entire construction schedule.

Finally, the Building Trades Department suggests that implementation of any activities designed to meet projected manpower requirements include close consultation with the Building Trades. ERDA’s

description of its manpower development program makes no mention

of the allied building trades. Yet, it is these trades in conjunction with contractors and private sector employers who have spearheaded our industry’s various training programs. We regard this

as a serious omission.

In closing, the Building Trades Department wishes to commend

ERDA on its National Plan. Hopefully, the Plan is truly a blueprint for our future energy well-being.

With best wishes, I am

RAG/lr

260 ATTACHMENT I
1012 14th STREET, N.W. ●

LEE C. WHITE, CHAIRMAN

SUITE 901 ● WASHINGTON, D C 20005 ● (202) 7373732

ELLEN BERMAN DIRECTOR

Mr. Emilio Q. Daddario

Director

Office of Technology Assessment

Senate Annex, 119 D Street, NE

Washington, D. C. 20510

Dear Mr. Daddario:

Actio n .-—, -

-- --

— ----- - -

— —-—- -- -

.

1 have had a chance to review briefly the recent Energy Research

and Development Administration report, and have some comments that

I hope will be helpful. Although it is obviously an ambitious

effort, it does not adequately encompass several important issues.

Recognizing the inherent difficulties in developing a comprehensive

and positive energy program, Congress authorized ERDA to survey the

country’s needs and problems. The recently released report details

many of the numerous difficulties which lie ahead. The stated

solutions, however, merely reinforce our deepest concerns without

necessarily providing a direction or, for that matter, much hope.

Reflecting the residual influence of the old Atomic Energy Commission, ERDA emphasizes nuclear reactors and describes high hopes

for fast-breeder reactors. However, the same pages containing these

aspirations bear disclaimers that reactors are terribly intricate

and cannot possibly be completed until the next century. Nevertheless, the money recommended for atomic research is astronomically

larger than the amount designated for solar energy research, perhaps

the most available, safest way to solve our energy problems. There

is nothing necessarily wrong with this, but one gets the uncomfortable

feeling that we are not pursuing alternatives at a lusty enough level.

In addition, “environmental restraints” on the potentially hazardous

nuclear energy development are only mentioned in oblique, muted

terms. Although our national security and environmental health

might be at stake as this research develops, ERDA did not find it

necessary to outline precautions. It is nearly inconceivable that

the authors of the ERDA report would believe any new energy research

should go forward without due concern for necessary precautions and

environmental safeguards.

ATTACHMENT I 261
—

Mr. Emilio Q.

July 22, 1975

Page Two

Daddario

Perhaps such oversights--if they are oversights--could be prevented

if consumer-oriented non-governmental advisors were added to ERDA

advisory committees. These programs affect us all, and there should

be a corresponding broad representation in the advice received by

ERDA. And after research is started--nuclear and otherwise--

progress reports should be presented to Congress and to a citizenoversight committee on a regular basis. No such reporting mechanism

is detailed in the ERDA report, although it is of considerable

importance.

The authors of the ERDA report have only discussed the use of waste

materials in terms of environmental control. In fact, the actual

conversion of waste material, including everyday garbage, may provide

a valuable energy resource. This omission may be another indication

of the authors’ bias towards centering energy and energy-related

research around nuclear development.

The ERDA report explains that the development of new resources

will be shared by both the public and private sectors. However,

there is no explanation of the turnover from the government to industry

or for the sharing of original costs. There is no explanation of who

will do original research. No mention is found in the report’s

pages of the need for competition in the research and development

aspects of new energy resources and equipment. Obviously, such

questions must be answered before any plans for development can be

taken seriously.

The task before us is not easy. The establishment of ERDA and its

efforts to map out our future energy needs and programs are basically

encouraging. We hope, however, that some of the above suggestions

will be helpful.

Thank you for the opportunity to comment.

Sincerely,

262 ATTACHMENT I
NATIONAL ASSOCIATION OF ELECTRIC COMPANIE S

SUITE 1010, 1140 CONNECTICUT AVENUE, N W

WASHINGTON. D. C. 2003 6

DAVID R TOL L 2021223.346 0

MANAGING DIRECTOR

AND

GENERAL COUNSE L July 22, 1975

Mr. Emllio Q. Daddario

Directo r

Office of Technology Assessment

Washington, D.C. 20510

Dear Mr. Daddario:

Thank you for your letter of June 23, addresse d

to Mr. Guy Nichols, Chairman of this Association.

We appreciate your invitation to critique th e

two volumes relating to ERDA’s National Plan for Energy

Research, Development and Demonstration.

To present a composite commentary from investor -

owned utilities , we have prepared our comments in collaboration with the Edison Electric Institute in New York City.

Their critique does include our comments and should be

received by you shortly .

Sincerely ,

/

w“ David R. Toll

ATTACHMENT I 263
July 24, 197 5

Thank you for your June 23, 1975 letter which provided

the Edison Electric Institute with the opportunity to submit comments to the Office of Technology Assessment on ERDA’s Energy

Research, Development & Demonstration plans and programs. As the

principal association of the nation’s investor-owned electric

utility companies, EEI is vitally concerned with steps taken by

the Federal government to advance the technology that will insure

an adequate supply of energy for the United States in the years

ahead.

We note that the objective of the review that OTA will

submit to the House Committee on Science and Technology, the

Senate Committee on Interior and Insular Affairs and the Joint

Committee on Atomic Energy is to “identify and discuss those

questions concerning the programs presented by ERDA that are

critical for Congressional attention because they represent unresolved, controversial, or overlooked areas.” Our analysis of the

two ERDA documents has been from this point of view. We fin d

that while the overall ERDA outline is, for the most part, com -

plete and comprehensive, in certain critical respects relating

to the science of generating, transmitting and distributing

electricity, it is unbalanced, out-of-focus and inadequate. EEI

welcomes the opportunity to have its views on these crucial weaknesses included in the OTA review that will be called to the

attention of key legislative bodies.

EEI commends ERDA for its comprehensive analysis of

the country’s energy situation and outlook that has resulted in

the “National Plan for Energy Research, Development & Demonstration:

Creating Energy Choices for the Future.” The significance of this

undertaking is even more noteworthy in view of the fact that it

has been formulated in the absence of a strong, coherent national

energy policy. In lieu of such basic policy, we endorse the soundness of the five “national policy goals” used as a focus for the

ERDA program.

264 ATTACHMENT I
Mr Emilio Q Daddario - 2 - July 24, 1975

We also support ERDA’s intention of insuring that its

national energy RD&D plan is kept responsive to changing needs

and conditions. This would be done by periodic up-dating of the

initial plan. We take this occasion to suggest that through the

Electric Power Research Institute an electric utility industry

advisory group of high technical management level representatives

be organized to work with ERDA on a continuing basis. Similar

groups from other industries may also be of assistance. Without

strong and active industry involvement, technology assessments

and planning guides will tend to be out of touch with reality.

EEI does not agree with the general tone of ERDA’s

Volume I in one important respect. While recognizing the country’s

need for Liquid Metal Fast Breeder Reactor (LMFBR) technology to

permit the use of an essentially inexhaustible resource, ERDA

appears to de-emphasize the priority assigned to the development

of this concept. Chapter VI of Volume I classifies the LMFBR concept along with solar-electric generation and controlled nuclear

fusion as technologies whose potential contribution to the nation’s

energy supply will occur in the year 2000 and beyond. The prospect

for the LMFBR is underestimated. ERDA’s Experimental Breeder

Reactor II has logged more than ten years of successful operation,

and breeder reactor technology is clearly established.

As the Edison Electric Institute has pointed out repeatedly before Congressional committees and other government bodies,

there is no single energy related research effort that holds

greater promise for insuring adequate reliable electricity supply

for the American public than the breeder reactor program. The

importance the electric utility industry attaches to development

of the breeder is reflected in its commitment to contribute nearly

$260 million to the Clinch River Breeder Reactor demonstration

plant project. This is the largest contribution to a single R&D

project ever made by the industry. Solar-electric and fusion research should be accelerated to the extent that funding can be

used effectively. It would be a serious mistake, however, to do

this by slowing down development of the LMFBR and delaying the date

at which this option becomes available.

Another specific comment relates to the method selected

by ERDA in Volume I to yield its conclusion that to meet the

country’s needs, research effort must be directed at a combination

of technologies rather than toward a specific area. This conclusion is reached by selecting six contrasting national energy

“strategies” or “scenarios” -- some of which are assumed to have an

“unrealistically high degree of success.” By analyzing the net imports of oil and gas required by each of these scenarios to the

year 2000 in this “paper and pencil experiment,” the “Combination

of all Technologies” scenario is found to be superior.

ATTACHMENT I 265
Mr Emilio Q Daddario - 3 - July 24, 197 5

Although the rationale for the selection of this

methodology is not entirely clear, the ERDA conclusion that technology should be attacked on all promising fronts is reasonable .

EEI takes exception, however, to Scenario III which is the

“Intensive Electrification” case. Scenario III examines how “the

total energy picture would be affected by an intensive shift to

electrification, with (1) maximum use of all sources to generate

electric power and (2) maximum reliance on electricity for enduses.” With certain assumptions included, although basic data

are lacking, the results of this scenario are shown to be less

desirable in terms of net imports of oil and gas in the year 2000

than do all other cases with the exception of the “No New Initiatives” scenario. To suggest that it is undesirable to move toward

greater electrification, based on indigenous fuel reserves, is

inconsistent with achievement of the country’s energy goals.

Not only is the scenario method of analysis open to

question, its implied and stated conclusions relative to the future

role of electricity in the country’s energy picture is unwarranted.

In a conservation oriented and environmentally conscious society,

electricity will be substituted increasingly for end-use energy

purposes. Expanded electric power grids will improve the efficiency of our energy transportation system.

A final comment is concerned with the discussion in

Chapter VII of Volume I dealing with the responsibility of industry in achieving national RD&D goals. The recent organization of

the Electric Power Research Institute stands as evidence of the

electric utility industry’s recognition of the important part it

has to play in this government-industry cooperative effort.

Investor-owned electric utility companies will continue to meet

this vital responsibility. The industry agrees with ERDA that

the “private sector” should “Interact strongly with the Federal

government in developing the economic, technical, safety, and

environmental aspects of the National Plan for Energy RD&D.”

EEI points out, however, that while on occasion, as stated in the

ERDA Volume I, industry should “Play the major role (financially

and technically) in large demonstration and near-commercial projects,” there are instances when the cost of a technically

advanced demonstration plant will extend beyond the ability of an

industry. In these instances, such as the Clinch River Breeder

Reactor plant, the Federal government appropriately should

provide financial assistance that will make the R&D results available to assist in meeting the needs of the public .

Sincerely yours

President

c c : Messrs S L Sibley

F W Lewis

Chauncey Starr

266 ATTACHMENT I
ENVIRONMENTAL

DEFENSE

FUND 162 OLD TOWN ROAD, EAST SETAUKET, N.Y. 11 733/516 751-5191

July 17, 1975

Mr. Patrick Gaganidze

Congress of the United States

Office of Technology Assessment

Washington, D. C. 20510

Dear Mr. Gaganidze: .

Enclosed is a copy of my critique of the ERDA National Plan. I trust

it will be of assistance to you, your fellow staff members and the Congress.

Please feel free to call me should you have any questions regarding my comments.

Thank you very much for permitting us the opportunity to comment on

ERDA’s activities. I am

Staff Scientist and Director

EDF Energy Program

Enclosure

OFFICES IN: EAST SETAUKET, NY (MAIN OFFICE); NEW YORK CITY (PROGRAM SUPPORT OFFICE); WASHINGTON, DC; BERKELEY, CALIF.; DENVER, COL.

Printed on 100% Recycled Paper

8

u

ATTACHMENT I 267
July 17, 1975

Comments of Ernst R. Habicht, Jr.

Staff Scientist and Director, EDF Encrgy Program

Environmental Defense Fund, Inc.

162 Old Town Road

East Setauket, Ncw York 11733

To: The Office of Scicnce Technology, U.S. Congress

Re: ERDA 48; A National Plan For Energy Research,

Devclopment and Dcmonstration*:

. #

GENERAL OBSERVATIONS

Since the research and development activities of today are likely to provide

the basis for commercial technologies some twenty to thirty years from now, one needs

to make a number of educated guesses regarding plausible scenarios for U.S. and

world energy markets. Of no less importance is that, with rare exceptions, the

individuals who devise and advise the creation of such documents as the National

Plan (see also AEC Chairman Ray’s Report to President Nixon in December of 1973)

arc uniformly imbued with the spirit of past technological advances and, despite

recent strong evidence to the contrary, are still possessed of an expectation of everlower energy costs, at least in the long run. .

Thus it is not surprising that the National Plan appears as if it had been

written prior to the late 1960’s by the AEC for the Joint Committee on Atomic Energy.

Familiarity with the electrical utility sectors in the United States leads

one to several conclusions:

1. Even absent fuel price increases, electricity supply has

encountered absolute diseconomics of scale in generation which

began to become perceptible in the mid to late 1960’s;

.

2. Continued investment in central electric generation

technology is becoming increasingly unfavorable with respect

.

268 ATTACHMENT I

,
. .

3. From the perspective of the economist, the consumer or

the envirommentalist, the way electricity is priced has become

increasingly irrational in recent years.

From this set of perceptions regarding electricity supply, I conclude that the

Natioal Plan is most deficient in that it is moot On recent abrupt departures from past

experience and ignores the impact of institutional change within society on the technology

required in future years. Thus the National Plan focuses most heavily on large centralized

fuel processing and energy conversion facilities that accord most closely with an extrapolation of today’s energy technologies. Present and growing countervailing trends in

the U, S. energy economy render such an emphasis on centralized supply and conversion

technology misdirected in some instances and counterproductive in others. An incomplete

list of such countervailing trends follows:

1. Over 50% of the energy in the U.S. economy is directly regulated

at the state level as to price. Under far more pressure by consumers

than ERDA, state regulators are becoming increasingly sensitive to the

advice of economists most particularly with respect to the wisdom of

employing marginal cost pricing for electricity. This will stimulate

decentralized storage, integrated electric/solar space conditioning,

and, in some instances, integrated elctric/fossil fuel systems.

2. Present federal and state tax law is written in accord with the

perception that energy costs will fall overtime. Also, buttressed by

freight rates and numerous other regulatory policies, the tax laws

discriminate strongly in favor of primary materials in the U. S. economy

as opposed to recycled materials. It is reasonable to expect that there

will be an increascd need for superior recycling technologies including

those directcd towards the manufacturing of goods in such a way that

the composite materials may be more easily returned to material flows

in the economy.

ATTACHMENT I 269
.

3. Our high agricultural productivity depends upon centralized

inputs of large amounts of energy in the form of fuel, fertilizer,

pesticides, food processing and transport, Little if anything in the

pronouncements of the USDA in recent years would lead one to believe

that there is any concern about the energy intensity of agriculture in

i

the U.S. economy. Indeed, the overwhelming majority of federally-

.

●

funded agricultural research is directed towards increasing the

centralization of agricultural processes with concomitantly increased

energy intensity of production. Sustained high agricultural yield,

together with rcduced energy intensity in our agricultural economy

would seem to be a laudable research, development and demonstration

goal. Given the present structure and goals of the USDA, one should

not be optimistic about conducting solar or other energy R, D & D

within or in collaboration with that agency.

4. At present, the most critical energy sector in the U.S. economy

is natural gas. Great emphasis is placed on increasing gas supplies

through coal gasification. Present exceptionally expensive commercial

endeavors directed towards this end (and all the ERDA studies with which

I am familiar), have neglected an attractive alternative to be taken over

the next five years. This involves the production of low heat content

gas which, pursuant to modification of present large “gas-fired boilers,

would be “swapped” for that substantial portion of natural gas now

committed to the production of process steam and electricity. Customers

who are being curtailed are also an attractive near-term target for this

technology especially if they would normally switch to oil firing. TO

for both the El Paso and the WESCO coal gasification projects. The reader

is a1s. rcfcrrcd to the El Paso case before the Fcdcra1 Power Commission

(Docket No. CP 73-131).

.

270 ATTACHMENT I
While assuming that it is a laudable goal to become largely or entirely free

of imported energy resources, the National Plan seemingly neglects arguments against

such a policy and contains no useful discussion regarding the transition years during

which, under any possible scenario, we will continue to be dependent upon imported

oil and to a lesser extent, imported natural gas. Quite clearly, any rational U.S.

energy program need consider the merits and costs of an oil storage system; indeed,

Congress has already authorized a meaningful step towards such security. A research,

development and demonstration program should be directed towards the speedy testing

and implementation of some of the concepts for oil storage that have been advanced

thus far. (See, for example, The Oil Security System by Daniel H. Newlon and

Norman V. Brekner, Lexington Books, Lexington, Massachusetts, 1975. )

Since the world oil market has become an evermore important determinant

of the U.S. energy market, it seems foolish for ERDA to posit a research and development program without any discussion of what is going on in the rest of the world. We

are presently in the midst of a growing world oil glut. Many astute observers of

international oil markets are convinced that the OPEC cartel will soon begin to lose

strength and oil prices will fall sharply. One plausible scenario for the future is

declining world energy prices in the near term and increasing prices after another ten

to fifteen years -- when the world’s oil production and reserve data look like those

of the U. S. today. This indeed compounds the dilemma of policy makers here in the

United Stales. But, since credibility with the general public can only be viewed as

virtue (and this seems especially so today), this scenario should be more amply

discussed.

Many of the actions wc would take in a “crash program" directed towards

self sufficiency would lead this country to greater energy intensity in the short run

a

(via direct inefficiencies in energy use and the adverse near term ]mt-energy consequences

of rapidly changing conversion and end use technology). Continued reliance on imported

fuels over the next ten years or so is desirablaeif we take adequate steps to protect

ATTACHMENT I 271
.

ourselves against disruptions in supply. The more time that can be bought through

energy conversion and efficiency improvemcnts, the better. But it is really the long run

expectation that looms over the substantial bulk of the ERDA National Plan since the

payoff from new energy supply research, development and demonstration does not really

be@ to have much effect until 1995 or so. At our present level of knowledge about

world oil reserves, this turns out to be the period when wc can reasonably expect the

cost of oil to be relatively high and the price to be on a definite upward trend. By that

time, assuming our efforts have been successful over the preceding 20 years, we will

be in an excellent position to market technologies to other nations. This might be

compared to our present dependence on German coal gasification technology that was

brought into commercial.ization during the second World War.

While specific programs pertaining to energy supplied from both old conventional

and new exotic sources is discussed on a sector by sector basis below, some of the

present emphasis of the National Plan is commendable and in accord with the scenario

laid out immediately above. I agree wholeheartedly with the concept that the most

fruitful area of energy R & D in the relatively near term is to improve the efficiency of

energy use everywhere in the U.S. economy from the point of extraction to the point of

end U S C. Towards such ends, the endeavors of social scientists should be emphasized

heavily. Since future energy technologies (to be developed and demonstrated by the

year 2000) can be reasonably expected to be more expensive than today’s technologies,

the continued endeavors of such research programs over the life of ERDA seem highly

justified.

At every stage of ERDA efforts, unbiased and economically disinterested

technical review deserves a high priority. Attached is the testimony of EDF witness

Dr. Robert J. Budnitz in Application No. 54279 before the California Public Utilities

Commission. Dr.. Budnitz places considerable emphasis on the need for public scrutiny

of R & D budgets, (in this case, that of the Pacific Gas and Electric Company by the

public and independent agencics. Dr. Budnitz also speaks strongly to the need for

research on the general question of energy demands -- a subject touched upon in the

preceeding paragraph above.

272 ATTACHMENT I
ENERGY SUPPLY SECTORS

1. Nuclear Fission. This reviewer strongly supports the position of the

Natural Resources Defense Council and affiliated parties in their opposition to speedy

implementation of the liquid metal fast breeder reactor program. The work of Dr.

Thomas Cochran at NRDC and formerly at Resources for the Future is definitive in

providing irrefutable economic and technical criticism of the ERDA breeder program.

Energy R & D ought to focus most heavily on implementation of technologies whose

end results afford a minimum array of irreversible consequences and intertemporal

inequities. For this reason, if for no other, “bypassing the breeder” is a laudable goal.

While this priority may be leSS indicated in the future as a result of significant techno- -

logical change, the ERDA budget is badly skewed towards a program that offers speedy

●

implementation of a technology whose consequences are profound in terms of uncertainties,

risks, unknowns, intertemporal inequities and irreversibilities. The decision rules

employed by the NRC and ERDA deserve the closest possible scrutiny and criticism.

To this end and by way of specific example, I am attaching a copy of a paper by

Professor Paul L. Joskow entitled “Approving Nuclear Power Plants: Scientific Decision

Making or Administrative Charade?” (The Bell Journal of Economics and Management

Science, Vol. 5, No. 1, Spring 1974, at page 320).

2. coal. I am concerned about heavy emphasis on centralized federal research

in the domains of coal mining, handling, cleaning and conversion technology. The coal

industry has a sorry record for research and development over its long history in the

United States -- to be contrasted sharply with the joint government-industry endeavors

that have been encouraged in Englnd and Germany. With the possible exception of the

Consolidation Coal Company, no significant amount of innovation has come forth from

the domestic coal industry. In order to get new technologies that are more bcnign to

the coal miner, the coal environment and the coal consume, the industry itself is going

are going to have to change if this industry is ever to lift itself abovc the past tradition

of boom and bust with no thought for the future and a fondness for the past.

ATTACHMENT I 273

60-411 0-75 - 19
A national severance tax on coal directed towards R & D to revert only to

those mining firms who actively engage in R & D seems to be a warranted institutional

prod in the right direction. This should accompany a tough surface mine reclamation

statute that is also directed towards abating the externalities associated with deep

mining. Such a statute would, once and for all, relieve the coal industry of an

enormous barrier of uncertainty associated with future mining development. Entry into

the industry ‘should be encouraged through a progam of integrated federal leasing policy,

business loan policy and federal agency contract purchases of coal.

3. Oil and Cas e The petroleum industry substantially retrenched its energy

research and development efforts starting in the latter part of the 1960’s. Laboratories

were closed, consolidated or dedicated to more routine purposes and skilled personnel

were transferred out of research endeavors, retired early or fired. By having ERDA

involve itself in activities that would normally be undertaken by the industry itself, we

have a hefty increase in taxpayers subsidy of petroleum exploration, production and

consumption. This is particularly so in view of the very low domestic tax rate that is

.

effectively applied to the major petroleum producers.

The only seeming justification for government involvement in enhanced gas and

oil recovery is institutional. For example, individual oil reservoirs behave quite differently

under varying secondary and tertiary recovery approaches. Thus ERDA may be prompted

to be involved in such experimentation so as to speed the transfer of technology from the

oil fields of one company to those of a second company and thus avoid anti-trust

complications ● This may wcll duplicate information exchanged in joint ventures beyond

the continenta1 boundaries of the United States. Rcgardless of whether or not such

information cxchange takes place between individual fires, ERDA emphasis on this

particular set of endcavors seems to be one more nail in the coffin of the idea that wc

have a competitive oil industry here in the United States.

4. Solar. — While considerable work needs to be performed to make direct

.

solar space cooling technology dependably competitive, solar space heating technology

274 ATTACHMENT I
— .

implementing solar water and space heating technology would seem to be institutional

in nature. Questions of financing (life cycle costing) and constructing (in a depressed,

fragmented and under-capjtalizccl construction industry) seem to be of prime importance.

Some of 13 RDA’s “demonstration projects” manage to be counterproductive in that the

relatively slow-to-move financial and construction industries may continue to wait for

“the last word” from federally financed demonstration developments. The entire ERDA

solar space conditioning budget might be more favorably applied to the removal of institutional and lcgal constraints at the federal, state and local level. A combination

of small business loans to contractors, federal housing financing incentives and even

tax incentives might provide the necessary push and pull to achieve more rapid commercialization.

Virtually all of the solar electric dollars seem to be directed towards central

utility concepts. A large portion of the costs of solar elcctric technologies are in the

physical apparatus required for the collection of the sun’s energy. This is essentially a

“two-dimensional” technology and may not properly be expected to admit of great on-site

economies of scale with increasing deployment. Of course, substantial technological

change is needed to render any of the proposed solar electric technologies competitively

viable.

It would seem that more attention might be paid to future establishment of

small scale solar electric technologies intended for the customers side of the meter

where the diseconomies of scale of small storage units is offset by reduced transmission

and distribution requirements. As noted earlier with respect to conventional electricity

investment today, there is the greatest promise for small scale technologies. This would

include the load management and pricing reforms discussed earlier as well as the promise

of dispersed technologies such as fuel cells -- which can be sited quite C1 O Se to modcst

demand centers thus avoiding transmission cost-s.

5. Conservation. MO St of the goals in this gcncral category are certainly - — —

laudable but will probably be achieved quite speedily through normal market forces and

good flow Of’ information, A principal government role ought to be the wide promulgation

of developments concerning encrgy conservation so that managers, engineers, the press

and hence consumers can take cffective action all thc more quickly.

. .

ATTACHMENT I 275
There is little sense of priority in each of the separate conservation categories

and thus the ERDA program is made all the more fuzzy. Some of the proposed research

is worded in such a way as tO be directly counterproductive to the avowed goals of the

program. For example, the statement regardeing institutional problems concerning air

transport which reads: “Federal regulations on safety, noise and emissions need to be

reexamined to reflect strengthened fuel conservation policy. “ (Vol. 2 at p. 79) is almost

certainly a direct reflection of the DOT, CAB, FAA and State Department position in #

favor of the Frcnch/British SST. As such, it could not be more counterproductive with

respect to energy conservation. In this same section of institutional problems associated

with air transport, no mention is made of attempting to directly increase load factors or

to minimize problems that ensue from the control of airline regulation by the industry

itself.

In such “institutional problem” areas ERDA is stepping on sensitive political

ground. If we really wanted to improve transportation efficiency, we would pay close

attention to the advice of economists who advocate that user charges reflecting total

marginal social costs be imposed upon each transportation mode. Thus, commuter traffic

would begin to pay a formidable price for using crowded highways. There would begin to

be meaningful user charges for trucks which more accurately reflected the maintenance

requirements occasioned by their use of highways. Barges would, for the first time, begin

to pay a user charge. The conventional wisdom of the ICC would wither and with its

disappearance would return the health of the railways. Such a list is nearly endless.

The point to remember here is that ERDA may, by virtue of its working solely

within the existing framework, perpetuate and compound inefficiencies and idiocies that

presently obtain. If it is to involve itself in institutional problems, then let such

involvement be wholehearted. Such a step proved impossible to the AEC Whose failure

in this area led to tjr formation of the NRC and ERDA. This implies the need for

continued funding of institutionally directed R and D activities by other agencies

such as the National Scicnce Foundation.

276 ATTACHMENT I
6. Manpower Training. Where possible, programs should be initiated to

provide reeducation of unemployed and under-employed technical personnel. At a

fairly high level, the Miami University Medical School Program in Florida, directed

towards re-education of scientists in a considerably accelerated M. D. program, stands

as a good example. The field of mining engineering would certainly benefit by an infusion

of such new talent.

THE ERDA APPROACH TO R & D ——.-— —

It would be nice; to imagine an agency of five or six thousand people directed

towards research and development avoiding the past mistakes of the AEC. This may be

difficult since ERDA is so heavily dominated by personnel Who have been transferred

from the AEC. Serious questions need to be raised rcgarding the decision making apparatus

and speed of action within the agency regarding new policy and technologies.

Every effort must be made to pare down the number of level.s of decision

making within the agency. ERDA must pay attention to ideas as opposed to “proposals”

so that the agency gets behind innovative thinking at an early stage and avoids outright

intellectual dishonesty. Nothing is worse than the consequences of establisling just

another federal granting “old boy” network wherein new fresh talent is effectively shut

out of timely funding. Yet there is no inclination that a fresh approach has been made.

Stale corporate proposals placed before ERDA seem to be funded with regularity.

Some of these comprise efforts that would be normally undertaken by the industry in

question absent any federal funding whatsoever. Some redundancy is evident. individuals

and small groups with good ideas are heard to complain that they have difficulty talking

to anyone who can make a decision at the agency. There seem to be too many layers

of review wiithin ERDA and action seemingly takes forever. Only the large entrenched

powerful interests in the U.S. economy can long withstand such an approach to R & D

ATTACHMENT I
Whether or not ERDA is merely tO be the handmaiden of entrenched industrial

ventures (and the foe of new industrial interests), the question of how it is funded ought

to be addressed directly and soon. Every dollar of the taxpayers money that goes into

ERDA represents a transfer of taxpayer dollars into the consuming cnergy sector. Thus

we are subsidizing energy consumption out of general tax revenues. As ERDA and

similar agencies grow, this problem will become more severe. The history of the AEC

is rife with examples of such subsidies and it is of no use to repeat the litany of criticism

here. Instead, the reader is referred to the Book of Prophets: Chapter 26, Verse 11.

278 ATTACHMENT I
INSTITUTE OF GAS TECHNOLOGY ● 3424 SOUTH STATE STREET ● I IT CENTER ● CHICAGO, ILLINOIS 6061 6

July 21, 1975

Mr. Emilio Q. Daddario

Director, Office of Technology

Assessment

Washington, D.C. 20510

Dear Mr. Daddario:

The Institute of Gas Technology appreciates the opportunity

to review the “National Plan for Energy Research, Development and

Demonstration” developed by ERDA. We hope the appended comments

can be of help to you.

As one of the nation’s major energy research organization s

working both for the government and industry, we believe that this

is a document of major importance . It should receive constructiv e

inputs from all sectors of the nation .

To this end D r . Derek Gregory, the IGT staff and I have given

the document a very serious review. We hope to be able to serve a

similar role in the future.

Very truly yours,

Jack Huebler

Senior Vice President

JH/klf Action —.- . . . . .

— --- . .

—. —

AFFILIATED WITH ILLINOIS INSTITUTE OF TECHNOLOG Y

ATTACHMENT I 279
REVIEW OF “A NATIONAL PLAN FOR ENERGY RESEARCH,

DEVELOPMENT AND DEMONSTRATION"

Overall Comments

The document is comprehensive and intelligently put together. There “

is an excellent sum mar y from which one can extract national policy goals,

8--

national energy technology goals and priorities for developing technologiess.

.

Some qualifying statements about the present shortcomings of the plan itself

are given near the end of Vol. 1. A concisely expressed statement of the

National Energy Plan placed at or near the beginning might be helpful.

The report has a heavy bias towards nuclear energy and electric power.

This is not so much in the recommendations but in the examples that are drawn,

the scenarios chosen and the more detailed discussion of particular tech.

nologies. We would hope that forthcoming revisions could amend this weakness.

The report was probably put together primarily from people with an AEC

background, and their previous environment shows through in the way they

express themselves. It is especially disturbing to find the emphasis on the

opinion that the inexhaustible energy sources, breeder, fusion, and solar

electric, could only be used to produce electricity, and therefore there was a

need for the development of electrification techniques. This opinion is

expressed 4 or 5 times throughout the report. In the same vein, while one of

the inexhaustible sources is “solar electric other non -electric uses of solar

energy, including biomass and solar heating and cooling, are dealt with under

:

separate headings and not in the context of development of inexhaustible energy

sources. There is an unfortunate division of the solar energy option in the

. .

report which tends to emphasize the solar - electric route as the only one

that can provide ultimate long-term benefits.

.

INSTITUT E O F G A S TECHNOLOG Y

280 ATTACHMENT I
——

Page Two

There is considerable discussion of the resources of gas, petroleum and uranium, but remarkably little discussion of the resource of coal

and of oil shale. Coal and oil shale technology are properly ranked among

the highest priority of supply, but the coal and shale resources are lacking

in terms of how long will they last at the projected rates of extraction.

We find the coal gasification time table to be too long. It can be

materially shortened by proper emphasis. Similarly, we believe that

marine biomass should be put into an equal time frame with terrestrial biomass.

The remarks on environmental protection seem to indicate that that is

.

more important than the supply of energy. While protection of the environment

is very important, we believe that the case of the environmentalists has been

over stated. Emission levels have been set at unreasonably low levels without .

adequate proof of the need. We agree to the need expressed in the plan for

research on the establishment of these levels. We would also suggest work

toward establishing the amount of the overall energy dissipation which occurs in

reaching the emission levels and work to minimize this use of energy.

.’

While energy resource assessment is included in the Plan, we feel

it should be given a much higher priority than is indicated.

The s ummary (page 5 -8) calls for industry to "Play the major role

(f”inancially and technically) in large demonstration and near -commercial

projects" and to “Commercialize the technology It is very doubtful that

:

industry has the resources to bring the required gigantic revolution in energy

supply to reality in the short time required. Much more government support * ! .

will be required than is presently planned.

INSTITUT E O F G A S TECHNOLOG Y

ATTACHMENT I 281
Page Three

282

In order that the stated objective to “Shorten the time for transition

to new fuel forms . . . “ may be accomplished, a drastically speeded up

contracting procedure is required.

The plan uses the scenario technique of technological forecasting.

Five energy scenarios are postulated, and the report makes it quite clear

that none of these scenarios is expected to represent a case which is likely

to occur. They are “what if” exercises. The only scenario which is stated

to provide an acceptable level of imports by the year 2000 is the one in

which all possible technology options have been exercised. While we believe

this conclusion is valid, “the case is not really proven.

There is only one scenario in which a specific technology is omitted

or constrained, and this is the one in which nuclear development is not .

allowed to continue. Clearly, under these circumstances an unacceptable

situation arises. There are no scenarios in which other energy technology

options are withheld. It would also be important to assume partial successes

at faster or slower rates.

, 4’

The organization of Vol. 2 could be improved. Topics in several

cases appear to be out of order and/or separated; for example, the separation

of storage technology from solar technology. In discussion of solar energy,

little emphasis is given to the need for storage systems, and energy storage

development is treated at a different priority level to that of solar energy, and

“.

is discussed in a completely different context. Energy storage is ranked at a

fairly low priority because it is included in “Technologies Supporting Intensive

Electrification, “while solar-electric generation is ranked with the highest

priority technologies because it is considered an inexhaustible source for

the long term.

INSTITUT E

ATTACHMENT I

O F G A S TECHNOLO G

Y
Page Fou r

Discussion of Spe cific Technologies in Order of Presentation

Direct Combustion

Plan is limited to fluidized bed combustion. Is stack gas cleaning

completely developed or is there some other reason it is left out? There

are many other potential applications of direct combustion which deserve

attention.

Demonstration Plants

It is our understanding that the pipeline gas demonstration plant projects

will be selected from competitive bids in response to an RFP. It is unlikely,

at present, that various gas distribution and transmission companies located

in different states will be able to present combined bids although their

ultimate objective is common. ‘It may be necessary for ERDA to find a way

to bring the various state, local and industry interests together to minimize

the cost and enhance the strength and probable success of the effort.

“ The time schedule on pipeline gas can be materially shortened if a proper

effort is made.

,-.

Enhanced Oil and Gas Recovery

This is a vital program and deserves the emphasis it is receiving.

Pipeline Gas

This is a very important program. The means of bringing gas to the

market place economically and safety is in existance. This is not true of an

.

expanded electric supply. Industry is being badly hurt by curtailments. ’ Gas

can directly decrease the need to import oil.

- , .

The presentation is good and the time table seems obtainable. Plans for

third generation processes and second generation process improvements in

support of the demonstration program should be included.

INSTITUT E O F GAS - TECHNOLOG Y

ATTACHMENT I 283
Page Five

Oil Shale

The plan only refers

retorting needs research

to in-situ recovery technology. Aboveground

and the production of pipeline gas presents a

great developmental opportunity.

Fuels From Biomass

The delay of the marine program relative to terrestrial biomass seems

unfounded. We see no reason that it cannot proceed, at least as rapidly as

the terrestrial. Both are of vital importance.

Solar Heating and Cooling

This is a very important opportunity for near, mid- and long -term energy

supply. We feel that although some direct commercial applications are

immediately possible, a great deal of R, D&D is needed. A thorough investigation is required

processes.

Geothermal

.

The program

of where solar” augmentation can be applied to industrial

*

objectives, as classified by time periods, are reasonable.

The exploration and assessment efforts described under Strategy (1) are

insufficiently comprehensive. The Government should ensure that an appropriate

level of effort is applied to advanced geophysical exploration sciences and

technologies. For example, we understand that the U. S. S. R. is already using

an MHD magnetic pulse generator for geophysical hydrocarbon exploration,

and it seems reasonable to question whether this or comparably imaginative

techniques might be applicable to geothermal exploration. Even though the

credibility of geothermal r es our c e adequacy of some types of resources must

be more fully established (a need that we ourselves do not regard as generally

pressing), a need also exists for effective and economic means to find and

delineate geothermal reserves of the various types.

I N S“ T I T U T E O F GAS - TECHNOLOG Y

284 ATTACHMENT I
Page six

The intended extent of activity directed toward active volcanic energy

utilization, as compared with some of the other approaches, is not clear.

Although it does not deserve top priority at this time, we favor the prosecution”

of an aggressive, positive approach extending quickly well beyond "a” test

facility, presumably one with rather narrow capabilities. Many concepts

suggest themselves as worthy of serious consideration at an early date. Mor e

ambitious conceptual approaches, such as, perhaps, the use of terrenes,

should not be kept on the shelf too long.

Conservation in Buildings and Consumer Products

Development and demonstration of conservation technology and of in.

stitutional changes to aid the utilization of solar energy in new and existing

commercial and office buildings for heating and cooling should be promoted

in the near term (-1985) for the following reasons:

1.

2 .

3.

Initial results from U. S. Government funded studies (e. g. , G. S. A. ,

ERDA re: Dubin-Mindell-Bloome Assoc. New York) have shown both ●

technical feasibility of significant energy reduction by retrofit or new

.“

design and cost effectiveness.

Adequate technology for additional energy reduction by utilization of

d

solar energy has been demonstrated abroad (Australia ) for certain

commercial buildings.

Problems of implementation by private sector due to lack of awareness,

institutional barriers, and cost of collectors, can be overcome by a

continuous and vigorous government supply of such R, D&D activities

.

. enhanced by broad educational initiatives, in cooperation with other

INSTITUT E

. .

O F G A S TECHNOLOG Y

ATTACHMENT I 285
Page Seven

organizations (such as AIA, ASHRAE, SPE, etc. ), tax incentives \

or low cost Federa1 loan inducements to use solar energy alone or

as hybrid technology with conventional approaches and support of

research to advance mass production technology of solar collectors

at reasonable cost.

-Development of cost effective methods of retrofit of existing installations

of space and domestic water heating to recover combustion heat lost in the

. -

flue is begging the problem. The barrier is safety associated with the need

for proper draft and potential premature deterioration of heat exchanger

. .

from attendant water condensation in the flue. A more cost effective and safe

approach would be to increase by retrofit approaches the seasonal efficiency

of utilization of space and water heaters by such means as to reduce the

burner -off time losses of conditioned air. While such approaches are known

(flue dampers, proper sizing, modulating burners), there is need to establish

the magnitude of their potential for energy conservation in order to demonstrate

cost effectiveness to the homeowner.

,.

Electric Conversion Efficiency

The program is vitally needed but the approach is weakly stated and

incomplete. Improving the energy conversion efficiency should occupy the

highest government priority sine e it is one of our best m cans of conservationmaking existing fuel reserves (both fossil and fission) las t longer.

i

The strategy discussed seems to consider superficially the severe

materials problems and limitations encountered by some advanced energy

-,

.

conversion systems. The Electric Conversion Alternative Study (ECAS)

is mentioned. This program represents a good start in the direction of

asses sing advanced systems. However, care should be used in interpreting

INS T

286 ATTACHMENT I

ITUT E O F G A S TECHNOLOG Y
Page Eight

the preliminary results which have just been received. Thus far, the study

has been biased toward base load plants and has not considered materials

limitations. As a result of the base load bias, systems such as fuel cells

which operate best as peakers or in a dispersed fashion (in the electrical

distribution system) have not been considered equitably. This bias should

be recognized and proper attention should be given to fuel cells. Fuel cells

are not Carnot cycle limited and, therefore, show the best potential for

achieving the stated 55% efficiency when combined with a gasification plant.

Electric Power Transmission

The approach is sound. No mention is made of the problem of addressing

transmission over longer distances than are now typical. Distribution system

improvements are included in the Objectives, but are omitted from the

Implementation Program. Cryogenic systems are limited to very high capacity

lines. The role of large capacity lines and their reliability problems must be

addressed in an overall systems study before large coremitments to cryogenic

system technology can be justified.

Power transfer requirements will inevitably increase and make improve.

ments in Transmission Technologiess both de sir able and imperative. Until

order -of -magnitude improvements are made in the Transmission modes,

however, it must be recognized that physical laws probably impose a rather

tight ceiling on how much present performance can be improved before”

rapidly diminishing returns are felt. Such barriers can not be realistically

overcome by shifting development costs from rate -payers to tax-payers.

.

INSTITUT E O F G A S TECHNOLOG Y

ATTACHMENT I 287
Page Nine

The Federal Role should fall largely in this scientific field

on the potentia1 conservation of all r es our c es (land, aesthetics,

with emphasis

public health

and safety, etc. ) rather than primarily materials resources. As an example, “

the NBS should continue or expand its research on cryogenic and superconducting

materials, but the electric utilities and their suppliers should translate the

findings into transmission line technologies and should be allowed adequate

service rates to do so. Then if the approach is deficient, the system will be

economically self-correcting as high electric rates provide an umbrella for

competing energy transportation technologiess.

The Federal R&D agencies have much to offer and their potential contributions

are too valuable to be unnecessarily diluted by hardware programs.

Electric Transport

,

The program is much needed and the general approach is good. However,

some omissions occur in the objectives and in the information plan. Objectives

to produce prototype automobiles with 60, 100, and 200 mile ranges can be

o

met today, and do not need research, if this is all that is needed. These

objectives must include a reasonable vehicle weight target, capital cost target,

and operating cost (batter y replacement cost) target if they are to be meaningful.

These additional qualifiers on goals should be clearly stated as they are vitally

important to formulation of a research plan.

The “problems” do not place enough emphasis on the development of

low cost charging systems, provision of electric distribution capability for

recharging a large-electric vehicle population, development of inexpensive

and reliable vehicle control systems and cost reductions on electric motors

and drives. These aspects are also missing from the implementation plan.

INSTITUT E O F G A S TECHNOLOG Y

288 ATTACHMENT 1
Page Ten

The general comments on implementation makes the implicit assumption

that electric vehicles will have an overall favorable impact on the national

energy and economic situation. Some overall systems analysis and a corn.

parison with the alternative nonelectric, nonfossil fuel vehicle should be made.

This is missing both here and in the “Transportation Efficiency” program.

There is an overlap of effort in the Stirling engine program discussed

in this program plan and also in the "Transportation Efficiency" plan.

Some definite procedure for coordination of these two efforts is required.

Many of the technologies discussed in the electric -rail transport section

are already in use in other countries. The plan quite correctly emphasizes

a study of existing foreign train systems. The study should also encompass

a review of research in progress by foreign laboratories aimed at electric

rail traction. It is to be hoped that the reference to "third rail” electrification

also implies overhead catenary electrification, which is the more usual way

of supplying power to modern rail systems.

Energ y Storage

,

The program is needed, and is well presented, but with some omissions,

overlaps, and conflicts.

The near term objective of providing for 6% of delivered electricity to

come from storage by 1985 must be critically retie wed in the light of

potential availability of relatively low-cost off-peak power. Recent studies

(IGT) have shown that within a 10-year time frame, only small amounts of

off-peak nuclear or coal based power will be a available for storage: most of the

peaking generating capacity is oil-burning and gas turbine equipment not suited

.

for coupling to storage systems. The need for energy storage will develop in

INS TITUT E O F G A S TECHNOLOG Y

ATTACHMENT I 289

60-411 0 -75 -2 0
Page Eleven

the future as a) the storage technology becomes available and thus changes

the base-load construction priorities, and b) as more nuclear and solar

plants are commissioned.

There is a serious overlap and duplication of “storage in vehicle

propulsion systems” with the separate program on ‘‘Electric Transport. ‘‘

This must be resolved and duplication in the overall plan must be

eliminated.

The objectives specifically identify the development of electromagnetic

storage systems for a long term, while flywheel, compressed air, underground

purged hydro and thermal storage, all discussed in the strategy and implementation plans, are not specifically mentioned in the objectives. There seems to be

no reason why electromagnetic receives special recognition.

There is some concern that the hydrogen storage objective includes

“transmission and utilization systems as a substitute for petroleum and natural

gas fuels. “ This work is much needed and justified, but the words here imply

a far greater impact than merely an energy 6 to rage concept. The plan

should state whether a broad hydrogen energy program is proposed here, and

how the interrelations will be made with other hydrogen projects included in

other program areas (converter reactors, solar energy, transportation

efficiency, for example ) will be made.

There is a possible overlap and duplication of effort in the Energy

.

Storage in Buildings plan with the separate program on Conservation in

Buildings and Consumer Products. Heat pump development, for example,

.

occurs in both places .

INSTITUT E O F G A S TECHNOLOG Y

290 ATTACHMENT I
Page Twelve

Industrial Energy Efficiency

This important area has been the subject studies by A. G. A. and several

gas companies at IGT for the past several years. The program has been

very successful but could profit from financial support by ERDA.

F

Transportation Efficiency

An excellently laid out program. More comprehensive and logical than

most of the others.

Highway vehicle problems do not include development of engine systems

to operate on alternative” nonpetroleum fuels (methanol and hydrogen, f or

example), while these are emphasized in the implementation plan.

There are many mentions of the application of hydrogen to vehicle and

train systems. Most emphasis is on the storage aspect. There is an omission

of work on problems of delivery of hydrogen to the refuelling stations , its

storage there, and the safety aspects of refuelling operations. There is some

concern that the emphasis on hydrogen in this program is not backed up by

adequate emphasis elsewhere in the plan on hydrogen production, transmission,

and distribution technology. Specific mention of hydrogen as an aircraft fuel

is not made, while its light weight makes it specially advantageous in this

application.

Studies of hydrogen transmission in pipelines must be coordinated with

the hydrogen program in the “Energy Storage” plan, and there must be a

parallel comparison to the alternative of electric power transmission.

The program repeatedly stresses noncryogenic onboard hydrogen storage.

. .

This implies that cryogenic storage has either been ruled out or does not need

R&D. Neither assumption is justified, but whichever has been assumed should

be stated.

INSTITUT E O F GAS TECHNOLOG Y

ATTACHMENT I 291
Page Thirteen

A 50% reduction in use of petroleum for pipeline transportation is called

for, presumably by switching to electric compressor stations. This, it seems

to me, might add more cost and create more problems than its worth. (In

many cases, it would represent a waste of energy. )

Fusion /--

The Tokamak-type fusion reactor development program appears to be

structured in a logical sequence. Success is reasonably assured, but we assign

a low factor of confidence in schedules being met. We are satisfied to see

the program continue as planned without being comfortable in any assumption

that it can be depended on to fill major energy needs by 2020. This is not a

criticism of the program or its personnel but simply an assessment of the

prospects of the technological development progress as we see it.

By contrast, we see laser fusion as an unproven technology that might

make a significant contribution to closing the energy gap even before Tokamak

and its relatives become consequential. We recommend that laser fusion .

development be very aggressively pursued in the energy program on the

assumption that it is feasible even though this is unproven. Its failure to

match our wishes would be no more disgraceful than a failure of other concepts

on technological, economic, safety, or other grounds. The need for a deliberate

approach to CTR development has been documented

for a restrained approach to laser fusion has not.

Breeder Reactors

to our satisfaction; the need

We support the near -term objective as stated, and include the

CRBR, the PCTF, and possibly some other major facilities within

:’.

work.

INSTITUT E O F

;

FFTF, the

this frame -

G A S TECHNOLOG Y

292 ATTACHMENT 1
—

Page Fourteen

The mid-term objective is loosely constructed, as we believe its should

be at this time. Unnecessary Federal commitments to LMFBR

commercialization, as distinct from technological development, should be .

held in abeyance while alternatives are being aggressively evaluated. Intensive efforts should be applied to the preparation and continuous updating

of realistic, integrated, energy development schedules and programs to

avoid waiting too long to initiate commercialization, but the possibility of

superior concepts and technologiess arising (as the y have in past years under

comparatively weak incentives ) should not be ignored.

We support four of the five statements of the Federal Role , but take

sharp exception to the first of these five statements. ERDAs assistance on

safety R&D should not be conceived as “directed toward allaying the publics .

concerns” but, rather, toward ensuring safety. Public relations are important,

but they should be cultivated by PR people outside ERDA. If ERDA proceeds

with the stated concept of its primary (or even ancilliary) Federal Role, it

is headed for oblivion and the country‘s important nuclear energy program

will be even further emasculated. Please obliterate such words and concepts!

We believe it is not yet time, and 1978 may be too soon, for a commitment

to construction of a near-commercial LMFBR (NCBR) as a follow -on to the

CRBR. Before endorsing such a commitment, we would want to

prehensive energy development budget showing its impact.

We support the limited attentions to the GCFR, LWBR, and

as outlined.

Converter Reactors

see a comMSBR activities

The near -term objectives stated are appropriate national goals but we feel

that the time has come for the electric utilities to collect further needed LWR

INSTITUT E O F G A S TECHNOLOG Y

ATTACHMENT I 293
Page Fifteen

development funds from rate -payers rather than tax-payers. We sympathize

with their financial problems but thes e are now lessening due largely to

regulator y actions and further improvement could be rapid without further

subsidy. Similarly, LWR plant and equipment manufacturers are beginning

to show profits on the LWR segment of their businesses, with a strong market

demand on the horizon. The Federal Role should not be one of solving electric

utility operational problems and thereby encouraging further deficienciess in

conventional plant designs and practices. ERDA's role should be one of s

s simulating industry-utility efforts and monitoring their progress while

.

eliminating any unnecessary governmental obstacles to progress.

We do favor Federal support (including financial support) of midterm and longer -term objectives. It is our impression that industry is

.

capable of developing the HTGR direct cycle power plant largely with its own

resources, but we encourage ERDA to assist in the back-end fuel cycle work.

that needs CloSe coordination with other reactors fuel-cycle provisions.

The availability of private funding for development of gas turbine prototypes

will certainly be heavily influenced by the more positive Federal attitude

toward the HTGR, including its fuel cycle.

We particularly encourage early, aggressive efforts to develop the VHTR

reactor and related systems suitable for application to industrial chemical

processing, including conversions of organic and/or inorganic materials to

essential, non -electric energy forms. Systems work will be costly, but it

should include the early study and demonstration of the coupling of the VHTR

cool and loop to several important industrial heat absorbing processes. It is

not clear that this essential activity has been assigned a suitably high priority.

INSTITUT E O F G A S TECHNOLOG Y

294 ATTACHMENT I
Page Sixteen

Attention should also be given to adaptation of the HTGR for the purpose

of H2 or synthetic fuel manufacture. Analysis of industrial applications of

process heat other than in H2 or Synfuel should be included. Iron and steel .

and cement and stone industries in particular should be investigated.

Use of process heat is not included in the “Problems” or “Implementation”

program. One particular additional problem is that of coupling the HTGR coolant

loop with industrial heat-consuming processes, and adapting the reactor to accept

the return of coolant still at a high temperature.

Use of process heat for thermochemical hydrogen production, for coupling

to coal and oil processing technologies, to iron and steel production, is already

under examination at ERDA and should be continued.

We have frequently been dismayed by the complete disregard for process

heat demands as a factor in the analysis of uranium adequacy. We regard

nucles energy as an indispensable major source of o-ii and gas energy replace -

ment that can be used most efficiently and effective 1 y if it does not first go

through a conversion to electricity. This observation should be weighed

carefully throughout ERDAts nuclear and non-nuclear en erg y development

P

planning.

The whole program effort is too heavily emphasizing the production of

electricity, and not

Hydrogen

The technology

the use of nuclear energy in other (thermal) forms.

of hydrogen in energy systems receives mention in the

context of storage and energy transmission. Because it is still at the study

status, and has a long term of impact, and presumably because it has no

net energy supply impact in the long run, it received the lowest ranking in

national priority. In the Glossary section, hydrogen energy is defined as

-.. “

INSTITUT E O F G A S TECHNOLOG Y

ATTACHMENT I 295
Page Seventeen

including non-electrolytic

its storage and transport.

methods of hydrogen production and methods for

Specific mention of the electrolysis process, and

of the utilization of hydrogen, is not made. In discussion of the need for

increases in the capacity of energy transportation systems, rail movement

of coal and pipeline movement to fluid fuels and slurries is discus seal, but

no mention is made of the increasing needs to move either electricity or

for hydrogen transmission option. In none of the 5 scenarios, and

particularly in the combination of all technologies (scenario 5), does hydrogen

transmission or any form of bulk energy storage appear (neither does fuel

cell or any other form of decentralized conversion appear in the scenarios,

although the use of hydrogen energy, bulk electric storage systems, and fuel

cell generation are discussed in the plan as developable technology options).

INSTITUT E

296 ATTACHMENT I

O F G A S TECHNOLOG Y
SIERRA CLUB Mills Tower, San Francisco 94104

Sierra Club Research

July 16, 1975

Jon Veigel

Congress of the U.S.

Office of Technology Assessment

Washington, D.C. 20510

Dear Mr. Veigel:

I have carefully read the two volume ERDA decision document: “A National

Plan for Energy Research, Development and Demonstration: Creating Energy

Choices for the Future.” The document reflects a major conceptual improvement over earlier work, such as “project Independence.’! The presentation of supply alternatives allows a clearer public understanding of

exactly what the federal government plans to accomplish in the next few

years. It is a straightforward presentation of technological options.

I would most strongly recommend that the application of funds for research,

development and demonstration also consider social and economic issues.

This ERDA report/plan focuses too strongly on supply questions and fails to

follow through on the recognized realization that energy is not unlimited

and that prices will be high. Future analysis should treat a broader range

of social choices which can achieve improvements in the quality of life.

Research, development and demonstration might also be spent on social. demonstrations such as lifestyle changes in addition to energy conservation research which treats technological improvements.

The documents suggest that federal energy policy is based on a series of

goals necessary to achieve less dependence on imports, but the report fails

to explain the following:

1) How much these drastic supply goals will cost America - what

are the implications of domestic dependence?

2) How environmental impacts are to be treated.

3) Under what conditions a supply goal will be reduced or expanded.

ATTACHMENT I 297
Andersen/Veigel

July 16,-

Page Two

4)

5)

6)

7)

1975

What changes in the distribution of wealth and political

power are likely under each supply scenario.

The anti-trust implications or the rate of timing of the

plans.

How public access will be incorporated into the ERDA plans,

particularly in choices of technological implementation.

What the corporate contribution to this research will be -

who will capture the profit from the output.

I am particularly concerned over the presentation of the time tables contained in Volume 2. The process for making these plans and the conditions

which would lead to a sequence modification are not specified. I would

think that the public interest would be well served by a description of

explicit conditions which would lead to the abandonment of a technology

and the flexibility of choice which is contained in the plan. For example,

if nuclear plants were to prove unacceptable ten years from now, how

would America phase out the existing stock? One wonders what the economic

distinction is of dependence on foreign oil over which we have little control

and dependence on a questionable technology which becomes so dominant that

a phase out is impractical. Energy independence should be analyzed in the

context of social protection from unexpected events of all sorts. One even

might wonder whether the oil import uncertainty is as major a policy concern

as the technological failure potential. As a start, an analyses might

show the national consequences of a loss of expected energy supply for each

source of the technologies in this ERDA document for each yearinthe

planning process. Thus, the energy policy which chooses the source and

timing of energy exploitation would implicitly consider the uncertainty of

availability. In this sense, the cost of a reduction in the use of energy

would be analogous to an insurance premium paid to avoid the potential high

cost of a drastic, rapid curtailment of energy use.

Underlying all my comnents is a concern that the proposals for R,D,&D will

not be responsive to economic, social and environmental factors. If reseach is pursuedto obtain a supply goal and the goal is achieved, we are

not automatically assured that resources will be used efficiently or that

federal funds have not been wasted.

298 ATTACHMENT I
Andersen/Veigel

July 16, 1975

Page Three

Again, I would like to congratulate the authors on

decision document. The problem is to now convince

the supply strategy is not an ultimate solution to

and to expand the scope of future federal research

options.

.

a much improved

the government that

the energy problem

to include social

I am interested in cooperating directly, and in greater detail, in the

early stages of future ERDA decision plans. Please consider the advantages of professional resource economics input from research organizations such as Sierra Club Research.

Sincerely,

Stephen O. Andersen

Resources Economist

SOA/cLG

cc: Sid lbglewer

ATTACHMENT I 299
AMERICAN PUBLIC POWER ASSOCIATION

. 1

President STANLEY R CASE

President LOUIS H WINNARD

Vice President CHARLES E DUCKWORTH

Treasurer WALTER R WOIROL

General Counsel NORTHCUTT ELY

General Manager ALEX RADIN

.. .

JAMES E. SAKER

Shrewsbury, Massachusetts

ALDO BENEOETTI

Tacoma, Washlngton

EARL F BRUSH

Lansing, Michigan

STANLEY R. CASE

Fort Collins, Colorado

WILLIAM H. CORKRAN, JR,

Easton, Maryland

NORMAN E. DIETRICH

Austin, Minnesota

CHARLES E. DUCKWORTH

Garland, Texas

A. L. EDWARDS

Grand Haven, Michigan

JOHN C. ENGLE

Hamilton, Ohio

JAMES P FULLER

Muscatine Iowa

JAMES L. GRAHL

Basin Electric Power

Cooperative, Inc

Blsmarck, North Oakota

CALVIN R. HENZE

Memphls, Tennessee

PATRICK J. HESTER

Rockville Center, New York

WARREN D. HINCHEE

Burbank, California

W. G, HULBERT, JR

PUD #1 of Snohomish County

Everett, Washington

W. BERRY HUTCHINGS

Bountiful, Utah

ALAN H. JONES

McMinnville, Oregon

MAX E, KIBURZ

Loup River Public Power Distrlct

Columbus, Nebraska

C O McINTOSH, JR

Lakeland, Florida

JAMES L MULLOY

Los Angeles, California

A J. PFISTER

Salt River Project

Phoenix, Arizona

JOHN POLANCIC

Rochelle, Illlnois

V G SCOGGIN

Nashville, Tennessee

JAMES O SHERFEY

Bristol, Tennessee

EARL SWITZER

Macon, Missouri

J B THOMASON

South Carolina Public

Service Authority

Moncks Corner, South Carolina

MITCHELL W TINDER

Frankfort, Kentucky

MARlON R ULMER

Jonesboro, Arkansas

DENNIS VALENTINE

California Municipal

Utilities Association

Sacramento, California

DONALD VON RAESFELD

Santa Clara, Callfornia

GEORGE W. WATTERS

Clark County Public Utility District

Vancouver, Washington

LOUIS H WINNARD

Jacksonville, Florida

WALTER R. WOIROL

PUD #1 of Chelan County

Wonctchoe, Washlngton

300 ATTACHMENT I

Washington, D.C. 20510

Action #

Dear Mr. Daddario: —.

I appreciate the opportunity for the American Public

Power Association to comment on the Energy Research and

Development Administration’s National Plan For Energy Research

Development and Demonstration. We hope that the Office

of Technological Assessment and Congress will find our

comments useful in analyzing ERDA’s study.

APPA represents more than 1,400 local public power

systems in 48 States, Puerto Rico, the Virgin Islands and

Guam. More than 30 million people receive their power from

local public power systems in towns ranging in size from

Reynolds, Nebraska with 60 meters to the City of Los Angeles

with over 1,000,000 meters. Local public power systems have

a generating capacity of about 40,000 megawatts.

Local public power systems seek to provide adequate and

reliable electric service at reasonable price and in an

environmentally acceptable manner. Since national energy

research and development will certainly be a factor in the

ability of these systems to obtain their goal, APPA has

commented to ERDA on both the national energy research and

development plan and the Solar Energy Research Institute.

Copies of both comments are enclosed and referenced.

GENERAL COMMENTS

In my April 29 letter to Dr. LeGassie, I listed criteria

on which to base energy systems priorities. Many of these

criteria appear in Chapter X of Volume I of A National Plan

For Research, Development & Demonstration as unresolved For Ener

issues.

Net Energy : ERDA should have considered net energy in formulating a national energy plan for R&D. Net energy is a yardstick with which to measure the energy output for a given

energy input, and it provides one measure of the relative

attractiveness of competing energy systems.

cost: While ERDA claims to have considered costs in forming

their national plan, there are no cost figures in either

Volumes I or II of the National Plan. It seems to me that
Emilio Q. Daddario

July 24, 1975

Page Two

you must know “what you are getting

wisely.

End Use: A high priority should be

for how much” before you can allocate resources

placed on a sustained effort to develop the

technology to convert consumer products and industrial processes from gas and

oil to methanol and electricity. .

Regional Analysis: In our comments to ERDA, APPA recommended a regional approach

to the development of a national plan. This approach would highlight the regional

nature of most energy technologies, identify resource rich areas, and point out the

unique environmental problems associated with each region. With this additional

information, one could optimize the energy-mix for each region and determine

whether a given region is likely to be energy rich or poor, in terms of meeting

its energy needs. This information would indicate the amount and type of energy

to be transferred from one region of the country to another.

Water: APPA believes that the ERDA comments on water resources in Chapter IX of

Volume I of the National Plan would not have been made if a regional analysis had

been made. ERDA’s comments average out regional water shortages by speaking of the

problem on a national basis. Along these same lines, there is a critical need to

develop non-water consumptive technologies for electrical generation.

Another area of concern is what we view as the lack of sufficient input by the

user of the energy system to be developed. It is essential that users, regulators

and other local governmental officials understand and plan for the energy systems

being developed. The user should be involved in the planning, design and specifications of these energy systems. Advisory committees composed of these groups should

be formed for each major technology to insure that user needs are met. The Federal

government should retain control of all Federally-funded research, development and

demonstration projects with advisory committees to appraise and advise on each

program from beginning to end.

INDIVIDUAL TECHNOLOGIES

Solar: While APPA believes that ERDA has outlined a reasonable solar energy policy,

we are disturbed by the comment in the draft document that the Solar Energy Research

Institute mandated by Congress will be run by a contractor (see our enclosed letter to

Dr. Teem).

Fuel Cells: This is a technology barely mentioned in the ERDA National Plan, and

yet it represents a technology in which private industry has spent over $100 million

over the past 8 years. The technology is non-polluting at point of use and may be

operated on fuels such as methane, methanol, natural gas, and hydrogen and oxygen.

It can be used for direct electrical generation on its own or for energy storage with

solar technologies. Its demonstration would be rather inexpensive and near-term

when compared with other energy systems.

Fusion: ERDA offers no alternative to its development of the Tokamak. ERDA’s

fusion effort should be a balanced effort with energy programs in both electron

beam and laser fusion.

ATTACHMENT I 301
Emilio Q. Daddario

July 24, 1975

Page Three

Although there is much we like in ERDA’s

formulation of such a plan should incorporate

National Plan, we believe that the

the items discussed in our “General

Comments”. As far as the individual technologies are concerned, the problems that

we raise with solar, fuel cells and fusion can be readily corrected. These comments

are not an attempt to judge ERDA’s overall effort, but to point out considerations

that would improve their initial effort.

Sincerely,

Alex Radin

AR/dt

Encl.

302 ATTACHMENT
——

AMERICAN P U BLi C POWER AS SO CIATION

2600 VIRGINI A AVENUE NW WASHINGTON DC 20037 ● 2021333-9200

April 29, 1975

Mr. Roger W. A. LeGassie

Assistant Administrator for

Planning and Analysis

United States Energy Research

& Development Administration

Washington, D. C. 20545

Dear Mr. LeGassie:

I appreciate the opportunity which you have afforded

the American Public Power Association to contribute to

ERDA’s formulation of a national energy research and development plan.

APPA represents 1,400 local public power systems in 48

states, Puerto Rico, the Virgin Islands and Guam. More than

30 million people receive their power from local public power

systems in towns ranging in size from Reynolds, Nebraska with

60 meters to the City of Los Angeles with over 1,100,000 meters.

Approximately 80% of APPA member systems do not generate electricity but purchase power from other utilities. APPA member

utilities provide 10% of the nation *s electricity with a generating capacity of 39,508 megawatts.

Local Public Power systems seek to provide adequate and

reliable electric service at reasonable price and in an environmentally acceptable manner. National energy research and

development will certainly be a factor in the ability of these

systems to obtain their goal.

We believe that the decision-making process (criteria)

on energy R&D should first assess the impact of various energy

technologies on the efficient use of resources, the environment,

the public health and safety, the national interest, and the

utility industry. Based on these studies, judgments should be

made as to the acceptability of each of the energy technologies.

For those technologies judged unacceptable, projections should

be made as to how the energy technology could be made acceptable.

Estimates should also be made as to when new energy technologies

will be available for commercial operation for various levels

of R&D effort. Then, for a given date, those energy technologies

which are available and acceptable would be optimized in terms of:

ATTACHMENT I 303
Mr.. Roger W. A. LeGassie

Page Two April 29, 1975

1. the ability of the technology to meet projected electrical demand;

2. health and safety considerations;

3. environmental considerations;

4. resource availability and net energy consumption; and

5. the cost of developing, producing, and using the technology.

These studies should be done on a regional basis to provide an opportunity

to introduce as much diversity as possible into the energy mix. The optimization

variables should be regional in character where possible. A final national model

should be developed from a composite of the regional studies. Using this composite

model as a starting point, comparisons should be made between (a) the use of

relatively inexpensive generation in one region with transmission to another region

and (b) the use of more expensive generation within a region as given in the region

al model.

National Interest. If the “oil crisis” taught us anything, it showed us the

importance of developing a balanced energy policy which minimizes our dependence

on foreign resources or on a single fuel. It also pointed out the need for more

efficient production and use of energy as well as the need to assess all energy

and environmental control technologies on the basis of net energy.

Health and Safety. The projected health impact for present and future generations of the technologies being developed and their fuel cycles should be

assessed. This assessment, coupled with the prevailing public attitudes towards

what constitutes acceptable risk, should provide the basis for decisionmaking on

health. Energy systems should be designed for maximum reasonable safety during

construction, operation, and maintenance. The energy fuel cycles should also be

designed for maximum reasonable safety.

User Criteria. The development of energy technology should always be clearly

focused on the end-use of the technology. New energy systems should be designed

with an eye toward compatibility with existing utility systems. The program to

develop the new technology should aim at keeping capital and operating costs of

commercial equipment low while insuring that vendors can provide sufficient quantities of new equipment replacement parts and fuel to obtain the quickest possible

304 ATTACHMENT I
Mr. Roger W. A. LeGassie April 29, 1975

Page Three

application of the technology. The energy system should be efficient, reliable,

durable, and easy to repair. Designs should be standardized and construction

modular where possible.

ERDA

For ERDA to effectively deal with the intricate problems for which it was

created , it must define its goals so that if those goals are met the problems

which led to its formation would be solved. A clearly defined approach to meeting these goals should be developed and followed, along with the philosophical

underpinning for this policy. The policy would represent the administratively

most efficient means of applying the “principle of least action”, which is reaching the desired goal in the shortest period of time, with the greatest possibl e

economies of effort and resources. To keep ERDA vital, periodic review of its

goals, policies, and philosophy should be made to examine the agency’s successes

and failures plus changes in the overall energy situation. Every five years or so,

the agency should reassess its studies on the optimum mix of energy systems. This

reassessment should reflect technological advances and developmental failures,

shifts in public attitudes toward the various technologies or the criteria used in

decision-making, and new information on the impact of various technologies on the

criteria used in decision-making. On the basis of this information, five year

program plans should be developed.

To assure user acceptability and equipment availability, ERDA should work

closely with all segments of the utility industry and probable vendors as well as

with ERDA contractors. But it is imperative that close cooperation with these

groups not lead to monopolies on either the technologies developed or the fuels

used.

Allocations of Resources

TWO ways of looking at the projects to which ERDA will be devoting its efforts

are: (a) the nature of the work performed and (b) the time-frame in which technologies will be brought to commercial operation. The kinds of activities tha t

ERDA labs and ERDA contractors will be involved in appear to be basic research

mission-oriented R&D, and proof-of-concept experiments. A reasonable allocation

, of resources might be 15% for basic research, 45% for mission-oriented R&D, and

40% for proof-of-concept demonstrations. Another way of looking at this is to

provide 15% of the available funding for projects likely to be brought to commercial

operation in 25 years or more, 45% for projects commercially available in less than

10 years. There will obviously be a great deal of Overlap between long term projects

and basic research as there will between near term projects and proof-of-concept

demonstrations, but by simultaneously meeting both sets of requirements, balanc e

will be assured. It should be noted that long term basic research will provide a

needed pool of manpower to draw upon during the development phase.

ATTACHMENT I 305

60-411 r) - 75 - 21
Mr. Roger W. A. LeGassie April 29, 1975

Page Four

PROJECTS OF APPA MEMBER INTEREST

Presented below are some projects of special interest to APPA members and

and indication of APPA’s concern about these projects.

Fossil Fuels

Gasification. Coal gasification offers an opportunity to use a relatively

clean fuel, when compared to coal, for generating electricity. The price for

this clean-up is higher cost for the fuel, solid waste products from the cleaning

process, and increased water consumption. The loss of efficiency due to the gasification process means increasing either strip or deep mining to povide the

same amount of energy. Gasification should be compared with other ways of obtaining the same results in order to determine the extent of its future use. Many

of these same arguments apply to oil shale liquefaction.

MHD. MHD appears to be an effective method of increasing the energy efficiency

of coal burning steam electric generating plants. The Soviets are reportedly testing a 75 MW power plant with an MHD generator using natural gas. Studies indicate

that the nitrogen oxides can be controlled by using a fuel-rich mixture. . Sulfur

oxides would react with the alkali seed material to form compounds recovered by the

electrostatic precipitators. For economic reasons the alkali metals must be recovered and a by-product of that is control of sulfur. With a steam turbine as

the second stage of power production, the discharge of waste heat into the cooling

water would be well below that of any existing steam power plant. If a gas turbine

is used for the second stage, the need for cooling water is removed. Unfortunately,

to reach the required temperatures for MHD, auxiliary heating or an oxygen enriched

atmosphere is required.

Nuclear Power

Breeder Reactor. The breeder reactor may become an important element in our

methods of electrical generation over the next half-century. A balanced approach

to the breeder, as one of three or four major forms of electrical generation, would

be to fund the high-temperature gas-cooled reactor and the light-water breeder as

well as the LMFBR. In addition, some of the reliability and safety questions raised

about the LWR are magnified in the breeder case. The nuclear waste-disposal problem

must also continue to be studied.

Renewable Resources

The whole range of solar technologies hold the promise of meeting a significant

portion of the nation’s energy needs over the next forty years. In certain regions

of the country, it may become a major method for generating electricity. The Pacific

Northwest, is heavily dependent upon hydro power, which currently provides about 14%

of the nation’s electricity. While the development of new hydro sites cannot keep

pace with projected electrical demand, many previously marginal sites could be developed, existing sites could be redeveloped for increased capacity, and bulb-type

turbines should be developed for use both in hydro projects and possible tidal installations. On a net energy basis no method of electrical generation is as favorable as hydro.

306 ATTACHMENT I
Mr. Roger W. A. LeGassie April 29, 1975

Page Five

.

The development of first generation solar heating and cooling seems well

along, and an evaluation of the integration of this technology into the utility

industry is deserving of study. The economic use photovoltaic cells, solar

thermo-electric, ocean thermal, and wind turbines is regional in nature.

them

tion

Development and use of solar technologies over the next 25 years could allow

to take their place along side hydro as a major factor in electrical generaduring the first quarter of the next century.

Except for ocean thermal, an efficient and widely applicable energy storage

system is required to make solar systems viable. While pumped-storage and batteries

will probably be commonly used, a fuel cell using a fuel such as hydrogen may prove

to be the best form of energy storage.

Geothermal energy is an efficient method of generating electricity’.’ Its

application will be limited unless new ways of tapping geothermal fields are perfected and the environmental problems associated with using geothermal energy

are solved.

Fusion

APPA supports the development of both laser fusion and magnetic containment.

The laser approach appears to be the only one that offers many of our members the

possibility of actually operating such generation. Large fusion generation plants

would probably be jointly owned by all segments of the industry. Concepts such

as the KMS approach to produce methane with laser fusion should be studied to determine whether or not it has advantages over direct electrical generation with

fusion. A pressing need in this area seems to be the development of an efficient

high energy laser.

Fuel Cells

In addition to being an effective way to store energy for solar systems, fuel

cells promise inexpensive and reliable energy. They should be easy to install and

are modular so that fuel cells can be sized to meet the needs of almost all utilities.

There appears to be little environmental effect associated with generating electricity

with fuel cells. A unique approach to using fuel cells is being studied by the City

of Seattle. The fuel used in the cell would be obtained from converting the methane,

from pyrolysis of solid waste, to methanol which is used in the cell.

.

ATTACHMENT I 307
Mr. Roger W. A. LeGassie April 29, 1975

Page Six

Congress mandated that ERDA decide their energy priorities on the basis of:

1. power related values of energy sources;

2. preservation of material resources;

3. reduction of pollutants; and

4. export market potential (including reducing imports).

I believe the projects and evaluation scheme I have outlined meets those

requirements in a rational way.

Sincerely,

Alex Radin

AE:mls

308 ATTACHMENT I
June 17, 1975

1707 H Street, N. W.

Washington, D. C.

Dear Dr. Teem:

These comments on the role of the

Institute mandated by the Solar Energy

Solar Energy Research

Research, Development

and Demonstration Act of 1974 are a response to an ERDA request

for views published in the June 3, 1975 Federal Register.

The American Public Power Association is a national service

organization representing more than 1,400 local publicly owned

electric utilities in 48 states, Guam, the Virgin Islands, American Samoa and Puerto Rico. Because our membership is interested

in providing adequate amounts of reasonable priced, reliable electricity in an environmentally acceptable manner, APPA has a substantial interest in the development of economical solar energy

systems to generate electricity or to supplement electric@ .

With a membership as geographically diverse as ours, APPA is

interested in most forms of solar energy utilization.

we believe the role of the Institute should be to facilitat e

the utilization of solar energy, and that the Institute should be

organizationally separated from other ERDA solar activities. The

Institute should focu s on R&D on those system components which

are unique to solar energy. Related work in fields such as material science should be contracted to other agencies or resear Ch

organizations. The Institute should have test facilities a t

appropriate sites for testing all fores of solar energy, and should

be the national lab for solar energy.

System analysis activities of the Institute should include

the development of Conceptual designs for solar systems which are

tible with off the shelf non-solar components. The Institut e

should evaluate overall system performance and establish system,

component and material standards for solar systems. 1t should also

develop designs which are responsive to the concerns of an economic

group within the Institute.

An economic group should be concerned with all aspects of

marketing solar equipment, developing a strong solar energy industry,

and resting solar components and systems.

ATTACHMENT I 309
Page Two

A communications division in the Institute should compile

data in and provide information from a solar energy bank, as we11

as function as a public information office.

I hope that you find these comments useful.

Sincerely,

Alex Radin

~jb k

310 ATTACHMENT I
ATTACHMENT II

ERDA AND THE CONGRESSIONAL ACTS

This section weighs issues regarding ERDA’s

Plan and Program against provisions in two

Congressional Acts, The purpose is to compare

ERDA’s direction with Congressional intent.

The specific issues used in the comparison are

the 16 major issues identified by OTA’s Overview Task Group. These are explained in detail in

Chapter I.

The laws applied as yardsticks are (1) the

Federal Nonnuclear Energy Research and

Development Act of 1974 (PL 93-577), and (2) the

Energy Reorganization Act of 1974 (PL 93-438).

The first law established the comprehensive

Federal program for energy R, D&D, and the

second law established ERDA and designated it

as the lead agency in the program.

1. The Nature of the National Energy Policy

Goals

Issue: The national energy policy goals as

stated by ERDA deserve review and clarification.

The R, D&D Act: Sec. 3(b)(l): “The Congress

declares the purpose of this Act to be to establish

and vigorously conduct a comprehensive

national program of basic and applied research

and development including but not limited to

demonstrations of practical applications of all

potentially beneficial energy sources and utilization technologies within the Energy Research and

Development Administration.”

Critique: ERDA’s Plan states five national

energy goals to which energy R, D&D should

contribute. Summarized briefly, they are

national security and policy independence , . . a

healthy economy. , . preservation of life style

options , , , aid to world stability. . . and protection of the environment.

These goals and the emphasis among them

warrant careful Congressional review.

Such review would seem important first

because the goals provide the policy framework

for ERDA’s Plan and Program. Unless there is

agreement between the Administration and

Congress on these fundamental policy guides,

serious disagreement and delay could well occur

with respect to ERDA’s establishment and

implementation of the R, D&D effort.

And Congressional review would seem to take

on additional importance when the great potential impact of priorities among the goals is

considered. For instance, ERDA’s emphasis on

the goal of self-sufficiency as opposed to the goal

of environmental concerns will have major

consequences for future quality of life and

economic well-being. Similarly, the emphasis on

self-sufficiency rather than international

cooperation will have major impacts on our

foreign policy.

2. Overall Level of the Federal Budget for Energy

R, D&D

Issue: The overall level of the Federal budget

for energy R, D&D (about $2.3 billion for FY 1976)

was largely an outgrowth of decisions made prior

to the Arab oil embargo, and should be reexamined.

The R, D&D Act: Sec. 2(c): “The Congress

hereby finds that the urgency of the Nation’s

energy challenge will require commitments

similar to those undertaken in the Manhattan and

Apollo projects; it will require that the Nation

undertake a research, development, and

demonstration program in nonnuclear energy

technologies with a total Federal investment

which may reach or exceed $20 billion over the

next decade.”

Critique: The scale of the present Federal

energy R, D&D program appears heavily influenced by two factors.

First, in December 1973, there appeared the

Dixy Lee Ray Report to the President on energy R,

D&D. This report, largely prepared before the oil

embargo, was geared to an $11 billion 5-

year program of energy R, D&D.

The second factor is the $20 billion, 10-

year guideline supplied by Congress in Section

311
2(c) of the energy R, D&D Act, as quoted above.

The proposed Federal energy R, D&D budget is

now within the guidelines set forth by the Dixy

Lee Ray Report. However, in view of the

country’s post-embargo emphasis on energy

independence, it is by no means clear that this

budgetary framework is adequate.

As possible alternatives, ERDA should prepare

R, D&D programs for higher overall budget

levels, e.g., $20 billion and $30 billion for the 5

years beginning FY 1976. (It should be noted that

the Congressional guideline cited above provides

that the budget might reach or exceed the tenyear $20 billion level, )

3. The International Aspects of ERDA’s Plans

and Programs

Issue: The ERDA program does not place

sufficient emphasis on international considerations,

The R, D&D Act: Sec. 6(b)(2) establishes a

basic objective for the R, D&D program. “This

program shall be designed to achieve solutions to

the energy supply and associated environmental

problems in the immediate and short-term (to the

early 1980’s), middle-term (the early 1980’s to

2000), and long-term (beyond 2000) time intervals, 1n formulating the nonnuclear aspects of

this program, the Administrator shall evaluate

the economic, environmental, and technological

merits of each aspect of the program.”

Critique: If ERDA’s program is to achieve

solutions to energy problems, its concern should

reach beyond our national borders. In today’s

interdependent world, the goals of energy independence, economic well-being, and environmental quality are unlikely to be fulfilled

without considering international factors.

In its overall plan, ERDA identifies such

international considerations. But in its implementing program, it barely recognizes them.

Under a program truly designed to solve

energy problems, ERDA might well launch

vigorous research efforts with respect to the

global environmental effects o f energy

generating technologies; the management of

energy supply technologies significantly affecting the seas; the joint creation of targets of energy

conservation among the major energy consumer

nations,

4. Coordination of Programs Between ERDA and

Other Federal Agencies

The Issue: ERDA’s plans for coordination with

other Federal energy agencies need to be more

fully developed,

The Energy Reorganization Act: Under this

Act, ERDA was established as a key instrument

to meet national energy objectives: Sec. 2(b):

“The Congress finds that, to best achieve these

objectives, improve government operations, and

assure the coordinated and effective development of all energy sources, it is necessary to

establish an Energy Research and Development

Administration to bring together and direct

Federal activities relating to research and

development on the various sources of energy, to

increase the efficiency and reliability y in the use of

energy, and to carry out the performance of other

functions, including but not limited to the Atomic

Energy Commission’s military and production

activities and its general basic research activities. In establishing and Energy Research and

Development Administration to achieve these

objectives, the Congress intends that all possible

sources of energy be developed consistent with

warranted priorities. ”

Critique: As the above provision indicates,

Congress has given ERDA a strong mandate as

the lead energy R, D&D agency with responsibility to integrate and coordinate national efforts,

However, the ERDA Plan indicates a timidity

in accepting this leadership. It is not evident in

the Plan whether a comprehensive framework is

being established to permit ERDA to perform the

role.

The consequences could be costly,

For instance, three separate Federal agencies

are now exploring technologies for coal cleanup.

Without a formal structure to bring together

these diverse efforts, much waste could ensure

without any assurance that a technology will be

successfully developed,

And without coordination, agencies concerned

with different elements of a given energy

technology might work at cross purposes,

Regulatory requirements might clash with

economic policies; technological priorities might

conflict with environmental standards.

312 ATTACHMENT II
5. Cooperation Between ERDA and State and

Local Governments

Issue: Success of the ERDA Program will

depend in large measure on close and continuous

coordination with State and local governments.

The ERDA Plan does not indicate procedures or

mechanisms for accomplishing this coordination.

The R, D&D Act: In Sec. 8(D)(l)(A), ERDA is

instructed to establish procedures to insure that

Federal energy R&D assistance addresses the full

range of energy problems—from extraction to

end-use—in various regions under “real life”

conditions. “The Administration shall, within 6

months of enactment of this Act, promulgate

regulations establishing procedures for submission of proposals to the Energy Research and

Development Administration for the purposes of

this Act. Such regulations shall establish a

procedure for selection of proposals which (A)

provides that projects will be carried out under

such conditions and varying circumstances as

will assist in solving energy extraction, various

areas and regions, under representative

geological, geographic, and environmental conditions . . .“

Critique: If the Federal R&D program is to be

realistically conceived and effectively implemented, an objective emphasized by Congress

in the above provision, full State and local

participation would seem essential.

For instance, the success of energy programs

will depend heavily on appropriate water allocation, reasonable land use regulation, realistic

taxing policies, consistent environmental controls, and ultimately, on public acceptance. In all

of these areas, State and local levels possess

strong capabilities and valuable experience.

In its language, the ERDA Plan gives recognit ion to the need for a strong State and local role.

But in its specifics, the Plan does not provide

procedures or mechanisms for accomplishing

this participation.

6. Near-Term Energy Problems

Issue: ERDA’s Program gives very little

attention to near-term (next ten years) energy

problems.

The R, D&D Act: Sec. 6(b)(2): “This program

shall be designed to achieve solutions to the

energy supply and associated problems in the

immediate and short-term (to the early 1980’s),

middle-term (the early 1980’s to 2000), and longterm (beyond 2000) time intervals. In formulating the nonnuclear aspects of this program,

the Administrator shall evaluate the economic,

environmental, and technological merits of each

aspect of the program. ”

Critique: Rhetorically, ERDA’s Plan recognizes

the need to address the Nation’s immediate,

practical energy problems, as well as the basic,

longer term questions. In fact, the plan’s first

strategic element is to “insure adequate energy to

meet near-term needs until new energy sources

can be brought on line. ”

And specific aims are cited in ERDA’s nearterm program: Enhanced gas and oil recovery,

direct use of coal, more nuclear reactors, shifting

demand away from petroleum, and increased

conservation practices.

But these intentions are not reflected in the

“bottom line”- in the actual ERDA budget. Of the

agency’s total FY 1976 budget of about $1.8

billion, the only items relevant to the next decade

are $80 million in funds for energy supply efforts

and less than $7 million for end-use energy

conservation.

7. Socio-Economic Research

Issue: ERDA’s program of R, D&D does not give

enough attention to socio-economic analysis and

research in addressing the Nation’s energy

problems.

The R, D&D Act: Sec. 5(a)(2): “The environmental and social consequences of a

proposed program should be considered in

evaluating its potential. ”

Critique: ERDA’s program plans, budgetary

commitments, and professional staffing do not

seem to give adequate priority to social,

economic, environmental, and behaviora l

research needs, even though the Congressional

mandate makes clear that ERDA is given

responsibility beyond “technological” R, D&D.

“Nonhardware” research is needed for two

reasons: (1) to better understand th e

relationships of energy and the quality of life,

and (z) to identify nontechnological constraints

to increased energy supply or reduced energy

demand.

For instance, the Nation’s energy R, D&D effort

is confronted with this major issue: The social

concern and community resistance which have

become associated with virtually every energy

supply technology.

Unless this “nonhardware” question—the

attitude of the public—is examined and carefully

ATTACHMENT II 313
weighed in evaluating energy options, massive

investments in new energy supply or conservation technologies may never bear fruit.

8. Balance Between Supply Versus Demand

R, D&D

Issue: ERDA’s Program overemphasizes supply technologies relative to energy consumption.

The R, D&D Act: Sec. 5(a)(l): “Energy conservation shall be a primary consideration in the

design and implementation of the Federal nonnuclear energy program, For the purposes of this

Act, energy conservation means both improvement in efficiency of energy production and use,

and reduction in energy waste.”

Critique: Most of the programs inherited’ by

ERDA emphasize large-scale projects to increase

energy supply, especially through nuclear and

coal technologies,

Yet as is clear in the above provision, Congress

directs that a strong emphasis also be given to R,

D&D on the consumption side of the energy

equation.

Such a priority has not yet been fully

developed by ERDA. In fact, only about two

percent of the revised FY 1976 budget sent to

Congress can properly be termed applicable to

“conservation” activity.

Additionally, ERDA’s conservation program

focuses primarily on the near-term, underestimating long range potential.

In weighing the long-term advantages between

“supply” and “consumption” technologies, ERDA

should give fuller consideration to cost-effectiveness, time to pay off, environmental benefits

and costs, and demand on resources.

9. ERDA’s Basic Research Program

Issue: The goals of ERDA’s basic research

program have not yet been established. Considerable effort is required to organize a pertinent program of basic research.

The R, D&D Act: Sec. 3(b)(l): “The Congress

declares the purpose of this Act to be to establish

and vigorously conduct a comprehensive

national program of basic and applied research

and development.”

Critique: Applied R, D&D aside, ERDA’s

program for basic research has largely been

inherited from the agencies which it incorporated.

For instance, in the FY 1976 budget, virtually

all the basic research funds are devoted to

nuclear power and high energy science.

While these activities are important, the basic

research program should be organized to better

reflect the needs and objectives identified in

ERDA’s R, D&D Plan,

For instance, there is a need to strengthen basic

research efforts in nonnuclear aspects of

materials, combustion, fuel chemistry, environmental processes, social sciences, and other

disciplines pertinent to the non-nuclear ERDA

programs,

10. Commercialization

Issue: The development of effective commercialization policies and procedures is not adequately addressed in the ERDA Plan,

(a) The R, D&D Act: Subsections 5(b)(l) and

(2):

“(l) Research and development on nonnuclear energy sources shall be pursued

in such a way as to facilitate the

commercial availability of adequat e

supplies of energy to all regions of the

United States.

“(z) In determining the ap -

propriateness of Federal involvement in

any particular research and development

undertaking, the Administrator shall

give consideration to the extent to which

the propose d undertaking satisfies

criteria including, but not limited to the

following:

“(A) The urgency of public need for

the potential results of the research,

development, or demonstration effort is

high, and it is unlikely that similar

results would be achieved in a timely

manner i n the absence of Federa l

assistance.

“(B) The potential opportunities for

non-Federal interests to recapture the

investment in the undertaking through

the normal commercial utilization of

proprietary knowledge appear inadequate to encourage timely results,

“(C) The extent of the problems

treated and the objectives sought by the

undertaking are national or widespread

in their significance.

314 ATTACHMENT II
“(D) There are limited opportunities

to induce non-Federal support of the

undertaking through regulatory actions,

end-use controls, tax and price incentives, public education or other alternatives to direct Federal financial

assistance.

“(E) The degree of risk of loss of

investment inherent in the research is

high, and the availability of risk capital

to the non-Federal entities which might

otherwise engage in the field of the

research is inadequate for the timely

development of the technology.

“(F) The magnitude of the investment

appears to exceed the financial

capabilities of potential non-Federal

participants in the research to support

effective efforts. ”

Critique: The need for ERDA attention to “nontechnical” concerns is well illustrated by the

question of marketability.

For research supervised by the Department of

Defense or NASA, there is little question of “a

customer” for a new product or process. The

agencies’ own needs usually will guarantee

acceptance of the R&D results.

But the “market” for ERDA R, D&D output will

be both diffuse and, in some cases, poorly

defined, The potential outlet for the results of

successful programs may range from large

energy companies to the local homeowner.

Thus, it would appear that ERDA will need to

undertake special efforts to insure that it does not

develop products or processes that simply “won’t

sell.”

Such protection could be provided in part by

including comprehensive industrial and consumer participation in the planning phase of new

projects. These groups probably would have the

best perception of society’s requirements and the

marketability of R&D output,

ERDA’s Plan does not recognize or recommend

the utilization of this type of input into its

decisionmaking, although the R, D&D Ac t

appears to provide ample latitude for it to do so;

as follows:

(b) The R, D&D Act: Sec. 7(a): “In

carrying out the objectives of this Act,

the Administrator may utilize various

forms of Federal assistance and participation which may include but are not

limited to—

“(1) join t Federal-industry experimental, demonstration, or commercial corporations consistent with the

provisions of subsection (b) of this section;

“(z) contractual arrangements with

non-Federal participants including corporations, consortia, universities,

governmental entities and nonprofit institutions;

“(3) contracts for the construction

and operatio n of Federally owne d

facilities;

“(4) Federal purchases or guaranteed

price of the products of demonstration

plants or activities consistent with the

provisions of subsection (c) of the section;

“(5) Federal loans to non-Federal

entities conducting demonstrations of

new technologies; and

“(6) incentives, including financial

awards to individual inventors, such

incentives to be designed to encourage

the participation of a large number of

such inventors, ”

Critique: Another major problem involved in

bringing ERDA programs to the commercial

stage is that of “blurred competitive horizons. ”

For example, although it is possible to estimate

fairly accurately the cost of producing gasoline

from oil shale, the oil-exporting nations can

always lower the prices of oil to undercut the

potential market. Thus, the construction of shaleoil extraction and refinement facilities will

depend on some form of Federal subsidy.

Projects of this type may, therefore, never

reach “commercialization” in the purest sense. It

may in fact be desirable for the government to

form special public agencies, such as Amtrak, to

manage enterprises of this type. The formation of

such enterprises could have significant impacts

on the Nation’s basic economic structure.

The present ERDA Plan does not appear to

address this important problem, Yet the R, D&D

Act clearly provides the authority for wideranging study and use of Federal incentives and

participant ion.

ATTACHMENT II 315
11. Resource

Issue: It is

Constraints

essential that careful attention be

given to assessing energy resources, since they

represent assumptions basic to the ERDA

program plan.

The R, D&DAct: Sec. 4(a): ’’The Administrator

shall review the current status of nonnuclear

energy resources and current nonnuclear energy

research and development activities, including

research and development being conducted by

Federal and non-Federal entities; . . .“

Critique: Incorrect assessments of the Nation’s

energy resource base could result in huge waste

in the ERDA effort.

For instance, overestimates could lead to the

development of a new energy infrastructure that

would quickly run out of fuel.

Yet there is still a great deal of uncertainty

regarding the nature and extent of our energy

resources. Estimates vary widely for natural gas,

oil, coal, and uranium.

Clearly, ERDA should give high priority to

improvements in the methods used to estimate

energy resource potential.

12. Physical and Societal Constraints

Issue: Numerous physical, institutional, and

social constraints may limit the orderly development and implementation of the ERDA energy

Plan.

The R, D&D Act: Sec. 6(a) requires the

preparation and annual updating of the ERDA

R, D&D Plan. It also contains the stipulation that

the Plan be solution-oriented:

“Such plan shall be designed t o

achieve—

“(1) solutions to immediate and

short-term (to the early 1980’s) energy

supply system and associated en -

vironmental problems:

“(z) solutions to middle-term (the

early 1980’s to 2000) energy supply

system and associated environmental

problems; and

“(3) solutions to long-term (beyond

2000) energy supply system and

associated environmental problems. ”

Critique: The above provision would appear to

be critically important. It mandates an R, D&D

effort directed not towards a means, such as new

hardware, but towards an end–workabl e

answers to energy system problems.

The distinction is essential to make. Because of

the pervasive nature of the energy problem, the

solutions will only partly involve technology.

They will require as well the identification and

analysis of a myriad of nontechnological factors.

For instance, there are key institutional and

social considerations: Manpower, capital needs,

information access and dissemination, regional

and community impacts of mining.

And there are crucial physical factors: water

requirements, materials limitations, air pollution, land use, and net energy.

With Section 6(a), ERDA appears to have

strong authority to comprehensively address

these potential constraints, “

In its overall response, however, ERDA has

taken a much narrower view, It concentrates on

developing the technologies, This approach is

apparent across the full spectrum of the ERDA

R, D&D package— from conservation to nuclear

power.

This narrow interpretation of the law gives rise

to a fundamental concern: ERDA’s R, D&D may

produce a wide range of new technologies,

without providing the wherewithal to implement

them in the “real world.”

And it poses a key policy choice: If the

congressionally directed solutions-oriented effort is to be carried out, ERDA should broaden its

approach . . . or the job of addressing the “nonhardware” issues should be assigned elsewhere,

13. Overemphasis on Electrification

Issue: The ERDA Plan appears to lean toward

an overemphasis in electrification. This lack of

diversity, especially in the long-term “inexhaustible” sources, may not be the most effective

approach.

The R, D&D Act: Sec. 6(b)(3): “The Administrator shall assign program elements and

activities in specific nonnuclear energy

technologies to the short-term, middle-term, and

long-term time intervals, and shall present full

and complete justification for these assignments

and the degree of emphasis for each. ”

.

Critique: Breeder reactors, solar-electric

systems, and fusion reactors all have basic

characteristics in common: All are capitalintensive, have a low fuel cost, and are producers

of electricity.

ERDA’s emphasis on these as the three major

316 ATTACHMENT II
“inexhaustible” energy sources for the long-term

poses serious concerns.

For instance, there may not be sufficient

private capital to support almost total reliance on

capital-intensive energy technologies. As a

consequence, massive Federal subsidies might be

required.

And while electricity has advantages, there are

major uncertainties with respect to its complex

generating systems. The concerns include environmental impact and the danger of equipment

malfunction or sabotage.

ERDA’s heavy emphasis on electrification

R, D&D should be thoroughly reviewed now,

before long-range alternatives are lost by default.

Other possible approaches include production

of synthetic fuels by solar or nuclear energy,

increased emphasis on hydrogen and biomass

fuels, and expanded direct use of solar, geothermal and other direct heat sources.

While these approaches do not appear to have

the ultimate potential of the major “inexhaustible,” they could be vital ingredients in the

future energy mix.

14. Methodology and Assumptions Used in

Developing the R, D&D Plan

Issue: The ERDA Plan relies on a methodology

and assumption s for developing R, D&D

priorities which appear to bias the priorities

toward high technology, capital-intensive energy

supply alternatives and away from end-use

technologies.

The R, D&D Act: Sec. 3(a): “It is the policy of the

Congress to develop on an urgent basis the

technological capabilities to support the

broadest range of energy policy options through

conservation and use of domestic resources by

socially and environmentally acceptable means. ”

Critique: ERDA relies on a number o f

questionable assumptions which tend to distort

its R, D&D priorities, overemphasizing some

options and neglecting others.

These assumptions include the following:

● ERDA’s projections of future U.S. energy

options assume the same set of final demands.

The possibility of major reduction in energy

growth because of higher costs is not taken into

account;

● In calculations of the capital needs for new

energy supply systems, consumer costs are not

included, This could result in overoptimistic

projections of the society’s ability to pay for

expensive new energy technology;

● ERDA assumes that the strategy of improved

efficiency in the “end use” of energy—in the

home, in transportation, etc.—will have significant value only for a limited period, after which

the agency expects exponential energy growth to

resume.

Based on these assumptions, ERDA justifies its

heavy tilt towards the high technology, capitalintensive energy options which hopefully would

produce massive new energy supplies.

In fact, simpler, less-expensive technologies

may prove to be essential, major components in

the Nation’s energy future, This would be

especially so if energy growth permanently

slows and the availability of capital and key

natural resources is permanently constrained.

15. ERDA Management Policy

Issue: ERDA’s present management policies

could hinder achievement of its goal,

The R, D&D Act: Sec. 4(b): “The Administrator

shall formulate and carry out a comprehensive

Federal nonnuclear energy research, development, and demonstration program which will

expeditiously advance the policies established

by this Act and other relevant legislation

establishing programs in specific energy

technologies . , ,“

Critique: Present ERDA management practices

have three recognizable flaws. These could serve

as serious drawbacks to the agency’s effective

implementation of the R, D&D program.

The problems are as follows:

● Internal project management tends to impose

excessively detailed restrictions on R, D&D

programs;

● Project management delegated to outside

agencies or firms has been awarded t o

organizations having excessively detailed

management structures. The result has been a

loss of ERDA program control;

● Systems analysis—an important tool—has

been used excessively in lieu of actual, experimental testing of the feasibility o f

technologies,

At this early stage of ERDA’s development,

these difficulties could be easily remedied. As a

new agency, ERDA has excellent opportunities to

ATTACHMENT II 317
benefit from the experiences of older groups and

to adopt up-to-date management procedures and

techniques.

16. Net Energy Analysis

Issue: Net energy analysis can aid in decisions

as to which existing and developing technologies

deserve emphasis, but this methodology must be

employed with caution.

The R, D&D Act: Sec. 5(a)(5): “The potential for

production of net energy by the proposed

technology at the stage of commercial application

shall be analyzed and considered in evaluating

proposals.”

Critique: Net energy analysis is used to

determine the quantity of energy that is needed to

produce energy. For instance, to produce shale

oil, a certain amount of energy must be used to

mine, transport, and heat the shale.

This analytical technique can aid in evaluating

the potential of various energy technologies.

However, a great deal of research is needed

before it can be a consistent and widely accepted

method.

The ERDA Plan does not address the problems

with respect to the “net energy” approach or

establish criteria for its use.

o

318 ATTACHMENT II