An Analysis of the ERDA Plan and Program

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An Analysis of the ERDA Plan and Program

October 1978

NTIS order #PB-250636





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

OLIN E. TEAGUE, TEXAS, CHAIRMANDIRECTOR

CLIFFORD P. CASE, N. J., vICE CHAIRMAN O F F I C E O F T E C H N O L O G Y A S S E S S M E N T DANIEL V. DE SIMONE

EDWARD M. KENNEDY, MASS. MORRIS K. UDALL, ARIZ. W ASHINGTON , D.C. 20510DEPUTY 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. JacksonChairman, Committee on Interior

and Insular AffairsUnited States SenateWashington, D.C. 20510

The Honorable Olin E. TeagueChairman, Committee on

Science and TechnologyU.S. House of RepresentativesWashington, D.C. 20515

Gentlemen:

On behalf of the Office of Technology Assessment, we are pleasedto forward a report: An Analysis of the ERDA Plan and Program.

The report was prepared by the Office of Technology Assessmentwith the assistance of six panels of experts conversant with themajor program areas of the Energy Research and DevelopmentAdministration (ERDA). It is an analysis of the program plansubmitted 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 accordancewith Public Law 92-484.

Chairman u Vice Chairmanof the Board f the Board

. . .

Ill



T E C H N O L O G Y A S S E S S M E N T B O A R D

O L I N E . T E A G U E , T E X A S , C H A I R M A N

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

E D WA R D M . K E NN E DY , h l A SS . M O RR I S K . UD A L L, A R I Z.

ER NE ST F. HO L LI NG S , 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. DADDARIODIR EL ,0,7

O F F I C E O F T E C H N O L O G Y A S S E S S M E N T DANIEL V. DE SIMONE

W A S H I N G T O N , D . C . 2 0 5 1 0DEPUTY DIRECTOR

October 21, 1975

The Honorable Olin E. TeagueChairman of the BoardOff ice of Technology AssessmentCongress of the United StatesWashington, D. C. 20515

Dear Mr. Chairman:

In response to the requests to OTA from the Chairman of theHouse Committee on Science and Technology and the Chairman

of the Senate Committee on Interior and Insular Affairs, Iam pleased to submit a report entitled: An Analysis of theERDA Plan and Program.

This report was prepared by the staff of the Office of Tech-nology Assessment with the assistance of six panels of expertsconversant with the major program areas of the Energy Researchand Development Administration (ERDA) and personnel from threeuniversit ies with centers for energy policy analysis.

I t is antic ipated that this analysis, which identifies majori s su e s , summarizes their import , ra ises key questions, and pro-vides background data, will be of use to Congressional committeesreviewing the comprehensive energy research plan and programsubmitted by ERDA to Congress on June 30, 1975, in accordancewith Public Law 93-577.

EMILIO Q . DADDARIODirector

v



INTRODUCTION

The Office of Technology Assessment is pleased to present this report on itsanalysis of the Energy Research and Development Administration (ERDA) Planand Program “Creating Energy Choices for the Future. ” The Plan, was presented toCongress on June 30, 1975 in accordance with Public Law 93-577.

The Office of Technology Assessment (OTA) was asked by Chairman Teagueand Congressman Mosher of the House Committee on Science and Technology toanalyze the Energy Research and Development Administration Plan and Program.This request was joined by Senator Jackson, Chairman of the Senate Interior andInsular Affairs Committee and by the Joint Committee on Atomic Energy.

ERDA became operational on January 19, 1975. It was created by combiningelements from several agencies, notably the Atomic Energy Commission,Depar tment of In te r ior , Na t iona l Sc ience Founda t ion, and Environmenta lProtection Agency. During the initial months of its existence, ERDA’s task was todevelop 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 anational plan for energy research, development, and demonstration, hereafterreferred 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 thesegoals in light of a set of energy scenarios, and identifies R&D priorities for threetime 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 toachieve the Plan objectives.

In the letter from Chairman Teague and Congressman Mosher to OTA, datedDecember 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 thePresident’s view of national energy R&D policy, they will in large measuredetermine the broader options for our future national energy policy. The OTAassessment of the ERDA Plan and Program is intended to provide the Congresswith 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 theERDA 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. Theseare ERDA-49, National Solar Energy Research, Development Demonstration Program (June 1975), andERDA-23, National Plan for Solar Heating and Cooling [March 1975).

vii



These panels, whose members are identified at the beginning of each chapter, werestructured to contain a balance of viewpoints; participating authorities weredrawn from major manufacturing industries, energy utilities, academic researchcen te rs , pub l ic hea lth d isc ip l ines , env ironmenta l p rotec t ion g roups andprofessional engineering, architectural, and legal societies. The five panelsaddressed specific aspects of energy, development, and demonstration in week-long 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 hadidentified.

Three universities which have developed active centers for energy policyanalysis 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 Austinworked 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 taskgroup. Independent papers on other subjects were also prepared by a number of diverse outside groups and individuals. Critiques of the ERDA Plan were solicitedfrom 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 withkey energy staff members from the Environmental Protection Agency, FederalEnergy Administration, and Office of Management and Budget; and interviewswith a large number of senior ERDA management personnel. Special thanks aredue 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 eachtask group and a chapter for each of the six task groups, includes a summary, andset of related issue papers representing the diverse viewpoints of the task groupmembers. Each issue paper provides a list of specific questions relating to theERDA Plan.

Attachment I contains critiques of the ERDA Plan received from diverseinterest groups listed in the attachment.

The OTA staff effort was directed by Dr. Jon M. Veigel. The regular OTAenergy 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 FederalPower 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 EnergyPolicy Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

3. The International Aspects of ERDA’s Plans and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Coordination of Programs BetweenERDA and Other Federal Agencies . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Cooperation Between ERDA and Stateand 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pagevii

1

1112

13

15

19

19

21

23

25

2729

30

31

33

35

373839

41

4345

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 CyclePowerplants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . * . . * * * * * * * * * -

11. Advanced Fossil Fuel CombustionPrograms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 q. . . . . . . . . . . . . . . . . . . . . . . . . . .

Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Uranium Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Uranium Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fuel Recycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . * . . . * * * * * . * * * * * * .Public Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Controlled Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Technologies for Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59

6163

6466

68

6972

74

76

78

80

83

84

85

87

91

91

93959799

102

104105107108110

112113115

117119121123

CHAPTER IV. SOLAR, GEOTHERMAL, AND ADVANCED TECHNOLOGIESGROUP ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125TASK

A

B.

c .

SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMSTASK GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMSTASK GROUP ISSUES LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129



D. SOLAR, GEOTHERMAL, AND ADVANCED SYSTEMSISSUE 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 SolarElectrical Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Emphasis on Electric Energy Systems . . . . . . . . . . . . . . . . . . . . . . . .Emphasis on Solar Heating and Coolingof Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..””””Purposes of the Solar Heating and CoolingDemonstration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Role of User Incentives in Solar Heating andCooling of Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Standards for the Measurement of Solar Heatingand Cooling Equipment Performance . . . . . . . . . . . . . . . . . . . . . . . .Impact of Solar Energy on Utility Peak Demand . . . . . . . . . . . . . .Biomass Energy and Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Legal and Institutional Constraints inGeothermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Environmental Constraints of GeothermalEnergy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nonelectric Uses of Geothermal Energyand 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 . . . . . . . q. . . . . . . . . . . . . . . . . .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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . q. .Transmission and Distribution Priorities . . . . . . . . . . . . . . . . . . . . .Active Load Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133

133

135

137

139

141

143

144

146

148

150

152154155

157

159

161

163

165

169

170

171

173

175

175177179

181183

185187189

191193195

197

200202

xi



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

16. Cooperation With the Transportation Industry . . . . . . . . . . . . . . . 20617. Nonhighway Vehicle Transportation Program . . . . . . . . . . . . . . . . 20818. Energy Recovery From Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

CHAPTER VI. ENVIRONMENTAL AND HEALTH TASKGROUP ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. .. ... .. ...+..... 211

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

B. ENVIRONMENTAL AND HEALTH TASK GROUPISSUES 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 VoltageTransmission Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ground and Surface Water Contamination FromSurface Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Energy Consumption and Inadvertent Climate

Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Variance on Environmental Standards DuringDevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Energy Modeling and DataBank Requirements . . . . . . . . . . . . . . .Site and Technology-Specific Nature of Cause-Effect Relationships in EnvironmentalHealth Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Integration of Environmental, Health, Social,and Institutional Research Into Technology Programs . . . . . . . .Energy Impacts of Air and Water PollutionControl Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Competing Demands for Water in Western RiverBasins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Need for Social Research in Offshore EnergyProgr ams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Effect of Public Attitudes on ProgramImplementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Program Focus in Fossil Fuel Health EffectsResearch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Inadequate Inventory of Skills and Techniquesin Health Effects Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Atmospheric Sulfates as a Potential Constrainton ERDA’s Fossil Fuel Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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EXECUTIVE SUMMARY

The ERDA Plan (volume I) is a significantmilestone in the evolution of a long-term nationalenergy policy, However, the ERDA Program(volume II), to implement this plan does notappear adequate to achieve the stated goals,

In particular, there are two broad areas inwhich the differences between the policy goalsmandated by Congress and the programs pro-posed by ERDA to meet those goals are especiallysignificant. These deficiencies, unless remedied,could impede the solution of short-term and mid-term energy problems by the United States,which could lead to an increased dependence onforeign energy sources.

The first deficiency occurs because of ERDA’spursuit of technological options at the expense of a focus on a broader approach toward thesolution of energy problems. Simply establishingtechnical feasibil i ty is insuffic ient as non-technical constraints may prohibit implementa-tion. Such constraints could include any or all of:transportation, resource, manpower, and capitalavailability y; public a c c e p t a b i l i t y ; o r i n -stitutional, jurisdictional, economic, and en-vironmental compatibility. If ERDA is to supplysolutions to energy problems as mandated byP u b l i c L a w 9 3 -5 7 7 , n o n e o f th e se c a n b eneglected. I f E RDA c o n f in e s i t s a c t iv i t i e spredominantly to the proving of the feasibility of technological options, some other entity shouldaddress the more complex issues underlyingenergy solutions. In such a case clear coordina-tion with ERDA would be essential.

The second departure from congressional

mandate is to be found in the emphasis of both theERDA Plan and Program on options directedtoward increased energy supply, relative to theprograms in end use demand reduction, In PublicLaw 93-577 (Sec. 5(a)(l)), the Congress definedenergy conservation as meaning “both improve-ment in efficiency of energy production and useand reduction in energy waste. ” The law requiresenergy conservation be “a primary considerationin the design and implementation” of the ERDAprogram, Yet only 2 percent of ERDA’s budgeta pp ear s t o be al l o ca t e d t o co n s er v a ti o nprograms.

It is well recognized that expansion andconversion of our large energy supply systemswill be very costly and cumbersome, but that ourdwindling oil and gas reserves dicta te suchmodification. By contrast, successful widespreadimplementation of conservation programs withincreased efficiency or waste reduction objec-tives can have both a rapid and a continuingeffect. S u c h i m p r o v e m e n t s n e e d n o t b etechnologically complex; they may includemerely removing jurisdictional or institutionalconstraints, such as building codes which requireenergy-inefficient designs.

If ERDA is to provide near-term and mid-termenergy problem solutions, conservation throughefficiency and waste-reduction programs shouldbe an essential ingredient. The present ERDAprogram orientation toward developing complextechnological supply options for the long-termovershadows the importance of less-complexs o

OVERVIEW

I. The Nature of th e Energy Goals

In preparing its Plan, ERDA proposes fivegoals which, taken together, may constitute theenergy policy for the Nation.

The five energy goals are stated as follows:

1 , To maintain the secur i ty a n d in -dependence of the Nation;

lutions with near-term potential,

ISSUES*

2 . T o ma in t a in a s t r o n g a n d h e a l t h y

3.

economy, providing adequate employment

opportunities and allowing the fulfillmentof economic aspirations (especially in theless affluent parts of the population);

To provide for future needs so that lifestyles remain a matter of choice and arenot 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 throughcooperative international efforts in theenergy sphere;

To protect and improve the Nation’senvironmental quality by assuring thatthe preservation of land, water, and airresources is given high priority;

These goals and the emphasis among themwarrant careful congressional review. Withoutagreement between the Administra tion andCon gr es s o n t he s e ov e r al l o bj e c t iv e s an dpriorities, ERDA’s development of an R, D&Dprogram is more difficult.

Review and consensus become all the moreappropriate in view of the major influence thesegoals and their priorit ies will have on theNation’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 interpretationsof them are much too modest, however,

Basically in addressing the energy goals ERDAadopted a narrow, hardware-oriented approach.Its R, D&D effort is designed primarily to developtechnologies . . . rather than to explore solutionsto energy problems.

An almost exclusive emphasis on technologyhas gotten results in some other national researcheffort s—not ably, in the spac e p rogr am andmilitary weaponry,

In these cases however, the “missions” havebeen very sharply defined, decisionmaking hasbeen centralized, and ample resources have beenavailable . The re la tive narrowness of thesemiss ions a l l o w e d a h e a v y a p p l i c a t i o n o f hardware, and success has been achieved,

The energy crisis is a far more complex andwide-ranging challenge. It is a problem spanningthe whole of man’s activity. It involves decisionsfrom individual householders to entire blocs of n at i on s. I t s “ so lu ti on ” d e p en d s o n n a t u r alresources and human values, new sources of fuel,public perceptions, and government and industryresponses,

As a consequence, ERDA’s narrow approach tothe national energy policy goals might well fulfilla mission—developing new technology—withoutproviding an answer—a secure energy future,U nr es ol ve d “nontechnological” i ss ues —f rominadquate incentives for commercialization,

2 E X E C U T I V E S U M M A R Y

through environmental demands, competitiveuse of resources, to community resistance—couldb l o c k t h e m o s t sophisticated engineeringachievement,

The OTA Overview Task Group identified anumber of very specific issues with respect to theapproach of the ERDA Plan and Program to thenational energy goals. These issues have animportant common denominator—

th e y a r i sefrom, and reflect, the narrow, hardware-orientedapproach reflected in ERDA’s Plan and Program.

3. The Issues

The issues with respect to the ERDA approachare summarized as follows. Each of the followingis treated in more detail in chapter 1.

(a) Insufficient emphasis is placed on inter-national considerations: International coopera-tion is essential to cope with the environmentaleffects of energy-generating technologies; toaddress security issues such as, specifically, themanagement of nuclear materials and wastes,and to manage resources, like the oceans, that area common world heritage. ERDA identifies suchconsiderations in its Plan but barely recognizesthem in its Programs.

(b) Incomplete plans are provided for coor-dination with other Federal agencies: Splitresponsibilities among Federal agencies are amajor potential obstacle to a comprehensive andbalanced energy R, D&D program. ERDA hasbeen mandated by Congress as the leading energyR, D&D agency and has been given responsibility

to integrate and coordinate national efforts, But itis not evident in ERDA’s plans whether aframework is being established to permit ade-quate performance of this role,

(c) Inadequate provision is made for coopera-t io n b e twe e n E R D A a n d S t a t e a n d l o c a lgovernments. The involvement and support of State and local governments is crucial to thesuccess of ERDA’s projects. These levels offerstrong 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 importanceof close and continuous coordination, it does notin c lu d e p ro c e d u re s or m e c h a n i s m s f o r a c -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 ensureadequate energy to meet near-term needs untilnew energy sources can be brought on line.”ERDA plans to accomplish this through en-hanced gas and oil recovery, direct use of coal,more nuclear reactors, shifting demand awayfrom petroleum, and increased conservationpractices. However, a review of ERDA’s FY 76

budget indicates that only about 5 percent isdevoted to solving near-term problems.

( e ) O n l y l i m i t e d a t t e n t i o n i s g i v e n t osocioeconomic research and analysis in ad-dressing the Nation’s energy problems: Broad-ranging research is needed to identify non-technological obstacles to energy solutions andto better understand the relationships of energyand the quality of life. ERDA’s program andbudget do not give adequate attention to social,economic, e nv iron me ntal , a n d b e h a v i o r a lr e sea rch n e ed s , e v en th o ug h th e l e gi s l at iverecord makes clear that ERDA is given respon-

sibility beyond technical R&D.

(f) ERDA’s program overemphasizes energysupply technology relative to consumption: Inthe past era of constantly decreasing real energyprices, little emphasis was placed on efficiency in“e nd -u se ”- energy consumption in the businessor home. This, however, is now an area in whichsignificant and cumulative gains could be ac-complished.

ERDA’s plan makes provision for energyconservation. But the focus is primarily on thenear-term, estimates of long-term importance of

improved efficiency in energy end-use are un-defined.

(g) The development of effective c o m m e r -

cialization policies is not adequately addressedin the ERDA Plan: Bringing a new energytechnology to the point of commercial feasibilityis a risky process, especially when it involvesdiffuse markets, the uncertainty of global energyand economic circumstances, the competition forcapital. ERDA’s Plan outlines a philosophy forcommercialization, but clearly needs a moredetailed explanation and careful definition of plans for developing a mechanism for coordina-

tion with industry.

(h) Careful a ttention should be given toassessing energy resources: An incorrect assess-ment of the Nation’s energy resource base couldcause severe distortions in ERDA priorities andschedules.

Recent analyses clearly show there is stillmajor uncertainty regarding the nature of ourenergy resources and point out the critical needfor developing better estimation methodologies,

(i) Physical, insti tutional, and social con-straints may limit the progress of the ERDAEnergy Plan: As indicated earlier, there are many

potential physical and social constraints to theintroduction of new energy technologies. Thepotential for program disruption by possibleobstacles demands careful study by ERDA.

(j) The ERDA Plan appears to overemphasizeelectrification: All three major “inexhaustible”sources (solar, breeder, and fusion) identified bythe ERDA Plan are producers of electricity, Yetintensive electrification will have a noticeablesocial impact and may present problems of vulnerability and reliability.

In order to avoid dangerously narrow future

options, the long-term electrification approachsh o u ld b e mo re th o ro u g h ly a n a ly z e d th a npresently proposed to make sure that viablealternatives are not lost by default.

(k) The ERDA Plan relies on assumptionswhich appear to bias its priorities toward hightechnology, capita l in tensive energy supplyalternatives: M a n y o f t h e s e n o t o n l y a r equestionable, but, further, tend to distort thevalue of various R, D&D options, ERDA plans donot take into account the effect of higher prices onenergy demand; they do not include consumer

costs in calculating the costs of new energysystems, and they assume exponential energygrowth will resume after 1985.

T h i s c o n c e n t r a t i o n o f f o c u s t e n d s t ominimize the potential impact of R, D&D toimprove end-use energy efficiency and bias thechoice of research priorities toward the supplysector.

(1) Application and questions with respect tonet energy analysis receive little attention: “Netenergy” measures total energy output relative tototal energy input, thereby indicating which

technologies are likely to be most useful,This technique can aid in the establishmento f p ri or it ie s f or exi st ing and developingtechnologies, but research is needed before it canbe a consistent and widely accepted tool. TheERDA Plan and Program is not responsive to theAct in this area.

E X E C U T I V E S U M M A R Y 3



4. Other ERDA Issues

In addition to the above issues related toERDA’s narrow approach vis-a-vis energy policygoals, the OTA overview analysis identified thefollowing three concerns:

(a) There is a need for a reexamination of theoverall energy R, D&D budget: The Federal

energy R, D&D budget (about $2.3 billion for FY1976) was largely an outgrowth of decisionsmade prior to the Arab oil embargo, and shouldbe reexamined.

(b) ERDA’s present management policiescould hinder achievement of its goals: presentE R D A m a n a g e m e n t p r a c t i c e s h a v e t h r e erecognizable drawbacks: (1) Internal projectmanagement t e nd s t o i m po s e i nh i bi t i ng l ydetailed restrictions on the R, D&D program; (2)project management delegated t o e x te rn alorganizations has been awarded to organizationshaving excessively detailed management struc-

tures, result ing in a corresponding loss of program control by ERDA; (3) there is too littleemphasis on systems analysis and too much onproof-of-concept experiments,

(c) The goals of ERDA’s basic researchprogram have not yet been established: ERDA’sprogram for basic research has largely beeninherited from the agencies which i t incor-porated, It is not surprising because of the shortlife of ERDA, but nonetheless a concern that thebasic research program does not yet reflectERDA’s basic R, D&D goals.

5. Possible Remedies

Whether or not ERDA assumes responsibilityfor the broader, “nonhardware” R, D&D issuesdescribed above, there can be no question of theirimportance. As emphasized earlier, technologya lo n e w i l l n o t so lv e th e Na t io n ’ s e n e rg yproblems.

Thus, answers to the Nation’s energy problemsrequire that the programs deemphasized byERDA in its narrow interpretation of its role bevigorously pursued somewhere in the Govern-ment. Most are not, at present, receiving priority

attention anywhere.One possible answer lies close at hand—in theActs of Congress. The Energy Reorganization Actestablishing ERDA and the Energy Research andDevelopment Act authoriz ing i ts programsprovide ample latitude for a broad-gaged, well-coordinated R, D&D effort led by ERDA.

ERDA’s Plan in many instances acknowledgesthe need for such a broad perspective andprogram, In fact, the problems are not so muchwithin the Plan itself—which is a serious andpraiseworthy initial effort—but in the lack of broad commitment and coordination when theP l an , P r og r am a n d B u d ge t a r e c o n si d e r edtogether.

Within the mandates of the CongressionalActs, a variety of actions could be considered.They are summarized as follows:

(a) The scope of ERDA’s mission could beexpanded and clarified, particularly in the areasof demonstration and commercialization. Amajor requirement is to clarify ERDA’s jurisdic-tion and responsibilities with respect to those of the Federal Energy Administra tion, the En-vironmental Protection Agency, the NuclearRegulatory Commission, and the Department of the Interior, in order to remove overlap, anda mb ig u i ty a n d to p ro v id e th e g ro u n d s fo r

efficient and effective mission management.(b) As noted, widespread uti l ization of

newly developed technologies depends on acomplex process involving the removal of non-technological constraints on commercialization,industrial incentives, and technology transfer.This process requires further delineation thanexists in the present ERDA Plan,

(c) Programs associated with the identifica-t io n a n d e v a lu a t io n o f e n v i ro n me n ta l , i n -stitutional, and societal constraints associatedwith a lternative energy technologies should

receive immediate and substantial attention,(d) Programs directed toward increasing the

efficiency of energy use should be accorded thehighest priority,

[e) New efforts to assess global issuesassociated wi t h e ne rg y , s u ch as climatemodification, international energy supply anddemand es t imates , the ro le o f mul t ina t ionalenergy corporations, and the link with oceanresources, should be instituted,

(f) The ERDA management approach, in-cluding the management of national and Federal

laboratories and the role of contract R, D&Dshould be reevaluated.

(g) Closer working relationships with Stateand local governments, including their participa-tion in ERDA program planning, should beestablished.




(h) The potential national benefit whichwould result from higher ERDA budget levelsshould be examined. .

Fossil Energy

q

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There is an urgent need to develop increased

supplies of oil and natural gas.Programs to develop synthetic fuels fromcoa1 and shale should continue to be givenvery high priority.

The ERDA fossil energy program shouldemphasize the demonstration of technologieson a scale suffic ient to provide re liableinformation for evaluating their technical,economic, and environmental feasibility.

Attention should be directed toward theb ro a d ra n g e o f n o n - te c h n o lo g ic a l im-pediments that can seriously delay, if notaltoget her b l o c k , t h e in t ro d u c t io n o f otherwise economically viable technologies.

By focusing on new technologies, the fossil fuelprogram (contrary to the supply projectionscontained in it) limits itself to an insignificantimpact on energy supplies in the short-term—before 1985, The first priority should be to getbetter information about presently availabletechnologies and to facilitate their use whenfeasible: primary oil and gas extraction from newsources (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 oiland gas from coal and oil shale are available nowand should be vigorously pursued, Although theeconomic f e a s i b i l i t y o f m a n y o f t h e s etechnologies is highly uncertain at present, thepromise of second generation technologies maynot be much brighter. In the meantime there is aneed for better information about the impacts,economics, and operating ex per ien ce o f commercial-scale operations. It must berecognized that the era of abundant cheap energy

is over—especially in the cases of liquid and gasfuels.

Because of the urgency of the national energysituation, the ERDA fossil-fuel program shouldem phas ize t h e d e m on s t r at i o n o f av a i l ab l etechnologies at a scale appropriate to their stageof development: near-commercial scale for cases

where no serious technical obstacles exist (suchas high-Btu gas and possible oil shale withsurface retorting ), and pilot scale for cases wheretechnical problems still need to be solved (suchas tertiary recovery of oil, stimulation of tight gasformations, coal liquefaction, and low-Btu gas,combined cycle power plants ). Better and moreuniversally credible information can only be

obtained through demonstration,While fuel technologies are discussed in somedetail by ERDA, too little attention may haveb e e n d i re c te d to wa rd s th e b ro a d ra n g e o f impediments that can seriously delay, if notblock altogether, the introduction of otherwiseeconomically viable technologies, Institutionalconstra ints must be addressed early if thetechnologies upon which ERDA is concentratingits efforts are to be brought to commercialization.It is questionable planning, for example, forERDA to pour large amounts of funds into thed e v e l o p m e n t o f a c o m m e r c i a l l y f e a s i b l e

technology for coal liquefaction if the technologycannot then be used—because coal mines cannotsupply the coal, transporta tion facil i t ies areinadequate, capital is unavailable, or water isinsufficient. The efficient use of ERDA R, D&Dfunds requires a systematic look at entire energydevelopment systems. The fact that ERDA doesnot have the primary responsibility within theFederal Government for dealing with some of these constraints is not a sufficient response; allthe more reason exists in such cases for concernthat the Government may not adequately con-sider some components vital for the successful

introduction of new technologies.

Nuclear Energy Program

Improvement in the l ight water reactordesign and operational reliability is requiredto assure the near- and mid-term potentialfor nuclear energy,

Uranium resources should be more preciselydefined.

A final decision on disposal of nuclear wastes

should be made and implemented.The breeder reactor program continues torequire analysis, especially as regards timingof need for the LMFBR cost and management,

Alternative reactor systems need to be re-examined, and consideration given to ex-


60- 411 0 - ’75 - 2



ploratory program plans to develop suchsystems,

q Reexamination, should be considered of thebalance and rate of expansion of the fusionprogram.

The present generation of light water reactorsis well developed, but problems still exist, as

evidenced by rapidly increasing constructioncosts and disappointing reliability. In a majorshift from AEC policy, ERDA recognized aresponsibil i ty to support l ight water reactortechnology, but the program is not clearly spelledout; how does ERDA intend to encourage thestandardization of power plants, improve theirreliability, and build LWR’s on floating plat-forms? Continuation of ERDA’s LWR safetyresearch is a part of this support, and should beencouraged,

The future of nuclear fission power is depen-dent on an adequate fuel supply. The present,

highly speculative estimates indicate a uraniumshortage early next century. More precise es-timates are needed for better planning of LWRgrowth and scheduling of the breeder develop-ment program. The National Uranium ResourceEvaluation (NURE) is now underway; whencompleted in 1980 it should tell us whether wehave enough uranium to fuel the LWR’s until thebreeder can be deployed, It seems, therefore, thatNURE ought to be pressed with more vigor thanis 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, atleast if the nuclear industry expands no fasterthan at the moderate rate now projected. Of theremaining components of the fuel cycle, wastedisposal should be regarded as the one whichneeds most attention. In principle, safe disposalof reprocessed radioactive waste in salt appearsto be technically feasible. Prompt resolutions of remaining questions and a firm decision byERDA to proceed with a demonstration areurgently needed.

By far the largest component of the ERDAn u cle ar p ro g ra m i s th e d e ve lop me n t o f an

“inexhaustible” energy source based on fissionbreeders, in particular the l iquid metal fastbreeder. The high cost of the program, especiallywhen compared to its French equivalent, has ledto extensive criticism. In retrospect, it may bethat the early emphasis on commercializationwas premature and expensive. Recent manage-

ment changes should streamline the project andhelp prevent further cost escalation, but theireffectiveness remains unproven. Although theschedule for demonstration has slipped recently,delayed commercialization of the LMFBR isconsistent with lower projections now beingmade for nuclear power growth. Safeguardsagainst plutonium diversion is a problem in-timately involved with the LMFBR, but adequatesolutions appear to be possible.

With the creation of ERDA, AEC policiesshould be reexamined, Perhaps most important-ly, it is now possible to reopen the issue of alternative breeder systems, Three such systemsare being worked on: the light water breeder(LWBR), the gas cooled fast breeder, (GCFBR),and the molten salt breeder (MSBR), Of theseonly the LWBR is being pursued vigorously, It isappropria te to ask why the MSBR and theGCFBR should not receive emphasis at leastcomparable to the LWBR.

The plutonium-based economy entailed byLWR's and LMFBR’s increases concern overplutonium toxicity safeguards against diversionand possible problems with long-term wastemanagement. A nuclear system based on thorium(LWBR, MSBR, high-temperature gas-cooledreactor, HTGR, or thorium version of LMFBR),may be less vulnerable to some of these dif-ficulties, Yet a fuel analysis has never been madeof thorium-based systems as an alternative to theplutonium-based system; such an analysis isbadly needed as a guide to comprehensivenuclear system development. Additionally, the

role of high temperature process heat fromnuclear reactors, most importantly the HTGR,should be examined. The use of nuclear energyfor this purpose could save large amounts of fossil fuel.

Fusion is the other potential “inexhaustible”nuclear energy source, The prevailing opinion isth a t fu s io n w i l l p ro b a b ly b e su c c e ss fu l lyharnessed, and that it could be an attractivemeans of supplying much of the Nation’s elec-trical energy next century. Thus fusion ap-propriately occupies a prominent position in theERDA 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, isstill to be reached, This is the goal of the nextgeneration of fusion devices, called “fusion testreactors”, which in fact are large experimentaldevices to test the concept not generate power,




They will operate in new regimes of physics andtechnology . Because these machines a re socostly, a central issue is whether ERDA can meetits very heavy commitment to the tokamak fusionconcept while, at the same time, preserving itsoptions on other promising fusion concepts incase the tokamak is not successful,

Solar, Geothermal, and Advanced

Technology Programs

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T h e E R D A s o l a r - e n e r g y p r o g r a m u n -deremphasizes the potential of solar heatingand cooling relative to so la r e l e c t r i ctechnologies.

In its solar heating and cooling program,ERDA should consider giving increasedemphasis to: user incentives, standards formeasurements of equipment performance,and impact on utility peak demand of solarsystems,

Improved decision c r i t e r i a in th e so la re l e c t r i c p r o g r a m a r e n e e d e d t o a v o i dpremature exclusion of promising concepts.All the technologies proposed for solarelectric generation presently have large costuncertain ties.

T h e l e g a l a n d i n s t i t u t i o n a l p r o b l e m sassociated with geothermal resources shouldreceive greater emphasis in ERDA planning.

The principal issue raised with respect to the

ERDA Plan concerns the re la tive emphasisaccorded solar-electric and solar heating andcooling technologies, Solar-electric technology isidentified by ERDA as one of the three long-terminexhaustible sources; solar heating and coolingis listed merely as an underexploited technologyappropriate for mid-term utilization. The relativeimportance of these two technologies therebyimplied by the Plan is judged to be out of balance.The technology and economics for solar waterand space heating are available now, A greaternear-term emphasis placed in this area relative tosolar electric along with acceleration of the solar

heating and cooling demonstration program, maybe the most effective way to develop solar energy.Solar energy is suited to many direct thermal

applications, and it is in these areas that solarenergy can have its most immediate impact onour energy economy and can contribute substan-tially as a long-term inexhaustible energy source,

I t i s , h o w e v e r , e x t r e m e l y i m p o r t a n t t h a tnecessary attention be given to user incentives,standards for measurement of equipment perfor-mance, and the impact on utility peak demand of so la r power systems, inc lud ing wind-energyusers.

Although no technical barriers exist to solargeneration of electric energy, the high costs

estimated for these technologies necessitate along-term research program if they are to beeconomically competitive. The large cost uncer-tainties of different solar electric concepts (oceanthermal energy conversion, wind energy, solarsatellite, solar thermal) necessitates develop-ment of precise decision criteria for alternativeenergy technologies. Consideration of resourceavailabilities is critical due to the extensive useof land and, in some cases, water, by solar electricsystems. One specific concern with the ERDAPlan involves the apparent lack of considerationo f a n u mb e r o f p ro mis in g c a n d id a te s for

photovoltaic cell materials.Legal and institutional constraints are moresevere impediments to the rapid utilization of g eo th er ma l r es ou rc es t han are technicalproblems. The ERDA near-term projections forgeothermal energy development appear to beoptimistic, although geothermal resources dohave the potential to meet ERDA goals, if notlimited solely to electricity product ion. The mostimportant role for geothermal energy in theUnited States may be in nonelectric uses, a rolewhich is given inadequate significance in theERDA Plan. Because each geothermal reservoir

has unique characteristics, research strategy onpower conversion will have to consider a widevariety of possible utilization systems in order tominimize resource waste.

Conservation Program

The ERDA Plan for conservation is timid andunderfunded, despite strong congressionalencouragement,

The conservation program contains elementslargely unrelated to end-use conservation, a

situation wh ic h th re a te n s to k e e p theprogram unfocused and further exacerbatethe problems of funding and staffing for enduse conservation R, D&D.

E RDA h a s n o t a d e q u a te ly e s t a b l i sh e dpriorities within its conservation program.




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The success of ERDA’s conservation effortsw i l l d e p e n d o n c lo se c o o p e ra t io n w i thFederal, State and local agencies, industry,and private citizens.

Nontechnological constraints could impedethe implementation of energy conservationtechnologies unless addressed and removed,

ERDA’s program does not sufficiently ad-dress nontechnological aspects of energyconservation. Social sc ience research isneeded to:

1. Identify an d overcome i ns ti tut ion alobstacles to implementation.

2. Evaluate the economic (e.g., labor, capital,growth) implications of alternative conser-vation programs,

3, Analyze the appropriate roles of Federaland State regulatory agencies with respectto energy use,

4. Assist in continuing cost/benefit analysesof conservation options and researchprograms.

The new high price of energy has made ourpresent use of energy wasteful and uneconomic.There are wide variations in the possible savingsamong energy use sectors but a major efficiencyof energy use over pre-1973 practices will becost-effective. The optimum rate at which thetransition to higher efficiency should be maded e p e n d s u p o n ma rk e t f a c to r s , su c h a s th e

inventory of existing stock, and upon nonmarketfactors, such as the national policy decision to cutoil imports. There are, therefore, two reasons foractive Federal energy conservation efforts: 1) toassist governmental, corporate, and individualenergy consumers to become more energy-efficient in order to ease the economic hardshipcaused by higher prices; and 2) to accelerate thistransition in accordance with the national policyof reduced dependence on imported oil. AlthoughERDA was assigned broad responsibilities forenergy conservation R, D&D, and has been givenstrong congressional encouragement, the

program as presently conceived is very limitedcompared to the productive opportunities in thenear-term and major savings in the mid- andlong-term. Only about two percent of the revisedfiscal year 1976 budget sent to the Congress canproperly be termed applicable to “conservation”activity; moreover, only about one percent is


actually designated for end-use conservationprograms.

ERDA’s Plan contains a very broad interpreta-tion of conservation, It includes increased end-use efficiency through use of technology andelimination of waste; fuel shifts away frompet roleum; e ne rg y storag e; a n d e v en c ap i ta lsavings in various parts of the supply/demand

system, However important all these actions maybe, there is danger that such a broad operationaldefinition can shift the emphasis on conservationfrom the consumer to the suppliers and dis-tributors of energy. For example, inclusion of electric power transmission and distribution andenergy storage as conservation programs couldmask a low level of commitment to importantprograms directed at increasing efficiency of energy utilization.

Federal investments in various supply andconservation efforts should be weighted in termsof their cost-effectiveness, taking environmental

consequences as well as other nonmarket con-siderations into account. The amount spent tosave a barrel of oil, or its energy equivalent, isdirectly comparable to the money spent on newdomestic supplies to produce an additional barrelof oil or its energy equivalent. The ERDA Plandoes not appear to employ this type of assess-ment in determining priorities, although there aremany conservation opportunities that appearmore attractive than many new supply optionson this cost basis, When environmental costs areincluded, the advantage to conservation effortsusually becomes even more impressive. ERDA

should incorporate this kind of trade-off analysisinto its program decision structure more explicit-ly.

The implementation of energy conservationmeasures can be significantly influenced, notonly by technical problems but by nontechnicaldifficulties as well. Impediments to the adoptionof sound energy conservation practices includegovernment regulations, building codes, lack of consumer understanding of l ife cycle costs,industry and consumer resistance to change, andcapital availability, Development of technologieswithout regard for the institutional constraints,

social impacts, and the imperfect workings of the market is unlikely to achieve optimal energyconservation results,

ERDA’s separation of programs by end-usesector appropriately mingles research, develop-ment, and implementation. This problem-solvingapproach to conservation should prove very



productive in coordinating the Federal program,assuring comprehensiveness and relevancy inresearch, promoting rapid information transfer,and facilitating effective implementation.

Environment and Health Programs

q

q

q

q

q

q

Better integration of means to minimizeenvironmental and health impacts should bein te g ra te d in to th e E RDA d e v e lo p me n tprograms.

ERDA should analyze the environmentalimpact of the vastly enlarged use of fossilfuels in conventional technology envisionedin the Plan.

ERDA should address the environmental andhealth problems that may be created by theemerging synthetic fuels technologies.

Regulations concerning environmental quali-ty should be analyzed as they often imposeenergy penalties.

E RDA sh o u ld e x a min e th e g lo b a l e n -vironmental consequences of new energytechnologies.

ERDA should take a more active role inassessing i ts programs in the context of energy and non-energy demands for water.

The ERDA Program document contains anextensive description of proposed activity in

environmental, health, social, and institutionaltopics. Almost all of this description occurs in thesections of the report devoted to Environmentand Safety and Systems Analysis. Discussion of these topics in the sections of the report devotedto technology development generally consisted of one-line statements recognizing the existence of apotential constraint. There was no reference inthe schedules appended to technology orientedsections to the environmental or health researchprograms. Interviews with ERDA personnelyield the strong impression that the sta tedobjective of integrating the environmental con-

trol research into the technology developmentwas at present illusory. Given that environmen-tal, health, social, and institutional problems arelikely to impose serious constra ints on im-plementation of ERDA’s programs, much betterintegration of these concerns into the pursuit of the technology programs themselves is indicated.

At this t ime, the adequacy of a ir quali tyregulations concerning sulfur dioxide is beingquestioned. The complex interaction betweensulfur oxides and other consti tuents in thea tmosphere, ra t iona l and non induced, i s thesubject of extensive study by EPA, ERDA, andothers. The outcome in terms of sulfate standardsfor protection of public health and environmental

quality is unknown, but could have a seriousconstraining effect on achievement of ERDA’sPlan, which relies heavily on coal in the near andintermediate term. The health programs relatingto potential new chemical intrusions from coalconversion and oil-shale programs, some of which may be potent carcinogens should beconsidered. In the general area of health studies,there is little evidence of a serious effort to definethe relative priority between programs. There arealso indications that ERDA is involved inprograms which do not re la te to i ts energymission and needs to reassess the usefulness of

other programs in terms of the validity of theresults these programs will yield.

Existing regulations concerning air and waterquality and some which will become effective inthe next few years may impose significant energycosts or environmental impacts in categorieswhich are not encompassed by the regulatingagency. There has been no systems evaluation of the interact ions b etwe en environment alregulations and their total effect. This is a validand important area of inquiry for ERDA whichhas not been addressed.

There is a significant risk inherent in the

totali ty of ERDA’s mission. The impact onclimatic balance of massive increases in heatrejection to the atmosphere by man is unknownbut potentially catastrophic. There is an urgentneed for careful analysis by ERDA of globalmeteorological consequences of the atmosphericimpacts (heat, C0

2, particulate matter, etc. ) from

the processes it proceeds to develop.The problems of water availability for coal

conversion to liquid or gaseous fuels, shale oilretorting, electrical generation by any means andother energy oriented activities will have tocompete with other uses for water in water-short

areas, These same activities and associatedmining and waste management operations mayimpact water quality in the same areas, thuspotentially affecting agriculture and domesticand municipal water supplies. There are seriousquestions concerning the impact on air quality of the addition of new energy facil i t ies to the

EXECUTIVE SUMMARY 9



existing field of air pollution sources. These regional and site-specific component in ERDA’sproblems indicate an urgent need for a strong systems modeling and data acquisition program.

1 0 EXECUTIVE SUMMARY



Chapter I

Overview Issue Papers

11



MEMBERS

Dr. Paul Craig, Chairman, University of Califor-nia

A. OVERVIEW TASK GROUP

Mrs. Elizabeth Mann Borghese, Center for theStudy of Democratic Institutions

Prof. John H. Gibbons, University of Tennessee

Dr. Jerry Grey, Independent Consultant

Prof. Stanford S. Penner, University of Califor-nia at San Diego

Prof. David J. Rose, Massachusetts Institute of Technology

Dr. Robert Socolow, Princeton University

Dr. Alvin M. Weinberg, Institute for EnergyAnalysis

Prof. Wendall H. Wiser, University of Utah

CONTRIBUTORS

Dr. George Argyropoulos, Massachusetts In-stitute of Technology

Prof. Michael D. Devine, University of OklahomaProf. 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 atAustin

12 CHAPTER I



B. OVERVIEW TASK GROUP ISSUES LIST

1.

2.

3.

4.

5.

6.

7.

The Nature of the National Energy

Policy Goals . . . . . . . . . . . . . . . . . . . 19The national energy policy goals stated byERDA deserve review and clarification.

Overall Level of the Federal Budgetfor Energy R, D&D . . . . . . . . . . . . . 21

The overall level of the Federal budget forenergy R. D&D [about $2.3 billion for FY 76)a p pears to be an o u t growth of decisions madeprior to the Arab oil embargo and should ber e - e x a m i n e d

The International Aspects of ERDA’sPlans and Programs . . . . . . . . . . . 23

‘1’he ERDA Plan does not place sufficientemphasis on international considerations.

Coordination of Programs BetweenERDA and Other FederalAgencies . . . . . . . . . . . . . . . . . . . . . . 25

ERDA’s plans for coordination with otherFederal energy agencies need to be more fullydeveloped ,

Coop eration Be tw e e n ER D A a n dState and Local Governments . . 27

Success of the ERDA program will dependlargely on close and continuous coordinationwith State and local governments, The ERDAPlan inc1udes n e i t he r p r o ce d u r es n o rmechanisms for accomplishing this coor-dination.

Near-Term Energy Problems . . . 2 9

The ERDA Plan gives very little attention tonear-term (to 1985) energy problems.

Socioeconomic Research . . . . . . . 30

ERDA’s program of R, D&D does not giveenough attention to socioeconomic analysisand research in addressing the Nation’senergy problems.

8.

9.

10.

11.

12.

13.

14.

B a la n c e B e tw e e n Su p p ly V e r s u s

Demand R, D&D . . . . . . . . . . . . . . . 31ERDA’s program overemphasizes energysupply technologies relative to energy con-

sumpt ion.

ERDA’s Basic Research Program 33

The goals of ERDA’s basic research programhave not yet been establishcd, Considerableeffort is required t o organize a pertiprogram of basic research.

Com mercialization . . . . . . . . . . . . .

The development of effective commerciation policies and procedures is not adeqlly addressed in the ERDA Plan.

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

Careful at tent ion should be given to assess -ing energy resources, since the}’ representassumptions basic to the ERDA Plan.

Physical and Societal Constraints 38

Numerous physical, institutional, and social

constraints may limit the orderly develop-ment and implement at ion of thc ERDAenergy plan.

Overemphasis on Electrification 39

The ERDA Plan appears to lean toward anoveremphasis on electrification. This lack o f diversity, especially in the long-term “inex-haustible” sources, may not be t h e mosteffective approach.

Methodology and Assumptions Usedin Developing the R, D&D Plan . 41

The ERDA Plan relies on a methodology andas sump t ions f o r d e v e l o p i n g R , D & Dpriorities that appear to bias the prioritiest o w a r d h i g h t e c h n o l o g y a n d c a p i t a l -intensive? energy supply alternatives andaway from end-u se technologies.

C H A P T E R 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 tohinder achievement of its goals. which existing and developing technologies

deserve emphasis, but th is methodologymust be employed with caution.

14 C H A P T E R I



C. INTRODUCTION

Plans and Programs

Ideally, energy R&D programs should bederived from R&D plans which, in turn, should bederived from a national energy policy. Nationalenergy policy, for its part, should flow logicallyfrom a set of broad national goals agreed upon b yboth the Administration and the Congress. Inpractice the formulation of energy programs doesnot operate in such a tidy, rational way, It isreasonable, however, to expect that energy R&Dprograms be consistent, or at least compatible,with R&D planning and with energy policy ingeneral. Thus, potential effectiveness, rather

than perfection, has served as the standard forthis review of the ERDA Plan, Using thisstandard, the OTA analysis produced the follow-ing c o n se n su s a b o u t th e E RDA P la n a n dProgram:

q Volume I of the ERDA Plan represents aserious and praiseworthy initial effort toformulate a procedure whereby energy R&Dcan contribute to the realization of the fivegoals postulated as guidelines for nationalenergy policy.

q Volume 11 of the ERDA Plan and Program is

markedly inferior to volume I and does notalways present a convincing programmaticapproach to realizing the objectives set forthin volume I.

The lack of coordination between the plan of volume I and the program of volume II was citedrepeatedly by ERDA administrators during theoral presentations at the OTA review, The Planwas prepared in the spring of 1975, in the contextof ERDA’s still-evolving definition of its role andmission. Because of the short time available toERDA personnel for the preparation of the Plan,

the program plans of volume II appear to havebee n co mpi led f r o m t h o s e o f s e v e r a lorganizations folded into ERDA. Therefore, theydo not properly reflect the policy goals set forthin volume 1. The effectiveness with which ERDAwill relate its programs to its plans, and its plansto 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 avery limited range of scenarios. There is noinvestigation of the effects of price on the demandfor energy services, If the international oil priceor policy affecting low cost supplies changedrastically, clearly the demand for expensivenew low cost supplies change drastically, clearlyt h e d e m a n d f o r e x p e n s i v e n e w e n e r g ytechnologies will also change. A high priority forERDA in future versions of the Plan should be tolink energy demand to economics,

GoalsThe ERDA Plan addresses 5 national policy

goals. Realization of these goals requires thatinherently difficult choices be made betweeninternational cooperation and domestic self-sufficiency as well as between environmentalversus energy emphasis, These conflicts appearto have led ERDA to a very narrow, technologicalinterpretation of the 5 goals. For example, thefirst goal is apparently the most important as themajor thrust of the Plan is to minimize reliance onimported oil, This is to be done by vastly

increasing domestic supplies. An alternativeapproach would be to store sufficient supplies of petroleum to make an embargo ineffective andstriving to reduce our growing dependence onenergy. In addition, the ERDA Plan places littlee mp ha si s o n pro g ra ms ad d ress ing reg ion a lissues; it also neglects to identify programswhich might facilitate the implementation of technologies, such as commercializationstrategies, end-use conservation technologies,macrosystem modeling, and international in-stitutional development. Each of these subjectsfalls within the purview of the 5 goals and the

ERDA enabling legislation. Whether or not ERDAassumes responsibility for these broader R, D& D

issues, there can be no question as to theirimportance to the evolution of a national energyposture, Solutions to our national energy con-cerns require that those energy-related programsreemphasized by ERDA be vigorously pursued

C H A P T E R I 15



somewhere in the Government. Most are not, atpresent, receiving priority attention anywhere.

“Is ERDA’s role to develop technologies or tosolve problems?” was a basic question asked bythe OTA task groups. In general, it was agreedthat the ERDA programs are too narrowlyd e f in e d a n d th a t E RDA a p p e a r s p r ima r i lyconcerned with developing technological optionsra th e r th a n e x p lo r in g so lu t io n s to e n e rg y

problems. This hardware orientation has thefollowing consequences:

International cooperation receives minoremphasis as compared to domestic self-sufficiency.

E n v i ro n me n ta l c o n c e rn s r e c e iv e min o remphasis as compared to energy develop-ment,

Elaborate technology is favored over simplertechnology,

Supply technology is favored over end-usetechnology.

Technical R, D&D is favored over non-technical R, D&D.

Demonstration projects in partnership withenergy suppliers are favored over projectswith energy consumers.

Mid- and long-term results are favored overshort-term results, except for certain energyconservation programs.

Electrification options are favored over otheroptions.

As we move to diversify energy supplies andinc re ase e f fi ci en cy , a n u mb e r o f e l a b o ra tetechnologies will be developed; these will resultin large-scale projects such as breeder reactorsand central sta tion solar e lectric facil i t ies.However, many of our most promising oppor-tunities are smaller in scale. Examples are solarwater heaters, e lectric ity peak shaving, andmodified transporta tion systems. Large andsophisticated technologies have inherent appeal,especially to scientists and engineers, while “lowtechnology” opportunities may seem mundane.

ERDA should therefore maintain a program focuswhich continually measures relative economicand energy benefits, not merely technologicalaccomplishment, as its objective, Success indeveloping technological capabilities alone is notlikely to solve energy problems.

In order to avoid the bottlenecks that will delayor prevent solutions to energy problems, es-pecially in the short-term, a variety of actionscould be considered:

The scope of ERDA’s mission could beexpanded and clarified, particularly in theareas of demonstration and commercializa-tion, Central to this is a clarification of

ERDA’s responsibilities vis-a-vis the FederalEnergy Administration, the EnvironmentalProtection Agency, the Nuclear RegulatoryCommission , and the Depar tment o f theInterior,

Widespread utilization of newly developedtechnologies depends on a complex processinvolving the removal of constra ints oncommercialization, industria l incentives,and technology transfer, This process re-quires further delineation than exists in thepresent ERDA Plan.

Programs associated with the identificationand e va lu a t io n of environmental , in-s tit u t ion a 1, a n d s o c i e t a l c o n s t r a i n t sassoc ia ted w i t h a l t e r n a t i v e e n e rg ytechnologies should receive immediate andsubstantial attention,

Programs directed toward increasing theefficiency of energy use should be accordedthe highest priority.

New efforts t o a s s e s s g l o b a l i s s u e sassociated with energy, such as c limate

modification, international energy supplyand demand estimates, the role of mul-tinational energy corporations, and the linkwith ocean resources, should be instituted.

The ERDA management approach, includingthe management of National and Federallaboratories and the role of contract R, D&Dshould be reevaluated.

Closer working relationships with State andlocal governments, including their participa-tion in ERDA program planning, should beestablished.

The potential national benefit from higherERDA budget levels should be examined. Thepresent ERDA budget derives from preem-bargo assumptions which a r e h i g h l yquestionable at the present time.

16 CHAPTER I



Institutional Issues

The OTA review of ERDA’s Plan and Programidentified the problem of divided or uncertain

jurisdiction as a major concern. For example,responsibility for developing technologies toremove sulfur from coal is divided amongInterior, EPA, and ERDA. Similarly, coal mining

technologies are the responsibility of the Depart-ment of the Interior, while burning and process-ing technologies are ERDA’s responsibility. Thissituation o f s p l i t r espo ns ib il it ie s inh ib it sdevelopment of a comprehensive and balanced R,D&D program for coal.

Uncertainty concerning the roles of ERDA andFEA in providing incentives for commercializa-tion of new technologies poses problems. Incen-tives may range from provision of capital forcommercial demonstration plants t o l oa nguarantees to insuring floor prices for fuelsproduced from pioneer commercial plants. If the

various types of incentives are divided betweenERDA and FEA, orchestra tion of the mosta pp ro pr ia te in ce n tiv e p ac ka g e for c o mme r -cialization of a given technology will be difficult.This issue might warrant specific attention as theCongress considers extension of the FEA enabl-ing legislation. Moreover, institutional issuespermeate the whole question of the separation of energy R, D&D from the broader responsibilityfor energy policy which is presently dividedamong numerous agencies, Although the Con-gress 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 theERDA Plan and Program provide for effectivecoordination with other Federal agencies. ERDAcould be more assertive in assuming the lead role,in order to assure that the R, D&D needed toachieve the Nation’s energy goals and objectivesis undertaken.

Marketing and Commercialization

Because of the long lead times and high capitalcosts involved, special attention should be given

to commercialization of new technologies. Theenergy market is complex, ranging from theindividual consumer to large industrial facilities.The market for energy R, D&D is different fromthat supported by DOD and NASA, both of whichprovided the markets for their own R, D&D.

Similarly, the R, D&D of the AEC was aimed at aspecific market consisting of the large-scaleelectric power industry.

The broad responsibilities inherent in ERDA’sprograms call for an approach that involves bothproducers and consumers from the initiation of program planning. R, D&D should reflect ul-timate consumer preference and conditions of use(e.g., convenience, acceptable environmentalimpacts). The phasing from R, D&D to commer-cialization (usually by private enterprise) musttake such issues as proprietary rights, patentrights, and licensing into careful consideration.

Resource Constraints

The various energy technologies addressed inthe ERDA Plan frequently draw upon resourceswhich are also in demand for nonenergy uses. Itappears necessary that these multiple use factors

receive greater priority than they were accordedin the Plan and Program. Although the ERDAProgram emphasizes fuel resource constraints,there are actually two categories of resourceswh o se a v a i l a b i l i ty c o u ld c o n s t ra in E RDAprogram developments: physical and societal,The physical resources include water, land, rawmaterials, equipment, and atmosphere. Of these,water appears to pose the most urgent physicalproblem, particularly in the western UnitedStates. Societal factors which may constrainenergy developments include manpower con-straints, regional impacts, capital and financing

availability y, and information collection, process-ing and dissemination.

Supply Versus Conservation Balance

Lack of concern with end-use effic ienciesdeveloped during an era of decreasing energyprices. At current prices, it pays to shift to asystem of much more effic ient energy use.Although this will require years to achieve, itwill have the ultimate effect of greatly stretchingout energy resources. Hence, energy conserva-

t ion will not only help “buy time” in the near-term(the ERDA emphasis) but a lso dramaticallyreduce the rate at which resources are consumedin the long-term future. Furthermore, improvedenergy efficiency has distinct and permanentenvironmental benefits.

CHAPTER I 17



Unlike supply expansion, some conservationimprovements can be made quickly and withminimum investment. However, many of theachievable and cost-effective improvements willrequire R, D&D, Unfortunately, the ERDA Planfor conservation focuses on the near-term andthus neglects its long-term importance, It impliesan emphasis on conservation (principally higherefficiency of use) only until new supplies come on

line, thus ignoring the potential of a long-termefficiency improvement program. Funds com-mitted to conservation, as opposed to supplyincrease, are out of balance in terms of (a) cost-e ffect iveness ; (b ) t ime un t i l payoff ; (c ) en-vironmental benefits versus cost; and (d) demandon resources. ERDA also pays insuffic ientattention to research related to implementingknown energy conservation technologies.

Global Issues

One of the five national policy goals listed in

ERDA’s Plan is “to contribute to world stabilitythrough cooperative international efforts in theenergy sphere.” Clearly ERDA has to take theworld community into account if its Plan andProgram are to succeed in the long run. Inter-national cooperation is essential in the short- andmedium-term to cope with the environmentaleffects of energy technologies such as globalpollution of air and water; to address securityissues arising from the management of nuclearmaterials and wastes; and to manage resources,such as the oceans, that are the common heritageo f ma n kin d. F in a lly , c oo p era tiv e ef for t s inresearch programs can take advantage of sub-stantial advances in certain energy technologiesachieved in other countries.

Basic Research

ERDA’s inheritedneed reorientation

programs inin order to

basic researchconform more

closely with the ERDA Plan. Such reorientationshould not damage the vita li ty of existingprograms such as particle physics. Rather, otherbasic energy research needs should be defined.

Specific a ttention should be focused on theappropria te distribution between ERDA in-house (i.e., National laboratory) and contractedresearch; strengthening of social and behavioralresearch programs; and establishment of aneffective role for universities.

18 CHAPTER I

Relations to State and LocalGovernments

The ERDA Plan neither describes mechanismsfor incorporating state and local inputs intoprogram development nor shows any indicationthat these groups were consulted during thepreparation of the Plan; these omissions suggestthat State participation in energy programs may

be restricted primarily to the implementationphases. The ERDA Office of Industry and Stateand Local Government Relations is much toosmall to ensure effective coordination betweenthe Administration and the various State andlocal governments,

E RDA a n d ma n y o f th e S ta te a n d lo c a lgovernments differ in their perceptions of energyproblems and in approaches to solutions. TheState and local governments tend to attach moreimportance to conservation efforts than ERDA;they are more concerned with the potentia limpact of energy R, D&D projects on local

communities; and they have greater concern forstates-rights issues, including the allocation of water rights and the regulation of land use, Thesmaller jurisdictions could also benefit from thebroader viewpoint that ERDA can provide.

Failure of ERDA to adequately consider Statea n d lo c a l v ie wp o in t s a n d to in c lu d e th e seagencies in early program planning will result inunnecessary conflict and costly delays in theimplementation phases of these programs. Moreimportantly , such fa ilure will l imit the Ad-ministration’s ability to take advantage of thesegroups’ experiences and capabilities in the areas

of land and water rights management, taxing andregulatory incentives, m an po we r training,mobilization of public support, and many otherareas vital to program success.

ERDA Budget

Finally, the ERDA budget is largely an out-growth of decisions made in 1973, before theOPE C embar go l e d t he U n it e d S ta t es t oemphasize self-sufficiency. This budget, about$10-15 billion over a 5-year period, deserves re-examination in the light of the much greaterurgency now accorded the energy problem.

ERDA could usefully develop alternative 5-yearbudgets a t several specific levels (e .g . , $20billion, $30 billion and so forth) as a device tostimulate new thinking and to assist ERDA inbreaking out of established patterns of designingR&D programs,



D. OVERVIEW ISSUE PAPERS

1. The Nature of the National Energy Policy Goals

The nationalclarification.

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 nationalenergy goals to which energy R, D&D should contribute. Heavy emphasis on self-

sufficiency as opposed to environmental concerns will have major consequences inthe quality of life and economic well-being of the American people. Similarly,emphasizing self-sufficiency rather than international cooperation will have majorimpacts on our foreign policy. Emphasis among these goals warrants congressionalreview. Unless there is agreement between the Administration and the Congress onthe 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 onparticular importance because energy is so central to other policy areas. OtherGovernment agencies will be planning programs ranging from foreign trade towelfare based on their perceptions of these priorities. For these reasons maximumclarificat ion of priorities will be beneficial.

QUESTIONS

How were the goals determined? interpretation of “adequate” have a signifi-

Did representatives of agencies responsiblefor economics, international affa irs, the

cant effect on the phasing, size, and nature of an energy R, D&D effort?

environment, and natural resources have anopportunity to participate in the formulation

4 . Ho w d o e s E RDA in te rp re t Go a l 1 ( in -of the goals?

dependence)? How will ERDA achieve aWhat is meant by “adequate” employment balance between Goals 1 and 5 (environ-opportunities (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 toemphasis ERDA gives the various goals can be be pursued. Taking each goal in order:

CHAPTER I 19



q

q

20

To maintain the security and policy in-dependence of the Nation.

ERDA, espec ial ly i n t h e s y s t em smethodology of ERDA-48, volume I, reducesthis goal to a narrow concern for eliminatingoil imports, which seriously distorts themeaning of policy independence. ERDA couldhave read this goal as a mandate to explore

with a far greater sense of urgency any of thefollowing, for example:

—

—

—

—

—

New international institutions for manag-in g f i s s io n a b le ma te r i a l s a n d f i s s io nproducts

The role of the multinational corporationsin global energy policy and the impacts of a c t u a l a n d p o t e n t i a l U n i t e d S t a t e s ,foreign, and international regulations ontheir conduct

The potentia l impact of internationalpolitical developments on energy policies

The potential role of the United States, asa n ex p or t er o f fu el s ( e. g ., c oa l an duranium) and energy technologies (e.g.,solar heating) and cooling synthetic fuelprocesses

The potential for cartelization of criticalmaterials other than oil, notably uranium.

To maintain a strong and healthy economy,p ro v id in g a d e q u a te e mp lo y me n t o p p o r -tunities, and allowing the fulfi l lment of economic aspirations [especially in the less

affluent parts of the population).ERDA nowhere interprets this goal ex-

plicitly, The goal statement perhaps does notaddress a critical question concerning energyand society—the degree of coupling of themaintenance of “ a s tr on g a nd he al th yeconomy” with the perpetuation of increasesin the quantity of physical resources used inthe Nation’s economy each year. ERDA’ss c e n a r i o s ( i n c l u d i n g i t s c o n s e r v a t i o nscenarios) postulate exponential increase inthe use of these resources, continuing in-definitely. ERDA could have seized this goalas a m a n d a t e t o l a u n c h a v i g o r o u ssocioeconomic research program to gainsome understanding of the relationship of economic growth, energy, and the quality of l ife , and to shed l ight on the potentia lviability of low-growth societies.

CHAPTER I

To provide for future needs so that lifestylesremain a matter of choice and are not limitedby the unavailability of energy.

From available evidence, ERDA uses thisgoal as a rationale for emphasizing the periodbeyond the next decade and concentrating onenergy supply rather than energy demand.This goal could readily have been interpreted

by ERDA as a mandate to plunge into thesh o r t - t e rm p ro b le ms , wh e re l i f e s ty le sthroughout the country are being affected byenergy shortages and rapidly rising prices.This goal could also have been interpreted byERDA as a mandate to proceed rapidly toexpand its R, D&D program in order toimprove the efficiency by which energy isused, since problems with the availability of energy are as much alleviated by reductionsin demand as by expansions in supply.In d e e d , i f su p p ly a n d d e ma n d a re n o texamined evenhandedly, there is a serious

possibil i ty of the misapplication of theFederal R, D&D dollar. Even if an “infiniteenergy source” were found, the extravagantu se o f e n e rg y to p ro v id e a n d c o n v e r tmaterials would create material shortagesand environmental problems.

To contribute to world stability throughc oop er at ive i n t e rn a t i on a l e f f o rt s i n t h eenergy sphere.

ERDA appears to in te rp re t th i s g o a ln ar ro wl y a s b i la t er al a n d m ul t il a te r altechnical cooperation, such as the researchprogram on magnetohydrodynamics beingconducted jointly with the Soviet Union.This goal could have been interpreted as am a n d a t e t o l a u n c h f a r m o r e v i g o r o u sresearch efforts to explore, for example:

— The adverse global environmental effectsof energy generating technologies

— The management of the energy supplytechnologies which have significant im-pacts on the ocean (e .g . , sea thermalgradient technologies, oil tankers, andoffshore nuclear plants)

— The joint creation of short- and long-termtargets for energy conservation among themajor energy consumer nations

— The potentia li ty of one or more newinternational institutes to examine energyproblems globally



— Alternative approaches to the resolutionof the growing energy problems of the lessdeveloped nations of the world

— The worldwide economic effects of capitalshifts due to petroleum purchases by thiscountry.

q To protect and improve the Nation’s environ-mental quality by assuring that the preserva-

tion of land, water, and air resources is givenhigh priority.

This goal is apparently interpreted byERDA as a mandate to extend prior researchprograms on the generation, transport, andhealth effects of nuclear radiation so as toinclude the physical environmental impactsassociated with fossil and other energytechnologies. This goal could have beeninterpreted as a mandate to cast the net widerstill and to grapple with the social concernand community re s i s t a n c e ( e x p re sse dprimarily at the local, State and regional

l e v e l s ) a s so c ia te d w i th v i r tu a l ly e v e ryavailable energy supply technology; that is, aresistance which focuses on adverse impactsto environmental quali ty , the chance of damaging accidents, and the possibility thatthe technologies may hold unanticipated, andunwelcome, su rp r i se s . T h e se i s su e s a reinseparable from the physical environmentalimpacts, as far as energy policy is concerned,

It would be unreasonable to expect ERDA tohave developed responses along very many of these lines in the short time since its creation. It isreasonable, however, to call attention to theapparent reluctance of ERDA to contemplate anybroader construction of the five national goalssuch as those that are illustrated here. Of course,i t is quite legit imate that ERDA undertakeresearch in all those energy-related areas dis-cussed here (and others not discussed here),provided that ERDA assures that the areas areexplored elsewhere with adequate intensity.

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

ISSUE

The overall level of the Federal budget for energy R, D&D (about $2.3 billion forFY 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 bydeveloping a budget need for each component and then summing the components.In practice, however, the development of budgets for each component and thechoices among components are greatly influenced by what is perceived to be thelimit on the overall scale of the budget. The FY 76 Federal budget for energy R, D&Dof $2.3 billion is largely influenced by decisions taken in 1973 before the Arab oilembargo 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., $20or $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 into5-year budget of $2O or $30 billion? the development of future budgets?

CHAPTER I 21

6 0 - 4 1 1 0 - 7 5 - 3



BACKGROUND

The total energy research and developmentbudget for ERDA in FY 76 is approximately $1.8billion. To this must be added the energy R&Dbudgets 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 costsfor the Federal portion of the energy R&D budgetamount to about $15 billion for the next 5 years.

T h e o v e r a l l F e d e r a l e n e r g y b u d g e t i sp r e s u m a b l y d e v e l o p e d b y s u m m i n g c o n -tributions of the various components of theprogram. However, the general scale of theprogram is inevitably influenced by the implicitand explicit guidelines as to the size of the overallbudget for energy R, D&D. Two such guidelineshave had prime influence in scaling our present

Federal energy, R, D&D program. First, theDecember 1973 Dixy Lee Ray Report to thePresident on energy R, D&D, largely preparedbefore the oil embargo, was geared to an $ 1 1

billion, 5-year program of energy R, D&D. Theother guideline is supplied by the Federal Non-

Nuclear Energy R&D Act which specified that theFederal investment “. . may reach or exceed $2Obillion 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 isnow within guidelines set forth in the Dixy LeeRay Report to the President. However, it is by nomeans clear that this budgetary framework isadequate 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 theinterdependent world of the 1 9 7 0 ’ s and 1980’s, energy independence, economicwell-being and environmental quality (the essence of the five national energygoals) cannot be achieved without considering international factors. “ProjectIndependence” with its go-it-alone implications for R, D&D (let alone for nationalenergy policy in general) may well be inconsistent with requirements fordeveloping 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 technicalas well as institutional problems of monitoring, inventories, and control. ERDAidentifies these considerations in its Plan (volume I,) but barely recognizes them inits Programs (volume II).

QUESTIONS

1 . Ho w d o e s E RDA’s n e w Ass i s t a n t Ad - 3. What is the division of ministrator for International Affairs plan to international energyapproach such i ss ue s as e ne rg y in - Department of State

dependence, the need for international coor- national staff?

responsibility in thea r e a b e t w e e n t h eand ERDA’s inter-

dination of energy, economic and environ-4. What plans or programs does ERDA con-

m e n t a l po l ic y , t h e e x p l o i t a t i o n o f template for

nonnational energy sources, and the newinternational 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 concen-trated in Brussels? Should not ERDA be inclose liaison with the International AtomicEnergy Agency, the International Institutefor Applied Systems Analysis in Vienna, andthe 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 policyor a national growth policy, may have profoundimplications for world order.

But ERDA’s problems in this regard are evenmore acute than those of many other agencies of the Government. “Energy independence,” bydefinition, assumes an international posture thatmay be incompatible not only with other impor-

tant energy objectives, but also with criticalnonenergy national goals and America’s inter-national role. Moreover, the quest (and thecompetit ion ) for a nuclear solution to theimpending shortage of fossil fuels poses somepotential dangers that dwarf most other inter-national problems.

ERDA’s predecessor agenciescircumscribed responsibility andworld. This is a legacy that ERDA

h a d o n ly aview of the

must quickly

strive to remedy. Its problems in this regard maybe complicated because of long establishedresponsibilities for international affairs in theexecutive branch. These constraints are mirroredin the current R&D plan and program.

The appointment of a new Assistant Ad-ministrator for International Programs providesERDA with a timely opportunity to define its rolein the international energy area. Until this newofficial has had a chance to explore and resolve ahost of difficult institutional and substantivequestions, it would be premature for ERDA tolaunch new major research initiatives in theinternational area. Nonetheless, the Congressmay wish to express its interests and concernswith respect to the interpretation of ERDA’sresponsib il it ie s fo r the in terna t iona l energyissue.

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 bemore fully developed.

SUMMARY

ERDA has been mandated (Public Law 93-577) as the primary agency in energyR, D&D with responsibility to integrate and coordinate national efforts. It is notevident in ERDA’s plans whether a comprehensive framework is being establishedto permit ERDA to perform this role adequately. Two types of multiagencyresearch efforts exist where coordination is required. In the first, several agenciesundertake different R&D programs aimed at one energy technology. An example

are the three different approaches to coal cleanup by ERDA, EnvironmentalProtection Agency, and Department of the Interior. Without a formal structure tobring together these diverse efforts, much waste can ensue with no assurance thatthe technology will be effectively developed. In the second case, different agenciesare concerned with separate e lements, such as regulatory, economic, andtechnological, of a given energy technology. The lack of effective coordinationcould 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 . Wh a t sp e c i f i c management mechanisms,energy R, D&D? Does ERDA have the techniques, or coordination controls willresponsibility for ensuring that all research ERDA use to integrate and coordinate itsneeded to help solve the Nation’s energy activities with other affected Federal agen-problems (including those that are non- cies?technological) is receiving proper attentionin either the Federal Government, local orState governments, or the private sector?

BACKGROUND

Each task group notes areas where the coor- . In the 1972 Energy Reorganization Act, thed ina t ion b e twee n E RDA a n d o th e r F e de ral Nuclear Regulatory Commiss ion i s r equi redagencies is required, and the reader is referredthose reports for more detailed descriptionsproblem areas, They can be characterizedbrief, however, by the following examples:

to to report to-the Congress on the clustering of of nuclear reactors and supporting facilities inin “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 howheavily ERDA will be involved with theNu c le a r Re g u la to ry Co mmiss io n in a d -dressing this topic.

q In the energy conservation area, some meansof formal management control must bedeveloped to assure coordination of relatedprograms in various Federal agencies and

d e p a r tme n t s ( e .g . , F e d e ra l E n e rg y Ad -minis t ration, E nv iron me ntal Protect ionAgency, Federal Power Commission, Depart-me n t o f T ra n sp o r ta t io n , De p a r tme n t o f Commerce, Department of Housing andUrban Development, and U.S. Department of Agriculture) that impact on energy demand.O f c ri t i c al c o nc e r n i s t he r e la ti on sh ipbetween ERDA and the Federal EnergyAdmini s tr a tio n in e f for t s to c o ord ina teanalysis and policy input in R, D&D programdesign, The lack of a clear statement regard-ing the way in which the implementation

measures managed by the Federal EnergyAdministration will be integrated with theR, D&D programs of ERDA requires atten-t ion,

q In the fossil fuel area, a point of concern is thedivision of responsibility for the clean directutilization of coal. Precombustion cleanup(e.g., by magnetic desulfurization) is in thescope of the Bureau of Mines; cleanup at thepoint of combustion (e.g., by fluidized bedcombustion) falls within ERDA; postcom-bustion cleanup (e.g., by stack gas scrubbers)

is largely within the Environmental Protec-tion Agency.

The ERDA Plan does not indicate how tradeoff evaluations or a balance among these separateresponsibilities and/or alternative approachesare to occur. The criteria used to evaluate eachoption could vary with the lead agency, and theremay be no place where the entire profile of criteria—environmental, economic, institutional,efficiency—is applied across the board to alloptions. The size and effectiveness of programsdevoted to each technology or problem elementby different agencies could be quite variable, and

there is no guarantee that the overall effort willbe properly balanced or that its components willbe 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 neitherprocedures nor mechanisms for accomplishing this coordination.

SUMMARY

State and local governments are well aware of the Nation’s energy problemsand 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 moreimportance to conservation and, most important, feel strongly that they should beincluded 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 inunnecessary conflict and delays in program implementation. Thus, it is importantfor ERDA to expand the Office of Industry and State and Local GovernmentRelations and to provide the local governments regularly with information, such asa listing of all energy R, D&D projects, clear definitions of State and local roles inenergy R, D&D, and well defined planning procedures.

QUESTIONS

What specific procedures does ERDA projectfor effecting coordination of its program withState and local governments through the R,D&D process? What is the schedule for theirimplementation?

Does ERDA plan to produce and circulate toState and local governments a listing of program plans to assist states in their ownplanning processes? When can distributionbe expected?

Does ERDA planresearch projects

Although volume IERDA recognizes thelocal participation in

to conduct or sponsorconcerning the potential

4 .

impacts of its R, D&D program? What will bethe scope of such research; by whom will it beconducted; and how will State and localgovernments be included in research efforts?

What plans does ERDA have for supportingand maintaining lia ison with multista teorganizations interested in regional energyplanning? What are the mechanisms in-volved; who is responsible for coordinatingERDA’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 inputimportance of State and into program planning and execution can bei ts energy programs, no accommodated.

CHAPTER I 27



The State and local governments are wellaware that the primary responsibility for in-itiating and carrying out large governmentalresearch and development programs resides withthe Federal Government and, more specifically,with ERDA. However, they recognize that they,too, have major contributions to make in thetranslation of these programs into energy-producing facil i t ies. The successful develop-ment and implementation of ERDA’s energyp ro je c t s w i l l d e p e n d o n a p p ro p r ia t e wa te rallocation, on reasonable land use regulation, onrealist ic local taxing polic ies, on successfulmanpower tra ining programs, on consistentenvironmental controls, and ultimately on publicacceptance of new technologies and procedures.All of the foregoing are areas in which State andlocal governments possess valuable experienceand expertise, and their cooperation could proveextremely useful to ERDA. However, if thesegovernmental bodies are to lend effective supportto the ERDA program, it is imperative that theirinvolvement begin in the early stages of programdevelopment.

If, on the other hand, local governments feelthat Federal agencies are encroaching on theirresponsibilities, their opposition can generated e l a y s o r e v e n cancella tion of importantprograms. Delays may also occur simply becausethe States are not kept abreast of energy relateddecisions, State and local governments may bewilling, 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 bestarted u nt i l l o ca t io ns a n d c o ns t ru ct i onschedules are known.

To assure maximum positive participation byState and local governments in i ts energyprograms, ERDA could establish and utilize

several practical mechanisms for effective coor-dination. Examples of such mechanisms are:

Expanding the Office of Industry and Stateand Local Government Relations to providean effective ERDA contact point for non-Federal government bodies, keeping themabreast of ERDA policies and programs, andtransmitt ing their recommendations andconcerns to the proper ERDA office.

Establishing procedures to consider Statea n d lo c a l g o v e rn me n t p o s i t io n s in a l lprogram planning activities; e.g., via the

National Governors’ Conference.Keeping State and local governments in-formed and updated of ongoing and plannedenergy R, D&D projects.

Providing for studies to analyze the potentialimpacts of implementation plans for all R,D&D projects on local areas.

E n c o u ra g in g mu l t i s t a t e c o o p e ra t io n inenergy program planning, by liaison withexisting 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 tomeet near-term needs until new energy sources can be brought on line. ” ERDAplans to accomplish this through enhanced gas and oil recovery, direct use of coal,more use of nuclear reactors, shifting demand away from petroleum, and increasedconservation practices. A review of ERDA’s FY 76 budget indicates, however, thatonly about 5 percent is devoted to solving near-term problems, which does notseem consistent with the stated goals, This deficiency results primarily from thelack of emphasis given to end-use conservation, the lack of a ttention tonontechnical 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 toattention to the energy problems faced over increasing energy supply or reducing con-the near-term (next 10 years)? sumption. Does ERDA feel it should increase

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

problems not given much attention by ERDA 3. How will ERDA ensure that proper attentionare end-use energy conservation, incremen- is given to advancing the arts in “ lowt al im p r ov e m e n t s i n existing supply technology” areas?technologies, nontechnological research to

BACKGROUND

Of abillion,

total ERDA energy budget of about $1the only items relevant to the next decade

are energy supplies ($80 million) and end-useconservation (less than $7 million).

E R D A ’ s l a c k o f a t t e n t i o n t o n e a r - t e r mproblems is closely connected with two otherissues: (1) too little emphasis on end-use conser-vation, and (z) inadequate programs of non-

technological research aimed at understandinginstitutional, social, and regulatory constraints.Serious R, D&D in these areas could be highlyproductive in the near-term. The reader isr e fe r re d to c h a p te r V fo r a mo re d e ta i l e ddiscussion of these deficiencies.

Also related to the lack of priority given near-

term problems is ERDA’s tendency to focusprimarily o n l a r g e - s c a l e e l e c t r i c p o w e rtechnologies. ERDA’s strength in these advancedareas of science and technology (e.g., fusion andbreeder reactors] is good and should be extended.However, many potential improvements relate tosimple technology, and many of these could havenear-term impacts, such as better storm win-

dows; home furnaces; home, commercial, andindustrial lighting systems; tires; and solar water

heaters. Large and sophisticated technologieshave inherent appeal, especially to scientists andengineers, but ERDA must be careful to giveproper priority to incremental improvements inexisting technology.

CHAPTER I 29



7. Socioeconomic Research

ISSUE

ERDA’s program of R, D&D does not give enough attention to socioeconomicanalysis and research in addressing the Nation’s energy problems.

SUMMARY

ERDA’s program plans, budgetary commitments, and professional staffing donot give adequate attention to social, economic, environmental and behavioralresearch needs, even though the legislative record makes clear that ERDA is givenresponsibility beyond technological R, D&D (Public Law 93-577, section 5A). Suchresearch is needed for two reasons: (1) to better understand the relationships of energy and the quality of life, and (2) to identify nontechnological constraints toincreased energy supply or reduced energy demand. The nonhardware researchprograms must be integrally tied to the hardware programs and the results used

when evaluating and comparing alternative approaches to “solving the energyproblem,”

QUESTIONS

I. How much effort is being devoted by ERDA energy supply and use patterns and theto socioeconomic research? quality of life?

2. What research program does ERDA envisage 3. How many professionals with social scienceto explore the intimate connection between backgrounds are employed by ERDA?

BACKGROUND

Al th o u g h l e g i s l a t io n g iv e s E RDA b ro a dresponsibility beyond technological R, D&D(Public Law 93-577, section 5A), many importantenergy supply and demand issues have majornontechnological components. In spite of this,ERDA’s program plan, budgetary commitmentsand professional staffing show little emphasis onsuch problems. If ERDA intends to help solveenergy problems through R, D&D rather thanmerely create new technological options relevantto solving energy problems, it must place moreemphasis on social sc ience and other non-technological issues. The degree and nature of coupling between the condition of the economyand the quantity of resources, especially energy,consumed each year is poorly understood, yetcrucial to national energy goals.

Each of the five task group reports explicitlycriticizes ERDA’s disproportionate emphasis onhardware research and development. Theseobservations emphasize the need for a balancedprogram, since nontechnical constra ints areoften the most serious impediments to deploy-ment of a technology. Specifically, the FossilFuels Task Group reports that little attention ispaid to nontechnical constraints that can serious-ly delay or altogether block the introduction of new technologies; th e Nu c le a r T a sk Gro u p

concludes that some of the primary obstacles toachieving nuclear goals and objectives arefinancial and institutional; the Solar Geothermaland Advanced System Task Group reports thatmajor impediments to r a p id u t i l i z a t io n o f geothermal resources are legal and institutional;

3 0 CHAPTER I



the Conservation Task Group states that ERDA-48 does not adequately address the social ,political, economic, and environmental problemsinherent in the application of energy conserva-tion technologies; and the Environmental TaskGroup notes that ERDA overemphasizes theengineering aspects of environmental protection,

As one example, consider the case of offshoreoil and gas development. Currently, ERDA has no

identifiable R, D&D component associated withthis particular resource, even though mostqualified observers agree that this is one of thefew options available for increasing oil and gasfuel supplies in the near-term (by 1985). Thehardware associated with offshore developmentis commercially available, and there are probablyadequate incentives for industry to continue toimprove the technologies where possible. Thus,th e re i s p ro b a b ly n o re a so n fo r E RDA toundertake hardware research in this field. On theo th e r h a n d , th e re a re se r io u s o b s ta c le s to

expanded offshore development that are relatedto the environmental impacts—concern about theeffects of oil on marine ecosystems and about theonshore socioeconomic effects. Whereas somerecent legisla tion has proposed that coastalsta tes be compensated for adverse impactsproduced by offshore development, currentlyvery little is known about how to measure theseadverse impacts. If offshore oil and gas develop-

ment is proceeding at a significant rate, then agreatly expanded research effort is needed tod e t e r m i n e i t s e n v i r o n m e n t a l , s o c i a l , a n deconomic impacts. This research obviouslyshould and could not be done by the industry—itis the responsibility of the Federal Government.Some research of this type is currently beingdone by the Environmental Protection Agency,National Oceanic and Atmospheric Administra-tion and Office of Technology Assessment, butno such programs currently exist in ERDA.

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

ERDA’s program overemphasizes energy supply technologies relative toenergy 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-useefficiency. Although there is some recognition of the need for improvement,ERDA’s conservation program focuses primarily on the near-term and un-derestimates its long-term importance. Factors inadequately considered in therelative 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 torelative cost-effectiveness of research on the year 2ooo while simultaneously main-energy demand and research on energy taining a strong and healthy economy.” Whatsupply? 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 theAtomic Energy Commission and from the Officeof Coal Research in the Department of theInterior. These programs emphasized large-scaleenergy supply projects in the nuclear and coaltechnologies. ERDA has been mandated by the

Congress to undertake energy conservationresearch, but as yet this program has not fullydeveloped, and it is not yet possible to state withassurance what the payoff from this type of research will be.

Although preliminary analyses suggest thatthe payoff is potentially large, the situation isespecially complex because of the degree of fragmentation in the end-use sectors as com-pared to energy supply sectors, Another com-plicating factor in estimating the payoff fromconservation is the division of responsibilitiesbetween ERDA and other agencies within the

Government having responsibilities for the useof energy, no tab ly the Federa l Energy Ad-ministration,

Historically, government involves itself in theexpansion of production and exploita tion of natural resources but avoids intruding into howits citizens consume them. For example, theNat ion’s water programs have almost exclusive-

ly been designednot to husband

to augment the supply of water,water at the point of use. The

Helium Conservation Program never sought tore d u c e th e d e ma n d fo r h e l iu m b y e n d -u seconservation practices.

This involvement by the Government with

supply rather than consumption exists in thearea of regulations and subsidies as well as inenergy research. For example, the FederalGovernment contemplates assuring the producerof synthetic fuels a guaranteed price for hisproduct in case the price of alternative fuelsshould fall, but does not consider supporting theinvestment by a homeowner in upgrading thethermal performance of his home. There is amandated plan for a national solar energylaboratory to assure that new technologies toharness solar energy are pursued vigorouslyacross the board, but no comparable intensity of

effort and imagination has been directed towardc rea t ing pro gra ms to d ev e lop n e w en d -usetechnologies. Ye t th e two se t s o f r e se a rc hproblems involve similar areas of engineeringand physics (heat transfer, surface properties of materials, energy storage), as well as similarproblems 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 theagencies 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 doesnot reflect ERDA’s R, D&D goals. In particular, a need exists to reexamine (a) therelationship between ongoing research and ERDA’s program disciplines, (b) theintegration of basic and supporting research, (c) the distribution of emphasis on in-house and contracted research and (d) the role of the national laboratories vis-a-visuniversities 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 researchpolicy that separates basic and supportingresearch?

Does ERDA intend to reorient its researchprogram to reduce the emphasis on nuclearpower and high-energy research relative to

materials and molecular research?

How does ERDA intend to deal with “in-herited” ongoing research that seems inap-propriate or redundant in terms of ERDA’smission?

How does ERDA envision the research role of the national laboratories, the universities,

and industries? How does ERDA plan torationalize and ba l ance these variousresearch capabilities?

5. With particular regard to the university rolein energy research, how does ERDA view theestablishment of “Centers of Excellence” for

energy-related research in the pure andapplied sciences, engineering, and inter-disciplinary programs dealing with environ-mental, health, and policy issues?

6. What is ERDA’s view and intent with respectto social science research, which bears on theinstitutional, social, and legal aspects of itsenergy program?

BACKGROUND

With regard to the issue of research disciplines, power and to high-energy physics. Despite theERDA’ s Pla n (vol ume II , p. 1 25) id entif ies clear value of high-energy physics, there is somematerials and molecular research as two of the question as to whether it properly belongs tofour basic (physical) research areas, but prac- ERDA rather than, say, to the National Sciencetically all the budgetary emphasis in FY 76 is Foundation, since it does take by far the lion’sdevote d to research associat ed with nuclear share of ERDA’s basic research budget. On the

C H A P T E R I 33



other hand, basic research efforts are weak ornonexistent in nonnuclear aspects of materials,combustion, thermodynamics, fuel chemistry,environmental processes, nonnuclear radiation,non fusion plasmadynamics, biomedicine,geology, cryogenics, and other disciplines perti-nent to the nonnuclear ERDA programs. Assess-ment of the basic research program is thereforeneeded to align it more closely with the overallenergy goals stated in ERDA-48.

With regard to integrating basic and support-ing research, there appears to be some indication(ERDA-48, volume I, p. VIII-11) that the polariz-ed research management policy characteristic of the Atomic Energy Commission may be carriedover into ERDA. Although there are somebenefits to this policy, such an approach can tendto isolate scientific and engineering research and,therefore, has not produced innovative advancesin technology comparable to those, say, in thepace-setting electronics laboratories, where acentinuous spectrum of applied and fundamentalr e s e a r c h h a s b e e n c a r r i e d o u t u n d e r t h ecooperative l e a d e r s h i p o f s c i e n t i s t s a n dengineers, Experience has shown that thosecharged with engineering responsibilities andconstra ined by t imetables are not effectivemanagers of basic research, whereas scientistsdo not generally apply their insights to thesolution of practical problems when they areisolated from engineers and participating inmission-oriented problems. The optimum solu-t ion to innovation in advanced technology is,therefore, cooperative leadership between scien-tists and engineers, rather than separation of basic and supporting research. Such inter-disciplinary teams, sharing a common sense of responsibility, are characterized by elements:

q A l a rge mea sure of 1oca1 managementautonomy.

q A definite, though broadly defined, mission.

t.

q Full-t ime, interdisciplinary technical andnontechnical staff selected by managementto implement an engineering objective havinga multidisciplinary dimension,

. Adequate support that a llows for programcontinuity by committing a full-time staff engaged in high-risk, high payoff technicaldevelopment.

q Intelligence and strong personal motivationfor performance at all levels of the organiza-tion.

Neither management practices nor fundingdecisions by ERDA have yet given adequaterecognition to t h e a d v a n t a g e s o f inter-disciplinary organizations.

As id e f ro m p ro g ra ms in h e r i t e d f ro m th eNational Science Foundation, the bulk of ERDA’sre se a rc h i s p e r f o r m e d a t t h e n a t i o n a llaboratories, As a consequence, the extensivenational research capabili ty available a t theuniversities and in industry has not yet beenutilized effectively.

One mechanism for utilizing these capabilitiesis the establishment of university-based centersof excellence for energy-related research. Suchcenters should often assure continuity of fundingfor reasonably long periods of time (5 to 1 0years), thereby eliminating the costly and time-consuming n e c e ss i ty fo r a n n u a l p ro p o sa lpreparation and providing the necessary long-term support for both faculty and studentresearch participation, An important benefit isthus the training of the students needed to tacklethe Nation’s energy problems. Precedents forsuch university centers of excellence for energyresearch are the successful InterdisciplinaryLaboratories for Materials Science, which havebeen supported on a continuing basis by AtomicEnergy Commission and Advanced ResearchProjects Agency at a number of major univer-sities.

34 C H A P T E R I



10. Commercialization

ISSUE

1.

2.

3 .

Whatbeen

The development of effective commercialization policies and procedures is notadequately addressed in the ERDA Plan.

SUMMARY

p ro g ra m a n d th e p la n s fo r i t sconsidered the commercializationspecific mechanisms for assuring

ERDA-48 identified commercializationimplement at ion; however, ERDA has notprocess in sufficient detail, For example,ERDA/industry coordination are not clearly outlined, and the administration’srelationships with international companies is not defined. Moreover, the Plan doesnot address a number of very important issues; e.g., long-term support of energyindustries 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 commercializationprocesses could be suitable for implementation and how will implemental ion beachieved.

QUESTIONS

formal procedures and agencies have 4. How does ERDA plan to address the problemestablished by ERDA to facil i ta te Of long-term support of neocommercial

coordination with private industry? energy industries; i.e., those which requirelarge capital expenditures but which can be

In specific terms, how does ERDA plan to underbid by lowered imported energy costs?encourage industry to partic ipate in the

development of new energy technologies? 5. Does ERDA plan to conduct or support anyHow does ERDA plan to ensure that small

research in commercialization and incen-tivization policy and procedures?

energy companies and energy consumers arenot excluded from its R, D&D program andtheir subsequent commercial implementa-t ion?

BACKGROUND

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

procedures for applying this philosophy tospecific projects (volume II) are, for the mostpart, very general and, in some cases, inconsis-tent from one program area to another, Clearly,the Plan needs a more detailed explanation of commercialization plans, a more carefu1 defini-t ion of patent policies and procedures, and

further discussion of the role of small industriesand energy consumers in the ERDA program,

Several aspects of commercialization and theERDA/industry relationship problems do notappear to have been adequately considered inERDA-48 such as the re la tionship betweenERDA and international companies, the possibleneed for long-term government support of commercial-sized energy programs, and the role

C H A P T E R I 35



of ERDA in coordinating the commercializationprocess with other government agencies.

Although ERDA-48 indicates that the ultimateobjective of each research program will be itsintroduction into the commercial market, thediverse nature of the ERDA programs presents anumber 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 andSpace Administration-supervised research anddevelopment have been primarily used internal-ly, and those of the Securities and ExchangeCommission were intended for the power produc-t ion indust ry , the marke t for the resu lts o f successful ERDA programs may range from thelarge energy companies to the local baker. Tosome extent, this problem can be ameliorated byincluding comprehensive industrial and con-sumer participation in the planning phase of new

projects, These groups probably have the bestperception of society’s requirements, and theirearly involvement in program planning can helpto prevent the development of products andprocesses that simply “won’t sell.” ERDA-48 doesnot recognize or recommend the utilization of thistype of input.

Second, in those programs where the market isclearly defined, the ERDA Plan implies thatcommercialization will occur when the risksinvolved in introducing a new energy technologyare reduced to the point where private industrywill be willing to invest in it. However, corporate

investment decisions are based not only on therisk of investment loss versus potential profit,but also on the size of the investment required,the compatibility of the technology with theoverall company structure , the breadth andcentinuity o f t he m ar ke t, t he l ong -t er mavailability y of raw materials and other necessaryresources, and many other factors.

The Federal Government may therefore seek totilt corporate decisions in a desired direction byoffering 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 increasinglyimportant to plan incentives much earlier in theR, D&D process; the need for multiple incentiveswi l l p ro b a b ly in c re a se ; a n d a c t iv e p r iv a tepartic ipation may require continued Federalsupport, in one form or another, well into what is

now thought of as the commercialization phase of project development. At present, the basicmechanism to create incentives in new energytechnologies is not well understood, and there islittle indication in ERDA-48 that research inunderstanding these mech ani sms i s con-templated,

A third major problem involved in bringingERDA programs to the commercial stage is thatof “blurred competitive horizon s.” For example,although it may be possible to estimate fairlyaccurately the cost of producing gasoline from oilshale, the oil-exporting nations can always lowerthe prices of oil to undercut any potential marketfor such gasoline, Thus, the construction of shale-oil extract ion and refinement facilities maydepend on subsidies in some form by the FederalGovernment. Projects of this type may, therefore,never reach a true commercialization stage.Consideration could be given to forming specialpublic agencies (e.g., Amtrak) to manage enter-

prises of this type. However, formation of suchenterprises could have significant impacts on theNation’s basic economic structure. The presentERDA plan does not appear to address thesecons ideations.

The success of ERDA’s commercializationprogram will depend in large measure on itspatent and proprietary rights policies. Manycompanies, particularly small ones, will be veryhesitant to become involved in ERDA programsunless they are confident that their rights in theseareas will be adequately protected. Efforts todevelop acceptable regulations should beginimmediately.

The existence and growing importance of multinational companies further exacerbatesERDA’s difficulties in program commercializa-tion, The desirability of subsidizing such com-panies, the problems involved in protection of United States patent rights, the differences inregulatory philosophy among countries, theeffect on international treaties and agreements,and numerous other issues have only beentouched on in ERDA-48.

Although many aspects of commercializationlie outside ERDA’s jurisdiction, the lead role of

ERDA in energy R, D&D and its important role incommercialization as recognized in ERDA-48requires ERDA to understand the overall com-mercialization process and to employ this un-derstanding 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, onthe Nation’s energy resource base, An incorrect assessment of the extent of all orpart of the resource base could cause severe distortions in ERDA priorities andschedules. If the estimated recoverable reserves of a given resource are greatlyoverestimated, and several different technologies are developed and commer-cialized 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 adependency 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 theseestimates.

QUESTIONS

1. How reliable are energy resource estimates 2. How are these uncerta inties incorporatedfor petroleum, natural gas, coal, uranium ore, into the R, D&D strategies?and thorium ore?

BACKGROUND

There have been several estimates of energyresources made over the last few years, for whichextensive ranges of values exist. For example,undiscovered recoverable natural gas resourceshave been estimated to range from 322 to 5 , 5 7 2

trillion cubic feet. The most recent survey gives arange of 524 to 857 trillion feet. Similar wide

v a r ia t io n s a re a v a i l a b le fo r o i l , c o a l , a n duranium. A more complete analysis of energy

resources is given in Energy Alternatives, AComparative Analysis, U.S. Government Print-ing Office, Stock No. 041-011-00025-4, May1975, Washington, D.C. These documents showthat a great deal of uncerta inty st i l l existsregarding the nature of our energy resources andpoints 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 includewater requirements, materials limitations, air pollution, land use, and net energyconsiderations, Among the social and institutional constraints are manpower;capita l; lags in technology transfer; information accession, re trieval, anddissemination; regional and community impacts of mining and plant construction;metropolitan dislocations caused by fuel shortages and price increases; and socialacceptability of new technology.

QUESTIONS

1. What is ERDA’s strategy for identifying and 2. What levels of effort are planned with respectassessing the physical and societa l con- to systems studies, cost-benefit analysis,stra ints upon the implementation of the technology assessment, and other energyNational energy plan? policy planning research?

BACKGROUND

The identification and assessment of materialslimitations which might arise in the constructionand operation of large numbers of energyconversion facilities is a major task which ERDAmust address, Examples include not only rarephotovoltaic materials such as gallium, cad-mium, and iridium for photocells, but also morecommon materials such as copper, aluminum,high temperature alloys, and conversion resistalloys. Extensive studies of near-term potentialshortages in materials, components (e. g., valvesand 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 inputrepresenting possible long-term constra ints.Land,types

38

too, is a natural resource of which certainand locations are already in short supply.

CHAPTER I

Some of the nonphysical constraints may bemore difficult to assess than the physical ones.For example: in principle, capital for economicventures is always available at some interestrate, In fact, however, government interventionmay be appropriate when an overriding socialneed, such as independence from imported oil, isidentified. There are many forms which suchintervention might take; careful study is neededin this area to ensure that a wise course of actionis chosen.

Information handling—accession, retrieval,

and dissemination— and technology transferconstitute a set of closely related institutionalconstra ints. An objective methodology forassessing the impact of a new technology—leta l o n e q u a n t i f i a b l e m e a s u r e s o f s o c i a lacceptability—has yet to be developed,

Another set of social constraints, perhaps the



least understood and hardest to define, concernsthe regional and community impacts, includingthe social acceptability, of the drastic shiftsexpected in energy supply and demand. Whereand how people live affec t the amounts and kindso f energy th ey c o nsu me ; c o nv e rse ly , fu elavailabi1ity and cost significantiy affect 1ivingpatterns and associated urban and suburban

development. Furthermore, some of the remote,sparsely populated regions of the Nation inwhich most new coal mining and processingplants must be located are already beginning toexperience severe soc ia l, po l it ical , and in -stitutional stra ins from the large influx of newworkers and their families. (For example, a 1,000MW nuclear plant requires a peak construction

site force of 2,000 to 3 , 0 0 0 workers; coal-firedpowerplan ts , as wel l a s gasi f ica t ion and l i -quefaction facilities, will require similarly largeforces, ) Furthermore, workers and their familiesmay be stranded in remote locations whenconstruction is completed, thereby contributingto as serious a set of community problems at theend of a program as at the beginning. These and

other potential problem areas could benefit fromfurther 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 notbe the most effective approach.

SUMMARY

All three major “inexhaustible” sources identified by the ERDA Plan areproducers of electricity having high capital cost and low operating or fuel cost.Examination of the functional energy needs indicates, however, that otherconcepts, although having less ultimate potential, should be given equal priority,Intensive electrification itself will have a noticeable social impact and may presentproblems of vulnerability y and reliability. Alternatives include expanded direct useof solar, geothermal and other direct heat sources for industria l process,production of synthetic 1iquid or gas fuels b y solar or nuclear energy, and increasedemphasis on hydrogen, biomass and conservation.

q

BACKGROUND

Breeder reactors, solar-electric systems, and This commonality, particularly the intensivef us ion reactors identified in the ERDA Plan as t he electrification these technologies will entail, maythree “ inexhaustible” energy sources have a dangerously narrow future options. Thus thiscertain degree of functional commonality, All are approach must be thoroughly analyzed to makecapital intensive, have a low fuel cost, and are sure that viable alternatives are not lost byprimarily suited to the production of electricity, default.

C H A P T E R I 39



There is already considerable concern aboutthe ability of the energy industry to raise neededcapital, (see issue 12 of this chapter), If industryis forced by resource depletion and lack of a lternatives to deploy the capita l-intensivetechnologies, but is unable to raise the capital,massive Federal subsidies may be required.

Electricity has many advantages as an energyform, It can be generated from a variety of resources and mixed with impunity. At its pointof use it is clean, efficient, and versatile.I n cr ea s ed u s e c a n r e d u ce c o n s um p t i on o f petroleum, particularly in e lectric cars andtrains, heat pumps for space conditioning andmedi um- t emperature p r o c e s s h e a t , e t c .Nevertheless, intensive electrification involvesmany uncertainties. The environmental problemassociated with heat re jection is a primaryconcern in the massive generation of electricity,The very complexity of the “ inexhaustible”systems makes them more vulnerable to equip-ment malfunction or sabotage, The reliability of

present day nuclear plants has been less thanexpected; breeders and fusion reactors can beexpected to suffer from similar problems, Solarelectric systems and transmission networks are

especially vulnerable to sabotage. The disrup-tions caused by the 1965 northeast blackout weresevere; a similar event in an economy much moreh e a v i ly d e p e n d e n t o n e le c t r i c i ty c o u ld b edevastating.

The potential alternatives to these electricity-intensive ERDA choices are more nearly alignedwith current energy demand, over half of whichis for thermal energy and half of the remainderfor transportation. Synthetic fluid fuels can beemphasized; they are not mentioned in ERDA-48.Solar or nuclear energy could be used in theproduction process. The production of hydrogenfrom water directly by light (photolysis) ormoderate temperature catalytic reactions showp ro mise , b u t n e e d a su b s ta n t i a l r e se a rc hprogram. The direct use of solar and geothermale ne rg y i s f ea s i b l e f o r m a ny mo d er a t etemperature industrial processes. Biomass fuelsfrom energy “plantations” or from wastes,mentioned in the Plan, could contribute toheating and transportation. The relative lack of emphasis on conservation is also rather sur-prising, in view of the great benefits it offers inreducing the demand for now costly energy,

40 CHAPTER I



14. Methodology and Assumptions Used in D eveloping

the R, D&D Plan.

ISSUE

The ERDA Plan relies on methodology and assumptions for developing R, D&Dpriorities that appear to bias the priorities toward high technology and capitalintensive energy supply alternatives and away from end-use technologies.

SUMMARY

The ERDA R, D&D plan makes use of six energy scenarios as essentialelements in arriving at R, D&D priorities. An analysis of this approach discloses anumber questionable assumptions which tend to distort the value of variousR, D&D options. Included among these assumptions are:

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

q calculated energy “system capital costs include only supply side costs andignore consumer costs, and

q the scenario emphasizing improved efficiency in end-use assumes increasedefficiency will have an effect only up to about 1985, after which exponentialgrowth resumes.

These and other defic iencies tend to minimize the impact of end-usetechnology R, D&D and bias the choice of research priorities toward the supplysector. Although ERDA appears to recognize this problem, improvements in theapplication of the methodology are needed to develop the most effective set of energy R, D&D priorities.

QUESTIONS

1.

2.

How sensit ive are the R, D&D priorit ies 3 .arrived at by ERDA to the methodology andassumptions used in the development of thesix scenarios?

Does ERDA believe it can develop a “model”to generate R, D&D priorities? How impor-tant will “professional judgments” be indeveloping R, D&D priorities?

Ho w a re fu tu re p ro je c t io n s o f e n e rg ydemands arrived at? How do they affect theR, D&D priorities? What types of social,economic or institutional changes will lead togreatly reduced demand projections or great-ly 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 essentialelement in arriving at R, D&D priorities: “Basedupon an analysis of scenarios, the status of thecandidate technologies, and the extent of theresources 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 a p p e n d ix B , b y u s i n g a “ j u d g m e n t a lprocedure. ” An a ly s i s o f th e a p p ro ac h u se ddiscloses a number of problems, a partial list of which follows.

q The scenarios all assume the same set of finaldemands, The possible effect of price ondemand does not appear to be included in theanalyses in any way, For example, i t isassumed that air passenger miles will in-crease by an average of 8.14 percent per year

in the 1972-85 time period.q C a l c u l a t e d e n e r g y s y s t e m c a p i t a l c o s t s

include only supply side costs. Consumercosts are not included in the optimizationcal cul at ion , t h e r eb y b i a s in g t h e E R D Aanalysis in the direction of R, D&D todecrease supply costs, which will minimizethe potential impact of R, D&D on end-usecapital costs (e. g., refrigerators, heat pumps,and solar home heating systems),

q In scenario 1, increases in energy utilizationefficiency as a result of the rising cost of fuel

are not considered. Since this is the referencescenario, t h e d i s to r t i o n ca u s e d by t h i s

omission is perpetuated in a ll the otherscenarios that ERDA develops.

The “no new initiatives scenario” assumesautomobile efficiency will be 17.5 miles pergallon in 1985, and 20 miles per gallon in2000. Many persons feel automobile efficien-cies will be substantially better than thiseven without substantia l government in-

tervention,The scenarios developed did not take intoaccount constraints due to capital availabili-ty , manpower restric tions, environmentalcontrol regulations, materials supply limita-tion, competition for water resources, orregional sensitivities.

The scenario emphasizing improved efficien-cy in end-use (scenario 2) assumes increasedefficiency will have an effect only up to about1985. (see ERDA-48 volume I, fig, 5, p. V-5).Thereafter exponentia l growth resumes.

Thus conservation R, D&D is assumed tohave negligible long-term impact. As dis-cussed in detail in chapter V of this reportdealing with conservation, it is believed thatthere are many areas where conservation R,D&D might have a long-term and continuingimpact.

While solar electric power plays a role insome of the scenarios, solar heating of buildings does not. This technology, which isthought by many to offer significant poten-tial by 1985 and major potential by 2000,receives only limited emphasis in any of the

scenarios—a maximum of 3.5 Quads* in theyear 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:

q Internal project management tends to impose excessively detailed restrictionson R, D&D program.

q Project management delegated to outside agencies or firms has been awardedto organizations having excessively detailed management structures, with acorresponding loss of ERDA program control.

q Improper ba lance be tween systems ana lysis and p roof-of-concept ex-

periments.

QUESTIONS

Has ERDA undertaken any formal analyses 4. How does ERDA envision its relationshipof 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, model-Has ERDA formally considered the use of ing, field experiments, and judgmental con-less centralized project management? If so, siderations in i ts d ec is i on ma ki ngwhat conclusions have been reached? procedures?

H a s E R D A a d o p t e d a n y m a n a g e m e n tprocedure which it considers undesirable toprotect i tse lf from public , executive, orlegislative criticism?

BACKGROUND

Establishment of ERDA as a new agencyprovides i t with excellent opportunities tobenefit from the experiences of older groups andto initiate imaginative management procedures

and techniques. For example, at the Departmentof Defense and other agencies a growing tenden-cy is to increase the extent and detail of controlover research a nd d ev el op me nt p ro gr am s.Between 1947 and 1973 the Armed ServicesProcurement Regulation grew f r o m ap -proximately 125 pages to about 3,000. By 1971,

there were almost 1,300 directives involved in thesystems management process of major defenseprograms. This vast expansion of centralizedprogram control inevitably caused large in-

creases in the number of contractor and Federalpersonnel involved in systems management.

This increase in management effort might wellbe justified if comparable improvements in R,D&D results were noted. However, comparisonsof the present R, D&D procedure with earlier, lesscentralized U.S. procedures and with foreign

CHAPTER I 43



procedures reveal few differences in technical,schedule, and cost performance.

A r ecen t s t udy o f wor ldwide space andaviation research projects indicates that the mostsuccessful programs have been characterized byan individual identifiable as chief designer, theuse of small design teams, internal projectautonomy, small governmental project offices,aus t e r e budge t s , a n d s t r i c t a d h e r e n c e t o

schedule. Although there are obvious differencesin the R, D&D projects envisioned by ERDA andthose undertaken by the aerospace community,ERDA should nevertheless give serious con-sideration to these factors in developing manage-ment procedures.

In analyzing i t s managemen t procedures ,ERDA should carefully consider the need for newagencies to support its research requirements.The Solar Energy Research Institute, mandatedby the Congress in 1975, is an excellent exampleo f t he t ype o f new agency tha t migh t beestablished to support ERDA’s R, D&D goals. At

present, ERDA is exploring the appropriate roleand structure of such an institute through a

National Academy of Science study, requests forcomments from public groups, and internalanalysis. Issues to be considered include therelat ive stress to be given fundamental andapplied science versus demonstration projects,the inclusion of university and private researchgroups in the program, the overlap between solarand conservation research, and the nature andextent of inst i tut ional problems involved in

widespread solar energy utilization,Finally, ERDA should give careful considera-

tion to the appropriate use of systems analyses inlieu of critical field experiments needed to testthe viability of new energy technologies. Theimproper use of system analysis in such in-stances can constitute a serious obstacle to cost-effective, rapid and orderly assessment of newtechnologies which require primary experimen-tal demonstration of feasibility, Although thereis no quarrel with good systems analyses thathelp to generate an overview essential to thesuccess or failure of a concept, the improper

substi tut ion of systems analyses for cr i t icalexperimental 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 withcaution.

SUMMARY

Net energy measures energy output re la tive to energy input, therebyindicating which technologies are likely to be most useful. However, the concepthas been very loosely interpreted; as a result, comparisons of numerical estimatescan be misleading, due to the use of differing definitions of net energy. The termsand 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 differentplant locations. Moreover, net energy may not comprise the most significantcriterion 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 coalliquefaction facility. The ERDA Plan does not address any of these considerations,nor does it establish quantitative net energy criteria for the evaluation of energytechnologies.

QUESTION

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

BACKGROUND

Energy analysis is a method used to determinethe amount of energy required to provide aproduct or service. Net energy analysis is used todetermine the energy required to produce energy.For instance, to provide shale oil, the shale mustbe mined, transported and heated in order torelease the oil. The energy content of the resultingoil is compared to the energy required by the

above processes. For most technologies, the ratioof energy output to energy input must generallybe greater than six in order for the process to beattractive.

E n erg y an a ly s i s i s a sub set o f ec o no micanalysis. While decisions tend to be made on theb as i s of o pt imiz in g e co no mic s r ath er th an

energy, energy analysis can be useful when costsare unknown or when nonmarket forces areinvolved or contemplated. There are three mainuses for energy analysis: to determine the energyratio of a process, as in the shale oil example; todetermine the time required for a new facility topay back the energy invested in plant construc-tion; and/or to determine, from a thermodynamic

standpoint, the minimum energy necessary for agiven process.

Energy analysis has yet to advance beyond thestage of establishing a coherent framework of definit ions and accounting procedures. Theassumptions underlying energy analysis are stillsu b je c t to w id e ly v a ry in g in te rp re ta t io n s ,

CHAPTER I 4 5



thereby yielding widely varying results. Themost important difficulty involves determiningthe boundaries of the analysis. For example, incalculating the energy used in equipment produc-t io n , h o w fa r b a c k sh o u ld o n e e x te n d th ecalculations of energy used to manufacture theequipment required by the above process? Inaddition, how important are the differences inpowerplant efficiencies or fuel sources which

generate the electricity used in the process?C le a r ly , a g re a t d e a l o f r e se a rc h mu s t b eperformed before net energy analysis can be aconsistent and widely accepted methodology.The ERDA Plan and Program virtually ignoresthe subject, despite the consideration of netenergy as one of the five basic principles in thelaw 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 Com-

panyProf. Robert H. Essenhigh

Mr. Robert M. Lundberg, Commonwealth Edison

Mr. John L. McCormick, Environmental PolicyInstitute

Mr. Harry Perry, National Economics ResearchAssociates

Mr. Roland W. Schmitt, General Electric

Prof. Carl M. Shy, University of North Carolina

Dr. John D. Sudbury, Consolidated Coal Develop-ment Company

CONTRIBUTORS

Dr. George Argyropoulos, Massachusetts In-stitute of Technology

Dr. James Gruhl, Massachusetts Insti tute of Technology

Prof. Claude Hocott, University of Texas atAustin

Prof. David Huettner, University of Oklahoma

Prof. Don E. Kash, University of Oklahoma

Prof. Michael Leesley, University of Texas atAustin

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 fossilenergy contain unrealistically optimisticprojections of the energy supplies that can berealized from new technologies in the nearterm.

Primary Oil and

No Federal agencyprehensive research

Gas Recovery . 54

is engaged in a com-program for primary oil

and gas recovery from new sources; the

absence of such a program could lead todelays in the development of these resources.

Enhanced Oil and GasRecovery . . . . . . . . . . . . . . . . . . . . . . 56

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

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

ERDA’s priorities for oil shale R, D&D lack asense of urgency in meeting the Nation’senergy supply needs in the near- and mid-terms.

Synthetic Liquid Fuels FromCoal q* * * * * * * * * * . . * * * . *.*..*... 59

New and existing projects in coal liquefac-tion must be carried through the pilot anddemonstration stages in order to determinewhat technical problems remain and toe s ta b l i sh th e o i l p r i c e l e v e l s a t wh ic hcommercial production will occur.

High-Btu Gasification of Coal . . 6 1The construction and operation of a firstgeneration, commercial-sized, high-Btu coalgasification plant is a prerequisite to anydecision on a coal-based synthetic naturalgas industry.

7.

8.

9.

10.

11.

12.

Low-Btu Coal Gasification forIndustrial Use . . . . . . . . . . . . . . . . . 63

The ERDA program on low-Btu coal gasifica-tion should give attention to the fuel needs of industrial furnaces, kilns, and ovens.

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

Research on underground mining technologyis required if coal production is to double inthe next 10 years as projected.

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

ERDA’s near-term program for direct coalu t i l i z a t io n b y u t i l i t i e s a n d in d u s t ry i snarrowly oriented toward fluidized bed com-bustion.

Low-Btu Gasification, CombinedCycle Powerplants . . . . . . . . . . . . . 68

The present ERDA program to developintegrated low-Btu gasifier, combined cyclepowerplants has underestimated their poten-tial.

Advanced Fossil Fuel CombustionPrograms . . . . . . . . . . . . . . . . . . . . . . 69

The balance among various advanced energyR&D projects, as indicated by the relativebudget allocations, does not reflect thepotential of the competing technologies,

Interagency Coordination: Coal

Cleanup. . . . . . . . . . . . . . . .

72ERDA must coordinate its activities withthose of other agencies relating to researchand development of fossil energy, This isparticularly evident in the problem of coalcleanup.

CHAPTER II 49



13. Environmental, Social, and PoliticalImpacts of Mining . . . . . . . . . . . . . 74

Even if mining technology is adequate tosupport an expanded use of coal and oil shalein the United States, there are potentialobstacles associated with environmental ,social, and political impacts of a massiveincrease in mining.

14. Manpower q .****..******.***** 76

ERDA’s program for massive expansion of the use of coal will require far more trainedpersonnel at various levels than can natural-ly be expected to enter those sectors of thelabor market.

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

The application of fossil fuel technologyresearch will require improved transporta-tion systems in the United States.

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

ERDA has no t e s t ab l i shed a sys t ems-oriented study of water availability related

to its energy program.

50 CHAPTER II



Since ERDA has been in existence for only ashort time, its plans relating to fossil energy havehad to be developed very quickly. This is aformative period in the creation of a balancedenergy program, pressured by the urgency of decreasing the national dependence on externalsources of fossil fuel and by the decline indomestic resource oil and gas. Given the substan-tial challenge of formulating a balanced strategyunder these conditions, the ERDA program infossil energy is a good first effort. There is anobvious need, however, for continued planningand improved analyses of alternative strategies,and the following observations are made in thehope that they can contribute to this ongoingplanning process in a positive manner,

The Plan lacks a clear and consistent iden-tification of priorities— It is clear that there is astrong need for some form of systematic, across-the-board optimization of energy programs onthe basis of agreed-upon criteria. Congress hasrequested that ERDA develop such a capabilityand base its decisions on it. The present ERDAplan (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 anythingmore than an i l lustra tion, and the re la tivefunding levels of different programs discussed invol. II of the ERDA Plan must be determined insome other manner.

One striking feature of the fossil energyprogram is the absence of a clear priorities list of the various technologies being pursued. Therationale for this absence is that many of itsresearch and development programs lack suf-ficient information to make critical assessmentsof the alternative strategies. ERDA has apparent-

ly made the decision at this early stage to keepopen all options that hold any promise at all of having a long-term payoff. Although funding inthe fossil energy program appears to be sufficientto pursue this strategy at present, the situationwill change radically when the costs of theprogram mount in later years. Demonstration

and commercialization will require significantlyincreased funding and will force hard decisionswith regard to competing alternatives. I t isimportant that ERDA move swiftly to build thenecessary decisionmaking capability.

In decidin g priorities, the substitutability of one fuel for another is an important considera-tion. To what extent can electricity y based on coalcombustion (or systems other than fossil fuels)substitute for liquid and gas fuels? What are theneeds of industry for liquid and gas feedstock? Inwhat cases can low-Btu synthetic gas substitutefo r n a tu ra l g a s in in d u s t ry ? Wh a t a re th eeconomic and social costs of a conversion fromone product to another? What are the likely timelags? The answers to questions like these willhave a major impact on the relative needs fordifferent 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 aboutincreasing energy supplies f rom do me st icresources—By focusing on new technologies, thefossil fuel program (contrary to the supplyprojections contained in it) limits itself to an

insignificant impact on energy supplies in theshor t te rm—before 1985 . The f i rs t p r io r i tysh o u ld b e to g e t b e t t e r in fo rma t io n a b o u tpresently available technologies and to facilitatetheir use where feasible: primary oil and gasrecovery from new sources (especially, the OuterContinental Shelf), enhanced recovery of oil,pipeline gas from coal, and shale oil from surfaceretorting. Although the economic feasibility of many of these technologies is highly uncertain atp re se n t , t h e p ro mise o f se c on d ge n era tio ntechnologies is seldom much brighter. In themeantime there is a need for better information

about the impacts, economics, and operatingexperience of commercial-scale operations. Itmust be recognized that the era of abundantcheap energy is over—especially in the cases of liquid and gas fuels. Issues 2, 3, 4, 5, 6, and 9express concern about the urgency of the energysupply situation.

CHAPTER II 51



Demonstration plants should be the keystoneof the fossil fuel technology R, D&D program—Because of the urgency of the national energy”situation, the ERDA fossil fuel program shouldemphasize th e d e mo n s t ra t io n o f a v a i l a b letechnologies at a scale appropriate to their stageof development: near-commercial scale for caseswhere no serious technical obstacles exist (suchas high-Btu gas and possibly oil shale withsurface retorting), pilot scale for cases wheretechnical problems still need to be solved (suchas tertiary recovery of oil, stimulation of tight gasformations, coal liquefaction, and low-Btu gas-combined cycle powerplants). Although theopinion that emphasis should be placed ondemonstration plants for several technologies isnot universally espoused, i t is not just anindustry view. Environmental specialists anduniversity representatives join in the call forbetter, and more universally credible informa-tion about alternatives.

An unresolved question is the possible impactof the proposed national synthetic fuels commer-cialization program, If this is approved andimplemented, its impact on the development of fossil fuels would be substantial, As part of thereview of the ERDA programs in fossil energy,Congress may wish to clarify the status andeffects of the proposed program in synthetic fuelscommercialization, Issues 3, 4, 5, 6, and 10discuss specific technologies,

Constraints on the commercial application of fossil fuel technologies are given insufficient

emphasis in the plan—While fuel technologiesare discussed in some detail by ERDA, too littleattention appears to have been directed towardsthe broad range of impediments that can serious-

ly delay, if not block altogether, the introductionof otherwise economically viable technologies.Institutional constraints must be addressed earlyif the technologies upon which ERDA is concen-trating its efforts are to be brought to commer-cialization. It is poor planning, for example, forERDA to pour large amounts of funds into thed e v e l o p m e n t o f a c o m m e r c i a l l y f e a s i b l etechnology for coal liquefaction if the technologycannot then be used—because coal mines cannotsupply the coal due to inadequate transportationfacilities, capital is unavailable, or water isinsufficient, The efficient use of ERDA’s R, D&Dfunds requires a systematic look at entire energydevelopment systems, The fact that ERDA doesnot have the primary responsibility within theFederal Government for dealing with some of these constraints is not a sufficient response; allthe more reason exists in such cases for concernthat the Government may not adequately con-sider some components which are vital for thesuccessful introduction of new technologies, Inlater plans, perhaps ERDA will assume the leadrole assigned to it by Congress and formulate abroad interagency approach to all aspects of fossil energy problems, thereby providing thea ssu ra n c e th a t imp o r ta n t f a c to r s imp e d in gdevelopment are not overlooked. As with thetechnologies themselves, a key consideration indealing with constraints is the need for informa-tion that will be accepted as a basis for discus-sion by groups in society with varying view-poi nt s. T h i s i s es p e ci a l l y i m p or t a nt — a ndespecially difficult—in assessing the effects of technologies on e n v i ro n me n ta l a n d so c ia lsystems, and it emphasizes the importance of undertaking appropria te studies now. Issuepapers 8, and 12 through 16 treat these questionsin 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 newtechnologies 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 con-straints aside, these objectives cannot possibly be met for the single reason that thetime necessary to develop and demonstrate new technologies and to construct acommercial industry based on those technologies exceeds the 10 years betweennow and 1985. The lack of consistency between ERDA’s overall plan in volume Iand the specific program projections in volume II raises questions concerning theprocess by which the objectives were defined and the use served by the objectivesin establishing priorities.

QUESTIONS

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

a m ou n t of e n er g y d er iv ed f r om f o ss il How have ERDA’s programs been deter-resources? mined from these objectives?

Z. Why are the objectives different in volumes Iand II of the ERDA Plan?

BACKGROUND

In volume II, Program Implementation, ERDAspecifies the following energy supplies to bemade available from new technologies by 1985.

Direct coal combustion (fluidized bed) 1 QuadEnhanced oil recovery , , . . . . . . . . . . 2.9 QuadsStimulation of gas formations . . . . . 3 QuadsCoal gasification . . . . . . . . . . . . . . . . . . 1 to 3 QuadsCoal liquefaction . . . . . . . . . . . . . . . . . (at least) 5 QuadsIn-situ recovery of shale . . . . . . . . . . 0.1 Quad

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

If realizable, this increase would represent atruly major contribution to U.S. energy supplies,as it would constitute approximately 2o percentof 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 QuadsIn-situ oil shale , . . . . . . . . . . . . . . . . . . up to 2.5 QuadsCoal-direct utilization . . . . . . . . . . . . . over 6 QuadsGaseous and liquid fuel from coal . beginning in 1985

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

CHAPTER II 53

60- 411 C l - 75-

5



Obviously, disparities exist between the twosets of objectives. While the figures for enhancedoil and gas recovery are comparable, those fordirect coal utilization and for synthetic fuels arenot, As a consequence, the methods used toassign these objectives and their influence indetermining the priorit ies and direction of programs seem to be compromised,

Whatever the origin of these stated objectives,they cannot be considered reasonable in the lightof current commercial development. In theopinion of the experts consulted by OTA, theERDA projections are unrealistic and cannot beachieved with any reasonably designed nationalenergy R, D&D policy. In almost all areas, thearguments are similar. The technology first hast o b e p r o v e d t h r o u g h d e v e l o p m e n t a n ddemonstration stages; then a commercial in-

dustry must be built to provide the energy. In thecase of enhanced oil and gas recovery, field-pilottests may take five years or more; a similar periodis required to begin to produce significant newsupplies. Tertiary recovery of oil and stimulationof tight gas formations do not have quick payoffs.Although a proven technology exists for coalgasification, a large commercial industry cannotbegin until the economics of the process havebeen verified. Coal liquefaction is even furtherremoved from commercialization, as is theintroduction of pressurized fluidized bed com-bustion for direct coal utilization. In the near-term, the energy self-sufficiency of the countrycannot be based on ERDA’s stated objectives forenergy supplies from new technologies in fossilfuels.

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 programcould lead to delays in the development of these resources.

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

Outer Continental Shelf, continues to be severely delayed by the lack of planningon the part of the Federal Government. An aggressive ERDA research programwould complement industrial efforts. In particular, research is needed on theeffects of offshore drilling and on ways of mitigating those which are harmful t o theenvironment. Congress mandated in Public Law 93-577 Sec. 6(b)(3)(Q) that ERDAengage in a program to explore methods for the prevention and cleanup of marineoil spills, but the scope of ERDA’s proposed activities is not clear.

QUESTIONS

1 . W h a t i s E R D A ’ s c u r r e n t s c h e d u l e f o r 2 . Wh a t current studies of regional, social, anddevelopment of the congressionally man- economic impacts of Outer Continental Shelf dated program on methods for the prevention (OCS) exploitation is ERDA performing (orand cleanup of marine oil spills? monitoring if being performed by other

agencies )?

54 CHAPTER II



3. What are ERDA’s plans for development of acoherent information base to assist potential-ly impacted areas in coastal zone planning forOCS oil and gas development?

4. What studies are underway at ERDA or inother agencies w i t h w h i c h E R D A i scooperating on alternative OCS oil and gaslease management arrangements and com-

pensation provisions in the event of adverseimpacts on areas of OCS oil and gas develop-ment ?

5. How soon does ERDA anticipate having acomprehensive data base on site-specificenvironmental conditions of potential OCSlease areas? If the regional data are to beassembled by an agency other than ERDA,what is ERDA’s current role in defining thenature and extent of information to beacquired and the t ime schedule for theprogram?

BACKGROUND

There are three sources of large quantities of liquid and pipeline gas fuels from domesticresources in the near-term (to 1985): productionof oil and gas from the onshore lower 48 States,offshore sites, an d A la ska . E s t imates o f petroleum resources on the OCS (to a water depth

of 200 meters) range between 10 and 130 billionbarrels (20-50 percent of U.S. resources); OCSnatural gas resources are estimated at greaterthan 100 trillion cubic feet (20-30 percent of U.S.resources). Most of the present production istaking place in the Gulf of Mexico, but there arealso sources of oil and gas off the Pacific coast,the Atlantic coast, and the coast of Alaska.Although development in some of the promisingareas w o u ld b e h a m pe r e d b y se v e re e n-vironments, there are no serious technologicobstacles to extracting oil and gas. The basictechnology has been well-tested in the Gulf of

Mexico, the North Sea, and elsewhere.T h e e xp an s io n o f of f sho re p rod u ct ion toincrease domestic fuel supplies has recently beenvery slow, mainly because of environmental andinstitutional obstacles. In particular, the problemstems from an inabili ty to lease promisingdevelopment sites because of public oppositiondue to uncertainties about environmental andsocial impacts.

One way to remove development delays is toreduce the likelihood of environmental damagefrom oil spills by developing better blowout

prevention and cleanup technology. In the longrun, this would reduce uncertainty and shouldhelp to avoid delays in opening up new areas forproduction. In the short run, and especially overthe next several years, other Federal activitiesare needed as well . Research requirements

include the following:q

q

q

q

q

•

Geological information on new potential oiland gas resource regions.

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

Research on the prevention and conse-quences of oil spills.

Studies of the regional social and economicimpacts of OCS exploitation and possibleframeworks for compensation for adverseimpacts.

Support of coastal zone planning.Development of alternative lease manage-ment arrangements.

The Congress directed ERDA to engage in aprogram to investigate methods for the preven-tion and cleanup of marine oil spills. (Public Law93-577, Sec. 6(b)(3)(Q)), but it is not clear howmuch of an effort is proposed as part of theEnvironmental Control Technology program of ERDA—the only place in the ERDA Plan whereoil-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 recoverysignificantly increasing

SUMMARY

of oil and gas from known reservesthe supply of these fuels. The need

development in the area of enhanced recovery clearly exists, but

holds promise of for research andopinions differ as

to the proper role of Government in this endeavor. The present pace of industryR&D could be accelerated by formulation of a detailed workable incentive plan.The present ERDA tertiary recovery program for oil, which involves special jointGovernment/industry field-pilot testing and demonstration, and the similarresearch on the recovery of gas from tight formations, will not yield a significantincrease in production by 1985. ERDA’s projection of an additional annual increaseof approximately 6 Quads result ing from enhanced recovery is thereforeunrealistic.

QUESTIONS

On what basis did ERDA make the projection 3. What would be the effect on gas supplies inof 6 Quads input to U.S. energy supplies from the 1985-90 period of an increase in Govern-enhanced oil and gas recovery by 1985? ment funding for research on t ight gas —

What is ERDA presently doing to ensure thatformations from $5 million to $25 million pery e a r

tertiary methods for oil recovery are brought.

to commercial application in the shortestpossible time and with maximum potential

for application over the entire U.S. oilproduction industry?

BACKGROUND

Owing to the convenient form and relativeenvironmental attractiveness of crude oil andnatural gas as domestic resources, it is importantthat the United States extract and use what ithas. In fact, the necessary pace of development of synthetic liquid and gas fuels depends largely onthe amount of oil and gas that can be recovered.This amount depends partly on the ability to tapsources like shallow oil beds, oil that remains indeveloped oil reservoirs (secondary and tertiaryrecovery), and oil that is too viscous to extractwith conventional procedures. The NationalAcademy of Sciences has recently estimated thatnew tertiary techniques might yield 105 billion

barrels of oil from old fields. It is obviouslyimportant to find out how much is actuallyrecoverable by enhanced oil and gas extractiontechniques, an amount dependent partly on thestate of technology.

Tertiary recovery methods—as distinct fromsecondary methods such as water flooding andnatural gas injections —include polymer floods,surfactants, miscible recovery processes, im-miscible gases and thermal (usually steam)recovery methods. Tertiary recovery methodsare at an early stage of development and muchwork remains, particularly in identification of the most favorable conditions for each method

56 CHAPTER II



and characterization of the economics and netenergy yield from competing methods.

The present ERDA program in enhancedrecovery began in 1974 when a jointGo v e rn me n t / in d u s t ry p ro je c t wa s in i t i a t e dbetween the Bureau of Mines and a private oilcompany. These experiments are approximately50 percent supported by the Federal Government.The current program calls for roughly 10 tests of several techniques in different reservoirs overthe next three or four years. Three of these 10tests are currently underway.

Some experts have characterized the problemas one of testing and centralizing information ona 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 150experiments. The total cost of such experimentsis estimated at $300 to $400 million. Assumingthat half of the cost is borne by the Governmentover a 4-year test period, the Government costwould be $40 to $50 million per year.

Many support ERDA’s present tertiary oilrecovery program. On the other hand, critics of the program contend that direct Federal involve-me n t i s u n wa r ra n te d o n th e g ro u n d s th a tin d u s t ry c a n b e mo t iv a te d to d e v e lo p th enecessary technology on i ts own. However,sufficient price and other incentives would benecessary, since production costs of enhancedrecovery are expected to be high.

Expertise in enhanced recovery resides prin-cipally with industry, which has already in-vested heavily in the needed R&D, As theincentive approach does not require the release of proprietary information, it is likely to appeal toindustry. However, th is factor may also beregarded as a disadvantage, as it may deprivenonparticipating oilfield operators of valuabledata, Nevertheless, it is possible that a broadindustrywide incentive program could initiatemore research and development than a limitednumber of federally funded projects.

General agreement is that testing of a largenumber of reservoirs must be pursued. Until adetailed, workable incentive plan is formulated,the present R, D&D program undertaken byERDA, though insufficient, will yield at leastsome of the necessary information. In addition,because the stimulation of tight gas reservesi nv ol ve s gr ea te r r i s k s t h a n e n h a n c ed o i lr e c o v e ry , d i r e c t F e d e ra l p a r t i c ip a t io n in aprogram to develop these reserves is warranted;ERDA’s program in this area is reasonable.

It should be noted that no significant increasein production can be expected by 1985, because of the t ime required to complete and evaluateenhanced recovery methods for gas and oil, Theannual increase projected by ERDA of 2.9 Quadsfrom oil via enhanced recovery is thus un-realistically optimistic.

Similarly, the anticipated increase of 3 Quadsfrom the enhanced recovery of natural gas isunrealistic. The Western United States containsan estimated 600 tcf of natural gas locked in tightrock formations, but there is no developed,economically feasible technology to produce thegas. R, D&D is expensive and too risky forindustry to participate independently on a verylarge scale. Massive hydraulic fracturing andother nonnuclear fracturing methods are current-ly considered the most promising approaches,taking into account technical, environmental,and social factors, If a chance of using theseresources to meet gas fuel demands by 1990exists, a n a c c e le ra te d r e se a rc h p ro g ra m i sneeded, but because of the uncertain prospects of su c c e ss su c h a p ro g ra m i s u n l ik e ly to b eundertaken by industry. The proposed ERDAbudget includes $5 million for R&D on tight gasformations in FY 76. A c o mp r eh e ns i veaccelerated R&D program, however, wouldrequire $20 to $25 million a year. That sum wouldprovide the necessary funds to perform 15experiments lasting about 4 years and averagingabout $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 theNation’s energy supply needs in the near- and mid-terms.

SUMMARY

ERDA’s programs for oil shale development are concerned exclusively with insitu processes, but these processes will make no contribution to liquid fuel suppliesin the near-term and have uncertain prospects for the mid-term. The ERDAconclusion that the above ground processing of oil and shale is not economicallyfeasible (or has no need for Federal R, D&D support) has no basis in operatingexperience. An oil shale demonstration program based on available technologies isneeded.

QUESTIONS

1. Why does ERDA’s oil shale program fail to 4. What basis is there for being optimistic aboutinclude support for demonstrations of sur- the projects for in situ gasification of oilface retorting technologies? shale?

2. What led to the emphasis by ERDA on the 5 . H o w a d e q u a t e a r e w a s t e m a n a g e m e n tBureau of Mines horizontal in situ retorting procedures for the disposal of spent shale?concept r a t he r t ha n m od i f i ed i n si t uprocesses or vertical retorting concepts?

3. How serious are the problems of wastedisposal and water consumption for surfaceretorting processes?

BACKGROUND

The Administrator of ERDA is mandated, inPublic Law 93-577, Sect. 6(b)(3)(G) to “assignprogram elements and activities. . . (which) shallinclude. . , r e se a rch , d e v e l o p m en t , an ddemonstrations designed. . . to demonstrate theproduction of syncrude from oil shale by allpromising technologies, i nc l ud ing in situtechnologies.” T h e E R D A P l a n i n c l u d e s

programs to develop and demonstrate in siturecovery to produce shale oil, but no program atall for above ground research on oil shaleproduction and retorting to shale oil. The ERDAdocument c la ims that “adequate technologyexists for conventional mining and surface

retorting of shale, but the economics of surfaceprocessing are marginal at best.”

It is appropriate that ERDA should devoteconsiderable effort to in situ shale oil productionmethods, because of the reduced environmentalimpacts of this technology, but not to theexclusion of mining and above ground retorting.There is no assurance that a satisfactory and

economically competitive in situ technique canbe developed. Even among the range of in situextraction concepts, the horizontal technique,whichERDAfailure

receives the greatest emphasis in ‘thebudget, appears to carry a higher risk of than other techniques which are at least

58 CHAPTER II



. . —

as far along in development. ERDA’s proposedprogram for producing gas rather than oil fromshale is an even longer term option than produc-ing oil and has potentially serious additionalproblems; yet this option is supported in thebudget, while above ground oil retorting altern-atives dO not appear in the program. If ERDA hasvalid reasons for taking this course of develop-

ment, then better justification should be given forthe programs that have been proposed andreasons given for exclusion of other approachesthat many consider more promising.

Presently, no commercial above ground oilshale is processed in the United States. It appearsth a t p r iv a te se cto r in ve s tme n t so urc es a reunwilling to accept the risks associated with a

pioneer commercial facility. The several privateprojects which currently exist are still at the pilotretort stage. The critical problems associatedwith shale oil include mining technology forsha le extrac tion , the economics o f the to ta lactivity, and the management of waste in theform of spent shale. No commercial activity hashad to cope with the mining and waste manage-ment problems at the level which would becreated by a commercially viable shale oil plant,A commercial-scale facility can provide a broadrange of opportunities to test procedures, provetechnology, and train manpower in the specialskil ls which must be developed. This is anappropriate subject for ERDA involvement at thedemonstration level.

5. Synthetic Liquid Fuels From Coal

ISSUE

New and existing projects in coal liquefaction must be carried through the pilotand demonstration stages in order to determine what technical problems remainand to establish the oil price levels at which commercial production will occur.

SUMMARY

Justification of the coal liquefaction program rests primarily on the decline inU.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 the1980’s depends on the results of pilot projects, The existing and proposeddevelopment programs of ERDA are judged to be of the proper magnitude and in thecorrect direction. However, the constraints to commercialization, such as thecapital investment, construction time, and development of associated minefacilities imply that the projection by ERDA of 5 Quads per year cannot beovercome by 1985. Thus, ERDA’s projection that coal liquefaction will significant-ly 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 chemicallytion by 1985? problem?

3 . Wh a t h a s E RDA d o n e

likely to be car-

bonded nitrogen a

to determine the2. How serious are the environmental and economic and commercial viability of the

health problems associated with the use of product ion of methanol as d i rec t ed bysynthetic liquid fuels from coal likely to be? Congress in Public Law 93-577?

CHAPTER II 59



—

BACKGROUND

Given the growing disparity between theability of the United States to produce oil and ourconsumption of this fossil fuel, it is necessary toconsider seriously how either the supply and/orthe consumption of oil can be modified in waysleast likely to do damage to society. Whereas

replacement of oil by another fuel (coal) for directheat and electric power generation is relativelystraight forward, in principle, there presentlyexists no viable substi tute for oil used intransportation, particularly in automobiles andaircraft, and chemical feedstock. By restrictingoil to uses for which no other alternatives exist,the United States could extend its reserves of oiland provide a longer period to work on possiblel on g- te rm s o lu ti on s t o t h e t r a n s p o r t a t i onproblem. Ho we v e r , th e d e v e lo p me n t o f a neconomically competitive sy n th e t i c l iq u idhydrocarbon derived from coal would introduce

a valuable alternative strategy to counterbalancethe decline of domestic oil supplies.The technology for coal liquefaction developed

during World War II is not directly applicable toeconomic commercialization under present con-ditions. Several second generation processes forproducing liquid hydrocarbons have been shownto be technically feasible in small-scale testing.Data and experience to date, however, are toorudimentary to permit a prediction as to which, if any, of the several processes can yield a productfor large-scale use at an attractive cost. Theprobability of payoff is sufficiently high, how-

ever, to warrant proceeding with a broadly basedp ro g ra m. T h e o rd e r ly p ro g re ss io n o f th i stechnology necessitates continuing it through thepilot and demonstration plant stages. In thisregard, three projects are currently in progress:the H-Coal and Synthoil Pilot projects involvedirect, high-pressure catalytic hydrogenation,

whereas the Coalcon demonstration projectcovers a version of low-temperature carboniza-tion under hydrogen pressure, These programsshould be continued as long as results arepromising.

Existing additional approaches to coal l i-

quefaction should also be funded at a demonstra-tion plant level of sufficient size to permit scale-up to a commercial plant. Two-stage “hybrid”liquefaction processes involving extractionfollowed by hydrogenation are sufficiently wellunderstood to warrant the step up to this plantlevel. Given the large number of variants of thisprocess being tested on a small scale, two suchprojects may be justified. If a viable process isidentified, it should be possible to proceed tocommercial projects at the 50,000 barrels per daylevel in the mid-1980’s. Such commercial projectswould have a small impact on fuel supply in 1985.

However, the projection by ERDA of at least 5Quads per year at that time would require 50such plants, each involving a capital investmenton the order of $1 billion and a construction timeof 5 years. The time scale of this ERDA projectionis thus totally unrealistic,

Institutional problems do not appear serious inprocess development at the pilot stage under thepresent cost sharing procedure of 1/3 industry—2/3 Government, However, on proceeding tocommercialization, all the possible problemsa sso c ia te d w i th a n y p ro c e ss r e q u i r in g th eextraction of large amounts of coal from the

g r o u n d a p p e a r : m i n e r a l r i g h t s , m i n i n gtechnology, land reclamation, water use, capitalavailability, and so forth, These problems arediscussed in Issue 6 in connection with develop-ment 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, high-Btu 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 high-Btu gas from coal, can be constructed immediately using current technology.Through its construction and operation, the economic, technical, and operatingdata necessary to assess the desirability of a coal-based synthetic natural gasindustry can be determined. The objective of this construction is to determinewhether or not high-Btu synthetic natural gas from coal is economically justifiableas 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 commercialplant, they have not done so because of difficulties in financing such a plant, whichwill cost at least $1 billion, Incentives of some form, such as loan guarantees orregulatory changes, may have to be provided by the Government if the natural gasindustry is to build one of these plants,

QUESTIONS

1. What are the reasons for the uncertainty in 3 . S h o u l d s t e p s b e t a k e n t o c h a n g e t h ethe cost estimates regarding high-Btu gas- limitations imposed by the Federal Powerification projects? Commission in granting certification of high-

2. Why cannot a consortium of gas companies Btu gasification plants?

provide the necessary financing withoutGovernment assistance?

BACKGROUND

Although the Nation possesses vast coalreserves, they are not infinite, and the capitalrequired to convert coal to useful energy issubstantial. Therefore, i t is imperative thatutilization of coal be as efficient and economical

as possible. High-Btu gasification of coal is butone option which must be evaluated. In thisregard the construction of a pioneer commercialplant is important for the following reasons:

q Cost estimates for energy-related construc-tion have been notoriously bad. The costs of

high-Btu gas, determined from the operationof a pioneer commercial plant, will furnish avaluable basis upon which to make decisionsas to whether to proceed with further com-mercialization.

q The construction and operation of the plantw i l l p r o v i d e e x p e r i e n c e i n p r o b l e m sassociated with the production and handlingof massive quantit ies of coal, with thedevelopment 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 gasifica-tion process followed by a methanation stage,exists today to permit construction of a plantproducing 250 mill ion cubic feet per day.Moreover, since less than 25 percent of the totalconstruction costs of plant and support systems

is attributable to the gasification process, likelyimprovements in gasification technology canhave only a minor impact on overall costs. Therewould appear therefore, to be little reason tod e la y c o n s t ru c t io n in a n t i c ip a t io n o f su c htechnological improvements.

Industry has shown a clear interest in con-structing pioneer commercial plants. El PasoNatural Gas, WESCO (Pacific Lighting Corpora-tion and Texas Eastern Transmission Corpora-tion), and American Natural Gas Corporationhave each filed applications before the Federalpower Commission for certificates to authorize

construction of commercial coal gasificationfacilities,

The WESCO plant, which has received cer-tification by the Federal Power Commission, wasscheduled to be built in San Juan County, NewMexico and deliver 75 percent of its gas to the LosAngeles a rea, At o ral a rguments be fore theCommission on March 14, 1975, the cost of thisplant was stated to be in excess of $800 millionand the tailgate price of gas was placed at about$2.45 per thousand cubic feet. Although the gas isreadily marketable in Los Angeles, severalconstraints exist which have prevented WESCO

from proceeding with the project. The principalproblem is that the capital requirements of anindividual plant are more than 50 percent of thetotal capitalization of the company proposing theplant, while the increment added to their gassupply is only about 10 percent of their totalvolume. As a consequence, financial institutionsare unwilling to finance these plants withoutsome sort of guarantee that the venture willrecover its costs.

Central to this concern is the cost of thesynthetic gas. The estimated cost of a plant witha daily capacity of 250 million cubic feet has

increased from $300 million (mid-1972 dollars) to$800 million (January 1975 dollars) and the costof coal has increased from approximately 20cents per million Btu to 40 cents per million Btu.As a consequence the estimated cost of gasproduced has increased from $1.40 per millionBtu 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 theplants is to obtain Federal Power Commissionapproval of the cost of service guarantee concept,The Commission, however, has decided that itcannot grant approval and sti l l maintain i tsresponsibility to the public interest. In effect, theFPC has ruled that such a guarantee would allowan open-ended contract which could “escalatebeyond the zone of reasonableness” should gasproduction drop substantially. The Commissionh a s c o n s i s t e n t ly a d o p te d th i s v ie w o n a l lrequests for a cost of service guarantee and hastherefore attached a fixed rate to each certificate

subject to filings for rate increase under section 4of the Natural Gas Act,

The Federal Government can provide industrywith the necessary incentives to build one planthaving a capita lization of approximately $1billion, in order to be able to determine whethersynthetic high-Btu gas from coal is economically

justifiable as a replacement for the decliningn a tu ra l g a s su p p ly . T h e b e s t me th o d s o f providing these incentives remain to be deter-mined; the Federal Government might, forexample, guarantee the company a loan for plantconstruction 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 presenttime, on the grounds that the existing investmentin gas transmission and distribution systemsshould be fully utilized. However, the cost of coalgasification may be so high that other options forsupplying this energy demand will prove cheaperand, hence, more desirable, A commercial plant,made possible by offering the necessary incen-tives, would permit development of the dataneeded to clarify the relative merit of high-Btugas 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 thefuel needs of industrial furnaces, kilns, and ovens.

SUMMARY

Many usersnonferrous meta

of natural gas and oil in the industrial sector (ferrous andllurgy, glass, lime, cement, refractories, stills, etc.) could shift to

low-Btu gas from coal if suitable gas producers were available, This shift wouldmake an important contribution to the conversion from the use of oil and gas to theuse of coal, and it would help to ensure against production cutbacks due tocurtailments. There is much room for R, D&D supported by ERDA with a focus onassessment of the potential demand for low-Btu gas by the industrial sector, meansfor increasing this potential through modification of equipment or operations, and

the development of gas producers having performance characteristics suitable formodern industrial use,

QUESTIONS

1. How does the potential demand for low-Btu 3. Would the low-Btu gasifiers being studied bygas in the industrial sector compare with that ERDA for other applications be suitable forfor use with combined gas turbine/steam use in the nonelectrical industrial sector?turbine powerplants?

4. What steps are being taken to supply fuel for2. What fraction of the present use of natural those parts of the industria l 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 yearsago for making low-Btu nitrogen-diluted gas,have almost disappeared from use. They wereonce used primarily in close coupling to thefurnace to which they supplied fuel, therebyallowing effective delivery of the sensible heat

content of the hot fuel gas; but they weresometimes used to produce cleaned cold gas. Avariety of technical and economic factors led totheir disappearance, the most dominant factor of which was the increasing availability of cheapnatural gas. With our present declining naturalgas reserves and our increasing dependence on

foreign oil this situation has changed, and thedesirability of again being able to make in-dustrial gas from coal arises.

Although many industrial users of natural gasand oil could shift to low-Btu gas produced fromcoal if suitable gasifiers were available, the

ERDA Plan does not address the problem. Thisshift to coal by the industrial sector has t h e

potential to make an important contribution tosolving the Nation’s energy problem in the mid-term,

Since changes in labor, economics, size, en-vironrnenta1 concern, etc., make the old gas

CHAPTER II 63



producers unacceptable by today’s standards, a tion of industria l fuel, but unless specificstrong R, D&D program is needed now. Much of attention is given to the industrial sector, itsthe work being carried out by ERDA on low-Btu special problems and requirements may begasification will have application to the produc- overlooked.

4

8. Mining Techn ology

Research on

ISSUE

underground mining technology is required if coal production isto double in the next 10 years as projected.

SUMMARY

Government and industry are expecting coal production to double to 1.2 billiontons annually by 1985. To help assure that these projections can be met, coalmining R&D will require priority support . The productivity per miner inunderground mines has decreased in recent years, principally because of improvements in health and safety standards; technological progress has beenunable to offset the decline. Improvements in mining technology have the potential

for making significant contributions sooner than most R&D projects in fossilenergy, Although Federal responsibility for coal mining rests with the Bureau of Mines in the Department of the Interior, ERDA has a responsibility to ensure thatthe research necessary to improve the technology of underground mining of fossilfuel resources is carried out,

QUESTIONS

1. What importance does ERDA place on R, 3. What does ERDA view as the major prioritiesD&D in underground coal mining technology for R&D in mining technology and what arein 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 leadagency in energy R, D&D to ensure that theproper programs are in progress on miningtechnology?

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 1 0 0 million tons of replacementare expected to be consumed by electric utilities. capacity will be required to offset mine depletionTo meet 1985 projected demand, coal production or exhaustion, for economic and other reasons.

64 CHAPTER II



These large increases must be contrasted withthe pattern of the past 5 years, over which totalproduction of all coals remained stable,

Underground coal mining is expected toincrease in actual output but to decline as apercentage of total production. Traditional roomand pillar mining systems are the most widelyemployed methods for underground coal extrac-

tion. Equipment used is e ither conventional( m e c h a n i c a l l o a d e r , u n d e r c u t t i n g , w h e e lmounted shuttle cars, drills, roof bolters) orcontinuous miner (which eliminates undercutterand drill). To a lesser extent, the longwall systemof mining has been introduced as a means of improving recovery, particularly in deeperseams. Expansion of this type of mining hastended to be inhibited by higher capital invest-ment and a degree of inflexibility in layoutintroduced by the 1969 safety legislation, as wellas by downtime experienced during transfers of equipment f r o m p a n e l t o p a n e l , W h e r e

applicable , the higher production generallyoffsets the system limitations.

A relatively new system of mining for pitchingor inclined coal seams has been successfullyintroduced in Canada. Hydraulic or jet mininghas been used in Russia and Japan for a number of years. There is reason to believe that many of thesteeply pitching coal seams in the WesternUnited States can be mined economically by thismethod. The science of hydraulic mining is notnew; however, its application to coal in theUnited States would be,

There was a significant increase in the work

force in 1970 following the enactment of the MineHealth and Safety Act; employment jumped from124,000 to 140,000 workers. Although productionvolume has remained stable during the periodfrom 1970-74, the number of miners increased byan additional 10,000 employees to 150,000.

Overall industry productivity declined from19.9 tons per man day in 1969 to 17.3 tons per manday in 1974. More pertinent is the decline inunderground mining productivity from 15.6 tonsper man day in 1969 to 11.4 tons per man day in1974, Strip mine productivity has remainedabout the same, at 36 tons per man day.

Research and development in undergroundcoal mining technology has the potentia l of making important contributions to increasedproductivity and overall production, Advancedscientific and technological developments of thepast decade have not yet been transferred to coalmining but hold considerable promise of beingapplicable,

Re se a rc h i s n e e d e d o n a w id e r a n g e o f problems:

high speed mine development to decrease thetime necessary to bring new mines intoproductivity,

automated longwalling systems to increaseproductivity through automation,

machine reliability improvement to reducedelays,

continuous roof support to reduce the timerequired for installation of roof support,

haulage systems to speed the movement of coal from the operating face to the surfaceplant,

methods for full extraction from thick andmultiple seam western coal,

control of mine subsidence and waste dis-charge, and

preparation techniques for upgrading thequality of coal,

The Bureau of Mines presently has R&Dprograms covering most, if not all, of thesesubjects. Assurance is needed, however, that thelevel of effort in coal mining research is commen-surate with the importance of the increasedproduction of coal to meet the Nation’s energyrequirements. In reviewing and modifyingoverall R&D strategies for problems relating tofossil energy, ERDA must cooperate to ensurethat improved mining technologies are developedfor 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 isnarrowly oriented toward fluidized bed combustion.

SUMMARY

The use of fluidized-bed combustors with sulfur-absorbing beds to providegas cleanup is unlikely to make a significant contribution in the near-term (to1985), as predicted by ERDA, due to technological barriers to implementation, Twomajor coal combustion problems whose resolution would have major near-termimpacts are:

* ., , _

1) the technical difficulties of substituting coal for gas and oil in presentlyexisting 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 problemsare pulverized fuel firing, and precombustion cleanup; both of these need researchand development support in order to enhance their contribution to direct coalutilization by utilities and industry, There is also a need for more basic research incoal chemistry. The present division among three Federal agencies of responsibili-t y for coal cleanup causes variations in the criteria adopted by the agencies as wellas in the size and effectiveness of their programs. By assigning the funds andresponsibility for managing these programs to one agency, the development of abalanced coal cleanup program could be facilitated. In all areas, the energyprogram 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 fabricationindustries, the glass and ceramics industries, and manufacturers of cement andlime.

QUESTIONS

On what grounds does ERDA exclude R, D&D 3. What are the problems to be solved prior toon improved p ulveri zed coal combus tion? c omme rc ia li za tion o f p re ssur iz ed f lu id iz ed

bed combustion?

Wh a t imp ro v e me n ts in p u lv e r i z e d c o a l 4, How do the projected costs for solving thetechnology are necessary in order to make problems in pressurized fluidized bed com-this technique a viable option for future coal bustion compare to the costs of achievingburning plants? improvements in pulverized coal burning?

BACKGROUND

ERDA’s program in direct coal utilization is firing. The arguments for fluidized bed combus-narrowly focussed on fluidized bed combustion. tion are as follows. The combustion equipment isPressurized 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 combustioncial competitor with present pulverized fuel are great; and the technical understanding of

66 CHAPTER II



fluidized bed operation at atmospheric pressurewill spring-board the development of pressuriz-ed fluidized bed combustors. It is postulated thatthese later generation equipment, by the inclu-sion of sulfur-absorbing media in the bed, will bean ideal method of providing hot gases to drivegas turbines. The future use of fluidized bedcombustors requires the resolution of several

technical problems. These difficulties include theproduct ion of large quantities of waste (up to 300/0of the amount of coal burned), hot gas cleanupproblems, and materials problems associatedwith boiler tubes submerged in the bed. Theemission of sulfur compounds from coal combus-tion systems must be prevented or reduced inorder to make this source of energy environmen-tally acceptable. Until now, sulfur emission hasbeen controlled by post combustion cleaning,i.e., stack-gas scrubbing. Unfortunately, stack-gas scrubbers are expensive to build and operate,and have been unreliable in use. Alternatives are

being sought and the ERDA plan chooses anintracombustion method, i.e., the inclusion of asulfur-absorbing medium within a fluidized bedcombustor, Because of the technical problemsmentioned previously, additional options shouldalso be pursued. Precombustion coal cleaningtechniques can make a significant contributiontoward the reduction and control of sulfuremissions,

Precombustion methods have been in opera-tion 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 entire ly satisfactory inservice to remove up to 80°/0 of the sulfur present,although usually less than 500/0 is removed by thistechnique,

Research is needed to examine other precom-b u s t io n c le a n u p me th o d s a n d to s tu d y th efundamental mechanisms of the combustionprocess.

The division of Federal responsibility amongth re e a g e n c ie s p re se n t s a n o b s ta c le to th edevelopment of a balanced program in coalcleanup. Presently the Bureau of Mines oversees

Government support of R&D in precombustioncleanup, while post combustion cleanup fallswithin the jurisdiction of the EnvironmentalProtection Agency and intracombustion cleanuphas been taken up by ERDA.

Under these circumstances, adequate tradeoff evaluations or balances among these alternativeapproaches may not occur. Furthermore, thecriteria used to evaluate each option vary withthe lead agency, and there is no place where thee n t i r e p r o f i l e o f c r i t e r i a ( e n v i r o n m e n t a l ,economic, institutional, efficiency) is appliedacross the board to all options. Furthermore, the

size and effectiveness of programs devoted toeach technology by different agencies are likelyto be quite variable with no guarantee that themost promising a p p ro a c h w i l l b e p ro p e r lyemphasized, It would appear to be desirable tohave the funds devoted to these various ap-proaches allocated and managed by one agencyeven if these funds were then passed to otheragencies.

Finally, ERDA’s program in fossil fuels mustconsider the needs of industry, which consumes4 0 percent of the Nation’s energy. Failure toprepare for industrial needs for an acceptable

substitute for oil and gas in existing facilitiescould lead to reduced production to the detrimentof 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, combinedcycle powerplants has underestimated their potential.

SUMMARY

In terms of both efficiency and economics, the integrated low-Btu gasifier, gasturbine/steam turbine, combined cycle electrical generating system promises tobecome one of the best methods of using coal in an environmentally acceptablemanner that is likely to be developed, Commercialization of such a system, whichwould have an overall efficiency of 37 to 38 percent (coal pile to bus bar), should beachievable in the mid to late 1980’s if a balanced research and developmentprogram is conducted. The ERDA documents give no indication that planning forsuch a program is taking place.

QUESTIONS

1. On what schedule and at what funding levela re p i lo t a n d d e mo n s t ra t io n p la n t s fo rintegrated low-Btu gasifier, combined cyclesystems included in the ERDA program?

2. What is the schedule and funding level fordevelopment work on high temperatureturbines for improving cycle performance?

3. What plans has ERDA made for research anddevelopment on gas cleanup systems that areapplicable to low-Btu gasification, combinedcycle systems?

4. Of the different types of pressurized low-Btugasification, clean gas processes, (e.g., fixedbed, fluidized bed, and entrained bed):

a. What are the different probabilities of technical and commercial success?

b. Will the construction of demonstrationplants for all three gasification processesbe funded in order to assess their relative

economics?c. What are the probabilities of success of hot

gas cleanup versus cold gas cleanup viascrubbing?

BACKGROUND

The lowest cost, environmentally acceptable,coal-fired, base load electric powerplant in thefo re se e a b le fu tu re ma y b e a n in te g ra te d ,pressurized low-Btu gasifier, high temperature

gas turbine, and steam turbine plant. Such asystem could be built today but it would belimited to particular (noncaking) kinds of coaland to efficiencies comparable to conventionalcoal-fired steam plants. The operating featuresand requirements of the gasifier and the com-

bined cycle plant complement one another, theturbine producing compressed air and steam forthe gasifier and the gasifier producing gasturbine fuel, This integration offers the possibili-

ty of significant gains in overall plant energyefficiency and reduction in plant costs by thecommon use of large major components asc on tr as te d w i th f r e e s ta n d in g f u e l a n dpowerplants. There is a clear technical path bywhich such systems could be developed in stages

68 CHAPTER II



so as to use a wide variety of coals and reachoverall efficiencies (coal pile to bus bar) of above40 percent, One path which appears to have theleast severe technical barriers includes thefollowing developments: (1) improved pressur-ized fixed-bed gasifier capable of handlingcaking coals and having higher capacities thantoday’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 fir ingt em per at ur es w el l a bo ve 2 00 0° F , gr ow in geventually to near 30 0 0

0 F .The integrated low-Btu gasifier, combined

cycle system could be developed via no more thantwo to fo u r g e n e ra t io n s o f p re c o mme rc ia ldemonstration plants. Each plant would lead toanother round of technical advances; the finalgoal would be achievable in the late 1980’s. If thelikely technological developments occur, thesystem may generate electricity at a lower cost aswell as more efficiently than conventional coal-

fired plants with stack-gas scrubbing and, in

addition, would present a minimum of byproductproblems. The system costs would appear tocompare favorably with those of a nuclear lightwater reactor of equivalent size.

A program of the type described above does notappear as a line item in ERDA’s Plan. Rather, thetechnological components of the low-Btu gas-ifier , combined cycle system are distributedamong sever al o f the proposed ERDA programs.The turbine portion of the system appears under“Advanced Power Systems” and “Electric Con-version Efficiency, ” while the low-Btu gasifierportion is located under “Coal Gasification.” Thelow-Btu gasification programs would appear tobe better placed under “Direct Coal Utilization,Uti li t ie s/ Indust ry” since the la tte r desc r ibestheir functional objective—quite a differentobjective from those of the high-Btu and 1iquefac-t ion programs. In addition, the low-Btu gasifica-tion program should be carefully watched to takein to a c c o u n t p ro g re ss in a d v a n c e d tu rb in edevelopment.

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 energyyield over the long term.

SUMMARY

The ERDACombustion (i.e.programs. MHD

Direct Coal Util ization program contains both the Directfluidized 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 non-combustion Advanced Division in which it is housed. Relative fu ding of theseprograms indicates heavy ERDA emphasis on fluidized bed and MHD, much lessemphasis on advanced gas turbine research and an almost total disregard of fuelcell technology.

A portion of the present ERDA emphasis is well placed, given that fluidizedbed combustors and MHD systems can burn coal directly, while the advanced gasturbine and fuel-cell technologies require liquid or gaseous fuels which over thelong term will have to come from coal conversion. Thus, while the advanced gas

CHAPTER II 69

6 0 - 4 1 1 0 - ’ 7 5 - 6



1.

2 .

3 .

turbine and fuel-cell technologies can probably be brought to commercialapplication much sooner than MHD or pressurized fluidized beds, their fueldeployment will depend on progress in the commercialization of synthetic fuels.

In many applications, these technologies are mutually exclusive. Funding andprogram decisions about each will be affected by progress in the other programs.The MHD program in particular has several major technology hurdles to overcomeprior to commercial application using coal. While the MHD program appears to beadequately funded and structured, continuous assessment of progress in MHD

development relative to the other technologies will be necessary to ensure thatresearch expenditures yield the maximum benefit. By comparison, fuel-celltechnology development deserves more support than it is currently receiving inERDA. Both recent industrial progress in developing commercially feasible fuel-cell technology and the Congressional mandate in Public Law 93-577, Section6(b) (3] (N) “to commercially demonstrate the use of fuel cells for central stationelectric power generation” indicate a need for more ERDA attention to fuel-celltechnology,

,,

QUESTIONS

What is ERDA’s projection of the MHD/com- 4. How does the ERDA program in fuel cellsbined cycle contribution to U.S. electrical relate to the private industry commitment toenergy production as a function of time? this technology?

What are the technical problems which must 5. What will be achieved with the FY 76 budgetbe solved before coal-fired open cycle MHD of $500,000 for fuel cells? How would apower plants can be considered for commer- greater expenditure on fuel-cell technologycial operation? improve the program. ?

What is ERDA’s view of the relative merits of MHD, Ra n k in e to p p in g c y c le s , o rg a n icbottoming cycles, and fuel cells in terms of their potential for energy generation efficien-cies and fuel savings as a function of time?

BACKGROUND

The MHD generator is a direct energy conver-sion device which transforms the kinetic energyof ions entrained in a high-speed gas flow intoelectrical energy by passage of the flow of gasand entrained ionized particles through a strongmagnetic field. There are two basic types of MHDgenerators:

. Open-cycle, in which the working fluid is

produced by the combustion of a fossil fueland is passed once through the cycle.

q Closed-cycle, in which the working fluid isrecirculated, the heatvia a suitable highchanger.

7 0 CHAPTER II

input being suppliedtemperature heat ex-

Since open-cycle systems utilize the combus-tion products as the working fluid of the cycle,they do not need any solid surface interposedbetween the heat source and the conversiondevice, and the temperature is fundamentallylimited only by the heat source.

The primary utility of the concept lies in itspotential use as a topping cycle for extending theupper temperature limit on conventional elec-trical generating systems, thus increasing theefficiency of energy conversion of the overallsystem from the presently achievable 38-40percent up to 55-60 percent.

The MHD concept has been in development atthe laboratory research level since the late 1950’s.



Primary interest in the United States in MHD isbased on the concept’s projected abil i ty tooperate with direct coal combustion. The SovietUnion has a working demonstration system, butthe Soviet U-25 facility is fired with natural gas.

There are presently three critical questionsrelating to the feasibility of MHD, the answers towh ic h w i l l d e te rmin e wh e th e r th e p re se n tresearch efforts should be continued. ERDA’sp ro g ra m i s p u r su in g th e a n swe rs to th o sequestions, which are described below.

The first problem area relates to the efficiencyof enthalpy extraction, or the transfer of energyfrom the moving gas stream to the electricalcircuit. The efficiency of this transfer is depend-ent on the orderly linear motion of the ionizedgas through the magnetic field created by asuperconducting magnet. W h a t d a t a a r eavailable indicate that efficiencies on open-cycleMHD achieved to date are in the vicinity of 8percent, rather than the 20 percent which will berequired for feasible application of the MHDconcept. Over 20 percent enthalpy extraction hasbeen achieved in closed-cycle MHD experiments.These percentages, however, were not obtainedat the flow conditions and magnetic f ie ldscontemplated for commercial service. The opencyc le en tha lpy ex trac t ion was ob ta ined insupersonic flow with a magnetic field of abouttwo tesla. Commercial open-cycle generators areexpected to operate in subsonic flow withmagnetic field strengths of about six tesla. Theclosed cycle extraction was achieved at highertemperatures and lower magnetic field strengththan are considered appropriate for commercialequipment.

A second major area of inquiry relates to thefeasibility of preheating the combustor inlet airby exchange of heat from the gas exhausted fromthe MHD duct. The efficient and durable heatexchanger configuration required to accomplishthis has not been demonstrated. (Such a hightempera tu re hea t exchanger , i f successfu l lydeveloped, would also be applicable to a widerange of advanced heat generation and fuelconversion processes).

The third critical area of inquiry relates to

recovery of the ion “seed”. The entire MHDprocess rests on the seeding of the combustiongases with a potassium salt, which both ionizeseasily and preferentia lly combines with thesulfur in the coal to form potassium or cesiumsulfate. The economic feasibility of the MHDconcept requires virtually total recovery of theseed, which is then chemically processed forreinfection. The high recovery rate required hasnot yet been demonstrated in the slaggingenvironment of a coal-burning MHD generator.

Assuming successful laboratory scaledemonstration of these three critical processes,the further development of the MHD process tothe commercial level will require many years.This fact is reflected in the schedules for theprogram in the ERDA documents.

Fluidized bed combustors and advanced gasturbines are described elsewhere in this chapter( I s s u e s 9 a n d 1 0 ) a n d w i l l n o t b e fu r th e rdiscussed here.

Fuel-cell technology holds great promise forelectrical energy generation at efficiencies com-parable to those claimed for the MHD/combinedcycle technology. Industry has made significantcontributions in fuel-cell R&D and has advancedthe state of the art to the point where fuel cellsusing methane or natural gas are now com-petitive with standard steam generator systemsin terms of effic iencies, There is need forcontinued research to further improve both theefficiency and the economics of fuel-cell systems.Fuel-cell technology can be a natural complementto low-Btu synthetic gas production from coal,and has further advantages in the potential forgeneration of electricity at the neighborhood ordistrict level. The Congress, in Public Law 93-5 7 7 , Section 6(b)(3)(N), directed the Ad-ministrator of ERDA to “. . . assign programelements and activit ies ( including) research,development and demonstrations designed. . .(N) to commercially demonstrate the use of fuelcells for central station electric power genera-tion.” The amount budgeted for fuel cell R&D($500,000) for FY 76 seems so l i t t le as torepresent a token response to this mandate.

CHAPTER II 71



12. Interagency Coordination: Coal Cleanup

Coordination between ERDA and other agencies appears to be inadequate inactivities relating to research and development of fossil energy. This is particularlyevident in coal cleanup.

SUMMARY

The responsibility for many programs important to the successful develop-ment of increased fossil fuel supplies lies outside ERDA. While this division of responsibility acknowledges the scope and expertise of other agencies, ERDA, inits capacity as lead agency in formulating Federal R, D&D strategy, has aresponsibility to participate in the design, development, and coordination of theseoutside activities and to evaluate their progress. This is necessary to ensure that noserious omissions or delays occur because of problems in non-ERDA programs on

which ERDA programs are dependent either in their development or theirimplementation. Further, when policy decisions are made concerning alternativetechnologies, it is important that the criteria used in assessing the options do notvary 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, duringcombustion 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 i ts 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 the2. 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&Dprograms in fossil energy are administered by

agencies other than ERDA. For example, miningtechnology and ore beneficiation are located inthe Bureau of Mines, fossil resource assessmentin the Geological Survey, stack-gas cleanup inth e E n v i ro n me n ta l P ro te c t io n Ag e n c y b u tprecombustion cleanup in the Bureau of Mines,and coal transportation in the Department of

Transportation, This division of responsibilityevolved from the previously existing agency

charges and acknowledges the basic interestsand expertise of the various agencies.This separation of R&D programs among

different agencies poses problems to successfulimplement at ion of overal l energy strat egy.ERDA, in its position as the agency directlyresponsible for formulating and implementing

72 CHAPTER II



Federal R, D&D policy, is charged by i tslegislative mandate with an oversight respon-sibility relative to energy programs which are notunder its authority. It must participate in thedesign and development of important programsand provide the coordination to insure that nogaps or wasteful overlaps in programs occur; itmust also continually monitor the progress of outside activities to avoid unnecessary delays.The size and effectiveness of programs devotedto energy-related problems by different agenciesis likely to be quite variable, with no guaranteethat the level of effort will match the needs. Thecriteria used to evaluate competing options canalso be expected to vary depending on the agency.ERDA has a mission in reducing these problems.

One example of a division of responsibilityimportant to the increased use of coal is the

problem of coal cleaning. Precombustion cleanupresearch (e.g., magnetic desulfurization) is per-formed by Bureau of Mines, during combustioncleanup (e .g . , f luidized bed combustion] byE RDA a n d p o s tc o mb u s t io n c le a n u p (e .g . ,stackgas scrubbing) by EPA. Are the relativele v e l s o f e f fo r t o f th e se v a r io u s r e se a rc hprograms adequate in proportion to their poten-tial contributions to the different technologies forthe use of coal in utilities and industry? Ananswer to this question cannot be obtained fromthe ERDA documents. The present distribution of research programs must be carefully examined todetermine whether it provides the best approachto solving environmental problems associatedwith 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 andoil shale in the United States, there are potential obstacles associated withenvironmental, social, and political impacts of a massive increase in mining.

SUMMARY

A major increase in electricity y generation from the direct combustion of coal orthe conversion of coal to synthetic gas and liquid fuels at a commercial scale willrequire a significant expansion of coal extraction, For example, a 250 million cubicfeet per day plant for producing pipeline gas from coal will require a coal mine aslarge as any presently operating in the United States. The plant will consume morecoal than is now mined in Utah. An activity of this scope will almost certainlyencounter resistance from groups in society that are especially concerned aboutenvironmental quality; these groups may have considerable influence at State andlocal 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 areestablished to reduce uncertainties about environmental and social impacts and tomitigate serious negative impacts,

d

QUESTIONS

1, Are the research activities of Federal agen- 30 H o w large a community must be establishedcies, other than ERDA, sufficient to avoid to build and operate - a commerc ia l -s ized

2

future environmental and social constraints synthetic fuel plant and its associated miningon the application of improved fossil fuel activities?technologies?

What are the options—and the pros andcons—for accommodating the concerns of States about potentia l negative environ-mental 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 minelandliquid fuels, are certain to increase in importance reclamation, waste disposal, protection againstin 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 environmentalbillion tons a year by 1985. Along with the and social impacts of the mining activities.

74 CHAPTER II





14. Manpower

ISSUE

ERDA’s program for massive expansion of the use of coal will require far moretrained 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 significantincrease in the number of underground coal miners, including first-line super-visory 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 forcecomposed principally of miners over 50 or under 30 years of age. Simultaneously,advanced mining techniques and machinery impose a requirement for moreeducation and special training. Coal research and mining engineering programs at

the university level are few and thinly staffed. Significantly more faculty areneeded to expand and multiply these programs. The development of gasificationand liquefaction plants will also increase demand for both university-trainedprofessionals and for subprofessionals with special skills. Failure to support thedevelopment of the necessary manpower pool in these and other areas requiringcritical skills could result in failure to achieve the goals which ERDA has set, evenif 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 howhave 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 educationalability of existing professional and trade programs is planned to provide the necessaryeducational facilities t o p r o v i d e t h e manpower, and over what period of time?necessary trained personnel?

BACKGROUND

The future in fossil fuel production andconsumption envisioned in the ERDA programconsists of a continuing decline in the supply of petroleum and natural gas from primary sources,with the difference between supply and demandbeing replaced primarily by coal, either in directuse or via conversion to liquid and gaseoussynthetic fuels. The projected massive increasein coal extraction and processing will require a

76 CHAPTER II

comparably massive injection of newly trainedmanpower into industries which either havelanguished for decades or are now in theirinfancy.

The manpower supply situation for the re-quired increase in coal production may becomesevere. There are certain special skills requiredby underground miners which can only be gainedby experience. The recession in the industry that



reduced product ion during the post-war yearscurtailed recruitment, so that the average age of skilled miners is now in the upper 40’s. Youngpeople are being recruited in increasing numbers,b u t th e re i s a miss in g g e n e ra t io n a n d th econtinuity has been broken. The father-to-sontradition and local community spirit have largelydisappeared, Moreover, there has been a signifi-cant increase in the technical training required toopera t e and main t a in the sophisticatedmachinery that is now in use . Supervisorypersonnel who would normally be drawn fromthe middle generation are not available, andintensive education and training are necessary toassure a stable skilled work force.

Strip and auger mines have fewer problems inrecruiting personnel, provided job, wage, andliving conditions are comparable, since they candraw on general construction skills. Strip miningis capital intensive; a large dragline or shovelmay cost more than $15 million fully installed,requiring full utilization and operation by highlytrained personnel.

There was a significant increase in the minework force in 1970 following the enactment of theMine Enforcement and Safety Act; employment jumped from 124,000 to140,000 workers. During1970-74, manpower increased by an additional10,000 employees to 1 5 0 , 0 0 0 .

Because of a decline in underground miningproductivity y, o v e ra l l i n d u s t ry p ro d u c t iv i tydeclined from 19.9 tons per man in 1969 to 17.3tons per man in 1974. Strip mine productivityremained about the same at 36 tons per man, and

auger mining increased from40 to 45

tons perman. The effects and the measures required bythe 1969 Mine Health and Safety Act have nowbeen absorbed by mine operators and may notcause any major additional impact on futuremining manpower or costs, although their effectswill escalate steadily in step with other miningcosts .

Projections of production, manpower, andproductivity for 1 9 8 5 are:

Product ion . . . . . . . . . . . . . . . . .Work Force:

IJnderground mines . . . . . . .Strip and Auger Mines . . . .

Total Estimated . . . . . . . .Productivity Per Employee

S h i f t :Underground Mines . . . . . . .Strip Mines . . . . . . . . . . . . . .

1.0 to 1.2 billion tons

160,000 persons75,000 persons

235,000 persons

13 to 15 tons40 to 45 tons

In general, the following developments can beanticipated:

The labor force will be composed of highlyskilled technicians, electronic and hydraulicexperts able to op era te and maintainsophisticated and costly equipment.

Underground and strip mine workers will bemore highly skilled, younger, and better paid.

There will be an increasing demand for miningengineers and other engineering skil ls tomaximize system performance.

There will be increased need to upgrade theeducational level of the work force throughtrade schools and adult education facilities.

The requirement for university-trained per-sonnel raises an additional set of problems. Thereare at present only three substantial universitycoal research programs and only 5 schools whichteach coal preparation technology. The number

of students in these programs is quite small, Theopening of new college and university programsand the expansion of existing departments islikely to distribute more sparsely an alreadysmall faculty base unless special attention is paidto this area. The support of university trainingprograms via R&D contracts does not appear tobe an adequate response to the problem for tworeasons. First , u n iv e r s i t i e s th a t a re u n d e rpressure to produce competitively in R&Dprograms often compete for professional man-power and neglect their educational role. Second,universities may be unwilling to undertake long-

term educational programs in support of R&Dbecause of past experience in which abruptcancellations of support left them with unsup-ported educational programs. Direct supportthrough fellowship and traineeship programs atboth graduate and undergraduate levels willprobably be required in the educational areaswhere a future shortfall of personnel is iden-tified.

CHAPTER II 77



15. Transportation Systems

ISSUE

The application of fossil fuel technology research will require improvedtransportation systems in the United States.

SUMMARY

A shift from the use of crude oil and natural gas, imported or domestic, to theuse of coal and synthetic fuel products from coal will make heavy demands onexisting transportation systems. The rail network, which moves most of theNation’s coal, will be especially affected. In order to avoid major constraints on theapplication of improved fossil fuel. technologies, ERDA needs to anticipate thecommodity movements that may be required and to assure that necessaryadditions to or changes in present transportation systems are brought about.

QUESTIONS

1, What are the interregional transporta tion 3. To what extent are the needed changes inrequirements of ERDA’s scenarios in volume t ra n sp o r ta t io n c a p a b i l i t i e s a p ro b le m o f 1, and how do they compare with the present F e d e ra l r e g u la to ry p o l i c y r a th e r th a n acapacities of transportation networks? problem of technology development?

2. In ERDA’s opinion, what are the prospects foran increased use of coal slurry pipelines?

BACKGROUND

Whenever an energy product is produced at alocation other than where it is to be consumed, itmust be moved, We are well aware of theimportance of pipelines for oil and natural gas inthe United States today, and we are increasinglyaware of the need to move large quantities of coalfrom mines to the locations of electrical genera-tion plants, industria l users, and other con-sumers.

As a larger portion of the energy in the United

States is made available from domestic resourcesother than oil and natural gas, the demands onour transportation systems will grow rapidly,and the present systems will certainly proveinadequate. For example, 44 percent of theelectricity in the United States in 1972 wasgenerated by burning coal, and 69 percent of the

78 CHAPTER II

coal was moved by rail, If new technologies forthe direct combustion of coal allow the 44 percentto be increased to 70 percent, replacing most of the portion now fueled by oil and natural gas (37percent in 1972), the impact on the Nation’s railsystem will be massive: congested rail lines, ashortage 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 theWest is much less dense, adding to the chance of bottlenecks and posing a problem of nationalsecurity.

Other transportation systems m a y b ep r o b l e m a t i c a s w e l l . D e m a n d s f o r b a r g etransporta tion will increase, with the same



dangers of congestion, equipment shortages, andpressures for price increases. Slurry pipelines, analternative to the rail or barge transport of coal,presently require negotia tions for easementswith each State to be traversed, and they aresignificant users of water. The production of synthetic oil and gas will in many cases requireeither new pipelines or the reversal of directions

of flow in existing ones. And there are numerousq u e s t io n s o f fu e l o r e n e rg y s to ra g e c o n -figurations and regulatory responsibility. Forexample, coal slurry pipelines are the respon-sibil i ty of ERDA; natural gas pipelines andelectrical transmission are regulated by the

Federal Power Commission; and rail transporta-tion is overseen by the Department of Transpor-tation and the Interstate Commerce Commission.

If coal utilization and conversion technologiesare to be used to meet national energy needs,ERDA must assure that transportation systemswill be capable of meeting the new demands onthem. This calls for a wide-range study of the

relative locations of resources and users, thecapacities of transport networks that link them,and s t ra t eg i es f or m it i ga t in g a nt i ci p at e dproblems. The effect of tariff structures intransportation 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 forsupply of energy in the United States, These programs all imply a greatly increaseddemand for water, in terms of both withdrawal and consumption. When theseprograms are viewed in the context of the total ERDA program, including nuclearand geothermal energy programs, it is apparent that the availability of water tosupply commercial level energy production activities is uncertain, especially in thefossil fuel area. A large percentage of the fossil fuel development programs relate tothe use of low-grade coal, generation of low-Btu gas, processing of oil shale andother activities which involve fuel sources or product streams which are noteconomically transportable. These activities may be located primarily in theresource-rich but water-short Northern Great Plains and Colorado River Basins.There is no evidence in the ERDA Plan of any coordinated water-resource planningactivity to facilitate the implementation of the technologies for fossil energyproduction 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 andavailability for ERDA’s projected fossil fuel State agencies in the areas of water availabili-supply 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 wateravailability for ERDA’s total energy supplystrategy?

BACKGROUND

There is widespread concern in the Western

S t a t e s a b o u t t h e w a t e r c o n s u m p t i o n r e -quirements of coal gasification and liquefaction,oil shale l iquefaction, and electrical powerg en erat io n f ro m c oa l . E v ery c o mpre he n siv eenergy supply plan for the United States calls forsiting new facilites in the Northern Great Plainsand 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 wellshort of average supply levels, and represen-ta tives of the energy industry believe thatadequate water is available for a commercialfossil fuel-based energy industry. But as long asthere is considerable uncertainty in the minds of

80 CHAPTER II



citizens of States like Montana and Colorado, the wilwater question can be a focus for polit icalresistance to new commercial facilities. Conse-quently , i t is vita l that water resources forwestern fossil fuel development be assessedcarefully, clearly, and publicly—and comparedwith water consumption requirements for com-mercial developments that would be the result of ERDA-supported R&D. An adequate assessment

1 have to include water r ights law, theeconomics of water resource development anduse, seasonal and annual variations in surfacewater availability, interstate compacts for thedownstream delivery of water, preferentia ltreatment for (and the definition of) “beneficial”u se s o f wa te r , and groundwater resourcesavailable 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 forEnergy Analysis

Dr. Ralph H. Brooks, Tennessee Valley Authority

Dr. Thomas B. Cochran, Natural ResourcesDefense Council

Dr. Robert J. Creagan, Westinghouse Electric

Dr. Leonard Geller, S.M. Stoner

Prof. John P. Howe, University of California atSan Diego

Prof. Moshe J. Lubin, University of Rochester

Dr . A l f re d M. P e r ry , In s t i tu te fo r E n e rg yAnalysis

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 atAustin

84 CHAPTER Ill



B. NUCLEAR TASK GROUP ISSUES LIST

1. Standardization . . . . . . . . . . . . . . . 91

The present procedure for the design, con-struct ion a n d l i c e n s in g o f a n u c l e a rpowerplant is time-consuming, inefficient,and costly. An ERDA-supported standar-dization program could alleviate these dif-ficulties,

2. Performance and Reliability . . . . 93

Problems relating to the performance andre l i a b i l i ty o f l ig h t -wa te r r e a c to r s h a v ereceived insufficient attention since the AECceased nonsafety light-water reactor R&D.

3. Floating Nuclear Powerplants . . 95

Floating nuclear powerplants offer potentialimprovements in LWR licensing and con-struction, but implementation is in doubt.

4 . Helium - Cooled R e a c t o r s —Converters and Breeders . . . . . . . 97

Helium-cooled reactors have some potentialadvantages not offered by water- or sodium-cooled plants, yet have a re la tively lowpriority in ERDA’s program.

5. Liquid Metal Fast Breeder Reactor 99

The liquid metal fast breeder reactor hasgreat potential as an “inexhaustible” long-term energy source, but it poses serioustechnological and societal problems.

6. Light-Water Breeder Reactor . . 102

The light water breeder reactor concept hasseveral advantages, but the need for it isquestionable.

7. Molten Salt Breeder Reactor . . 104Support for the molten salt breeder reactordevelopment program is small compared toother reactors and may be insufficient topermit evaluation within a reasonable timeperiod.

8. Nuclear Environmental Effects 105

There is a continuing need for the evaluationof the environmental effects associated withnuclear energy sources.

9. Plutonium Toxicity . . . . . . . . . . . 107

The toxicity of plutonium may pose a seriousthreat to a plutonium-based nuclear option,such as the LMFBR or plutonium recycle inlight-water reactors.

IO. Waste Disposal . . . . . . . . . . . . . . . 108

Satisfactory handling of nuclear f issionwastes appears to be technologically feasi-ble, although it has yet to be demonstrated.Other problems exist, mainly societal andinstitutional, which greatly influence thenature of the demonstration required.

11. Safeguards for Nuclear Materials 110

Safeguards must be adequate to prevent thetheft or loss of f ission materia ls, withs ubs equ en t cl andes ti ne construction of nuclear weapons.

12. Siting q . . . . . . . . . . . . . . . . . q . * . . . 112

Nu c le a r Re g u la to ry Co mmiss io n p o l i c ychanges for siting could influence reactor andsupporting system design.

13. Uranium Resources . . . . . . . . . . . 113

The lack of precision in present uraniumresource estimates and questions as to therate of expansion of uranium productionc ap a bi l ity ma ke re so u rc e- rela te d is sue sdifficult to address,

14. Uranium Enrichment . . . . . . . . . 115

Expansion of uranium enrichment capacityis required to meet domestic requirementsand fo re ign commitments fo r LWR andHTGR fuel.

CHAPTER Ill 85



15.

16.

17.

Fuel Recycle . . . . . . . . . . . . . . . . . . 117

Fission fuel recycling capability is needed forthe orderly development of nuclear power.

Public Understanding . . . . . . . . . 119

Public understanding of the energy problem,and especially of the nuclear option, receivesminor emphasis in the ERDA Program,

Controlled Fusion . . . . . . . . . . . . . 121

Great care must be exercised to ensure thatthe ERDA-controlled fusion program does

not expand at a rate so fast that properattention is not given to the different physicsproblems of controlled fusion and thatd e v e l o p m e n t o f n e w c o n c e p t s i s n o tprematurely abandoned.

18. Technologies for Fusion . . . . . . . 123

New technologies, which will be critical tofusion’s successful development through the1980’s, require a long time to develop and willrequire rapidly increasing effort with time,

86 CHAPTER Ill



C. INTRODUCTION

Under the Atomic Energy Commission, nuclearpower enjoyed substantial funding compared to

that available for alternative energy sources.Though the existence of ERDA is expected tobring about a more appropriate balance, the needfor nuclear power has never been greater, andmany problems remain. Research and develop-ment to find solutions to these problems mayrequire expansions in what is still by far thebiggest part of ERDA’s budget. The major issuesin fission, fusion, and supporting technologiesare discussed here. More detailed discussions of the nuclear program elements are given in theissue papers,

1. Converter Reactors

Light-Water Reactors. Light-water reactors(LWR’s) now supply about 8 percent of thenational electric energy needs (or 2 percent of allenergy), and they will almost certainly dominatethe nuclear industry for the next 2 decades. Thereactor technology is well in hand, but manyproblems still exist, as evidenced by rapidlyincreasing costs and long leadtimes. These, inconjunction with the capital squeeze and powerdemand reduction, have caused the recent plant

deferrals and cancellations. Nevertheless, theERDA-48 Scenario 111 goal of 225 reactors by1985 could be attainable if financing, licensingand manpower constraints are reduced, sincethat number of reactors have already been builtor ordered. The projected plant startup rate in theremainder of the century, although twice that of the 1975-85 decade, still averages only to thenumber of plants (35) that were ordered in 1973.The primary obstacles to achieving either goalappear to be financial and institutional, nottechnological.

The cost and leadtime problems could be

substantially alleviated if design, construction,and licensing techniques were improved. ERDA’snew program addresses these problems, but theresources devoted to plant standardization seeminsufficient to fully realize its potential to speedconstruction and cut costs. Issue Paper 1 dis-

cusses these problems and a possible standard-ization program.

While the reliability of large LWR’s has beenequivalent to comparable-sized fossil plants, ithas been less than expected, An increase innuclear plant availability would have a substan-tial effect on oil consumption, since utilities oftenmust replace the missing base load capacity withoil-burning units. Each large LWR generates heatat a rate equivalent to more than 40,000 barrels of oil per day. The ERDA program addresses themajor causes of unreliability; Issue Paper 2discusses reliability and advanced safety andefficiency concepts.

The floating nuclear plant (FNP), which would

be factory built on a barge and floated into itspermanent location, offers the possibility of speeding construction and cutting costs. Utilitiesh a v e b e e n re lu c ta n t to o rd e r th e se p la n t s ,however, because of the general slowdown innew plant orders and because of doubts as to thelicensable nature and ultimate performance of the plants. As a result, the only supplier of FNP’sis now in a precarious financial condition. Aproposed ERDA program to stimulate introduc-tion of FNP’s is discussed in Issue Paper 3.

High-Temperature Gas Reactor. The onlyAmerican competitor to the present LWR which

is near commercialization is the helium cooledhigh-temperature gas reactor (HTGR). It offers ahigher efficiency than the LWR, equivalent to thebest fossil units; a possibly more easily managedsafeguards problem; potentia l use as an in-dustrial process heat source because of its highero p e ra t in g t e mp e ra tu re ; a n d f r e e d o m f ro mmidterm fuel resource worries. It is, however,more expensive than the LWR, and utilities haveless confidence in its reliability because of veryl imi te d a n d l e s s th a n re a ssu r in g o p e ra t in gexperience with the Fort St. Vrain demonstrationplant, As a result of these factors, about half of

the HTGR orders have been canceled, and themanufacturer may have difficulty surviving. TheHTGR concept seems to be worth developing as aviable option, but the present ERDA programmay be insufficient to accomplish this, ERDAmay soon have to decide whether to provide

CHAPTER Ill 87



greater support or let the concept die, Issue Paper4 discusses the HTGR potential and program.

Other Converter Reactors. At present, thereseems to be little advantage to foreign converterreactors. This situation could change in the nextfew years if the Canadian deuterium-moderatedreactor (CANDU) continues to show superiorc ap ac it y f a ct or s. T h i s r e ac t o r u s e s n a tu r a luranium, thus avoiding the expensive enrich-

ment process, and consumes slightly less fuelthan the LWR over its lifetime. Its lower thermalefficiency and its need for large quantities of heavy water, which require large amounts of energy to produce, tend to offset these advan-tages. In addition, the l icensabili ty of theC A N D U r e a c t o r u n d e r e x i s t in g Nu c le a rRegulatory Commission (NRC) regulationsappears doubtful. Importation of the reactorsa p p e a r s u n d e s i ra b le fo r r e a so n s o f e n e rg yindependence and balance of payment considera-tions. Alternatively, if these reactors were to beproduced domestically under Canadian license,

U.S. industry would have to make a costlyconversion to the manufacture and support of avery different technology which probably will besuperseded in the near future, The advancedCANDU i s u n d e r d e v e lo p me n t a n d sh o wspromise of greatly extending resources andproducing power more cheaply than the presentdesign. ERDA should follow this developmentclosely.

2. Breeder Reactors

Liquid Metal Fast Breeder Reactor. The liquidme ta l f a s t b re e d e r (L MF BR) i s th e mo s ttechnologically a d v a n c e d of t h e b r e e d e rtechnologies both here and abroad. It is muchcloser to technological and economic successthan the other “inexhaustible” long-term energysources and has the potential to produce vastquantities of power early in the next century at acompetitive price. It could do this in a mannerthat is more acceptable environmentally thanany present technology. Nevertheless, it is themost controversial item in the ERDA program.

Controversy centers around the cost of the

R&D program, especially relative to the fundingof alternative energy sources; the economics of the LMFBR when fully developed; the quality of the design; the increased safeguards problemthat will result from the large quantities suscep-tibility 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 inview of the recent delay in the Clinch Riverd em on st r at i on p la nt , T h i s i s p r ob a b l y no tcritical, however, because many of these projected units could be replaced by converterreactors.

Gas-Cooled Fast Reactor. The gas-cooled fast

reactor (GCFR) is a possible successor orsupplement to the LMFBR, It has a higherbreeding ratio and thermal efficiency and mayentail more easily managed problems of safetyand safeguards than the LMFBR. Technologicaldevelopment of the GCFR is less well advanced,however, and substantial development work isneeded in such areas as component developmentand fuel-cycle analysis. Issue Paper 4 discussesthe GCFR with the HTGR, since the two areintimately related technologically.

Light-Water Breeder Reactor. The light-waterbreeder 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, andproduce as much fuel as it burns. Thus, tem-porary freedom from fuel resource limitationsmight be achieved with a small expenditure forresearch and development and a relatively lowcapital cost increment. Too few details have beenreleased for a realistic assessment to be made.Little is now known of the fuel-cycle cost orlicensing problems, and utilities have shownlittle 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 differentbreeder design that has been funded for manyyears at a very low level, If successful, it wouldsimplify the safety and safeguards problemsbecause of its continuous fuel reprocessing anduse of thorium fuel. The fuel breeding ratio ismuch better than that of the LWBR, but isunimpressive compared to the LMFBR andGCFR. The lower fuel inventory should meanth a t l i f e t ime u ra n iu m re q u i re me n ts a re n ogreater than for the LMFBR. Despite the many

unique technical problems that remain to besolved, the MSBR offers sufficiently significantadvantages to be funded at a higher level to allowa realistic determination of its potential. IssueP a p e r 7 d i sc u sse s th e r e l a t iv e me r i t s a n dproblems of the MSBR.

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3. Supporting Technology

Environment and Health (Issue Papers 8 a n d9). The nuclear environmental hazards duringnormal operations are well understood relative tot h e h a z a r d s a s s o c i a t e d w i t h c o a l - f i r e dpowerplants and, on balance, appear relativelysmall. Much work, however, is still needed,

especially on the question of plutonium toxicity.Waste Disposal (Issue Paper 10). Several wastedisposal options that appear technologicallyfeasible are under consideration. Disposal incarefully selected salt beds or areas in the oceanfloor are both possible. Public acceptance is a lesstractable problem. A strong effort is required toall ay publ ic fea rs, but it must result in atechnically well supported choice that will nothave to be revoked, as was the plan to use theLyons, Kansas, salt bed. Reprocessing of spentfuel with actinide removal can greatly ease thewaste disposal problem by reducing the time

from 200,000 years to about 500 years thatwastes present a danger (and must be isolated).The relatively small volume of actinides could bestored separately in a very safe location or putback into a reactor to be burned up. With suitabledilution, the radioactivity diminishes to aboutthe level of uranium ore in 500 years even withouta c tin id e r e mo v al . I f r e pro ce ss in g d oe s n o tbecome widespread, ERDA should have ready aplan for retrievable storage of fuel elements.

Safeguards (Issue Papers 11 and 12). Nuclearmateria l diversion by clandestine groups toconstruct weapons is a difficult problem which

involves abnormal human behavior and poten-t i a l ly d e v a s ta t in g c o n se q u e n c e s . I t s e e msprobable, however, that technical solutions canbe devised to keep the risk of such diversions atacceptably low levels. The cost is not expected tobe prohibitive, but a continuing effort will berequired to make the system perform accordingto design, A promising possibility is to locatereactors and their associated fuel reprocessingplants and fuel fabrication plants together in anuclear park. This would eliminate the transpor-tation links and thus reduce the possibility of diversion. Siting, environmental , and other

problems, however, may be greater than forpresent methods.Resource Base (Issue Paper 13). All estimates

of the Nat ion’s ultimate uranium resources arestill highly uncertain. Critics have claimed thatthe ERDA estimate is e ither too high andtherefore exaggerates the potential importance of

nuclear power, or that it is too low andoveremphasizes th e n e e d fo r th e b re e d e r .Utilities already are worried about ensuring thesupply of fuel for the lifetime of new reactors,perhaps in part because the price of uranium hasrisen sharply recently, Since very importantdecisions, such as the breeder timetable, dependon the estimates of U.S. uranium resources, it is

vital that they be substantially more accurate,ERDA should consider expediting its NationalUranium Resource Evaluation Program.

Enrichment (Issue Paper 14). The present andplanned capacity of ERDA gaseous diffusionenrichment facilities is fully subscribed, and newcapacity will be required by about 1 9 8 5 . T h eGovernment anticipates that private industrywill provide the needed expansion, but it isestimated that industry would require 9 or 1 0

years to learn the technology and get their firstplant operating. If industry and Congress do nottake positive action very soon, ERDA itself must

consider building another enrichment plant orincreasing the capacity of existing plants. Thecentrifuge separation technique shows greatpromise, but it is not as far advanced as gaseousdiffusion; nevertheless, the succeeding genera-tion of commercial enrichment plants may wellbe a centrifuge type. Centrifuge technology and,to an even greater extent, the laser separationtechnique, have potential for illicit use because of their adaptability to small-scale production.

Fuel Recycle (Issue Paper 15). The NRC hastentatively delayed plutonium recycle until thesafeguards i s su e is adequately addressed.

Plutonium recycle greatly increases the risk of diversion of weapons-grade material or acciden-ta l re lease of a highly toxic substance, Inaddition, the economics are now only marginallyattractive. Industry, however, expects to proceedwhen possible as reprocessing should somewhatimprove the economics of the fuel cycle, facilitatewaste storage, and extend the uranium resources.Experts are divided on this issue. Some expertswant to aid industry as ERDA proposes to do;others feel the hidden social costs will be greaterthan any possible societal benefit. While the lackof recycle capability will not become critical until

the breeder is commercialized, the issue shouldbe resolved soon because LMBFR economy res ts

on plutonium recycle, and a significant energysource is being neglected.

Public Acceptance (Issue Paper 16). There is agreat deal of opposition to the siting of almostany nuclear plant. While some objections are

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irrational, real concerns such as the emergencycore cooling system performance, safeguards,and waste disposal have not yet been fullyresolved, ERDA should discuss these problemspublicly and candidly while dispelling publicmisco nc ep tion s, su c h a s th e p o ss ib i l i ty of nuclear explosions in powerplants.

4. Fusion (Issue Papers 17 and 18)

There is a consensus that if nuclear fusion canbe successfully harnessed to give economicpower, it would be a very attractive means of supplying much of the Nation’s electrical energyneeds by the next century, The abundance of cheap fuel, the low level of radioactive wasteproducts, and nuclear explosive materials areamong the advantages that would accrue fromsuccessful fusion power, The required researchand development deserves favorable fundingwithin the Nation’s long-term energy program.

However, the scientific demonstration of fusionf e a s i b i l i t y — t h a t i s , t h a t t h e r e q u i r e dtemperatures and c on ta in me nt fo r t he r-monuclear burn can be achieved—has yet to beshown.

Substantial advances have been made in recentdevices (tokamaks and laser experiments), butthere is no certainty that these experiments canbe scaled up in size and power to give therequired conditions, The R&D will necessarily

take many years, will be very expensive, and asyet carries no guarantee of success. Nevertheless,the potentia l is so great that i t should bevigorously pursued.

There is concern, however, as to whetherERDA has narrowed the focus of its fusionprogram too much by its heavy concentration onthe tokamak concept. The ERDA Plan calls forscaling up the tokamak device to machines in

which scientific feasibility (energy “breakeven”)can be achieved. Although this scaling upappears to be a necessary process to achievesuccess in the fusion program, the cost andcomplexity of these next generation machinesraises questions as to whether options on otherpromising fusion concepts can be kept open incase the tokamak concept is not successful. If continued assessment of program directions isnot carefully maintained, there is danger of premature abandonment of other fusion con-cepts.

The economic harnessing of fusion power will

require several new technologies, including newmaterials for the reactor walls, economic storageof large amounts of energy, large superconduct-ing magnets, and the safe handling of tritium,Since developing these new technologies willtake many years, adequate R&D programs shouldbe started now to avoid possible delays in theoverall program, There is evidence that theERDA Plan has done this. Continued assessmentis a necessity to ensure a balanced effort.

9 0 CHAPTER Ill



D. NUCLEAR ISSUE PAPERS

1. Standardization

ISSUE

The present procedure for the design, construction, and licensing of a nuclearpowerplant 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 bya combination of suppliers. This procedure leads to very complex interfacesbetween the various suppliers, the utility, and the NRC. The incomplete status of the design at the time the construction permit is issued (conditioned upon theresolution of incomplete design features) and the changing regulatory re-quirements result in many design changes, imposition of retrofitted systems,delays, and cost increases. Standardization is a potential solution that is notfeasible in the present environment of fragmented responsibility and rapidlychanging regulatory requirements.

ERDA could support the development of a standardized design of a completenuclear powerplant for which the NRC would issue a “license to manufacture. ”Participation by all concerned parties would ensure a high-quality design. Thelicensing 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 standardization2. Are there significant anti trust issues in- over present procedures if the latter were

volved in terms of specifying brands of implemented more expeditiously?

BACKGROUND

When a uti l i ty decides to build a nuclear architect/engineer [A/E], and a constructor, Thepowerplant, it usually selects a nuclear steam NSSS designs are fairly well standardized bys y s t e m s u p p l y ( N S S S ) v e n d o r , a n each of the four LWR vendors. The balance of the

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plant, which costs considerably more than theNSSS, is designed by the A/E. The A/E generallystarts with a previous design and revises i td e p e n d in g o n NRC re q u i re me n ts , u t i l i typreferences, and site requirements. The con-structor (often the A/E) then builds the plantaccording to the NSSS vendor and A/E drawings.This is basically the same procedure historicallyfollowed for fossil plants. It results in a custom-

designed and built plant, which then must beindividually reviewed by NRC,

This fragmented approach leads to a divisionof responsibil i ty and contributes to uncoor-dinated overall systems design. In addition, thereare so many combinations of NSSS vendors andA/E’s that the A/E may find all his projects quitedissimilar. If the A/E does have a prior design tofollow, he may copy previous mistakes orotherwise fail to cut costs as much as possiblebecause of the pressure of the schedule.

Standardization is a potential solution to theseproblems, but it has not happened yet for a

number of reasons. The multiplicity of A/E’s andNSSS vendors could make each combination aseparate design. Technological advances leaveprevious designs outdated, but this processseems to be slowing, The largest roadblock of all,however; has been the NRC and its changingregulatory requirements.

At the time the utility submits an application toNRC for review, the detailed final design of thenuclear plant is generally no more than 10percent complete, and it is usually less than 50percent complete at the time that the constructionpermit is issued, This lack of a completed design

leaves the utility extremely vulnerable to NRC-imposed design changes, which all too ofteninvolve ripping out a portion of the plant alreadyconstructed and replacing it at a significant costand delay in the schedule.

Some of these changes are the result of oversight or the analysis of previously un-suspected but creditable ramifications of ac-cidents, These changes should be incorporated

into the designs if they involve a significant riskto public health and safety . Many changes,however, are attributed simply to new regulatoryguides and changes in requirements that areapplied retroactively,

Two years ago, the AEC announced a policy of supporting standardization. There have been an u mb e r o f r e c e n t a t t e mp ts to imp ro v e th esituation—the SNUPPS group of plants (five

v i r tu a l ly id e n t i c a l p la n t s o rd e re d b y fo u rutilities), the Duke Power Company “six pack”and the floating nuclear plant being put forth byOffshore Power Systems (OPS), Indeed, the NRCregulations were actually modified to provide a“license to manufacture” to OPS who willmanufacture the FNP in a factory and thendeliver it via water to the utility’s prepared site,None of these concepts, however, has enjoyed thefull antic ipated benefits of standardization,particularly in regard to the licensing process,

One possible role for ERDA would be tosupport the complete design of a land-based

nuclear powerplant through the whole licensingprocess, including the issuance of a “license tomanufacture,” and then to offer it to all interestedutilities for a prorated fee, based on the projectednumber of users. If the design is carried out withthe input from a number of utilities who areinterested in proceeding with the project, itshould represent an acceptable design, Indeed,the possibility y of saving up to 3 years in licensingtime (especially if a procedure for preapprovingsites is also implemented) would be so attractiveto a utility that prudence might dictate that itaccep t s u c h a n a p pr o v ed s ta n da r d iz e 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 changeswhich have a significant impact upon the healthand safety of the public. As a result, the financialexposure of the utility would be minimized, sinceit has only to secure the approval of the site viathe 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 reactorR&D.

SUMMARY

Until the late 1960’s, substantial governmental research work was carried outon light-water-cooled nuclear power reactors. At that time, the AEC decided thatLWR’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 forand to initiate extensive R&D efforts of its own. Second, increases in reactor powerlevels greater than those warranted by existing technology resulted in componentperformance and reliability problems. Third, continuous AEC tightening of safety-

related design criteria and operating restrictions over the past 6 to 8 years hasresulted in economic penalties and reduction of plant operating flexibility. Withrespect to the first two problems, it is noted with approval that ERDA is planningto renew governmental support of R&D aimed at improving LWR performance andreliability. The third problem would seem to be NRC’s responsibility. However, itis questionable whether NRC has adequate incentive for doing research to optimizethe balance between costs and safety. Furthermore, it has little incentive to developimproved safety concepts or systems so long as i t considers i ts primaryresponsibilities to the review of proposed systems for adequacy. The ERDA LWRsafety program can serve both to control the costs of safety systems and reduce theunknown factors in safety-related areas, thereby possibly increasing safetymargins and reducing public fear.

QUESTIONS

1. What is the proposed scope and level of effort 3. Who wil l ult imat ely deci de the bala nceby ERDA on LWR component performance between economies and safety in LWR’s?and reliability?

Z . What will be the relationship between theERDA and NRC programs in LWR safetyresearch?

BACKGROUND

Over the past 20 years, substantial Govern- a result of an AEC decision that light-waterment 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 thetors, 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 researchefforts. Subsequent to the AEC decision anumber of difficulties have developed.

q T h e in d u s t ry h a s b e e n s lo w to in i t i a t eextensive research efforts. For example,significant research efforts by the ElectricPower Research Institute (EPRI), supportedby the electric utility industry, have only

begun within the past 2 years.q Over the past 6 to 8 years, there has been a

large increase in the operating power levelsof light-water-cooled nuclear power reactors.Although efforts are made to accomplish thisp o we r in c re a se in a wa y wh ic h ma k e sm ax im um u s e of p r ev i ou s ly d ev e lo p edtechnology, a number of performance andreliability problems have resulted that re-quire substantial R&D in order to be satisfac-torily resolved. Such problems include fueldensification, Zircaloy-clad hydriding,s t earn-g en era t o r t u b e f a i l u r e s , a n d

premature component failure, The new largefossil plants exhibit somewhat analogousbehavior, but downtime on nuclear plants ismore costly because of their higher capitalcosts, which must be carried regardless of theoutput. When the baseload units are in-operative, utilities must make up the missingpower by using higher priced fossil fuels.This generally means oil, because oil-firedunits are most economical for peak loads oremergencies.

q Safety-related design criteria and operating

restriction imposed by the AEC (NRC] havetightened continuously over the past 6 to 8years. This trend, exemplified most recentlyby the decision to adopt new criteria forevaluation of light-water reactor emergencycore cooling systems, has led to a situationwhere a few reactors are operating at powerlevels below the power level for which theywere designed and/or are severely limited inoperating flexibility. In addition, new fueldesigns are being pushed in a direction whichsignificantly reduces economic performance.That these trends and effects are in the

direction of increased safety and that reactorsafety is important cannot be questioned.

Nevertheless, there is a wide difference of opinion a mo ng q u al i fi ed e n gi ne er s andscientists as to whether this increased levelof safety is either significant or needed andtherefore worth the cost,

With respect to the first two of the aboveproblems, it seems evident that if light-waterreactors are to continue to be developed and

utilized effectively, additional R&D will berequired in individual component and systemperformance and reliability, Moreover, if this isto be done quickly, a significant increase in thelevel and scope of Government support will beneeded. It appears that high payoff will resultfrom increasing Government support of R&Drelating to these areas of reactor technology. Inaddition, more advanced concepts to improveperformance could be investigated. These mightinclude the production of superheated steam,either in the core of boiling water reactors or inadvanced steam generators of pressurized water

reactors.At first glance, it would appear that resolutionof the third problem area is the responsibility of NRC and/or the nuclear industry, and, indeed, anumber of research programs funded by bothindustry and NRC are presently underway.However, in considering the possible eventualresult of such programs, it is important to notethat, over the 10 years since the AEC beganlimiting its R&D efforts to safety R&D in supportof its regulatory role, there have been virtually noinstances where safety regulations have becomeless rather than more restrictive, The problem is

that NRC does not have an incentive to doresearch n ee de d t o d ev el op a nd j us t if yregulations which provide adequate assurance of safety a t a minimum cost. Also, i t has noincentive to develop improved safety concepts orsystems so long as it considers its role to beprimarily the review of proposed systems foradequacy. ERDA, on the other hand, having aresponsibility for effective development and useof nuclear power, does have such an incentive, Itseems likely that industrial efforts will need to besupported by the Government if they are to beeffective in the near future. Therefore, it is

recommended that ERDA increase its efforts inareas 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 yetseveral years of design and sales effort, only four units haveutility, and all four of these units were recently delayed from thethe 1984-90 time period. As a result, the supplier is in financial

been built. Afterbeen sold to one1979-86 period todifficulty. 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’senergy generation needs.

The FNP is to be built in a factory setting favorable to rapid, high-qualityconstruction and controlled costs. The plant design is to be approved by NRC priorto the issuance of a “license to manufacture”; hence, a utility has only to license thesite. Indeed, the concurrent construction of the plant and the licensing andpreparation of the site significantly reduces the time to install FNP’s.

The present reservations about FNP’s among utilities concern the licensabilityof the plant and site, and the performance of the plant upon completion. ERDAshould consider aiding utilities in the licensing process and guaranteeing operatingperformance if the reactor vessel melt-through problem can be satisfactorilyresolved.

QUESTIONS

1. Are the l icensing questions of FNP’s so 2, Are there any reasons that a FNP would notserious that a utility committed to nuclear be expected to reach ra ted power or bepower would not accept the risk of delays and restricted to less than rated power by NRC?additional costs to resolve the issues in-volved?

BACKGROUND

An innovative concept which has been broughtto the point of commercialization is the FNP, in

which standardized plants are assembled on aregular schedule in a factory. Each plant wouldbe installed on a barge and towed to its site,which might be located offshore or in a moreprotected site in a bay or lake. The FNP conceptoffers significant financial, schedule, and quality

control advantages, but it does involve someuncerta inty in l icensable nature and perfor-

mance. ERDA could assist in resolving thesequestions,

Siting of FNP’s is a unique problem in that aspecially designed protective barrier around theplant will probably be required, even shore-based units, will require some protection. The

CHAPTER Ill 95



loss of coolant accident protection systemsrequires special attention since, according to theRasmussen Report (WASH 1400), the chance of an a cc i de nt l ea di n g to a r ea ct o r ve s se lmeltthrough could be as high as 1 in 100,000reactor-years. Some of these in turn could leadeventually to a containment floor burnthrough.At a landbased unit, extensive release of radioac-tive material might still be avoided if the molten

core cooled suffic iently to solidify withoutcoming into contact with ground water. At anFNP, however, after burning through the con-tainment floor, the molten core would drop intothe ocean or lake where the plant is located. Thes p ec i al p r ob l em s a s so ci a te d wi t h f i s si o nproducts in the water present a unique type of l i c e n s in g i s su e . Re so lv in g su c h u n iq u e ly

different licensing questions is a task ERDAcould undertake with NRC.

Certain other technological questions still arebeing examined by NRC. Some of these issues—such as turbine/generator alignment on a floatingbarge—could result in a restriction of the plantpower level or operational difficulties, The onlyexisting plant using a containment ice condenserpressure suppression system similar to that

planned for FNP’s is presently operating at lessthan rated power due to licensing restrictions,

ERDA could assist the utilities by undertakingR&D to resolve any problems that impose powerrestrictions. Since the first few utilities to installFNP’s will bear the brunt of any technologicalproblems, it may be advisable for ERDA toguarantee 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 water-or 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 byLWR’s, but private and foreign development have brought it to the point where itcould become a significant factor. The HTGR and its potential successor, the veryhigh temperature reactor (VHTR), can be used to generate electricity at muchhigher efficiencies (up to 50 percent) than LWR’s, but they may have even greaterpotential for producing industrial process heat. In addition, they would extenduranium resources and possibly present more easily managed safety andsafeguards problems, although the spent fuel safeguards advantage is somewhat

counterbalanced by the need to protect the clean fuel. The HTGR, however, is lessdeveloped than LWR’s, thus presenting cost, performance, and licensing uncertain-ties.

The GCFR has been viewed as a backup to the LMFBR. It may, however, havesufficient advantages to warrant concurrent development. The breeding ratio isabout 1.4, somewhat better than the LMFBR. The thermal efficiency is higher thanthe LMFBR, and the capital cost could turn out to be lower since the system isinherently simpler. There exists, however, serious uncertainties regarding the lossof coolant accident, since the power density is higher than the HTGR and the coreheat capacity is lower, resulting in a faster temperature rise.

QUESTIONS1 . Wh a t i s th e p o te n t i a l o f h e l iu m-c o o le d 2 . Wh a t i s th e r e l a t iv e imp o r ta n c e o f th e

reactors for industrial process heat, both in inherent safety features of the GCFR com-the 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 70

0

0

C (130 0

0

F) circulates fromthe reactor core to steam generators, compared towater at about 330

0 C (600°F) in PWR’s. The gastemperature can be much higher than the water ina PWR because helium remains an inert, single-phase fluid, while water presents corrosion andhydrodynamic problems at high temperatures.

The efficiency of the HTGR powerplant is limitedby the maximum temperatures and pressuresallowed in the steam system, as are fossil units. Itshould be relatively easy to add a topping cyc legas turbine and achieve efficiencies of up to 5 0percent. It would then be advantageous to raisethe helium temperature even higher, and 1000° C(1800° F) appears to be feasible.

Industry now consumes about 40 percent of the

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Nation’s energy, much of this in the form of high-temperature process heat, The HTGR and VHTRappear well suited to provide such heat, and theiruse could replace the consumption of largequantities of fossil fuel. One potential use is insteam-methane reforming to produce hydrogenfor use in coal gasification and liquefaction.Other possible applications are in petroleumrefining and chemical industry processing, A

process heat reactor would be the first major useof nuclear energy for nonpower use, and manynew problems would have to be solved, Forinstance, an entire ly new type of industria lorganization would have to learn how to copewith nuclear reactors, and the load-followingcharacteristics in some applications could bemuch more demanding than in central stationpower generation.

The HTGR uses mainly uranium-233 as fuel,although the initial core contains highly enrichedU-235, The fertile material is thorium-232, whichis converted into U-233, corresponding to the

conversion of U-238 to plutonium-239 in LWR’sand LMFBR’s. With appropriate fuel manage-ment, as many as eight U-233 atoms can beproduced for each ten consumed, Thus, theHTGR utilizes fuel much more efficiently thandoes the LWR, and this fuel cycle demands muchless uranium than that of the LWR, Thoriumresources are several times uranium resources,so the use of HTGR’s could somewhat postponethe time when breeders are needed, On the otherhand, fuel reprocessing facilities are vital to theHTGR, but not the LWR.

The HTGR fuel has significant safeguards

advantages over the LWR fuel. The fissilematerial produced is U-233 rather than Pu-239,Both are suitable for weapons manufacture, butU-233 is much more easily detected than Pu-239because of its higher gamma ray production,Thus, surveillance and recovery is greatly eased.In addition, U-233 is far less toxic, so accidentalor intentional dispersion is a lesser problem,Some proposed fuel designs, however, leave thefresh fuel in a form that could easily be convertedto weapons. T h i s f u e l w o u l d h a v e t o 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 isslower for the same size pipe break, since thefluid has a lower density, and core heatup isdelayed by the graphite in which the fuel isinterspersed. Thus a core meltdown is even moreimprobable,

The HTGR has been commercially available

for several years, Several orders were taken forit, but most were deferred or canceled in recentyears either because of the general slowdown inthe nuclear industry or because of specialconcerns about the HTGR on the part of theutilities, The Fort St. Vrain demonstration plant(330 MWe) has suffered from a rash of operatingproblems which have greatly delayed its powerrise. There are also many licensing uncertainties,since HTGR’s have not been subjected to thesame scrutiny by NRC as LWR’s. Initial costs alsoare high, though there are indications that thisproblem can be eliminated.

The GCFR is being funded at a much lowerlevel than the LMFBR or LWBR. Much of thetechnology of the HTGR and the LMFBR will beusable in the GCFR, but the program could bepursued more energetically.

The core of the GCFR is more like that of anLMFBR than an HTGR. The fuel is enclosed infuel rods, and no moderator, such as graphite, ispresent, This eliminates the HTGR advantage of slow-heatin g following a loss of coolant. Heliumis a less effective cooling medium than liquidsodium. Hence, the loss-of-coolant accident mustbe 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 doublingtime of about 10 years, better than is forecast forthe LMFBR with oxide fuels.

The capital costs of the GCFR might turn out tobe lower than the LMFBR because the system isinherentl y simpler. There is still a great deal of uncertain y o v e r th i s , h o we v e r , s in c e th etechnology is not as advanced.

98 CHAPTER Ill





core, When struck by a neutron, U-238 generallydoes not fission as does U-235 or plutonium-239.Instead, it absorbs the neutron and eventuallye mi t s two e le c t ro n s f ro m th e n u c le u s totransmute itself into Pu-239. The core itself consists of fuel rods containing uranium enrichedin U-235 or Pu-239 as in an LWR. The familiarchain reaction takes place in the core. On theaverage, more than two neutrons are produced

per fission. One of these is required to produceanother fission, and the rest are available forabsorption, The LMFBR is designed so that forevery atom fissioned, about 1.2 atom of Pu-239 iscreated. This plutonium can be removed by fuelreprocessing and used to refuel the core, whilethe excess can be used to fuel an LWR or anotherLMFBR.

Large quantities of U-238, essentially a wasteproduct of uranium enrichment plants, are nowavailable. When this is exhausted, only smallquantities of ore will have to be mined. Since it isworthwhile to mine our vast reserves of low-

grade ore for a breeder (but not for the LWR), theLMFBR is for millenia an “inexhaustible” energysource.

There is already substantial experience withLMFBR’s. EBR-I produced the first electricityever obtained from a nuclear powerplant in 1952.Both EBR-II and the Enrico Fermi demonstrationplant started up in 1963. The Fast Flux TestFacility (FFTF) is currently under construction atHanford , Wash ington , and is scheduled fo roperation by 1977, The basic purpose of this 400-MW reactor will be the testing of a variety of ma te r i a l s a n d fu e l s th a t c a n b e u se d in a

commercial breeder, The LMFBR has the highestenergy priority abroad and plants are beingoperated successfully in France, England, and theUnion of Soviet Socialist Republic,

The prime impetus for developing the commer-c ia l b reeder i s the l imi ted ava i lab i l i ty o f u ra n iu m. L WR’s r e q u i re l a rg e a mo u n ts o f uranium, but can only fission about 1 percent of itcompared to the LMFBR’s 70 percent. Presentestimates of high and medium quality domesticuranium reserves and LWR demand show con-sumption exceeding supply early next century.Some time before then, the fuel price for LWR’s

will have risen enough so that the higher capitalcost of the - LMFBR will be justified by its lowerfuel cost . The economics of the transit ion,however, are hard to predict, The capital costdifferential will not really be known until acommercial-sized plant is built, but so far none

has ever been designed in this country. The fuel-cycle cost of the LMFBR is expected to beextremely low, depending on the actual amountof plutonium produced, but the ultimate breedingratio (and the future price of plutonium) can stillonly be estimated. Uranium prices have recentlyrisen sharply, possibly giving credence to fears of a short supply; however, a great deal more couldstill be discovered, thus delaying the necessity

for commercialization of the LMFBR. This topicis discussed in Issue Paper 13. Many cost-benefitstudies and discounted cash flows for costs andbenefits of the LMFBR program have been madewith net benefits varying from over $100 billionto zero, depending upon the choice of parameterswith improbable parameters at the extremes.

The growth rate of LWR’s is also a criticaleconomic parameter. Crit ics of the LMFBRprogram argue that the energy growth rate ingeneral and the electric and nuclear segments inparticular must be brought down drasticallybecause of increasingly serious social and

environmental impacts, They also point to otherindustrial nations such as West Germany, wherethe ratio of per capita consumption of energy toincome is much lower than here—thus indicatingthat the United States should be able to reduceconsumption. This would stretch out uraniumresources. Advocates of the LMFBR, however,point out that it is by no means clear that theUnited States can decouple economic growthfrom energy growth; that large segments of thep op ulat io n s t i ll l a c k e n erg y c on suming b u tdesi rab le ameni t ie s ; tha t soc ia lly a t t rac t ivedevelopments, such as electric automobiles and

mass transit, will increase demand substantially;and that the imminent shortages of petroleumand natural gas must to some extent be compen-sated for by electricity.

Emphasis on other types of reactors could slowthe consumption of uranium. The HTGR andCANDU can be operated so as to use uraniummore effic iently than present LWR’s. Theirprobable rate of penetration into the market,however, is too low to greatly influence the priceof uranium. Plutonium recycle in LWR’S wouldalso extend resources about 25 percent as wouldlowering the U-235 component of the depleted

uranium tails at enrichment plants, though thiswould decrease enrichment output. Both theseoptions would be available later if the need formore LWR fuel appears to be critical and both arediscussed in other issue papers.

Some critics also question the quality of the

100 CHAPTER Ill



design for the Clinch River (CRBR) demonstra-tion plant. The breeding ratio and reactor safetyare specific points mentioned by critics. This350-MWe plant is designed to demonstrate thelicensable nature, operability y, and maintainabili-ty of a LMFBR in a utility system. Sitepreparations for the CRBR has been delayed from1975 to 1976, to reflect the additional timerequired to address key licensing and environ-

mental concerns.Co n c e rn o v e r sa fe ty h a s b e e n e x p re sse d

because the LMFBR, unlike water reactors, is notdependent on moderation by the coolant; hence, aloss of coolant would not directly shut down theLMFBR but would in fact increase reactivity. Forthis reason, the so-called “core disruptive acci-dent” has been analyzed for the LMFBR in whichit is assumed a nuclear transient mechanicallydisrupts the fuel elements. Energy releases forsuch incidents have been calculated to be from100 to a few hundred megawatt seconds for theFFTF, which is equivalent to the energy released

by burning 1 gallon of oil or exploding 2 poundsof TNT. Both European and American programexperts believe that the chain of events that mustbe hypothesized for a core disruptive accident tooccur is so unlikely that such accidents are notcredible. Nevertheless, the reactors are con-structed with the capability to contain a widerange of very improbable events, The lack of aninherent shutdown mechanism, however, istroublesome to NRC, which is consideringmandating a core catcher for the CRBR. Thisdevice would hold the molten fuel in a noncriticalconfiguration if there were a core meltdown.

Another strong objection to the LMFBR is thedanger of diversion by terrorists of some of the

plutonium it produces, Only a very small fractionof the plutonium produced yearly in a breedereconomy would be sufficient to construct a cruden u c le a r b o mb c a p a b le o f r e l e a s in g e n e rg yequivalent to approximately 100 tons of highexplosives. It seems impossible to some criticsthat a safeguards system sufficiently effective toprevent this can be designed and implemented ata reasonable cost and without intruding on the

privacy of other citizens. Advocates disagree,saying that the safeguards system which will addonly 1 to 2 percent to the cost of power will bereasonably unobstrusive, and will hold thepublic risks to much lower levels than for othercatastrophic accidents. Nuclear parks are ap o ss ib le p a r t i a l so lu t io n in th a t th e mo s tvulnerable transportation links are eliminated.

T h e in te n t io n a l o r a c c id e n ta l r e l e a se o f plutonium possibly from a preprocessing of fuelfabrication plant is also a controversial topic.While plutonium is an extremely carcinogenicsubstance, it is an unlikely terrorist weapon

since no effects other than psychological are feltfor 25 years, but very tight controls will have tobe maintained over all equipment handling it.Safeguards and plutonium toxicity are discussedin other issue papers.

Under normal operation, the LMFBR economyshould be environmentally more acceptable thanLWR’s or fossil plants, The plant itself will have athermodynamic efficiency approaching 40 per-cent, equivalent to the best units today. Miningand milling will be virtually eliminated. Theenvironmental objections center mainly aroundthe safety and safeguards problems already

discussed.

CHAPTER Ill 1 0 1

6 0 - 4 1 1 0 - 7 5 - 8



6. Light-Water Breeder Reactor

ISSUE

The light-water breeder reactor (LWBR) concept has several advantages, butthe need for it is questionable.

SUMMARY

The LWBR is the only breeder reactor now being seriously pursued by theUnited States that uses thorium rather than uranium as its primary fuel. Thetechnology of the LWBR is based on that of the main line light-water reactor; theoriginal 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 yearhas been spent on this concept for the past 9 years, and a demonstration LWBR isexpected to operate in the pressurized water reactor vessel at Shippingport, Pa., by1976. 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 seriouscontributor to the nuclear energy programs, yet in the ERDA nuclear program thereseems to be no mention of LWBR actually carrying some of the nuclear load at anytime, and utilities have shown little interest in the concept.

QUESTIONS

1. W h y i s L W B R n o t m e n t i o n e d i n E R D A 3 . At what uranium price and rate of deploy-projections of future nuclear mixes? ment does the LWBR look attractive?

2. What measures does ERDA intend to take to 4. Does ERDA in tend to make a de ta i led

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 cyclet h a t d i d n o t r e q u i r e n e w a n d u n p r o v e ntechnology, The fundamental idea was to replacethe slightly enriched U-235-U-238 fuel elements

in a PWR with “seed blanket” fuel modules: eachmodule consists of thorium-U-233 fuel rods(seeds) surrounded by thorium rods (blankets).The normal fissioning process takes place in theseed rods, Neutrons produced in the seed arecaught in each blanket and thorium there is

converted into U-233. I t is estimated thatbreeding ratios of around unity can be achievedwith this arrangement.

When the LWBR was first proposed in 1965, itseemed to defy most of the precepts set forth for a

good breeder: high breeding ratio; low inventoryof fissile materia l; h igh thermal effic iency;simple fuel recycle. The one countervail ingadvantage was that the LWBR largely usedstandard pressurized water technology, andtherefore it could be developed for a fraction of

1 0 2 CHAPTER Ill



the cost of any other breeder, such as the LMFBR.The AEC, in weighing the matter, decided thatthe simplicity of the technology outweighed allother considerations, and it assigned the task of d e v e lo p in g th e L WBR to the Naval ReactorBranch under Admiral Rickover. The LWBR isnow at a point where a demonstration of theprinciple is about to be made in the Shippingport,Pa. reactor facility.

Originally , it was hoped that uti l i t ies wouldfind the concept interesting as a means of transferring easily from the standard PWR to a

breeder without having to switch to a completelydifferent technology. Thus far, utilities haveshown little interest in LWBR, primarily becauseLWBR fuel-cycle costs were estimated to be muchhigher than PWR fuel cycle costs; and, second,because so little hard information has been madeavailable about the LWBR.

The rapid rise of capital costs and the ap-proaching shortage of uranium may have im-proved the commercial outlook for the LWBR.

Because of the higher capital costs, fuel cyclecosts (which are probably high in LWBR) are nolonger so important; and the shortage of uraniummay make even the fuel-cycle cost of LWBR’scompetitive, especially if prorated over 30 years,

during which time the uranium shortage maybecome acute.

There st i l l remain a number of technicaluncertainties. For example, the LWBR has a moretightly packed lattice than PWR’s which maycause some difficulty with the emergency corecooling system; there will probably be less poweroutput for a given core size compared to a L W R ;the breeding ratio is so close to unity that LWBR

may turn out not to breed at all . The init ia lloading of uranium in a LWBR is much higherthan in a PWR; hence, an expanding LWBReconomy may place even heavier demands ontotal uranium resources during the first severaldecades. The purpose of the Shippingport test isto prove the feasibility of light-water breeding.Full technological development and economicdevelopment will require a substantia l R&Dprogram.

However, the situation since the LWBR wasfirst proposed has changed sufficiently that itseems prudent to consider LWBR to be a more

serious contender than has previously been thecase, Information on LWBR will soon be availablein the Environmental Impact Statement so thatpotential buyers of LWBR’s can assess the systemmore realistically.

CHAPTER Ill 1 0 3



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 withina reasonable time period.

SUMMARY

The MSBR program is presented by ERDA as a potential backup for solid fuelbreeder reactors. It uses an inherently different nuclear technology, and henceprovides technological insurance, Even if fast breeder reactors prove to becommercially successful and environmentally acceptable, the MSBR, based onthorium rather than uranium, would enlarge the options available for future energysystems and offer substantial advantages such as more easily managed safety andsafeguards 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 ERDAin the MSBR program?

2. What criteria will ERDA use in decidingwhether or not to continue the program?

3 . Is the funding level proposed by ERDA ($3.5

mill ion adequate to reach a meaningfuldecision point in FY 77, as suggested byERDA?

4. What level of funding would be required tomaintain the MSBR program as a realistica l t e rn a t iv e to th e f a s t b re e d e r r e a c to rprogram, so that commercial deployment of MSBR’s could be undertaken by the end of thecentury, if needed?

5. Would the MSBR be more secure than solid-fueled reactors a g a i n s t d i v e r s i o n o f fissionable material for unlawful purposes?

BACKGROUND

The MSBR offers the possibility of a signifi-cant breeding gain in a thermal-neutron reactorusing thorium rather than uranium as the basicfertile material. To reach self-sufficiency (abilityto fuel its own growth), an economy based on theMSBR would probably require no more naturaluranium than a fast breeder reactor economy if deployed at a comparable rate. Its advantages area short fuel cycle, fast reprocessing, low fuel

product ion, chemical complexity , and moreextensive requirements for remote maintenanceof radio active components, since contaminationis heavy throughout the entire reactor system.Fuel reprocessing i s d o n e b y c o n t in u a l lywithdrawing a small amount of the molten fuel,r e mo v in g th e f i s s io n p ro d u c t s a n d e x c e ssuranium-233 and reinfecting the clean fuel, Thus,the fuel in the reactor at all times has a low

inventory, and highdisadvantages of the

104 CHAPTER Ill

thermal efficiency. The inventory of fission products, which are theMSBR are high tritium major potential source of safety problems in solid



fuel reactors. The safeguards problem may bereduced because the fissionable fuel produced bythe MSBR is much less toxic and more easilyd e te c te d th a n p lu to n iu m. T h e fu e l r e c y c leprocess would be part of the reactor plant;successful development of equipment for this isan essential part of the MSBR program.

Molten salt breeder reactor technology hasbeen under development for more than 20 years.

Two reactor experiments have been operatedsuccessfully: the Aircraft Reactor Experiment(ARE) in 1954, and the Molten Salt ReactorExperiment (MSRE) in 1965-69. Key areas inwhich further development is needed are listedbelow:q Graphite moderator (reduced sensitivity to

irradiation )

q S t ru c tu ra l me ta l ( r e d u c e d se n s i t iv i ty tochemical attack by fission products such astellurium)

q Retention and control of tritium

Chemical processing (materials for equip-ment and processing)

q Component development, including equip-

ment for removal of fission-product gasesfrom the fuel salt.

Recent funding has been at $3.5 million per year,This is far less than any other reactor conceptcurrently funded by ERDA. Problems are beingaddressed, but at such a low level that evendetermining the potential for solutions is far off.

8. Nuclear Environm ental Effects

ISSUE

There is a continuing need for the evaluation of theassociated 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 effortsmust be maintained on long-term studies of radionuclide accumulations andrecycling in the aquatic and terrestrial environments, Other programs that shouldreceive increased attention are concerned with reprocessing facility releases andimpact/recovery studies of accidental releases from reprocessing facilities andreactors 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 eva lua te the economic2. To what extent is ERDA investigating the consequence of accidental re leases that

range a n d h i s to r i c a l r e l a ti o n s hi p s o f would restrict agricultural operations?

CHAPTER Ill 1 0 5



BACKGROUND

The use of nuclear fuel sources, as well as otherenergy sources, is associated with environmentalinteractions, most of which are either well knownor p red ic table. Both aqua t ic and te r res t r ia lecosystems are affected to various degrees.

Relatively large volumes of water are requiredfor cooling purposes. Depending upon coolingwater intake structural design and location, theeffects upon entrained aquatic life are highlyvar iable, wi th mortal i t ie s ranging f rom 10percent for well designed and sited once-throughsystems to as much as 100 percent for lowconsumption closed systems. In addition, heatedwater, metallic corrosion products, low-levelr ad io ac ti ve wastes, a n d w a t e r treatmentchemicals may be discharged to surface watereco sys tem s. W h e re e va p o r at i v e c o o li n g isemployed, the same pollutants are discharged atlower volumes and temperatures but at greaterconcentrations than with once-through cooling.

The use of large, evaporative cooling towersresults in the atmospheric dispersion of largevolumes of heat, moisture, salts, and a variety of chemicals which interact with the terrestrialenvironment as well as the atmosphere. This istrue for both nuclear and fossil p lants, butnuclear requires more cooling for the same powerand, also results in the release of low levels of radioactivity y. Released either to receiving watersor a tmosphere, these in terac t wi th man ande it he r di re ct ly w i t h t e r r es t r i al o r a q ua t i cecosystem components or indirectly through asynergism with other plant releases, such as

heated plumes (aquatic or atmospheric) metals,and chlorine. De p e n d in g u p o n th e ty p e o f meteorologic or hydrologic transport of thesel ow -l ev el r ad io ac ti ve pr odu ct s, they areavailable for uptake, cycling, and concentrationwithin biological food chains which include man.

S in c e E RDA’s P la n e n v i s io n s ma n y n e wnuclear energy sources, adequate resources mustbe devoted to the associated environmentalproblems. The environmental study program,however, appears to shift emphasis from nuclearto foss il power. This i s reasonab le becausenuclear environmental and health hazards areprobably better understood than those fromo the r so urc es , a l th o ug h ma n y u nc e rt a int i e sremain even here.

Specific data deficiencies also exist, such asthe biological cycling of low-level ionizingradiation within various aquatic ecosystems,Studies are needed to assess the patterns of accumulation and resultant effects on the aquaticcommunity, as well as any resultant hazards toman.

Another area for research concerns localizedaccidental re leases around operating nuclearreactors and reprocessing facilities. Insufficienteffort has been devoted to the specific economic,sociological, and radiological impacts that applyto the population groups involved. In particular,there is need for a better understanding of remedial measures available and their resultantcost/value relationships.

106 CHAPTER Ill



—

9. Plutonium Toxicity

ISSUE

The toxicity of plutonium may pose a serious threat to a plutonium-basednuclear option, such as the LMFBR or plutonium recycle in light-water reactors.

SUMMARY

Suggestions have been made recently that plutonium may be much morehazardous than had been previously believed to be the case. Though these claimshave been specifically denied by the British Medical Council, to ERDA scientists,and many other scientists and scientific groups, the issue remains a lively onerequiring a more definitive resolution than exists at present.

QUESTIONS1. 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 usableplutonium? condition?

BACKGROUND

Plutonium is a very hazardous material; forexample, the maximum permissible concentra-

tion of the isotope Pu-239 in the air, when theplutonium is in the form of insoluble plutoniumoxide, is about 6 x 10 -14 microcuries per ml or 100x 10-20 gin/ml. Nevertheless, other materials(such as the botulism virus) are much more toxicper gram than p lut oni um. Fo rt un at el y,plutonium is not readily absorbed by the gas-trointestinal tract or by the food chain.

Inhalation of radioactive discharges fromnuclear facilities is the more likely mode of significant plutonium ingestion. This results indeposition in sensitive lung tissues with possibleultimate development of lung cancer. The max-

imum permiss ib le lung body burden is 1 6nanocur ies ; however , va r ious cr i t ic s o f the

nuclear energy program have argued that thisbody burden is too high by a large factor.

The position of the nuclear energy communityand of the majority of qualified experts in thebiomedical community is that currently allowedlevels are safe. Primary evidence for this conclu-sion is that , despite man having dealt withplutonium on a large scale for over 30 years, nocase of lung cancer in man can be attributed toplutonium. In particular, some 25 workers at LosAla mo s re c e iv e d a s mu c h a s 1 0 t ime s th eoccupational dose limit to the bone, yet some 30years later none of these people has suffered illeffects. Critics claim that these findings are not inconflict with their position because the doses

were not received in the most dangerous manner,

CHAPTER Ill 1 0 7



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, mainlysocietal and institutional, which greatly influence the nature of the demonstration

required.

SUMMARY

Spend fuel discharged from a reactor contains radioactive fission productswhich must be isolated from the biosphere for approximately 700 years as well asactinide elements (uranium, plutonium, americium, curium, and other heavierelements) which are radioactive for hundreds of thousands of years. Because thereare no chemical reprocessing plants currently operating in the United States, spentfuel elements from nuclear powerplants are stored temporarily in water basins atthe 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 disposedof in solidified form. Several options for this exist, each with different short andlong-term economic and societal costs and benefits, If the wastes are sequesteredwithout further separation, the long-term radioactivity between 700 and about1,000,000 years of the approximately 1 meter3 per reactor-year is several times thatof natural pitchblend ore; but if diluted to the original volume of mined uraniumore, the radioactivity is less than that of the ore. If the actinide elements are alsoremoved 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 tototal value of associated power produced.

QUESTIONS

What program exists to evaluate the hazardsand options associated with nuclear wastesand at what level is this program funded?

What are the expected total hazards from thevarious main options for nuclear wastedisposal?

What reservations does ERDA have concern-ing the disposal of solid waste in saltformations (as at Carlsbad, N. Mex.)?

4. How does the scheme for burning out thelong-lived transuranic elements in a reactorcompare with other options?

5. What is to be done about the so-called alphawastes (e.g., plutonium-contaminated tools,gloves, etc. ) where the activity per unitvolume is low, but the volume is so large thattotal activity is comparable to the high-levelwastes?

BACKGROUND

For permanent disposal of wastes, present . Disposal of wastes as presently envisaged tooptions are as follows: be processed in sites with very high integrity

1 0 8 CHAPTER Ill



up to 700 years or so, with integrity at longert i me s s tr i ve n f or , b u t n o t e s s en t i al t oguarantee, T h e p r e s e n t di spo sal -i n- sa ltschemes seem satisfactory provided obviousmistakes such as susceptibility to intrusionof ground water are avoided.

q Better removal of the long-lived radioactivewastes; specifically, the 0.50/0 remaining

plutonium, plus the bulk of americium,curium, etc., which are now normally left inthe wastes, The impact of such extra separa-tion on the total fuel cycle cost is uncertain,but quite possibly modest, The separatedlong-lived wastes would then have to beburned out by re insertion into operatingnuclear reactors (fast reactors would bebest). If this option were developed, the long-term storage problem would be virtuallyeliminated, and the shorter-term storageproblem would become even more straight-forward.

q Disposal of untreated wastes in hithertorelatively unconsidered locations: for exam-ple, burial in ocean floors, Many of thesegeologic regions have been stable for manymillions of years, and modern deep oceandrilling techniques have improved substan-tially in the last several years.

Presently contemplated chemical reprocessin g

methods for spent fuel elements are expected toremove 9 9 ,5 0 / 0 of the plutonium and uranium and

little of anything else; this procedure representsthe best macroeconomic profitability because of the value of these materia ls for recycling.Substantia l quantit ies of radioactive heavyelements americium and curium with half-livesof 10 , 000 to 2 5 , 0 0 0 years would remain with thefission products, whose half-lives are less than50 years. Since ten half-lives reduce the originalactivity by a factor of a thousand, which is

usually a safe level, 700 years’ isolation isadequate for the fission products as contrastedwith 200,000 years for the heavy elements,

Inclusion of a further reprocessing step, whichwould remove these heavy elements from thefission products, appears feasible, Because theheavy elements are small in volume, they canprobably be returned to a fast reactor to befissioned, at which point they become normalfission products. Thus arises the question of present costs versus far future benefits.

In any event, th e wa s te s mu s t h a v e lo wleachability y. T h i s c a n b e a ssu re d v ia we l l

developed waste technology. Evidence that suchlow leachability can be achieved, even withoutany processing or conversion to solid form, isprovided by some ancient “natural reactors” inGabon which have been under study by Frenchscientists. Neither plutonium nor other long-lived wastes were found to have migratedappreciable distances since ancient geologictimes, as evidenced by the fact that their finaldecay products are spatially coincident with theremaining uranium.

CHAPTER Ill 1 0 9



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 smallquantities of other fissionable materials, are required to make a crude nuclearbomb. Furthermore, the information needed to design and construct nuclearweapons is readily available. Preventing diversion of small amounts is difficultbecause fissionable material must be processed and handled in multiton quantitiesannually. Plutonium, which is already produced in large quantities in light-waterreactors, is an even larger component of the LMFBR fuel cycle, While it is widelyagreed that pas t safeguards practices have been inadequate, a number of measuresare 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 . T o w h a t e x t e n t w o u l d t h e s a f e g u a r dplutonium from being stolen from fuel problems be eased if the entire nuclear powerfabrication and reprocessing plants by heavi- p r o g r a m w e r e s h i f t e d f r o m u r a n i u m -ly armed gangs? plutonium to thorium-uranium?

2. I s ERDA s tudy ing o r deve lop ing newsafeguard techniques?

BACKGROUND

The information needed to design and con-struct crude nuclear weapons is available, as arethe associated nonnuclear materials required.Dozens of nations have the skills and facilitiesnecessary to build reliable atomic bombs. Some,but not all, nuclear weapons experts assert thatsmall groups of people, conceivably even in-

dividuals, could construct a crude bomb which,although inefficient, could be transported in anautomobile and would be highly destructive.Furthermore, modest workshop facilities wouldsuffice. Such a crude bomb might have the powerof 100 tons of TNT and, if exploded in a densely

populated city area, might kill more than 100,000people under some circumstances.

The only ingredient not readily available fors uc h we ap on construction i s t h e n u cl e arfissionable material required. A few tens of pounds of plutonium or highly enriched uraniumare needed, the exact amounts depending on the

chemical form and the degree of dilution of thefissionable isotope with nonfissionable isotopes.Such plutonium or enriched uranium is used orproduced in most fission power reactors.

Plutonium is also a potentially toxic material.If dispersed in the form of small particles in the

1 1 0 CHAPTER Ill



atmosphere with sufficient concentration, in-halation might lead to many eventual deathsfrom cancer. The potential threat in populatedareas should be compared with the correspond-ing threat of dispersal of highly poisonouschemica l o r b io log ica l agen ts , excep t tha tphysical effects are not generally visible forseveral decades. Thus, the primary threat as aterrorist weapon is psychological.

In addition to the countries which already havenuclear weapons, 15 others operate powerreactors which produce plutonium. By 1985, thenumber will be a t least 50. The plutoniumproduced 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 radioactiveand dangerous fission products whose radiationwill play an effective “self protecting” role so thatclandestine theft and handling would be verydifficult. This situation changes when the fuelelements are reprocessed and the plutonium isseparated from the other e lements; several

countries have or are constructing nuclear fuelreprocessing plants,

The International Atomic Energy Agency(IAEA) in Vienna has the responsibility forsafeguards to detect the diversion of nuclearmaterials from peaceful purposes in nations thatare parties to the Treaty of Non-Proliferation of Nuclear Weapons or have otherwise agreed tohave their c ivil ian nuclear materia ls underinternational safeguards. The responsibility forapplying physical security safeguards to preventth e f t o r d iv e r s io n o f n u c le a r ma te r i a l b yclandestine groups belongs to the individual

countries involved.In the United States, the present physical

security for civilian nuclear materials, thoughstrengthened substantia lly during the last 2years, may still be inadequate to prevent theft by

heavily armed groups with adequate resourcesand motivation comparable to the Brinks gang,NRC is presently studying new regulatoryactions which involve “the principle of contain-merit, ” in t h a t a l l p o t e n t i a l l y e x p l o s i v efissionable material will be handled in areascircumscribed by well-defined barriers. Alimited number of channels for the flow of m a t e r i a l s t h r o u g h t h e b a r r i e r s a n d o t h e r

channels would be continuously monitored.Some of the new safeguard measures under

consideration are:

Collocation of fuel reprocessing and fuelfabrication plants.

Dilution of the separated plutonium byuranium at the output stages of reprocessingplants. To produce explosive fissile materialchemical separation would then be required,and the weight of the material which must bestolen would be increased by a factor of about100,

“Spiking” of the plutonium with dangerousradioactive materia ls. Massive shieldingwould be required for all subsequent hand-ling.

Limited “sp ik ing” of the p lu tonium withradioactive materials to make detectioneasier by monitoring systems.

Use of specially designed vehicles or heavycontainers for shipment.

Establishment of a Federal protective serviceto safeguard nuclear materials in transit,

It is estimated that the cost of implementingthese extra safeguards, although high, wouldincrease the cost of the nuclear electric power byno more than 15 percent,

CHAPTER Ill 111



12. Siting

Nuclear Regulatory Commission policyreactor and

supportingsystem design.

changes for siting could influence

SUMMARY

The Energy Reorganization Act (ERA) of 1974 calls for the Nuclear RegulatoryCommission (NRC) to report to the Congress on the clustering of nuclear reactorsand supporting facil i t ies in “nuclear parks. ” Nuclear parks offer severaladvantages: easier safeguarding of fissionable material, lower unit constructioncost, probably increased safety, and less disruptive construction (since the workforce is stable), Disadvantages include higher vulnerability in the event of war,creation of heat islands, and increased expense of transmitting power from theremote site. If nuclear park siting becomes a general practice, certain technical

problems would require more serious study and resolution: electrical transmissionof extremely large blocks of power; the simplification of transport systemsbetween reactor and chemical plant; the incorporation of interim waste disposalfacilities on the nuclear park site; and the design of different reactor systems thatare better suited to park siting, Though siting policy and the possibility of nuclearparks is largely the responsibility of NRC, the matter is so vital to the entire futureof the nuclear energy enterprises that ERDA should be strongly involved in thedevelopment of the concept from the beginning.

QUESTIONS

1 . If nuclear parks siting is required, how would 2. Is ERDA planning to examine the social andthis 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 theUnited States during World War II, nuclearreactors and their chemical plants were confinedmainly to nuclear parks: Hanford, Wash,; Savan-nah River, S, C,; Oak Ridge, Term,; and IdahoFalls, Idaho, In the ensuing 30 years, this originalpractice has been replaced by scatter-siting, Thereactor has not been viewed as part of a system,

but as a replacement for the boiler in a conven-tional steam plant.

With increasing popular concern about nuclearenergy, the idea of nuclear park sit ing hasreceived increasing attention as a means of answering some of the objections to nuclearenergy. The feasibility of nuclear parks is nowbeing studied under the auspices of NRC, and it is

1 1 2 CHAPTER Ill



not clear what role ERDA ought to playclarification of the problem. There are

n the cooperate to support such large enterprises; thesome g ener at ion o f e l e c tr i c i t y w ou l d t e n d t o b e

react or configurations— MSBR, the coupled separate from its distribution; and land useHTGR-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 ininstitutional 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 tothe rate of expansion of uranium production capability make resource-relatedissues difficult to address.

SUMMARY

Since the adequacy of the domestic uranium resource base has an importantbearing on ERDA’s and utilities’ nuclear strategy, and especially on the timetablefor breeder reactor development, a much more precise evaluation is needed then ispresently available or anticipated. To keep pace with the Nation’s energy needs asprojected by ERDA, substantial expansion of domestic uranium production overthe next 25 years will be required. This entails long leadtimes, major capitalexpenditures, and in the relatively near term, large exploration effort and ore-bodydevelopment. The long time, perhaps 10 years, required for the development of anew mine-mill complex, together with the existence of competing investmentopportunities, may require the creation of a relatively low-risk investment climatethrough loan guarantees, accelerated depreciation regulations, and assureduranium markets. Market prices have increased dramatically during the 1973-75period from $7 per pound of U 3O 8 to about $30, and there is no reason to expect anearly end to the seller’s market,

QUESTIONS

1. Is the National Uranium Resource Evalua-tion (NURE) adequately funded to meet then e e d fo r th e id e n t i f i c a t io n o f a s su re dreserves for the next 30 years?

2, What is ERDA’s program for obtaininguranium resource information for its database which is held in the private sector?

3. What incentives are needed, if any, tostimulate substantially greater exploration

and development of mining and mill ingoperations 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 theparticipation of foreign interests in domesticresource development.

CHAPTER Ill 113



BACKGROUND

The adequacy of the domestic resource basehas an important bearing on ERDA R, D&Dstrategy—in particular, the timetable for breederreactor development and application. Also,uti l i ty perception of the resource base maycondition the pace of utility commitments to

nuclear power in the prebreeder era, As mattersnow stand, information needed for a definitiveassessment of the domestic resource base islacking, and expert opinion on the question of itsextent is divided. ERDA’s NURE program,initiated in 1973 and targeted to be completed by1980, represents the first attempt to develop acomprehensive analysis of domestic uraniumresources and hopefully will bring the questionof adequacy into c learer focus. Work beingcarried out by the U.S. Geological Survey(USGS) will contribute additional insights, butis by no means clear that the sum of the ERDA,

NURE, and USGS activities can or will provideall of the answers needed.To keep pace with ERDA requirements projec-

tions, the domestic uranium production industrywill have to expand at a very substantial rate, Forexample, ERDA’s so-called “medium low” projec-tion defines the growth in annual requirementsas follows:

Year Tons of U3O

8

1975 . . . . . . . . . . . . . 10,0001980 . . . . . . . . . . . . . 19 ,000

1985 . . . . . . . . . . . . . 37 ,000

1990 . . . . . . . . . . . . . 6 1 , 0 0 0

These figures assume recycle of uranium and plutonium,starting in the late 1970’s. Requirements would be about 25percent higher than indicated here without recycle.

In 1974, the domestic industry produced 13,000tons of U3O 8. It is estimated that a 25,00()-ton peryear production level could be realized if thedomestic industry w e r e t o p r o c e e d w i t hmine/mill ventures to exploit ore bodies alreadylargely developed. Significant expansion beyondthat level hinges on the results of explorationeffort and ore-body development in the yearsimmediately ahead, The leadtimes entailed are

appreciable, and the capital requirements aresubstantial.

An appreciable part of the upward pricemovement of uranium since 1973 is a necessaryand long overdue adjustment from an artificialuranium price economy to one that provides areasonable incentive for supply industry expan-sion. At the same time, some portion doubtless

reflects the existence, since mid-1973, of a strongsellers’ market atmosphere, in which the quan-tities of low-cost reserves which suppliers haveplaced on the market are limited in relation to thequantities utilities would like to purchase.

During the interval to the end of the century,the typically projected annual ore productionrequirements will increase by a factor of roughly10, which is more than twice as fast as the mostrapid growth phases of other significantly largemining industries (such as copper) in the UnitedStates. The general resource shortages in the nextfew 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 a lso potentia llysignificant in affecting whether adequate fuelsu p p l i e s w i l l b e a v a i l a b le , a n d th e y me r i tattention in any coordinated national energystrategy:

The recent occurrence of increased delaysand costs in exploration and developmentactivities because of new State and Federalenvironmental protection requirements[such as the NEPA statement).

The need for improved geological models andexploration equipment (such as more sen-sitive, lightweight, airborne gamma-detectors).

The abandonment of mines depleted of currently economical ore.

The increased ore requirements which will beimposed if the ERDA-announced plan toincrease the tails assay of the U.S. enrich-ment plants is implemented, if Pu-recycle is

indefinitely delayed, or if the HTGR is noteventually commercially successful,

1 1 4 CHAPTER Ill



14. Uranium Enrichment

ISSUE

Expansion of uranium enrichment capacity is required to meet domesticrequirements

Enriched

and foreign commitments for LWR

SUMMARY

and HTGR fuel.

uranium fuel is needed in light-water reactors (LWR) and hightemperature gas-cooled reactors (HTGR). The existing ERDA diffusion plants are

.

being upgraded and expanded, but their capacity will be exceeded within a decadeif presently contemplated nuclear powerplant construction occurs. ERDA policycalls for development of new production facilities by the private sector, but thefinancial 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 newtechnology, such as the gas ultra-centrifuge or laser separation, might render a new

diffusion plant obsolete. A related management question concerns the proposal toallow the U-235 content of the enrichment plant by-products material (“tails”) toincrease, thereby producing increased enriched uranium output at the expense of greater natural uranium input.

QUESTIONS

1. What financial and technical arrangements 3 . Wh a t a re th e imp l ic a t io n s fo r n u c le a rare required to bring a private enrichment weapons proliferation in the advancedplant on line at an early date? enrichment technologies?

2. How and when will ERDA make its cen-

trifuge a n d la s e r i s o to p e se p ar a t io ntechnology available to industry, and whateffect will this have on the development of acentrifuge enrichment industry?

BACKGROUND

Before the mid-1980’s, ERDA will have upgrad-ed U.S. enrichment capacity to support thegeneration of approximately 320,000 megawattsof electricity (MWe) if other fuel-cycle factorsdevelop favorably. This capacity has alreadybeen unconditionally committed (208,000 MWedomestic and 107,000 foreign), and there areconditional foreign contracts already in handthat could increase the load by another 14,000MWe. There is a c lear need, therefore , foradditional enrichment capacity to be completed

by 1985, and perhaps earlier if other fuel-cyclefactors develop less favorably than presentlyant ici pat ed. T he se f ac to rs i nc lu de d el ay edp lu to n iu m re c y c le , lo we r U 3O 8 p r o d u c t i o ncapability and higher LWR capacity factors.Enrichment capacity can be easily expanded byincreasing the tails assay. This means that agiven batch of uranium is not wrung out as hardas possible, but is replaced by new richer feedsooner.

The proposed change of enrichment tails from

CHAPTER III 115



0 .2 to 0 .3 percent U-235 would increase theexisting enrichment capacity by 20 percent. Thedrawback is that the incoming feed of uraniummust be increased by a similar factor, Theenrichment cost would decrease, while theincreased feed requirement would stimulateincreased exploration and ore production. Op-ponents of this proposal argue that it representsfalse economy, in that it effectively reduces the

long-term uranium supply for the LWR andHTGR, and that uranium production capacityalready will be strained in the period whenenrichment capacity will become critical.

The need to begin construction of a newenrichment plant is urgent, since constructiontime is estimated (by the National PetroleumCouncil) at 9 years for private construction, 6 to 7years for the Government. Financial backing foran additional diffusion plant has so far beenunavailable to industry because of severalfactors: high cost, about $3,5 billion for a $9-million separative work unit per year plant; the

p r e s e n t l y l o w p r i c i n g b y e x i s t i n g E R D Afacilities; and the threat of early obsolescenceinduced by the gas ultra-centrifuge and laserisotope separation. P o ss ib le Go v e rn me n tassurances to induce industrial participation areguaranteed price for the product, guaranteedconstruction loans, and a change in pricing policy

for enriched uranium from existing plants.Of the new technologies, laser isotope separa-

tion is a promising concept but not yet even at thepilot-plant stage and there is no assurance of increases. Both this and the centrifuge processpromise such substantial reductions in costs, aswell as in the minimum scale for economicaloperation, that they represent a potential inter-national threat through the clandestine produc-

tion of nuclear weapons materia ls, As withgaseous diffusions, much of the informationrelated to both processes is classified.

Gas centrifuge technology is well advanced,but a large-scale commercial plant has not yetbeen constructed. A major advantage to thisprocess is its substantially lower electric powerconsumption, about 10 percent of that by acomparable diffusion plant. A Western Europeanconsortium has developed the process, andplants have been built in the Netherlands and theUnited Kingdom, Although classified, thistechnology is presumably available to the United

States under bilateral agreements. In addition,the United States has a classified centrifugeprogram which is generally believed to besuperior to the European technology and may beat the stage to support production plant construc-t ion.

1 1 6 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, Thedischarged fuel can be reprocessed to recover the usable fuel material, which canthen be recycled through a reactor, There are four basic reasons for recycling thefuel: (a) the recycled fuel reduces the demand for new uranium that would have tobe mined and refined; (b) recycling, desirable for LWR’s, is an economic necessityfor HTGR’s, LMFBR’s, and other advanced reactor designs; (c) lower power-generating 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, arefabrication, and a radioactive waste disposal industry must be constructed andoperated. Second, safeguards and transportation must be developed to protect thematerial adequately. Third, the economic advantage of recycling in LWR’s is smallat best although the spend fuel still contains material that can produce a largeamount of energy.

The central point is whether ERDA’s budget is adequate to develop thenecessary recycling capability or whether adequate incentives can be provided toindustry to provide this capacity,

QUESTIONS

1 . Wh a t a re th e imp l ic a t io n s fo r r e so u rc e 2. What safeguards programs will ERDA sup-e co no mi cs an d s af eg ua rd s i f r ec yc le is p or t fo r re pr oc es si ng p la nt s, p lu to ni umfurther delayed? shipment, and mixed-oxide fuel fabrication?

BACKGROUND

During the last decade, major emphasis in thenuclear field has been in reactor development andin the “front-end” of the fuel cycle. This emphasis

was necessary to transform raw uranium ore intofuel that could be used in the reactors. The “back-end, ” consisting of reprocessing, refabrication,and radioactive waste disposal, was not stressed;the AEC may have felt that these operationsshould be developed by private industry or thatthere was no urgency involved.

The arguments for recycling center on theconservation of uranium resources, the an-ticipated economic savings, radioactive waste

handling, and the economic necessity for recy-cling in HTGR’s, LMFBR’s, and other advancedreactor designs, The lifetime 1,000 MWe LWRrequirement for yellowcake (U3O 8) is 5,400 shorttons with no recycling, or 3,800 short tons withrecycling. This results in a uranium savings of 30percent over the reactor lifetime, For reactors

CHAPTER III 117

6 0 - 4 1 1 0 - 7 5 - 9



other than LWR’s, the economic savings aresubstantial; even for the LWR, recycling fuel isexpected to offer an economic advantage. Arecycle industry will definitely be needed in thefuture if a reactor concept other than the LWR isdeployed, since the economic advantage of theseadvanced reactors hinges on the ability to recyclefuel.

Three companies—Nuclear Fuel Services,Allied-Gulf Nuclear Services, and GeneralElectric—entered the reprocessing business, butpresently no plant is operating, even though allthree companies have contracts for reprocessingspent nuclear fuel in the 1970’ s . General Electricpractically completed their plant a t Morris,Illinois, but found that certain advanced designfeatures limited the throughput to noneconomiclevels; they are now evaluating possible coursesof action and hope to make a decision by the endof 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 toupgrade its radioactivity control systems and t o

consider designs to increase throughput, Anapplication for a construction permit to carry outthis expansion has been submitted, and the plant

could be operational in the 1980’s if the licensingprocess is continued. The Allied-Gulf NuclearServices plant, which is 95 percent complete inits basic structures, is now awaiting its operatinglicense. S imi la r ly , l a rg e - sc a le c o mme rc ia lrefabrication plants are not operating, althoughseveral private pilot plants are in operation.

B e c a u s e o f s u b s t a n t i a l c o s t increases

associated with newly implemented regulations,high construction cost escalation, and riskallowances to cover future uncertainties, therecycle of LWR fuel has lost much of its economicattractiveness. However, spiraling costs for rawuranium and for enrichment may change theeconomic picture.

ERDA, in a report (ERDA-33) on the problemsof the fuel cycle, reviews this situation. They areconcerned that a number of key process steps inthe reprocessing plants are still undemonstrated,such as conversion of plutonium nitrate to solidform accept able f o r s h i p me n t , i n c r ea s e d

safeguards, waste solidification and packagingfor shipment to storage/disposal facilities, andt h e r e m o v a l a n d p a c k a g i n g o f c e r t a i nradionuclides from process streams to meet siteeffluent limits,

1 1 8 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 towardbetter public information programs. Within the past several years, public anxiety,confusion, and doubts have increased, and the energy problem is widely perceivedas a “contrived situation. ” More effort must be directed toward better understand-ing of energy options so that well-informed energy decisions can be made by thepublic. One of ERDA’s tasks is to create and encourage “. . . the development of general information to the public on all energy conservation technologies andenergy 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 Govern-understanding of energy options? ment as compared to the development, and

how will the agencies involved coordinatetheir roles?

BACKGROUND

There is great uncertainty among the publicabout the energy options that are being selected,but little effort seems to be directed toward thedevelopment and dissemination of informationon energy issues. The nuclear field is poorlyunderstood, even by otherwise well-educatedpeople, and nuclear technology is widely mis-trusted among the public. The task of providing

adequate information for informed choices isformidable.

Another source of public concern may be theoutgrowth of mili tary needs. Although thenuclear industry has matured and has largelydivorced i tse lf from its mili tary origin, the

problem of safeguarding fissionable material top re ve nt i l li c it we ap o ns p ro du c tio n retainsmilitary implications. This subject is treated inmore detail in Issue Paper 11 on “Safeguards. ”

In addition, past practices of the AEC may bepartially responsible for public mistrust. Theformer agency tended to be secretive and did notalways respond fully to public requests for

information. Reports and internal memorandawere suppressed, and the Commission’s dual roleof promoter and regulator resulted in criticism of the agency’s objectivity. Understandably, thepublic is suspicious when a topic is surroundedby secrecy. A more basic problem is that the very

CHAPTER Ill 119



technical, complex nature of nuclear science andte c h n o lo g y p ro h ib i t s e a sy e x p la n a t io n s toseemingly simple questions.

Although most people who are knowledgeablein the nuclear field favor the continued develop-ment of commercial reactors and believe thatboth reactor safety and nuclear safeguardsquestions are resolvable, there are some expertswho disagree and who advocate a slowdown or

cessation of reactor procurement. The controver-

sy is complicated by the fact that most pro-nuclear experts, of necessity, are employed in theindustry, by ERDA, or in university programspartially dependent on ERDA. As a result of thelack of scientific consensus, the concernedla y ma n ma y b e a t a lo ss fo r a n in fo rme d

judgment. The advantages and problems of nuclear power compared to other options must bethoroughly aired for the public to make rational

choices,

1 2 0 CHAPTER Ill



17. Controlled Fusion

ISSUE

1.

2 .

3 .

Great care must be exercised to ensure that the ERDA-controlled fusionprogram 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 newconcepts is not prematurely abandoned.

SUMMARY

The advantages of successful fusion power are great; fusion research needsshould receive high priority, but success is not yet assured by any future date. Forexample, it appears necessary to scale present experiments up to larger machinesin order to maintain an effective program. While these next generation devices arebeing conservatively designed, they are still experimental. In addition, eventhough the science may scale to larger sizes, technological, engineering andeconomic 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 orcomplete path to fusion power now exists for any fusion concept, and since fusionis one of the few major long-term energy options, no fusion scheme shouldpresently be abandoned unless it can be shown fairly convincingly to beunproductive. Second, in order to establish proper priorities in the face of thisuncertainty, a more or less continual assessment of fusion concepts and prospectsmust be maintained; otherwise the program may evolve into either uncriticalsupport of unfeasible concepts or unwarranted and premature concentration on asingle concept.

QUESTIONS

What program does ERDA have to assessprospects for fusion and to readjust theprogram priorities?

What are ERDA’s present views about theprospects for successful fusion via tokamak,magnetic mirrors, theta pinches?

Will ERDA be prepared in due course torequest funding for “test reactors” for morethan the one promising concept, or does itplan to weed the prospects down to only onebefore that time?

4 ,

5 .

6 .

What is the present support for tokamak,mirror and theta pinches, laser fusion, andless-advertised schemes?

In the light of our past experience in building“big-machine” facilities, are the schedulesrealistic?

In view of the lack of assurance as tolaboratory success, how does ERDA ratefusion as an option to either the breeder orsolar energy’?

BACKGROUND

Wit hint he next century controlled fusion could manageable impact on the environment, but theprovide the world with an abundant, essentially scientific demonstration that controlled fusioninexhaustible s u p p l y o f energy with a can provide an economical source of power is

CHAPTER Ill 1 2 1



expected to require a series of large and costlydevices.

The successful development of commercialelectric power by controlled fusion requires thesolution of extremely difficult scientific andengineering problems. In the magnetic confine-ment concept, the principal scientific problemsconcern confining and heating a deuterium and

tritium plasma to reach conditions of net energyrelease, There are several potential difficultieswhich may limit the ability to achieve a stableconfiguration of the plasma and to effectivelysupply energy to bring the plasma to ther-monuclear temperatures. M a n y o f t h e s eproblems have been identified on the presentgeneration of experimental devices,

Among the magnetic systems which have beenstudied experimentally over the past 2 decades,t h e t o k a m a k c o n c e p t h a s b e e n t h e m o s tsuccessful, Because of this, the ERDA fusion planis based primarily on rapidly developing this

approach. The program calls for scaling up thetokamak device in a series of progressively largermachines leading to the construction of anexperimental device which can demonstrate thatsignificant energy can be produced by controlled

fusion. The latter device, the Tokamak FusionTest Reactor (TFTR), is projected to cost $215million.

Although tokamaks have not displayed anyb e h a v i o r w h i c h w o u l d d e f i n i t e ly p r e c l u d esuccessful fusion power reactors, there is stilluncertainty as to whether these devices can besc a le d u p to th e r e q u i re d s i z e a n d p o we r

generation conditions. There is considerablefeeling, h o we v e r , th a t l a rg e r ma c h in e s a reconsidered in light of the need to keep severaloptions open for development of controlledfusion. The major difficulties will arise whendeciding how to proceed beyond the TFTR stage,to the Experimental Power Reactor (EPR) phase.The ERDA fusion plan is pursuing two otherlower priority magnetic confinement schemesbesides the tokamak, and it is not reasonable toassume that a separate EPR could or should befinanced for all three. This is to say nothing, of course, of other concepts which may develop as aresult of unforeseen breakthroughs. Therefore,ERDA must take extreme care in the coming fewyears to ensure that they have not abandonedother paths to controlled fusion prior to acomplete evaluation of their potential.

1 2 2 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 rapidlyincreasing 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 neutronbombardment from the fusion reaction.

(b) Economical storage of large amounts of electrical energy to operate pulsedfusion devices.

(c) Very large superconducting magnetic systems needed for all but laser fusionschemes.

(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 materia lsto affect the range of fusion concepts that can compare with previous programs, such asbe developed? fission reactor development and rocket

propulsion?

BACKGROUND

Present m a te r ia l s w i th h i g h- t em p er a tu r estrength need to be perhaps 10 times as resistantto radiation damage by high-energy neutrons foruse in a fusion reactor. Experience shows thatnew exotic materials require many years to bringto the application stage, even when substantialdevelopment funds and intellectual effort areapplied; 10 to 20 years is not uncommon. The long

time is required not only because the basicmetallurgical research depends on new ideas, butbecause tests may require several years undersimulated operating conditions. Fission reactortechnology will not provide much support ,because fusion requirements are more severe.

The energy storage devices are large by

electrical standards (10 to 100 megajoules), butsmall by chemical standards (1/2 to 5 pounds of gasoline). However, the output is requiredrapidly in electric form, so conventional storageschemes do not suffice: capacitors are tooexpensive except in a few critical applications;superconducting magnetic energy storage isuntried, and means of coupling out the energy are

p re se nt ly u ns at is fa ct or y; a n d ro ta t in gmachinery is generally slow. This energy storageproblem may limit the options for fusion, and thelimits are uncertain.

T h e p r o b l e m o f l a r g e s u p e r c o n d u c t i n gmagnetic systems can be well illustrated byconsidering a conceptual design for a large

CHAPTER III 1 2 3



tokamak reactor. It may have a magnetic field of 1 0 0 , 0 0 0 gauss (10 tesla), in a doughnut-shapeddevice whose outer diameter will be at least 15meters. This is like a subway tunnel made into atight loop; the force from the magnetic field isabout 6 , 000 pounds per square inch, 3 times thatin present pressurized water reactor pressurevessels. Furthermore, this huge doughnut has

inlet and outlet pipes which also give magneticperturbations that increase the local stress. Allth i s s t r e s s mu s t b e c a r r i e d b y re in fo rc in gm a t e r i a l a t superconducting temperatures(perhaps 4 degrees above absolute zero) wheremost materials are brittle, not ductile. Practicalstructures in this size and magnetic field rangewill require years to develop, and the cost cannotyet be estimated.

Tritium, and deuterium and lithium are the

fusion fuels for the first generation of reactors.The tritium must all be generated by interactionof high energy (14 MeV) neutrons in a surround-ing breeding blanket of lithium, which would beabout 1 meter thick. For each fusion reaction, onehopes to generate about 1.25 new tritium atoms (afusion 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 reactper pass, while the rest escapes via an “exhaust”(yet to be realistically designed for any fusionconcept) where it must be captured and returnedto fuel storage with virtually no loss.

A major difficulty is that tritium is a hydrogenisotope, and like ordinary hydrogen diffuses veryreadily into and through materials, gets trappedin the metallurgical structure (grain boundaries),and is difficult to recover.

124 CHAPTER Ill



Chapter IV

Solar, Geothermal,and Advanced TechnologiesTask Group Analysis

1 2 5



A. SOLAR, GEOTHERMAL, AND

ADVANCED SYSTEMS TASK GROUP

MEMBERS

Dr. Jerry Grey, Chairman, Independent Con-sultant

Mr. Sheldon H. Butt, Solar Energy IndustriesAssociation

Prof. James B. Combs, University of Texas atDallas

Dr. John C. Fisher, General Electric

Mr. Albert J. Fritsch, Center for Science in thePublic 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 Foun-dation

Mr. Arthur D. Watt, Watt Engineering, Ltd.

CONTRIBUTORS

Prof. Karl Bergey, University of Oklahoma

Prof. Richard Deller, University of Texas atAustin

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 ProgramPriorities . . . . . . . . . . . . . . . . . . . . ..133

Decision-point criteria defining measures forevaluat ing success within a given solarenergy program, choices among programs,and readiness for commercialization need tobe estaiblished, quantified, and justified.

Rationale for Funding of High-Risk Projects . . . . . . . . . . . . . . . . . . . . .. .135

It is important that effective mechanisms bedeveloped by which ERDA can make rationaldecisions on solar energy projects havinggreat potential as future energy sources, butinvo l ing l a rge cos t ou t l ays , and be ingsubject to major uncertainties in projectedcosts and/ or technologies.

Resource Availabili ty . . . . . . . . . .137

The ERDA Plan lacks adequate emphasis onthe role that cr i t ical resources play in

selecting energy alternatives.

Organization of ERDA’s ResearchProgram . . . . . . . . . . . . . . . . . . . . .. .139

A major concern with ERDA’s research effortis that the management distinction betweenbasic and supporting research formerly usedin the AEC continues to polarize the sciencesfrom engineering.

ERDA Program Management .. .141

The use of outside organizations and Federallaboratories b y ERDA for some of itsprogram management functions, particularlyin the solar area, could produce an ineffectiveorganization.

6.

7.

Support for Study of DecentralizedSolar Electrical Generation .. ...143

The study of the decentralized production of Electricity has received 1imited attention,especia11y as it involves the potentia1 utiliza-tion of waste heat.

Emphasis on Electric EnergySystems . . . . . . . . . . . . . . . . . . . . .. .144

The program goals of the ERDA Plan appearto emphasize development of electric powersystems to the point where the fu1l potentia1of solar heating is not recognized and thepossibility of obtaining synthetic fuels fromsolar energy is 1argely ignored,

8. Em p h a si s on Sol ar H eat i ng an dCooling of Buildings . . . . . . . . . . .146

The importance of solar heating and coolingrelative to other programs is not recognizedin the ERDA Plan.

9. Purposes of the Solar Heating andlCooing Demonstration program 148

The size, scope, and purposes of the solarheating and cooling demonstration programneed specific definition.

10. Role of User Incentives in SolarHeating and Cooling of Buildings . . . . . . . . . . . . . . . . . . . 150

A well-structured user incentive programwould accelerate the so l a r hea t ing andcooling o f b u i l d i n g s ( S H A C O B ) a n daccelerate dcvelopment of the infrastructureto support large-scale applications.

CHAPTER IV 12 7



11.

12.

13.

14.

Standards for the Measurement of Solar Heating and Cooling Equip-m e n t P e r f o r m a n c e . ............152

For consumer protection, standards areneeded to provide comparative performanceratings, to allow comparison of durabilitity,and assure proper installation of solar equip-ment.

Impact of Solar Energy on UtilityP e a k D e m a n d . . . . . . . . . . . . . . . . . . 1 5 4

On si t e so la r e n e rg y so u rc e s (mo s t im-mediately solar heating and cooling), unlcssdeveloped properly, will cause a significantutility peak demand problem,

Biomass Energy and Food .. ....155

Biomass energy generation may conflict withfood production.

Legal and Institutional Constraints inGeo the rmal Energy . . . . . . . . . . . . 157

Geothermal energy irnplementation is not somuch constrained by technology as by legaland institutional restraints.

1 5 .

1 6 .

17 .

E n v i r o n m e n t a l C o n s t r a i n t s o nGeothermal EnergyD e v e l o p m e n t . . . . . . . . . . . . . . . . . . 1 5 9

Environmental problems, which have beeninadequately stressed by ERDA, can plaiceconstraints on thc potential development of g e o t h e r m a l r e s o u r c e s .

NonelectricEnergy and

U s e s o f Geothermal

GeothermalGoals . .161

The ability to approach ERDA’s presentlyunrea1istic 1985 goal for geothermal utiliza -tion will require a substantial increase inemphasis on nonelectric use.

Variability y

Reservoirs

of Geothermal

. . . . . . . . . . . . . . . . . . . . . 163E a c h g e o th e rma l r e se rv o i r h a s i t s o wnunique character st ies, which affect thercsearch strategy and demonstration portionof the ERDA program.

128 CHAPTER IV



.

The review of ERDA’s Plan for solar and

geothermal technology is an attempt to examinethe plan with as balanced a view as possible, inorder to identify and summarize for the Congressthose areas of the plan in which Congressionalinterest might be both appropriate and useful inthe national interest. These areas are discussedin a series of issues, some of which cut across allaspects of geothermal, solar, and others whichpertain to a specific technology.

T h e re i s u n a n imo u s a p p re c ia t io n o f th eproblems and difficulties faced by ERDA inpreparing 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 isgenerally well done. There are important short-comings, however, and it is hoped that the issuesraised in this report will help the Congress andERDA to refine the plan more effectively.

1. General Issues

In establishing a program that involves choicesamong several technologies of varying degrees of cost uncertainty, careful attention must be paidto the decision process to ensure not only that the

m o s t p r o m i s i n g t e c h n o l o g i e s a r e r a p i d l ydeveloped and commercialized, but also thatmarg in al o r h igh - r isk t ec h no log ies a re n o tprematurely pushed into engineering develop-ment and demonstration phases (Issue Papers 1and 2). Without these decision criteria much time,effort, and money can be wasted on unproductiveprojects.

A lack of adequate emphasis on resourceas ses sment c a n l e a d t o d ev e l o p me n t of technologies which are counterproductive in thattheir use of other valuable resources (such aswater, land, and materials) is excessive com-

pared to the energy produced. The question of available manpower must also be considered inany resource assessment because of its potentialfor limiting program development (Issue Paper3).

A final set of general issues deal with ERDAorganization and program emphasis. If ERDA

C. INTRODUCTION

staffing is adequate, program management and

assessment can be carried out centrally. Thise l imin a te s p ro b le ms b ro u g h t a b o u t b y th emultilayered management which occurs whenout side o rg a n iz a t io n s and/ or F eder allaboratories are extensively used (Issue Paper 5).The separation between science, engineering,and marketing research which appears in theERDA structure can reduce efficient flow frombasic research to commercial application, This iscritical when the nontechnical aspects of energyR, D&D are considered, but even more so for thedevelopment of high-risk technologies (IssuePaper 4), With regard to program emphasis, there

is concern that ERDA has given inadequateattention to decentralized solar electric genera-tion systems, Their ability to take advantage of the distributed nature of solar energy and toutilize waste heat is reason for giving them highpr io r i ty ( Issue Paper 6) . F inal ly , a h e a v yemphasis on development of e lectric energysystems fails to address important possibilitiesfor synthetic-fuel production and could precludewidespread direct use of solar and geothermalheat which may be more efficient both technical-ly and economically (Issue Paper 7),

2. Solar Electric

Solar-generated electric energy is consideredas one principal option for an inexhaustibleenergy source in the long term, Although notechnical barriers exist which could precludedevelopment of solar-generated electricity, theuncertain costs of these plants necessitate acareful development program if they are to beeconomically competitive. It appears that a c -

curate full scale estimates, necessary for in-telligent national energy planning, may only

follow full scale prototype testing, regardless of whether these plants are themselves cost effec-tive.

The large cost uncertainties of different solarelectric concepts (ocean thermal energy conver-sion, solar satellite, solar thermal) necessitatedevelopment of precise decision criteria for

.

CHAPTER IV 1 2 9



.

alternative energy technologies (Issue Papers 1and 2). Consideration of resource availability iscritical due to the extensive use of land and, insome cases, water by solar e lectric systems(Issue Paper 3), Finally, the emphasis placed byERDA on developing electric systems of all types,affects the priority placed on solar electric. If thisemphasis is reconsidered, it could affect the rate

at which solar electric is pursued (Issue Paper 7),T h e re sh o u ld b e a r e a sse ssme n t o f th eprograms which call for pursuing four parallelefforts on a single concept—the central tower,Concern is also express that the ERDA approachto solar total energy systems may be too narrowin that photovoltaic systems were not included.Finally, there is the need to ensure that a fullrange of photovolta ic cell candidates is in-vestigated (Commentary),

3. Solar Heating and Cooling

of Buildings

Approximately 25 percent of the total energyused in the United States is for domestic waterheating (4 percent) and for heating and cooling of buildings (2 I percent). In addition, approximate-ly 2 9 percent of our total energy is used forindustrial process steam and direct heat, Thus, inexcess of 50 percent of total energy demand is thedirect use of thermal energy. Solar energy is bests u i t e d t o m a n y o f t h e s e d i r e c t t h e r m a lapplications and it is in these areas that it canhave its most immediate impact on our energy

economy and can contribute substantially as along-term, inexhaustible energy source,

The technology and economics for solar waterand space heating are available now. Greaternear-term emphasis should be placed in this area,relative to solar electric, along with accelerationof the Solar Heating and Cooling of Buildings(SHACOB) demonstration program. This isproposed as a more effective way to develop solarenergy (Issue Papers 8 and 9). User and manufac-turer incentives, as well as the educational andmarket development v a lu e o f a n e f fe c t iv edemonstration program are necessary for effec-

tively introducing solar heating and cooling intothe economy (Issue Paper 10). Furthermore, top ro te c t th e c o n su me r a n d ma in ta in a h ig hindustry standard, it will be highly desirable torequire manufacturers of solar equipment toprovide valid performance information on theirproducts (Issue Paper 11]. Although many of the

legal and institutional issues will be resolvedeasily as the technology advances, some, such asguaranteeing access to sunlight, require atten-tion now. Finally, as the solar energy industrydevelops, plans should be made to minimize theimpact on-utility peak demand

4. Biomass

Synthetic fuel from biomass

(Issue Paper 12).

is considered byERDA as a lower priority technology which couldcontribute in the long term, The uncertainty as tothe economic and technological requirements forlarge-scale b i o c o n v e r s i o n s y s t e m s m a k e sp re ma tu re a n y d e f in i t e e s t ima te a s to th eeventual contribution of biomass to the energysystem, but support of genetic studies for thedevelopment of better energy crops is warranted.The potential conflict with food requirements forarable land is probably the most severe limita-tion on large-scale fuel production from biomass,Unless strategies can be developed to resolveboth the perception and the fact of this competi-t ion, biomass energy will necessarily havelimited impact (Issue Paper 13), Use of organicwastes, both urban and agricultural , offersanother potential source of synthetic fuels fromthe bioconversion process, It is not clear to whatextent ERDA has considered this, Finally, acareful assessment of the land availability andnet energy gain per acre for marine biomass areneeded for a sound decision on how to proceedwith this technology (see Commentary, pages165-167).

5. Geothermal

Geothermal energy is derived from the abun-dant thermal energy of the earth’s core andusually is available for use as hot water or steam.“There is a substantial, but limited, number of individual geothermal reservoirs i n w h i c hrecovery of geothermal energy is deemed prac-tical,” D ep en di ng on t h e t e mp er a tu r e a ndcharacterist ics of the reservoir , geothermalfluids can be used for e lectric generation,

industrial process heat, space heating, and airconditioning. Geothermal energy has a large mid-to long-term potentia l to contribute to theNation’s energy supply.

The main impediments to rapid utilization of geothermal resources are the legal and in-stitutional constraints which could effectively

1 3 0 CHAPTER IV



prevent utilization of this resource (Issue Paper14). The resolution of these legal and in-stitutional problems is critical to the success of any geothermal energy development programs.Other potentially severe impediments relate toenvironmental considerations. D isp o sa l o f geothermal pollutants and a vo id anc e of geological disturbances need to be given greater

emphasis to ensure acceptable development of geothermal energy (Issue Paper 15).An e s t ima te o f th e e x a c t r a t e a t wh ic h

geothermal energy sources will be developed isdifficult to make and perhaps the ERDA near-term predictions are optimistic. Even thoughgeothermal resources have the potential to meetthe ERDA goals, they will probably not beachieved as soon as predicted unless there is asubstantial increase in emphasis on nonelectric

use. Since a major portion of the geothermalresources is low temperature, the most importantuse of geothermal energy in the United Statesmay be for nonelectric uses as is presently thecase throughout the world. The ERDA Plan maynot assign enough significance to the develop-ment of the nonelectric uses of geothermal energy(Issue Paper 16). Each geothermal reservoir is

unique in its characteristics, and, if the maximumamount of energy is to be extracted from anyreservoir, the applications and the equipmenttechnology must be optimum and must match thecharacteristics of the reservoir, Thus, the equip-ment and power conversion research strategywill have to be designed for a wide variety of possible utilization systems in order to minimizeresource waste (Issue Paper 17).

CHAPTER IV 1 3 1



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 givensolar energy program, choices among programs, and readiness for commercializa-tion need to be established, quantified, and justified.

SUMMARY

The ERDA Plan does not treat the important question of how decisions will bemade between solar energy technologies, and between solar and other energyoptions. Criteria are necessary to evaluate, for each program: (1) the projectedrewards upon success, (2) the total costs to the public and private sectors, (3) therelative risks of economic or technical failure, and (4) the potential and projectedreadiness for commercialization. The decision-point criteria, to be applied atregular 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 continuouslyevaluated and revised in the light of changing conditions during the course of theprogram.

QUESTIONS

1. What specific goals will be set (and when]against which to measure your solar andgeothermal programs; that is, how will ERDAdefine success?

2. In the ERDA estimates of the penetration of solar and geothermal technologies into use bythe private sector, what costs and costrelationships were assumed for capita l ,i n te r es t r a te , d i sc ou n t ra t e, f u el , a ndoperations and maintenance for the solar andgeothermal systems and the conventionalsystems that they are to replace?

3.

4.

How does ERDA make evaluations of variousenergy technologies which may have tocompete for limited developmental funds,such as solar electric and fusion?

Has ERDA conducted cost-benefit and riskanalyses which might help implement thedecisions to accelerate, abandon or delayavailable or near-term options, in the expec-tation that we can make it to the point wherethe more advanced technologies can ade-quately supply our needs?

CHAPTER IV 1 3 3

6 0 - 4 1 1 0 - 7 5 - 1 0



BACKGROUND

The lack of definitive program goals in theERDA Plan can have two important conse-quences: It can distort projections of commercialacceptance of a technology, and it can increasethe probability that an unsuccessful programwill be drawn out longer than necessary. Criteria

are needed to evaluate the relative rewards andcosts of a research program in order to determinewhether it should be continued, accelerated, orterminated,

Specific criteria, which may vary from projectto project, are also needed in order to define theappropriate points at which paper studies moveinto component testing, component testing intopilot plant testing, pilot plant testing intodemonstration projects; and demonstration projects into full commercialization.

An important criterion is the cost goal. For thedifferent energy technologies treated in theERDA planning documents these goals arerepresented by vague references to achievingeconomic viability (such as ocean thermal energyconversion), cost-cutt ing by given multiples

where no present-day costs exist (solar thermalelectric and wind), or specific cost goals indollars per kilowatt (photovoltaics). Such goalshave little meaning unless the assumptions andcriteria that went into their formulation area v a i l a b le fo r c o mme n t b y p o te n t i a l u se r s .Furthermore, there is little indication that ERDAhas conducted an analysis of the relative cost andperformance risks, or of the costs associated witheach of its programs in the light of future rewardsof 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 futureenergy sources, but involving large cost outlays, and being subject to majoruncertainties in projected costs and/or technologies.

SUMMARY

Theresearchpromise

Energy Research and Development Administra tion is undertakingand development of long-range solar energy projects which offer muchin 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 early-phase funding levels are not necessarily very large for these projects prior toreaching the demonstration phase, it is nevertheless very important that a rationalmethod be established to decide: [a) whether or not to initiate the program (b) atwhich level to maintain or accelerate it, and (c) when to implement major andcostly undertakings such as demonstration projects. There appears to be noeffective mechanism now being used to make these decisions.

QUESTIONS

1 . How does ERDA determine the re la tive 2 . Do e s E RDA h a v e a d e f in i t e “plan” forfunding 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 uncerta inties arecurrently performed by one of several methods,The most common is that where an in-housed e c i s io n i s ma d e to p ro c e e d , r e q u e s t s fo rproposals on a “zerophase” study program are

issued, and one or more contracts are granted tothe winning bidder or bidders, In projects wheresome degree or prior experience is available, eventhough the system applications are new (such asphotovoltaic c o n v e r te r s o r so la r h e a t in gsystems), it is possible for ERDA to obtaincompetent reviews of early studies and analyses

and make reasonably accurate system perfor-mance and cost estimates, However, when theprior technology is in its very early stages, even if technical feasibil i ty has been demonstrated,there is no obvious mechanism by which ERDAcan test the conclusions of its study contractor.

No matter how objective he may be, if there islittle or no prior body of knowledge, the contrac-tor’s estimates are necessarily uncertain, perfor-mance estimates tend to be optimistic, and costestimates are almost always too low. Hence,some method for evaluation involving bothtechnology and cost uncertainty forecasting is

CHAPTER IV 1 3 5



necessary. At the very least, study results mustbe subjected to careful and extensive (probablycontracted) review by other sectors of the field.

If uncertainties cannot be narrowed by suchreviews, proceeding to costly demonstrationscould be questionable. P r e m a t u r edemonstrations can have a far more severe effectthan the simple wasting of funds, Often a projecthaving great potential can be “turned off” by anunsuccessful demonstration; whereas a moremeasured approach, which allows a somewhatgreater development of the basic technology forthe p rojec t, migh t have led to success andsubsequent benefits to society. However, it maybe necessary to proceed to a demonstration evenwhere the uncertainties remain excessive, simplybecause there is no other way to reduce them.This decision clearly can constitute a majorgamble and should be reached only after thebroadest possible interdisciplinary review.

An e x a mp le o f su c h a p ro je c t wh ic h i scurrently under ERDA’s jurisdiction is the oceantemperature energy conversion program. It hasbeen subjected to “phase zero” studies, and itscost/benefit projections appear quite promising.However, there still remain major cost uncertain-ties (both capital and operating/maintenance)because of the lack of experience with the large-scale specialized equipment needed, biofouling,and corrosion in long-life metallic marine struc-

tures, and powerplant operations associatedwith offshore locations. Whether these uncer-tainties should be resolved by further studies andlimited testing, or by an early demonstrationproject, is a difficult and vital decision, whichprobably is best approached (although notnecessarily successfully) by extensive multisec-tor review of study results.

A second example is the satellite solar powerstation, a concept which could offer significantlo n g - ra n g e p o te n t i a l b u t d o e s n o t a p p e a ranywhere in the plan, despite its identificationby other Federal agencies as a highly promisingfuture option. The decision processes needed toinitiate the low-cost but essential early studiesand experimental research efforts for suchconcepts apparently have not yet been properlyformulated or implemented.

The Congress does retain the ability to critical-ly review the decisions with which ERDA will beconfronted in the future since all demonstrationprojects requiring funding in excess of a specifiedamount must be brought to the Congress forapproval. Consequently, the Congress can askthe appropriate ERDA personnel at that time if the required cost-benefit-risk analyses have beenmade. Furthermore, the Congress can ask thatindependent reviews/assessments be made priorto 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 solarenergy technologies:

,. . Water q L a n d q M a t e r i a l s q E n e rg yq Capi ta l q Ma n p o we r q 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 thatin our preoccupation with our current energy shortage we do not divert excessiveamounts of our critical resources into energy production. Therefore, it is clear thatintegration of these impacts across disciplinary lines within ERDA will minimizethe chance for oversight.

QUESTIONS

What steps is ERDA taking to evaluate, on a 4. Are potential multiple uses of land and waterper-unit output of energy basis, the demands being considered for the alternative energyof their propos ed ener gy al ter natives 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 beingassessed?

What input/output (1/0] balances, includingtime-to-repay, have been or will be preparedfor the energy and capital 1/0 of the alter-native energy systems?

BACKGROUND

In o ur la st en vi ro nmen ta l c ri si s, th e Uni te d T h e swi tc hStates took several steps to improve air quality represents a

w i th ou t a de q ua t e c o nc e rn f or o ur l i mi t ed manpower. I t

b a c k to c o a l n o w in p ro g re sswaste of energy, capita l , and

is important that we not makedomestic 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 l imita tions onards that mandated a switch from coal-burning available energy and capital. The potentiallyto gas or oil-burning in some electric powerplants large demands on our supplies of other criticalwere established without an adequate apprecia- resources should be of equal concern. There aret 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 ourchoices of life style. Opportunities for multipleuse of water must be explored actively, andcareful planning is needed to avoid exceedingsafe consumption rates in any one region. Landuse, also, must be assigned only after carefulevaluations of all multiuse opportunities andpriorities have been determined,

The reduction of engineering graduates in thelast few years has placed us in a position wherewe cannot mount simultaneously an effective,large development effort on all new energya lt erna tive s. F or tu na te ly , a t u r n a r o u n d i nenrollments has occurred; however, there will bea shortage of engineers and scientists skilled insolar energy technology for some years to come if other energy technologies are also expandedmore rapidly. F or tu na te ly , m an y e ne rg ytechnologies are supportive and many of therequired personnel will be drawn from existingmanufacturing concerns. A more serious problemmay occur in the skilled trades required forin s ta l l a t io n a n d ma in te n a n c e o f th e so la rsystems. The environmental impact of varioussolar energy sources and conversion systems isan important factor which must be considered.

For example, atmospheric disturbance caused bylocal heating near large solar collectors could besignificant as solar energy use increases.

Although the subject of materials is touchedupon in the ERDA Plan, it has received inade-quate attention. A case in point is in the collectorpart of the solar heating and cooling program,where the amounts of materials required to meetthe projected energy contribution do not appearto have been considered.

The energy required to produce these and othermaterials must also be accounted for in thecalculation of the net energy consumed toproduce 1 Quad of output. For example, theproduction a n d fa b r i c a t io n o f e a c h to n o f aluminum requires from 20,000 to 90,000 kWh of energy. Therefore, th e 4 .3 mi l l io n to n s o f aluminum needed to ha; e an installed annualcollection capacity of 1 Quad by 1985, requiresfrom 0 . 35 Quad to nearly 1.5 Quads, Thus, thealuminum alone could cost as much as 7,5 percentof the energy produced over a 20-year equipment

life. These figures emphasize the importance of programs to reduce the amounts of cri t icalmateria ls in collectors when large-scale im-plementation 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 managementdistinction 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 researchmanagement policy is being carried over from the AEC into ERDA. The problemwith this management policy is that its tendency to isolate scientific andengineering research has not produced innovative advances in technologycomparable to those, for example, produced by the pacesetting electronics

laboratories where a continuous spectrum of applied and fundamental researchhas been carried out under the cooperative leadership of scientists and engineers.Energy-oriented research is even more complex since it involves social andinstitutional problems in addition to the scientific and engineering aspects of advanced-hardware development. Thus, a nonpolarized institutional mechanismis needed if rapid solutions are to be found for these complex energy problems.

Creation of a Solar Energy Research Institute (SERI) represents one of severalinstitutional mechanisms that can be utilized for this purpose, but there is as yet noindication that it will take the necessary interdisciplinary science/engineeringform.

QUESTIONSWhat are some of the specific programs of b a s ic ma te r i a l s r e se a rc h th a t E RDA i ssupporting? How do they relate to ERDA’smid-term or long-term goals?

Is engineering work toward these goals beingdone in the same laboratory? If so, are thee n g in e e r in g a n d s c i e n t i f i c p ro g ra msmonitored by the same ERDA manager? Dothey have a common laboratory leader? If not, what mechanisms have been established

to insure dialogue between the two managersas well as between the engineering andscientific efforts?

How is ERDA addressing the social, legal,and institutional problems associated withsolar and geothermal energy?

4. How many dollars have been allocated to theERDA laboratories for basic research innonnuclear energy? How large a fraction of the total budget for such research does thisrepresent? How many engineers and howmany scientists are involved? Is this a typicalp ro g ra m? I s E RDA su p p o r t in g s imi la rresearch at other institutions? If so, how arethese programs coordinated?

5. Do you think SERI should be established as a

central managerial and assessment officehaving regional technical laboratories? A S acentral research laboratory having regionaldemonstration projects? Wh a t fu n c t io nwould ERDA like to see it exercise? Whatrelationship does ERDA think it should haveto existing facilities.

CHAPTER IV 139



BACKGROUND

The distinction between basic and supportingresearch is motivated by the need to preservescientific freedom in the research aimed atdeveloping the conceptual context within whichinnovative technology operates. Experience hasshown that those charged with engineering

responsibilities and constrained by timetablesare not effective managers of this type of research. However, experience has also shownthat scientists do not generally apply theirinsights to the solution of practical problems if they are isolated from engineers and a participa-tion in the mission orientation that engineeringprovides. Therefore, the optimum solution toi n n o v a t i o n i n a d v a n c e d t e c h n o l o g y i scooperative leadership between scientists andengineers and other individuals and groupsresponsible for commercialization. Effectiveimplementation of mid- and long-term programs

in energy-oriented research requires a continuingd ia lo g u e n o t o n ly be tween sc ien t is ts andengineers, but also between design, materialsdevelopment, materials processing, and systemengineers, and marketing people. This dialoguecan be effectively carried on within inter-disciplinary teams sharing a common sense of

responsibility. The following elements appearessential todevelopment:

q

q

q

q

q

A la rg eautonomy

successful advanced-technology

measure o f loca l management

A definite, though broadly defined, mission

Full-time, interdisciplinary technical staff selected by management to implement anengineering o b j e c t iv e h a v i n g a m ul -tidisciplinary dimension

Adequate support that allows for programcontinuity by committing a full-time staff engaged in high-risk, high-payoff technicaldevelopment

A high degree of interaction with individualsresponsible for commercialization

Intelligence andfor performancetion.

strong personal motivationat all levels of the organiza-

Neither management practices nor fundingdecisions by ERDA have yet taken adequateadvantage of existing organizations that haveinterdisciplinary 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 anineffective organization.

SUMMARY

Interposing an additional management level in the development of solarenergy technology is not likely to be efficient because some of the organizationsused by ERDA for this function have not been constrained by cost considerations.Their management and contractual procedures are highly structural and extremelydetailed, an approach which may not be appropriate—or cost effective—for thedevelopment of new solar energy forms.

Since the new energy technologies are very sensitive to costs, requireinnovation, and must interface with commercial energy producers (the utilities),ERDA’s current reliance on outside management organizations may cause seriousproblems with program costs and the cost effectiveness of end-products.

Furthermore, when ERDA delegates complete control of an entire program or alarge part of a program to one of these organizations, it may be too far removed fromthe actual research planning to maintain its mandated responsibility for theNation’s energy research and development.

QUESTIONS

1. What is the cost in t ime and money of

interposing an additional management levelin the energy development program?

2. Is a highly structured management styleconsistent with the goals of ERDA? Whatalternative management systems has ERDAinvestigated?

3. What portion of the ERDA budget is used tosupport program management and programp la n n in g b y o u t s id e o rg a n iz a t io n s a n dFederal laboratories?

4. What new responsibilities have the National

laboratories undertaken in the last year?What staffing levels have these required? Towh a t e x te n t h a v e th e n e w s ta f f in g re -quirements been met by new hires? Byinternal reassignment?

5. What are the existing guidelines for numberof contracts monitored by each programmanager?

BACKGROUND

The rapid expansion of the Federal agency p ro v id e a n in te rme dia te l ev el o f p rog ramb u d g e t h a s fo rc e d E RDA to c o n t ra c t w i th management which has responsibility for theorganizations which have immediately available success of a large research area within which itmanagement capabili ty . 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 highlyprogram, a ll communication with ERDA by structured crash programs have been frequent.individual researchers is through these in- Such approaches may not be appropriate for R&Dtermediate agencies. programs which are aimed ultimately at commer-

To 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 limitedattention, 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 atleast can be appreciably smaller. The small distances between generator and user,which are possible with decentralized production, make utilization of the wasteheat more feasible than with central station plants. Since future principal energyshortages are predicted mainly in the oil and gas supply areas, which have recentlysupplied 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 atleast as well in hand as central station technologies. Fossil-fired total energysystems are in use in many European countries. With photovoltaics especiallythere are no major economies of scale as larger electrical generating stations arecontemplated.

The present ERDA organization establishes the study of decentralizedelectrical production as a small part of the central station solar thermal branch. Arecent (and first) total energy symposium had almost no discussion of photovoltaictotal 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 atSandia, following an extensive survey under AEC sponsorship. No other electrical-generating facility will be ready for several years according to present ERDA

plans, despite the relative simplicity of the technology and the availability of allcomponents. The reason for this delay in construction is not clear.

QUESTIONS

1. Is present ERDA solar organization (whichsepara tes e lec t r ica l and the rmal a reas)appropriate for undertaking a project whichcombines several technologies in a system?

Z . What coordination is now occuring with theE RDA Co n se rv a t io n D iv i s io n wh ic h i sresponsible for fossil-fired tota l energysystems?

,

3. Why is no further immediate solar thermalhardware deployment planned, in light of thesuccessful Sandia work, and the rapid costimprovements already obtained?

4. Why has the photovoltaic program not beenmore active in placing experimental totalenergy systems into the field (the only one isthe very early “Solar One” at the Universityof Delaware, which was in large part fundedlocally)?

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 forment which will be released at approximately the the report from this additional solar energysame 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 notrecognized, and the possibility of obtaining synthetic fuels from solar energy is

largely ignored.

SUMMARY

Preoccupation with coal, solar, and nuclear energy for electric powergeneration has produced too narrow a view of the alternatives for utilization of ourenergy sources and, in selected areas, would commit the Nation—perhapsprematurely—to a massive change in the infrastructure for energy delivery andutilization, Much of the Nation’s thermal end-use energy requirements over thelong 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 developmentis expensive and about half of the end-use of technologies which produce syntheticenergy consumption in the United States is in fuels from solar and nuclear energies? Howthe form of heat, why hasn’t more emphasis does ERDA’s basic research program reflectbeen 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 bylogic that: (a) because mid-term energy demands sources, and (c)will be met increasingly by coal and nuclear tion is the best

having interchangeable energybecause electric power genera-“common denominator” for all

energy (both best suited to e lectric power sources (including geothermal, fusion, andgeneration), (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 uponelectrification. Thus, top priority in the ERDAPlan is given to systems that convert primaryenergy (coal, nuclear, solar, geothermal) toelectricity. Lower priority is given to the directutilization of thermal sources, whether fromsolar energy (a distributed source) or fromgeothermal and nuclear energy (centralizedsources ).

The use of biomass for fuel is regarded as apossible long-term energy supplement, but noexplicit considerate ion is given to the productionof alternative fuels, such as hydrogen, methane,and methanol. However, high-temperature elec-

trolysis, photolysis, and pyrolysis for alternate-fuel product ion from solar or nuclear energy areattractive options awaiting technical develop-ment,

These priorities are not consistent with thepresent patterns of energy consumption. Ap-proximately 25 percent of the present energydemand is for industrial process heating and

direct heat. Moreover, about25

percent of theenergy demand will probably continue to be fortransportation which is at present totally depen-dent on fossil fuels. There will be a continuingneed for fuels for heating and cooling as asupplement to solar energy utilization systems.

CHAPTER IV 145



8. Emph asis on Solar Heating and Cooling of Build ings

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 alarger potential for energy savings in the immediate and near term (to 1985), an dbeyond 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 coolingis categorized at the third level of priorities as an “under-used mid-termtechnology“ and one which may “provide an energy ‘margin’ in the event of R, D&Dfailure in other areas.” These statements in the ERDA document project asignificant potential for solar heating and cooling, yet underemphasize thedevelopment and actual impact of solar heating and cooling on our energyeconomy.

QUESTIONS

1. How does ERDA reconcile the inconsisten- 2. Howcies between the statements made concerning than

does ERDA justify lower 1985 goalsthose put forward by FEA in Project

priorities and emphasis on solar heating and Independence as being attainable with - a ncooling in ERDA-48 and the projected fuel “accelerated government program?”savings shown in ERDA-48?

3. How does ERDA define the interface betweensolar “demonstration” and solar “commer-cialization”?

BACKGROUND

Solar water heaters are used extensivelyabroad (Israel, Japan, and Australia) and to alesser extent in the United States (Florida andCalifornia). In excess of 100 solar space heatingsystems have been installed in the United States,most of which were not Federally funded. There

is no similar foundation of existing technologyin use to serve as a point of departure for othersolar technologies,

The existing base for solar heating and coolingprovides an opportunity for rapidly acceleratingits growth through governmental action, in-

cluding: (a) government-funded demonstrationprogram intended to accelerate consumer accep-tance; (b) more government-funded R&D toaccelerate development of more efficient andlower cost systems; and (c) an incentive program,needed temporarily to enhance production and to

b r ing d o wn co s t s . T he E RDA pr ior i ti e s infunding do not appear to recognize adequatelythis opportunity,

ERDA-48 (volume II, p. 40) projects energysaving objectives for solar heating and cooling at0.2 to 0.6 Quad in 1985, The maximum objectives

146 CHAPTER IV



projected in 1985 for other individual solartechnologies are small compared to the 0.2 to 0.6Quad range projected for solar heating andcooling. Further, the 1985 goals may be too low.The accelerated program of FEA’s Project In-dependence projects 1.5 to 2.0 Quads per year in1985. 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 25percent of total energy use for heating andcooling of buildings.

In view of the above, it seems reasonable toanticipate that ERDA would assign high priorityto solar heating and cooling programs needed tocapture this potential. The statements quoted inthe 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 demonstrationprogram need specific definition.

SUMMARY

The prime objective of the demonstration program should be to accelerateconsumer acceptance of solar energy as a heat source so that substantial fuelsavings 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 thesepurposes. In particular they do not appear to place as much emphasis ondemonstration 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 thedevelopment stage. Principal immediate emphasis in solar cooling should beresearch, development, and testing, whereas the thrust in the solar space and waterheating effort should be demonstration.

QUESTIONS

1. Does ERDA agree that acceptable solar waterand space heating systems are now commer-

cially available?

2. Does ERDA agree that there is a disparitybetween the emphasis placed on demonstra-t ion of solar heating and cooling in ERDA-48and in (Public Law 93-409), the Solar Heatingand Cooling Demonstration Act?

3. What should be the principal purpose of thedemonstration program in the solar heatingof buildings?

4.

5.

6.

Is the suggested 400 solar-heated residentialinstallations over a 4-year period sufficient

for a vigorous demonstration program? If not, how many should there be?

Should solar-heating demonstrations beconcentrated in the present year and nextyear, or should they be approximately evenlydistributed over a 4- to 5-year period?

If solar heating is expected to grow in thep r i v a t e sect o r w i t h o u t g o ve r nme n tdemonstration, is there justification for ademonstration program?

BACKGROUND

Commerci ally acceptable equipment for solar in several sections of the country. The primaryspace and water heating is available in today’s objective of the solar heating demonstrationmarket 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 therebya reduction in fuel consumption. By providingfunds for a significant number of solar-heatedbuildings, ERDA’s Plan could stimulate ad-ditional solar installations. The solar-heatingdemonstrate ion program is designed to show tothe public at large (users; designers; builders;financiers; and tax, insurance, and regulatorya 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 avariety of buildings in wide areas of the country.Legal, institutional, environmental, and socialdeterrents to adoption should be assessed anddealt with as part of the demonstration.

Another p ur p o se o f the solar-heatingdemonstration program is the integration of various available components and subsystemsinto effective heating systems, and the deter-

mination of performance and cost of suchsystems, This program should demonstrate thebenefits attainable by use of various subsystemand s ys tem i mpr ove me nt s resulting fromresearch and development.

The overall goal of the program should not bethe development of technology or of hardware,but rather the development of consumer markets.

Research on and development of solar cooling

and advanced solar-heatin g c o mp o n e n t s a n dsystems are important activities which should beconducted under a well-funded R&D effort, butthis should be dissociated from the demonstra-tion programs. Whenever such developmentsreach the stage at which available solar-heatin g

systems have now reached, they should bein c lu d e d in th e d e mo n s t ra t io n p ro g ra m a soutlined above.

CHAPTER IV 149

60-411 0-75 -11



10. Role of User Incentives in Solar Heating and Cooling

of Build ings

A well-structured user incentive program would accelerate the solar heatingand cooling of buildings (SHACOB) and accelerate development of the infrastruc-ture to support large-scale applications.

SUMMARY

Properly structured user incentives are perceived as having the potential tosubstantially accelerate the growth of solar energy utilization. Although incentiveprograms should probably not be developed nor administered by ERDA, they havepotential impact on ERDA’s program. The important interfaces and distinctionsbetween the various Federal agencies with regard to solar incentive responsi-bilities, have not been delineated in ERDA-48,

Incentives may be looked upon as temporary. Economics are less favorable forsolar 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 beenattained, (b) cost reduction engineering accompanying volume production remainsto be done, and (c) it is probable that costs of competing fossil-based energy formswill 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 otherincentives provided to corporate producers of fossil energy forms. No incentiverecognizes his contribution to society in reducing pollution, preserving fossilresources 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 apropose to delay study of incentive programs structured incentive program, and whatuntil 1979?

The development of s o l a r e n e r gy fo r th ebuildings requires that

should be the nature of ERDA’s interactionwith it?

BACKGROUND

large-scale application of decisions is the economics of the choice asheating and cooling of perceived by the potential user, Each has his owna 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 favorablemajority of cases these decisions will be made by decision, and the rate at which conventionalindividua1 consumers, and a major factor in these energy costs will escalate, Thus, a properly

150 CHAPTER IV



structured incentive program which reduces theusers first cost and operating cost will increasethe number of individual favorable decisions. Bysubs id i zing equipment cost to the user, the costsavings effected by increased production can bemade available to the consumer. On the basis of present equipment costs, the current payout timeon solar systems, resulting from savings inconventional energy costs, is satisfactory to a

significant but moderate number of consumers,mainly if the user’s current alternative is electricenergy. Because heating oil and gas prices arelower than electricity prices, for home heating,present costs of solar equipment currentlyrepresent an attractive investment only to aminority of consumers.

In a very real sense, the user of solar energybecomes an energy producer. His costs, which arelargely investment related, must be competitivewith those of producers of competitive forms of

energy. Many of these are also capital-intensive.The corporate producer of competing energy isassisted in recovering his investment by invest-ment tax credits which provide for immediaterecovery of a portion of the investment frompretax income. Also, he can recover the balanceof his fixed investment over time with pre-taxincome through depreciation allowances. Inaddition, in some cases he also receives tax-free

depletion allowances. I f t h e s o l a r e n e r g yproducer is a n in d iv id u a l h o me o wn e r , h ereceives none of these tax benefits, and must payfor his productive facil i t ies with after-taxincome, As an owner of commercial or rentalproperty, h e r e c e i v e s o n ly d e p re c ia t io nallowances, Therefore, under present tax laws,the individual (noncorporate) producer of solarenergy is subjected to discrimination and faces adisincentive to use solar energy.

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11. Standards for the Measuremen t of Solar Heating and

Cooling Equipment Performance

ISSUE

For consumer protection, standards are needed to provide comparativeperformance ratings, to allow comparison of durability, and assure properinstallation of solar equipment.

SUMMARY

In order for the consumer or builder to intelligently compare solar equipmentproduced by competing manufacturers, it is necessary that all equipment be ratedaccording to realistic and consistent standards. In order for the owner, builder, orarchitect to properly size equipment to the load, the equipment performance asdetermined from a standard measurement procedure must be specified. At present,

many equipment manufacturers omit rating data or rate their own equipment indifferent terms so that it is very difficult to make comparisons or to sizeinstallations. Thus, it appears that standards are required not to protect theconsumer. It is particularly appropriate that proposed incentive programs be tiedto 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 toto accelerate development of adequate stan- e n a b le th e c o n su me r to ma k e h i s o wndards? comparisons on life cycle cost effectiveness

2. Is it intended that standards be written so and energy conservation potential?

that they consciously avoid stifling innova-tion?

BACKGROUND

It is generally true in the development of anindustry that some of those who enter it seek tocapitalize on the consumer’s lack of knowledgeby marketing products which are either un-

suitable for their intended purpose or which donot perform as claimed. Significant commercialsale of solar heating equipment is now emergingand volume will grow, particularly if sales ares t i m ul a t ed b y t h e g o ve r nm e nt t hr ou ghdemonstration programs and user incentives.

There is evidence that unscrupulous suppliershave already entered the market.

For the consumer to intelligently compare thesolar equipment of different manufacturers,

realistic and consistent ratings are necessary. Toselect equipment for a particular application,valid performance data are also required. Atpresent, the performance of much equipment isunspecified or is presented in a manner unique tothe particular manufacturer, and it is difficult to

152 CHAPTER IV



. —

make comparisons or to size installations, This istrue even of manufacturers whose reputation issu c h th a t th e re i s n o se r io u s q u e s t io n o f fraudulent c la ims. T h e re a re o th e r s wh o seperformance claims are at least suspect.

Standards intended to establish equipmentdurability and life are also required to protect theuser’s investment, Al though manufac ture rs’warranties are important, they are not a sub-

stitute for standards at this stage in industrydevelopment. Many equipment producers do nothave the financial strength required to back upmeaningful warranties, and therefore validequipment ratings are essential.

Standards intended to assure adequate in-stallation practices are also needed in lieu of nonexistent local codes and regulations. It shouldbe expected that in time, such standards will bereplaced by local codes and regulations.

It appears that the industry is st i l l in aformative stage of development and that Govern-ment ass is tance is required to acceleratedevelopment of standards, It is paramount to

rapid consumer acceptance of solar energy thatthe credibility of this industry be guaranteed byindustry self-regulation and governmentvigilance.

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’senergy requirements can be met by solar energy, The remainder must be suppliedfrom an auxiliary source— for example, electricity or natural gas from a publicutility or a stored onsite source, such as fuel oil. As the use of solar energy becomesmore extensive, it may contribute to an increased peak demand problem for theutilities (particularly the electric utilities), because such energy supply systemscould need auxiliary power simultaneously. Expensive standby electricity ratesfor solar energy uses could result, If auxiliary energy is supplied by a public utility,

the solar energy systems should be carefully designed to minimize regionalstandby capacity. An alternative is onsite, self contained auxiliary energy storage(such as fuel oil], which makes the consumer independent of the utility or whichwill ensure his utilization of auxiliary sources at offpeak times.

QUESTIONS

1. At what levels of implementation (percen-tage of solar homes) will a peak demandproblem for utilities become serious?

2. What standby energy and/or capacity (peak

or off peak) rate structuring can be an-ticipated or recommended in the future forbuildings using onsite solar energy?

3. What methods appear a ttractive for self-c o n ta in e d o n s i t e su p p le me n ta ry e n e rg ystorage?

4. How best can an onsite solar energy systembe designed to minimize the impact on theutility system while simultaneously max-imizing the benefit to the solar consumer?

5 . Wh a t c o o rd in a t io n i s p la n n e d w i th th eConservation Division of ERDA for storages c h e m e s u n i q u e l y a p p l i c a b l e t o s o l a rsystems?

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 demandtherefore has little effect on a uti lity’s load supplementary energy at off peak hours and storedistribution. As onsite solar energy use makes a it until needed, thereby minimizing the peakgreater impact, it in itself will cause an in- demand problem and possibly even enhancingcreasing peak demand problem for uti l i t ies the relation between peak and baseload for theunless these systems are designed wisely. If the utility. Another option is onsite, self-contained

154 CHAPTER IV



auxili ary energy stora ge ( such as fuel oil, seriousness of this problem should be studied byreplenished 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 inthe U.S. explicitly for energy production may be seen as irresponsible and mayconflict with out own capacity to produce food. For this reason, it is important thatthe 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 andfertilizer demands

q Changes in cattle-feeding methods and a reduction in the United Statesdemand for beef

Development of lands unsuitable for food crops

q Integrated food and energy production systems.

Unless such approaches are successful (and are also perceived as beingsuccessful), a large-scale biomass energy program will probably be unacceptable.

QUESTIONS

1.

2.

Have studies been made of the comparableeconomic value of organic materials whenused for food, lumber, and energy?

What support is ERDA giving to geneticstudies for the improvement or development

of plants with high energy yield—and withlow water and nutrient demands?

3. Is ERDA undertakingensure the long-termu se d fo r in te n s iv efarming?

studies or research toproductivity of landagriculture or tree-

CHAPTER IV 155



BACKGROUND

Biomass energy production has a number of a ttractive features. As id e f ro m b e in g e n -vironmentally benign, the organic products maybe burned for energy or converted to liquid,gaseous, and solid fuel forms, They may be usedfor either peak- or baseload electric-generatingcapacity in central power systems, or may beused as transportable fuels.

This flexibility y of end-use extends to construc-t ion (lumber), food (cellulose), and the farmsthemselves (green belts and recreation), Thespecific way in which the organic farm product isused will depend on need and economics ratherthan on rhetorical choices between food and

energy. Food and biomass energy are not mutuallyexclusive, and such implications may foreclosean attractive option, unless viable developmentstrategies are pursued which do not seriouslyaffect food production,

In addition the re la tively low conversionefficiencies may me a n th a t s in g le -p u rp o seenergy plantations are not economically com-petitive. Energy biomass as a by-product fromfood production, however, may be economicallya t tract iv e. R e o r i e n t a t i o n i s n e e d e d i na gr ic ul tu ra l R&D to ma x imize fo od /en e rg yproduction cost effectiveness,

*

156 CHAPTER IV



14. Legal and Institutional Constraints in Geothermal

Energy

ISSUE

Geothermal energy implementation is not so much constrained by technologyas by legal and institutional restraints.

SUMMARY

Federal, State, and local agencies are inexperienced and inconsistent in dealingwit h leasing, exploration permits, and licensing of geothermal resources. Forexample, geothermal resources are variously classified as water, minerals, or fossilfuels by regulatory agencies. Furthermore, unlike oil and gas exploration,extensive licensing and environmental analyses are required prior to exploratorydrilling,

ERDA sponsorship of innovative legal and insti tutional studies maydetermine the best methods of resolving these and similar problems to ensure theorderly development of the resource.

QUESTIONS

1. What can ERDA do to expedite the leasing 3 . Wh a t s t e p s c a n b e t a k e n to e n su re th eand exploration of po tent ia l geothermal efficient development of the total geothermalresources? resource ?

2. Can the Environmental Impact Statement

(EIS) requirements be modified to stimulateexploration without damage to the environ-ment?

BACKGROUND

Current exploration for and development of g e o th e rma l r e se rv o i r s i s b e in g s lo we d b yproblems with the licensing, permitting, andleasing process. T h e p re se n t p a c e a n d 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 leas-ing without exploration will not encourage theresource industries to expand the data baserequired for valid resource evaluation.

Requirements for a complete EnvironmentalImpact Statement prior to exploratory drillingmay be an unnecessary burden. A complete EIS isnot required for exploratory oil and gas drilling.Perhaps a better plan would be to allow ex-

ploratory activities to be initiated with limitedinitial environmental analysis, but subject tominimum standards. Upon discovery and con fir-mat ion of a resource, a master plan, including acomplete EIS, would then be filed for approvalbefore development of the field,

CHAPTER IV 157



The various states with geothermal resourcesdefine the material in different ways—that is, aswater, as a mineral, as a fossil fuel, or not at all—and no ownership is defined for the dissolvedminerals and gases, These ownership quest ionscan only hinder development, since the problemsof leasing large areas with multiple ownership of wa te r a n d min e ra l r ig h t s a re su f f i c i e n t inthemselves to prevent utilization of the resource,

To encourage geothermal development, theresource will have to be uniformly defined aswater, as a mineral, or as a unique resource. Itmay be in the interest of rapid utilization tocons icier innovative solutions, such as defininggeothermal fluids and all associated minerals,gases (methane, carbon dioxide, etc.), and thermalenergy, as a unique resource. Furthermore, toconserve the available resources, i t may benecessary in some cases to consider legislationwhich would prevent exploit a t ion of the resourcesolely for the recovery of the mineral or methanecontent while wasting the thermal energy (heat)

which is also available. A situation could develop

similar to the one which existed when it wasconsidered uneconomical to recover natural gasand it was wasted (flared),

Jurisdiction o f r e g u l at o r y a g e nc i e s o f t e noverlaps and, in many cases, results in conflictswhich can almost totally prevent utilization of the resource. An elimination of multiple permitsfor the same steps and unnecessary multitieredregulation may be one approach to the solution of

this problem.The use of water from geothermal reservoirs

presents similar problems. In most cases, it willbe necessary to reinject the spent fluids intoeither the reservoir or some adjacent geologicalformation to prevent subsidence and to disposeof any undesirable fluids. In some cases, waterusable for irrigation must be wasted becausecurrent regulation may prevent its use simplybecause the composition of the geothermal fluidis different than that of the underlying freshwater aqu if ie rs . Such res t rain ts may be un-necessary in many areas,

CHAPTER IV



15. Environmental Constraints on Geothermal Energy

Development

ISSUE

Environmental problems, which have been inadequately stressed by ERDA, canplace constraints on the potential development of geothermal energy resources.

SUMMARY

Geothermal energy development will have environmental constraints becauseof the disposal of gaseous and liquid pollutants, the potential for large-scalesubsidence, and the potential for fault movement and earthquake generation. Theimplementation document of ERDA’s Energy Plan does not adequately define thenecessary environmental evaluation problem for geothermal development.

QUESTIONS

1. To what extent is land subsidence a potentialproblem with geothermal energy develop-ment, and how large a geographical area willbe affected?

Z . What types and degrees of exhaust gastreatment wil l be required to minimizepo ten t i a l a i r po l lu t an t emis s ions f romgeothermal energy development, and whatwill be the resultant costs?

3 . Wha t chemica l s c a n b e e c o n o m i c a l l yrecovered from geothermal brine streamspr ior to reinfect ion , and what addi t ionaleff luent t reatment may be required forabove-ground disposal?

4. What magnitudes of earthquake intensitiesmay occur from varying levels of geothermalenergy development, and how might thisconstraint affect future utilization?

BACKGROUND

Geothermal energy results from the heating of ground water in the Earth’s crust by proximity toits molten core, The four basic types of geother-mal energy developments are the hydrothermalbrine, geopressurized water, geothermal steam,and molten magma systems. Potential environ-mental impacts from major producing fields andpotential major fields are as follows:

q The Geysers, California. Geothermal steamproduction for electric-power generation atthe Geysers releases hydrogen sulfide to theatmosphere in small quanti t ies with thenoncondensable gases, whereas the majorportions are precipitated as a sulfide sludge

to constitute a potential solid waste problem.Mercury vapor is also released in tracequantities from the exhaust gases from thegeothermal steam fields.

q Imperial Valley, California. Hydrothermalbrine development in the Imperial Valleynecessitates the disposal of highly salinebrine streams through either deepwell rein- jection or surface disposal. The potential forland subsidence and the activation of earth-quakes are environmental constraints thatcan deter future development. The release of hydrogen sulfide in significant quantitiesconstitutes a potential odor problem, whiletrace element releases of arsenic, boron, and

CHAPTER IV 159



mercury also pose possiblproblems.

q G u l f C o a s t , T e x a s , T h e

e en vi ro nmen ta l t ion, but al so provide for potenti al naturalgas recovery, This energy source is still in the

geopressurized- developmental stage where technical andgeothermal water sources along the Gulf economic feasibility has not yet been fullyC o a s t s o f T e x a s a n d L o u i s i a n a p o s e established. There is an additional need toproblems, relating to water quality, land provide for a detailed environmental assess-subsidence, fault activation, and air pollu- ment of this energy resource.

160 CHAPTER IV



16. Nonelectric Uses of Geothermal Energy and Geother-

mal Goals

ISSUE

The ability to approach ERDA’s presently unrealistic 1985 goal for geothermalutilization will require a substantial increase in emphasis on nonelectric use.

SUMMARY

A realistic maximum prediction for electric generation by 1985 is 4,000Megawatts of Electric Power (MWe). To reach the objective of 10,000 to 15,000Megawatts (MW) stated by ERDA, however, will require a large amount of nonelectrical uses. Since a significant portion of the resource base is lowtemperature, the most important use of geothermal resources in the United States

may be for nonelectric applications. Indeed, the principal impact of geothermalresources on worldwide energy needs, to date, has been through nonelectricutilization.

The thermal energy from a geothermal reservoir can be used to replaceelectricity or fossil fuels in low-grade industrial heat applications and spaceheating. Geothermal water, because of its temperature, can also be used forsolution 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 potentiallyimportant 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 for1985 is expected to come from nonelectricuses?

Is a process heat survey being planned todetermine what fraction of the tota l in-

dustrial heat could be supplied by geother-mal sources?

Would a person or firm who was interested inusing geothermal process heat be eligible forthe Federal Geothermal Loan GuaranteeProgram?

4. Does ERDA feel that as part of its dissemina-tion and implementation function it shouldencourage the location or re location of industries u s i n g l o w - g r a d e h e a t n e a rg e o th e rma l r e so u rc e s? Wo u ld th e lo a nprogram apply?

5. Does ERDA plan to use geothermal resourcesto develop central systems for the spaceheating and cooling of buildings in populatedareas?

CHAPTER IV 161



BACKGROUND

A problem in interpreta tion of the ERDAdocument arises since it does not specify whatfraction of the total utilization is, to be electric.

B y 1 98 5, t he Ge ys er ’s vapor-dominatedgeothermal field may be producing l,550 MWe.T he mo de r at e t e mp er a tu r e, l ow sa li n it y

hydrothermal demonstration plants (100 MWetotal capacity] will not be operational until 1979-82. Pilot plant programs to test other geothermalsources are not scheduled to be operational until1978-80. When the time required to advance fromoperation of a pilot plant through completion of asignificant number of commercial plants (greaterthan or equal to 50difficult to conceivebe on line by 1985.

Where geothermal

MWe) is considered, it isthat over 4,000 MWe could

energy is available, how-ever, it can readily be used to replace electric orfossil fuels as sources of heat, Much of the energy

expended in this country is used to provide heatfor industrial processes, space heating, and forprocesses which depend on a supply of moderatetemperature fluids. These include control of chemical reactions i n p e t r o c h e m i c a l a n dchemical plants, drying of agricultural products,processing of foods, paper production, andmineral extraction and purification. Geothermalwater could be used for food production enhance-ment processes that use temperature control to

generate maximum crop yield, such as field andgreenhouse heating. Protein supplies could beexpanded by algae growth in ponds heated year-round by geothermal sources.

Ge o th e rma l f lu id s ma y c o n ta in v a lu a b leminerals that are recoverable. In many cases, the

thermal energy in the fluids is sufficient to effectthis recovery.These nonelectric uses of geothermal resources

can expand the definit ion of a geothermalresource because a low-temperature reservoir,which is not usable for electric generation, can beused for some of these nonelectric applications.Note, however, that nonelectric uses will, ingeneral, probably be site specific. The ERDAPlan includes a pilot plant to investigate “multi-ple nonelectric uses of thermal waters.” It isdifficult to determine whether or not multipleuses will be practical at a given geothermal

reservoir . Support for “demonstrations” a tdifferent locations for different purposes mayprove to be more desirable.

To achieve the goal of extensive nonelectricuse, a greater emphasis is needed, especially inthe area of dissemination of information and inthe technology of conversion of existing in-dustria l heat processes from fossil fuels togeothermal heat.

162 CHAPTER IV



17. Variability of Geothermal Reservoirs

ISSUE

Each geothermal reservoir has its own unique characteristics, which affect theresearch strategy and demonstration portion of the ERDA program.

SUMMARY

Each geothermal reservoir has unique parameters, such as size , f luidcharacteristics, 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 equipmentand energy conversion technology must be tailored to the characteristics of thefluid in each reservoir; consequently, different power cycles may be used. If theERDA pilot/demonstration program were to concentrate on a single type of powercycle, multiple demonstrations of the same cycle would not aid the expansion anduse 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, theequipment and power conversion research strategy will have to consider a widevariety of possible utilization systems to ensure high efficiency.

QUESTIONS

1. What cycles has ERDA identified for its 3. To what extent will the pilot/demonstrationpilot/demonstration program in geothermal p r o g r a m b e c o n c e r n e d w i t h p r o b l e m senergy? associated with integrating a geothermal

How will advanced power cycles be demon-source with an existing power grid?

2.

stra ted?

BACKGROUND

The Energy Research and Development Ad-min i s t r a t io n h a s id e n t i f i e d twotemperature (about 20 0

0 C), low-salvoirs for demonstration and maybinary cycle (or a version thereof)these reservoirs, A variety of canal:

moderate-inity reser-choose thefor both of date power

cycles are possible , but they have not beenincluded in the current demonstration program.

The ERDA program also includes pilot power

plants for a high-temperature , high-salinityreservoir, a geopressured reservoir, and a dryhot-rock reservoir. The best choice of powercycle for these pilot plants may be other thanbinary.tempera

S in c e mo s t o f t h e k n o w n high-ure reservoirs are located in the South

and Southwest where water is scarce the mostappropriate cycle for a given reservoir should bedetermined by both the reservoir characteristicsand the availability of cooling water.

The demonstration of power cycles will notsolve a ll the potentia l operational problemsa sso c ia te d w i th w id e sp re a d u t i l i z a t io n o f geothermal energy for e lectric ity . Dynamicc o n tr o l o f the production/power/injection

system is important, particularly if the electricload is lost, Any interruption of electric load onthe generator creates control problems for thewell sinceconversionthe system.

the fluid must bypass the powerequipment until load is returned toWith a steam geothermal reservoir, it

CHAPTER IV 163



is safe and environmentally acceptable to vent the hot fluids would have to bypass the powerthe steam. However, with sal ine hot water conversion equipment and be immediately rein-systems, the fluid can not be dumped because of jected. All of these control, grid interaction, andenvironmental considerate ions. Thus, an artificial switching problems need to be considered whenload (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 orshort issue statements concerning the ERDA

solar and geothermal programs. The nature of theissues addressed by these comments is such thata short exposition is all that is required toadequately express them. They should not beconsidered to be less important than the severalissues developed in length in Section D.

1.

2.

3.

Has proper a ttention been given to thenece ssa ry in t raage ncy c o o rd in a t io nmechanisms to ensure the cross-fertilizationof information and technology between solarprograms and necessary auxiliary efforts inother divisions?

There are many aspects of the ERDAprogram which cut across divisional boun-daries, and which, although assigned to onedivision, are of vital concern to the solar-geothermal programs. Examples of suchareas are:

q

q

q

q

q

q

q

Energy storageH y d r o g e n g e n e r a t i o n , d i s t r i b u t i o n ,storage, and utilizationAdvanced power conversion cyclesCombined storage/conversion systems;e.g., fuel cells or thermal “batteries .“Superconductivity y

Electric power conditioning (e.g., d.c, toa.c, conversion)Resource availability, particularly freshwater.

Which research programs in the solar andgeothermal areas are budget limited? If morefunds were provided, what would be donewith them, and how would they assist theresearch effort?

What are the differences between a test bedfacility, a pilot plant, and a demonstrationplant?

In ERDA language, a test bed is a facilityused to test components of and ideas for atotal system. A pilot plant is a completesystem assembled t () show technicalfeasibil i ty and to gain construction andoperating experience. A demonstrate ion plant

4.

5.

6.

7.

8.

9.

10.

is a near commercial scale facility used toshow economic feasibility y although the plant

itself may not be economically competitive atthat t ime. Another but tota lly differentconcept of “demonstrations” is illustrated inconnection with solar heating and cooling of buildings (see Issue Paper 9), where theobjectives are to generate a user market.

Does ERDA’s patent policy enhance orimpede development and application of solarand/or geothermal energy?

Should ERDA research funding includerequirements that access to backgroundproprietary information and patent positions

be granted to the Federal Government?How does withholding of “proprietary infor-mation” by industry affect ERDA’s state-of-the-art reviews and data-bank usefulness’?

What should be the nature of incentives touse windpower systems and geothermalheating systems?

The issue of incentives related to solarheating and cooling has been discussedpreviously (see Issue Paper 10). Many of thesame points also apply to wind power andgeothermal heat utilization,

Would it be appropriate for ERDA to fundt ra in e e sh ip s in solar a n d g e o th e rma ltechnology?

The discipline requirements for the utiliza-tion of these resources is such that somein c e n t iv e , s imi la r to th e fo rme r NAS Atraineeships, may be required to encouragepursuit of these specialized educationalbackgrounds. The need for these hybridscientists/engineers is immediate,

What is the reason for the apparent emphasison the central tower solar electric concept to

the exclusion of solar electric approaches?

Should the Plan make a specific commitmentof allocating a portion of the solar heatingand cooling demonstration projects to theretrofitting of existing residential and com-mercial buildings?

CHAPTER IV 165

60-411 0-75 - ]2



11.

12.

13.

14.

15.

‘ 16.

A l t h o u g h s o l a r h e a t i n g a n d c o o l i n gsystems will be more cost effective in newbuildings designed with the systems, theapproximately 65 million existing buildingsp re se n t a n immense potentia l for solarheating and cooling, with a subsequentsignificant potential fuel savings. This isparticularly true in the case of solar-heateddomestic water.

Wh a t i s th e s t a tu s o f th e Gu a ra n te e dGeothermal Loan Program?

The Geothermal Guaranteed Loan Programwill be impossible to implement withoutappropriate ions availabl e to back up theguarantee.

Wh y d o e s a so la r thermal tota l-energysystem demonstration appear in the plan, butno photovoltaic total energy system?

P h o to v o l t a i c s ( a t l e a s t o n s i t e ) wo u ldappear to be at least as well suited for total

energy systems.

How does ERDA plan to verify and supple-ment the estimate of geothermal resourcesindicated in the USGS Assessment Program?

USGS cannot drill exploratory geothermalwells, but in order to determine the potentialreserves, geothermal exploratory wells mustbe drilled. Such exploratory drilling willallow for better planning of resource utiliza-tion and determine the resource for whichc o n se rv a t io n tec hn ol og y s h o u l d b edeveloped.

Why is little emphasis placed on alternativesolar-cell materia ls (other than sil icon)considered in the ERDA Plan?

A number of other materia ls (such asgall ium arsenide, cadmium sulfide, andi r id iu m p h o sp h id e ) a re r e c e iv in g c o n -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 equip-ment have any impact on R&D strategies?

Will geothermal resources benefit only cer-tain segments of the country?

Even though geothermal resources areregional 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 thepopulation. Because of the nature of theresource (heat), it must be used near the wellsite. However, when geothermal energy isused in one portion of the country to replacefossil fuel heat sources, the fossil fuel savedis available to the country as a whole in theform of high value liquid fuel,

What is the role of ERDA in the developmentof geothermal exploration methods?

The development of advanced geophysicalexploration techniques is needed to ensurefull and rapid development of geothermalresources, If ERDA agrees that it is within thescope of their mandate to do this type of work, such a statement should be made withdetails provided.

Has ERDA given adequate attention to theuse of international research efforts to solvecommon energy problems?

The solar energy field is a particularlyattractive area for cooperation.

Why hasn’t the use of wind energy fornonelectric applications been considered;e.g., water-pumping, with pumped-storagecapability?

It is possible that significant capital costand energy savings might be realized byexploiting all possible avenues for theseapplications.

Has ERDA considered establishing test

facilities, pilot plants, and demonstrationplants on Federally controlled rather thanprivately controlled lands?

This approach, with the assistance of private industry, would allow the rapidtesting of technology without many of thelong delays associated with licensing andrestraints on private land. This approachshould be considered for cases where earlytesting of a resource or technology is man-datory.

What is the nature of ERDA’s interaction

wi th th e E P A p ro g ra m in u rb a n wa s tedisposal? How do you integrate the use of agricultural and forest wastes with yourprogram of energy from biomass?

T h e u s e o f ’ o r g a n i c w a s t e s : u r b a n ,agricultural, and tree farming, can make a



22.

modest contribution to the fuel supply while marine biomass cultivation? Is this area largereducing an adverse environmental problem. enough to allow a significant impact? What is

What ocean areas have you identified thatyour estimate of the net energy-gain per acre

have su i t ab l e upwe l l i ng cond i t i ons fo rof marine biomass and the cost to harvest?

! 1’

CHAPTER IV 167





MEMBERS

Prof. John Gibbons, Chairman,Tennessee

A. CONSERVATION TASK GROUP

University of

P r o f . D e a n E . A b r a h a m s o n , University of

Minnesota

Mr. Michael B . Barker , American Institute of Architects

Dr. Paul F. Chenea, General Motors Corp.

Mr. Donald Hal lman, 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 atAustin

CONTRIBUTORS

Prof . W i l l i am H . C unn ingham , University of Texas at Austin

Mr. Tim Hall, University of Oklahoma

Dr. Robert D. Huntoon, Consultant

Prof. Jerold W. Jones, University of Texas atAustin

Prof. Phil ip S. Schmidt, University of Texas atAustin

1 7 0 CHAPTER V



1.

2.

3.

4.

5.

6.

B. CONSERVATION TASK GROUP ISSUES LIST

Importance of Conservation . . . 175

The ERDA Plan should better reflect theurgency and importance of conservation inresponding to the national energy problem.

Program Management andCoordination . . . . . . . . . . . . . . . . . 177

ERDA’s Plan for the program managementand coordination within the agency,other involved Federal agencies, withand local governments, and withnations, needs additional attention.

Interaction with the PrivateSector . . . . . . . . . . . . . . . . . . . . . . . .

withStateother

179

A comprehensive plan is needed for interac-tion between ERDA and the private sector inenergy conservation.

Use of the Term“Conservation” . . . . . . . . . . . . . . . 181

ERDA’s operational definition of energy

conservation is too broad.

Need for NontechnologicalResearch . . . . . . . . . . . . . . . . . . . . . 183

ERDA’s role needs clearer definition withrespect to research on nontechnologicalissues associated with energy conservation.

Demand Modeling and ConservationPlanning . . . . . . . . . . . . . . . . . . . . . 185

The basic assumptions underlying ERDA’sprojections of future demand are unrealistic;as a resu1t, the ERDA P1an has not accordedsuffic ient a ttention to conservation as ameans of reducing energy d eman d, en-vironment al impact, and financia1 stress.

7.

8.

9.

10.

11.

12.

Design Methods and

Standards . . . . . . . . . . . . . . . . . . . .187

Energy conservation efforts in the buildingand consumer product sector require thedevelopment and dissemination of analyticdesign met hods and the adoption of reasonable energy standards.

Development andDemonstration . . . . . . . . . . . . . . . . 189

ERDA’s plans for R, D&D of energy conserva-t ion technologies in buildings and consumerproducts should be accelerated and ex-

panded,

Constraints in BuildingConstruction . . q . . . . . . . . . . . . . . 191

E RDA d o e s n o t a p p e a r to b e d e v o t in gsuffic ient effort to overcoming the non-technological barriers to energy conserva-tion in building construction.

Need for ThermodynamicAnalysis . . . . . . . . . . . . . . . . . . . . . 193

The ERDA Plan does not describe how theagency plans to identify areas with thehighest theoretical potential for industrialenergy conservation and to assess the prac-tical feasibility y of implementing programs inthose areas.

Oil and Gas Substitution . . . . . 195

ERDA’s plans for the substitution of otherenergy forms for oil and gas as part of theindustria l conservation program are notwell-defined.

Use of Foreign Technology . . . . 197

The ERDA program should consider theuti1ization of foreign technology as analternative to new conservation research.

CHAPTER V 171



13.

14.

15.

Transmission and DistributionPriorities . . . . . . . . . . . . ..0...... 2 0 0

The economic, environmental, and reliabilitycriteria underlying ERDA’s choice of projectsand their relative priorities in the electricaltransmission and distribution program needclarification.

Active Load Management . . . ... 202Active load management is not addressed asa cost-effective way to save energy.

Orientation of AutomotivePrograms . . . . . . . . . . . . . . . . . . . . . .204

ERDA’s program on highway vehicles isdirected more towards prototype develop-ment than toward th e t ech nolo g ica lbreakthroughs necessary for successful com-mercialization.

16.

17.

18.

Cooperation With the TransportationIndustry ... **.*0** 206

Successful commercialization of ERDA-sponsored technology in the transportationindustry will be difficult to achieve withoutclose cooperation between ERDA and in-dustry.

Nonhighway Vehicle Transporta-tion Programs . . . . . . . . . . . . . . . . 208

ERDA presently has no program for energyconservation in the non-highway vehicletransportation sector.

Energy Recovery From Waste .. .209

ERDA has formulated no plans or programsin the productive use of waste, althoughspecifically directed to do so by Congress.

172 CHAPTER V



ERDA’s programs under the purview of the

Assistant Administrator for Conservation areamong the newest and least developed of anywithin the Agency, With the exception of theprojects in the division of transportation whichderived from the Alternative Automotive PowerSystems (AAPS) program within EPA, theDivision of Electrical Energy Systems in theDepartment of the Interior, and the AtomicEnergy Commission’s storage work, all areas hadto be created and assembled in the past 6 monthswithout benefit of antecedents. The staff respon-sible for this planning is to be credited for asuccessful beginning, but much further analysis

and program development is still required. Theeffort of the staff is all the more noteworthy inview of an apparent lack of appreciation withinthe Government of the role that conservation canprovide in helping to meet the Nation’s energygoals. The far greater emphasis given to energysupplies in comparison to energy demands in theERDA Plan has roots in the thinking whichinformed the national policy goal sta ted byERDA as “to provide for future needs so that lifestyles remain a matter of choice and are notlimited by unavailability of energy.” This state-ment makes no mention of the total cost of the

energy made available. It appears to focus on thenecessity of supply at any price and does notacknowledge that life styles can be maintainedand improved with more cost-effective use of energy. To provide a better balance betweenenergy supply and demand, the goal might bebetter stated as “to provide the opportunity forpresent and future generations to enjoy thoseamenities which they deem worthy at minimaltotal cost to themselves and society.”

The main issues upon which the conservationpanel reached a consensus are summarized b y thefollowing statements:

qThe ERDA Plan could advantageously take amore vigorous approach to energy conservation,

both in its objectives and in its level of effort.

The energy conservation targets presented inthe ERDA Plan project only minimal gains overthose which are already broadly recognized as

C. INTRODUCTION

attainable with existing technology, In part, this

is due to the ERDA scenario which ignores priceelasticity of demand.T h e l a c k o f a n a g g re ss iv e c o n se rv a t io n

program is also reflected in ERDA’s budgetrequests, which allocate less than 2 percent of itstotal budget for conservation. The conservationprogram is too narrowly focused in the transpor-tation and electrical sectors. These problems areaddressed principally in Issue 1 and are arecurring theme in others.

q ERD A 'S plans for program management an dcoord ina t ion w i th in the agency , w i th o the r

F e d e r a l a g e n c i e s , w i t h S t a t e a n d l o c al

governments, and with foreign governments arenot clearly delineated.

Most of ERDA’s conservation efforts will behighly complex, involving jurisdictionalq u e s t io n s b e twe e n p ro g ra mma t ic d iv i s io n swithin the agency, and between various agenciesof Federal, State, and local government. Use of foreign technology will require cooperativear ra ng em ent s w i t h ot h e r g o v er n m e nt s . F orexample, it is imperative to closely link Buildingsto solar thermal utilization. The mechanisms forinteraction must be resolved quickly to eliminate

unnecessary duplication of effort and to assurethat projects flow smoothly through the variousgovernmental entities responsible for research,development, demonstration, assessment, andimplementation. Issues 2 and 12 consider thisproblem in greater detail,

. ERDA has not yet developed a comprehen-

sive plan for interaction with the private sector.

In energy conservation, interaction with theprivate sector is especially crucial, since theconsumers o f c on se rv at io n t ec hn ol og y a rediverse and numerous.

Energy conservation is as much a matter of p r iva te en terp r ise in tere st a s g o v ern me n ta lconcern. Many valuable innovations have beendeveloped in the private sector. Many others canb e d e v e lo p e d a n d c o mme rc ia l i z e d th ro u g hFederal/private partnerships. Some programsreflect lack of knowledge of current industrial

CHAPTER V 173



know-how. There can be no assurance that ERDAR, D&D results will be commercialized unless thecorporate and individual consumers activelyparticipate in the planning, execution, evalua-tion, and implementation of the research.

ERDA must make a serious commitment toestablishing constructive relationships amongGovernment, industry, and private citizens toensure the success of its energy conservation

efforts, Various aspects of this problem aretreated in Issues 3 and i’.

qERDA’s use of the term “conservation” is too

broad. As a result, the program plan for conser-

vation is incomplete in some areas and overex-

tensive in others.

ERDA’s interpretation of the term “energyconservation” is important because it defines theboundaries of the conservation program. Itsdefinition of the term is sufficiently broad thatnot only fuel shifts but even financial savings,can be rationalized as “conservation, ” This is far

different from the more generally accepteddefinition of conservation (saving energy in acost-effective way). Irrespective of the impor-tance of the various ERDA programs under“conservation, ” there is a danger in their inclu-s ion as “energy conservation, ” One consequenceis a loss of focus on the role of the energyconsumer in conservation, Another is the poten-tial diversion of funding from true conservationprojects to others better justified on groundsother than energy conservation, such as theERDA electric energy systems program, Thespecifics of the problem are discussed in Issue 4.

. E R D A d o e s n o t a d e q u a t e l y a d d r e s s t h e

social, political, economic, and environmental

issues associated with implementation of both

exi s t in g a n d n e w en ergy conse rva t ion

technologies and systems.

Certain programs proposed by ERDA mayultimately be very successful technically, yethave no real impact on society because of inherent nontechnological problems. In theenergy conservation sector, the task of im-

plementation is made more difficult by the factthat the ultimate beneficiaries, consumers, aresubject to a multitude of constraints,

A meaningful R, D&D program must considerthese nontechnological barriers at the earlieststages of planning. This is done well in theprograms for “Buildings” and “Industry”, but ingeneral the ERDA document is basically atechnological plan, with little evidence of societal

assessment in its proposed projects. Almost totalattention is given to creation of technologies andnot enough to analysis and evaluation of alter-natives. ERDA is charged with this responsibili-ty (Public Law 93-577 Sec. 5(a)); its plans andprograms must consider these nontechnologicalfactors, Issues 5 and 9 describe the implicationsof this problem in specific areas of concern,

. ERDA h a s n o t a d e q u a t e l y e s t a b l i s h e d

priorities within its conservation program or of

the conservation program relat ive to energy

supply programs.

Extensive data on energy usage have beencollected within the past several years byGovernment and private researchers; improvedmethodologies have been developed for assessingthe potential savings which might be realized bythe implementation of various conservationinnovations. With the exception of its program inthe Building sector, it is not evident that ERDAhas made effective use of existing quantitativetools and data in establishing priorities for thethe conservation program, or that it has plans todevelop improved assessment tools for use in

future program planning and evaluation, Issue 6addresses this problem in general terms, whereasIssues 10, 13, 15, and 17 consider priorityquestions in specific areas.

In addition, several topics which do not fallnaturally into the general grouping of issuesoutlined above are discussed in the followingpapers: specific programs on demonstration andresearch on buildings (Issue 8); substitution of fuels in industry (Issue 11); e lectrical loadmanagement [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 ofconservation in responding to the national energy problem.

SUMMARY

ERDA-48 sta tes that energy conservation is of “crucial” importance,

particularly in the next decade. However, its program priorities and fundingrequests are inconsistent with the stated importance of conservation. There is littleevidence that cost-effectiveness or environmental/economic impacts have beenconsidered in establishing program priorities; moreover, programs to addressnontechnological but none-the-less vital issues in developing and implementingconservation 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 i tsprobable cost-effectiveness of conservation program can be rapidly implemented through

to be reflected in its programs, especially in an adequate, highly responsive procurementcomp ar i son w i t h su p p l y t e c h n o l o g y system?programs?

2. What guidelines are used to decide whethera n e n e rg y c o n se rv a t io n a c t iv i ty sh o u ldreceive ERDA funding rather than fundingfrom some other Federal agency or theprivate sector?

BACKGROUND

Studies of ways to respond productively to the energy conservation shall be a primary con-problem 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 regardingrelate to improved utilization rather than to the extent and rate at which price effects aloneaccelerated supply growth. The ERDA enabling will induce “the market” to shift to more efficientact, 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 Governmentregulations in the energy area, the price responsewill be far less complete and less rapid thanneeded to meet national needs.

Most observers feel that the energy problem isso urgent for both economic and national securityreasons, that an aggressive campaign must bemounted to:

Ž Accelerate the rate at which end-use efficien-

cies are improved;. Extend improvements from those that have

sufficiently fast payoff to attract privateinvestment to those that self-amortize moreslowly but are still attractive in terms of public benefit.

In addition, the public benefit of reducedvulnerability to embargoes and price cartelsprovides justification for Federal incentives thathelp induce otherwise “no profit” shifts to higherefficiency.

The urgency and cost-effectiveness of a major

effort to improve energy utilization is recognizedin the general pronouncements of the ERDAProgram Plan, but a closer review shows that thepronouncements do not transla te into actualprogram emphasis and budgetary priority:

q Despite the high priority and cost-effec-t iv e n e ss o f c o n se rv a t io n th e p ro p o se d

budgetary allocation to conservation versussupply development is only about 2 percent.Clearly the ERDA budget decisions accordlittle weight to relative cost-effectiveness.

q Approximately half of this 2 percent actuallyis only indirectly related to end-use conser-vation; rather, it pertains to miscellaneousprograms (e.g., electric transmission a n d

distribution) assigned to the Assistant Ad-ministrator for Conservation that, howeverworthy for other reasons, carry low priorityin terms of conservation potential, per se.

. Many of ERDA’s conservation programs areoverly cautious and conservative (e.g., theelectrical sector); they are not comprehensive(e.g., the transportation sector), they displaylittle aggressiveness or sense of urgency aswell as an unwillingness to make high-riskbut promising, high-leverage investments.

q

The old Atomic Energy Commission procure-ment procedures must be modified to matchERDA’s new requirements, especially in thearea of conservation. In this area, ERDA mustdeal with a very diverse set of constituentsrather than with a small number of largeindustrial concerns. There is little evidencethat these modifications are being made.

176 CHAPTER V



2. Program Management and Coordination

ISSUE

ERDA’s plans for conservation program management and coordination withinthe 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 energyR, D&D with responsibility y to integrate and coordinate national efforts. Its missionis to assure that existing ancillary resources (e.g., capital) manpower, materialistand expertise) are utilized to the maximum extent, thereby making available themost promising energy alternatives.

It is not evident in ERDA’s plans whether a comprehensive framework is beinge s ta b l i sh e d to p e rmi t E RDA to p e r fo rm adequately i ts required coord-

ination/integration role . Insuffic ient a ttention is given in the Plan to theimplementation of formal mechanisms or operating relationships to assure:

. location of programs within ERDA to maximize chances for an integratedsystems approach to solving problems;

q coordination of programs with the various Federal agencies, and State andlocal governments involved in energy conservation work; and

q integration of foreign energy conservation R, D&D into domestic planning.

Lack of programmatic elements to deal with the above responsibilities couldseriously impede the effort to achieve the stated objectives within the conservationprogram.

1. As specific examples

QUESTIONS

of problems in defini-tion of responsibilities:

. What is ERDA’s role in the developmentand implementation of technologies torecover resources and the energy contentof municipal garbage? This would appearto bean important function of ERDA and isso stated in the legislations, yet ERDA’sb u d g e ta ry c o mmi tme n t i s o f a to k e nnature, and other Federal agencies are

involved in this area.q H o w a r e

programsbuildingboth aredesign?

the solar heating and coolingto be coordinated with the

conservation programs, sinceintimately related to building

2.

3.

q Why is work in Elec t ric Convers ion ,Electric Power Transmission and Dis-tribution, and large-scale (powerplant)Energy Storage under the purview of theAssistant Administra tor for Conserva-tion?

What spec if ic management mechan ism,technique(s) or coordination controls willERDA use to integrate and coordinate itsconservation activities with other Federal

agencies?In the near term, where direct Governmentinfluence and incentives can create energysavings, how is the responsibility for energyconservation divided between ERDA andFEA?

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4. How does one separate the policy implemen- 6. What provisions have been made in thetation role of FEA’s energy conservation ERDA Plan to assure that the agency willprogram from the R, D&D activities of ERDA? utilize, to the fullest possible extent, in-

5. How does the ERDA Plan to integrate andcoordinate its activities with State and localauthorities assure that overlap, duplication,

novations for energy conservation developedin other countries? Who will be responsiblefor these cooperative arrangements?

and inefficiency in ancillary resource utiliza-tion are avoided?

BACKGROUND

ERDA has been mandated (Public Law 93-577)as the primary agency in energy R, D&D withresponsibility for coordination and integration of national efforts and for cooperation with othernations. Programs to develop energy supplieshave existed for many years. However, only inthe recent past with the rise in energy prices anduncertainties in availability, have significant

efforts been focused upon energy conservation.As a result, responsibility for energy savingsprograms is divided within ERDA, among otherFederal agencies, and among State and localgovernments. Although there are varying percep-tions about appropriate division of responsibili-ty, there is general agreement that operatingrelationships must be established in order tocoordinate ongoing efforts at all levels. It is notclear from the ERDA Plan that a comprehensiveframework has been established which willpermit ERDA to adequately perform its requiredcoordination/integration role. T he se me ch -

anisms need to be resolved early in ERDA’sdevelopment.

Wi th in E RDA i t se l f , t h e re a re q u e s t io n sre g a rd in g th e a ss ig n me n t o f p ro g ra mma t icresponsibilities, For example, on the one hand,responsibility for Solar Heating and Cooling of Buildings is located under a different ERDAAss i s t a n t Ad min i s t r a to r th a n p ro g ra ms fo rminimizing energy required to operate buildingseven though the two program areas are closelyinterrelated, More attention needs to be given tothe location of programs within ERDA in order tomaximize chances for an integrated systems

approach to solving conservation problems,In a s imi la r v ein , so me me an s o f fo rmal

management control must be developed to assurecoordination of re la ted programs in variousFederal agencies and departments (e .g . , theFederal Energy Administration, Environmental

Protection Agency, Federal Power Commission,Department of Transportation, Department of Commerce, Housing and Urban Affairs Depart-ment, U.S. Department of Agriculture) thatimpact on energy demand. In many cases ERDAhas a program goal that is either identical orimplicitly related to some other agency area of concern. Of critical concern is the relationship

between ERDA and the Federal Energy Ad-min i s t r a t io n in th e i r e f fo r t s to c o o rd in a teanalysis and policy input in R, D&D programdesign, The lack of a clear statement regardingthe way in which the implementation measuresmanaged by the Federal Energy Administrationwill be integrated with the R, D&D programs of ERDA requires serious attention, An implemen-tation strategy must be initiated at the earliests t a g e o f r e se a rc h p la n n in g a n d se t t in g o f priorities and goals, It is encouraging to note thatsuch coordination seems t o b e a l r e a d yoperational in the Buildings and Industrial sec-

tors,Likewise, an effective link needs to be made

between the Federal system and State and localauthorities, since they are responsible for some of the most important policies regarding energy use,The integration of State and local activities intothe overall process is important since suchactivities reflect various regional perspectives. Itis also essential in providing an effective channelfor information transfer and technical assistanceto these groups.

Finally, an equally important consideration isthe manner in which ERDA intends to participate

in international cooperative R, D&D programs, Itis important that the agency define more precise-ly h o w i t w i l l a s su re th a t fo re ig n e n e rg yconservation work is integrated into domesticplanning.

Although it is reasonable that energy conser-

178 CHAPTER V



vat ion efforts are ongoing in more than one ment controls and effective leadership, the resultagency, i t is necessary that these efforts be wil1 be duplication and inefficient t use of publiccomplementary. The “lead agency” role is at best resources.difficult, but without clearly defined manage-

3. Interaction With the Private Sector

ISSUE

A comprehensive plan is needed for interaction between ERDA and the privatesector 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 iscomplex since various areas of the private sector are organized quite differentlyand each (e. g., encrgy consuming industry, energy producing industry, the ElectricPower Research Institute (EPRI), individuals, public institutions], will require aunique approach to constructive interaction. The ERDA Plan provides few detailsas 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 privatefrom the industria l , labor and consumer conservation research results?sectors in its basic program planning effort? 4. What are the cri teria used for deciding

whether, and to what extent, energy conser-2. 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, c lose 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, Forsocieties, anti consumer groups, is crucial. While e x am ple, t h e b u i ld in g in d u s t ry i s h ig h lygovernmcnt may initiate much of the research, fragmented, involving standards organizations,u1timate implementation is largely dependent on prof ess ion al so ciet ies , manu fac tur ers , tr adethe privatc sector. groups, and labor organizations, each of which

CHAPTER V 179



will have a different role to play in utilizing newconservation technology. Many components of this sector have no research capability of theirown, and will depend heavily on government forhardware development and policy direction.Others have excellent research and developmentresources and can be vital contributors to thenational program at the planning and develop-ment level. The detailed format for ERDA

coordination with such diverse components of the private sector must be carefully designed tobe effective,

The electric utilities industry is a special case,both because of i ts central role in energyconversion and distribution and because of itscooperative sponsorship of a wide variety of research and development projects throughEPRI. Because of its close connection with theutil i t ies industry and i ts industry advisorycommittees, EPRI is both aware of the problemsof the industry and well-si tuated to lead intechnology transfer, ERDA, on the other hand,

should take the lead on projects with excessively

low profit potential, high risk, or high capitalrequirement.

It is vital that ERDA take affirmative steps toinvolve all elements of the private sector in theearliest possible stages of program planning.Advisory boards with representatives fromindustry as well as private citizens can provideimportant viewpoints to aid in the decision-making process a n d to su p p o r t a l t e rn a t iv e

courses of action. Since many energy conserva-tion initiatives may have significant impact onrelative competitive positions within industry,government’s role must be carefully defined.

Budgeting for research by ERDA should takeaccount, wherever possible, of private expen-ditures for related efforts. Cooperative programsinvolving cost-sharing contracts must considerpatent and proprie tary rights. Even in thedevelopment and demonstration stages, ERDAmust appreciate and work to eliminate problemsthat might impede the eventual commercializa-tion of new processes and products,

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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 improveefficiency or cost in either energy supply or energy demand can be subsumedwith in it. This has the possible consequence of shifting the emphasis onresponsibility for conservation actions away from the consumer toward thesuppliers and distributors of energy.

As an example, the Electric Conversion, Energy Storage, and PowerTransmission 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 thecontribution 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 thesupply side within the overall conservation program. Also to increase their chanceof success these programs should be coordinated with research on othercomponents of the electric power sy s te m wi th wh ic h th e y a re r e l a t e dsynergistically.

QUESTIONS

What is ERDA’s operaconservation ?

tional definition of p rograms in e lect ric convers ion ,transmission and distribution, and

electricenergy

How can ERDA better structure the diversestorage? How does this compare, in terms of cost, with savings achievable through load

activities under its Assistant Administratorfor 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 electricas a result of success in the proposed power system?

BACKGROUND

The operational definition of conservation is of accomplish a given end. Another definition alsocrit ical importance, p a rt i c ula rly d ur ing th e in clu de s l i fe s ty le a nd in s ti tut ion al ch a ng e speriod in which the ERDA energy conservation which result in a reduced demand for energyprogram 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 toresults in more “efficient” utilization of fuels to achieve given ends, and in some areas, goes

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60-411 0 - 75 - 13



beyond the latter to include interfuel shifts andmeasures which might more correctly be termed“economic efficiency” rather than energy ef-ficiency improvements. Too little attention isgiven, however, to efficiency increases in end-use. This results in an operational definition of energy conservation which permits therationalization of virtually any efficiency change

in the energy supply or demand systems as aconservation measure and can shift the emphasison responsibility for conservation actions fromthe consumer to the producer of energy.

The program areas of Electric Conversion,Energy Storage, and Electric Power Transmis-sion and Distribution are examples which meet

the “economic efficiency” criteria and are notp r i n c i p a l l y e n e r g y e f f i c i e n c y m e a s u r e s .Although these programs are quite worthwhile,there is a very real danger that by their inclusionunder the generic term of conservation they couldmask a low level of commitment to programsmore directly focused on the important task of eliminating wasteful expenditures of energy.

In addition, these programs are principallyconcerned with various components of electricpower systems and should be investigated incoordination with each other and with the othersystem components rather than as conservationmeasures. This, too, provides incentive foradministrative relocation of these programs.

182 CHAPTER V



5. Need for Nontechnological Research

ISSUE

ERDA’s role needs clearer definition with respect to research on non-

technological issues associated with energy conservation.

SUMMARY

present inefficient patterns of energy use, characterized by inefficiencies inbuildings and consumer products, in transportation, in industrial processes, and inthe generation and transmission of electricity, are to a large degree caused by acombination of historical, institutional, governmental, economic, and social forces.Implementation of known methods and technologies to improve energy useefficiency requires an understanding of how these forces operate and how changesin these forces will influence energy consumption patterns and fuel use. The

regulatory policies and programs of various agencies need to be criticallyreexamined 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 trade-offs among separate agency interests and establish an overall government postureis a key requirement. Guidelines in (Public Law 93-577, Sec. 5(a), imply a strongERDA role.

QUESTIONS

1. Has ERDA developed programs to analyze 3 . Wh a t e f fo r t s d o e s E RDA a n t i c ip a te tono nt ec hn ol ogi ca l i ss ue s r el at ed to ene rgy e va lu at e th e en er gy i mp ac ts o f Fe de ra luse? regulatory programs? Will the efforts involve

Z . What fraction of its energy budget will be the cooperation and participation of otherFederal agencies? If so, how?assigned to analyses of economic, social,

institutional, and behavioral issues? 4. How can the administrative costs of regula-tion to the taxpayer, the manufacturer, thebusinessman, and the consumer be assessed?

BACKGROUND

Energy conservation analysis which focusessolely on the technological issues and neglects

the many nontechnological considerations isincomplete and undesirable. Research on theeffect of Government regulatory agencies, as wellas studies of the social factors which influencee n erg y u se p at t ern s , wo uld b e p a rt i cu lar lytimely. For example, the Interstate CommerceCommission regulates all rail and much truck

freight traffic in addition to intercity bus travel,The Civil Aeronautics Board regulates commer-

cial aviation, The Federal Highway Administra-tion and the National Highway Traffic SafetyAdministration regulate truck weight and safetyfeatures. The Urban Mass Transit Administra-tion, and a bewildering array of local regulations,control the operation and labor practices of urbantransit systems. Almost none of these emphasize

CHAPTER V 183



energy conservation. Similar examples can becited for the other areas of concern.

R, D&D required to carry out programs inconservation is strongly sector-specific, whetherit be in technology, social science, or behavioralscience. It is encouraging to note that conserva-tion 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 andavailability warrant modifications to promotegreater energy efficiency, It is likely that theseanalyses can best be conducted in cooperationwith other interested Federal agencies, such asthe Federal Energy Administra tion and theregulatory agencies.

184 CHAPTER V



6. Dem and Modeling and Conservation Plann ing

ISSUE

The basic assumptions underlying ERDA’s projections of future demands areunrealistic; as a result, the ERDA Plan has not accorded sufficient attention to

conservation as a means of reducing energy demand, environmental impact, andfinancial stress.

SUMMARY

Investment in energy conservation can yield a high rate of return. In additionto lower total cost for a given standard of living, major benefits which result fromconservation efforts include:

q Lower energy and natural resource consumptionq Lower capital investment requirementsq 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 notrecognize 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 figureis the basis from which plans for new supply are developed,

Program emphasis and funding may thus be seriously biased toward thesupply options. Such an overstatement of need is damaging to future effortstoward energy development in both the supply and demand areas. Since the ERDAPlan is closely tied to numbers generated in the model, we must be careful to keep inmind the assumptions that went into the ERDA calculations.

QUESTIONS

1. E R D A d e p e n d s r a t h e r h e a v i l y o n t h eReference Energy System model to provideestimates of oil and gas imports requiredunder varying assumptions about supply andconservation actions. It is realistic to projectthat no increases in end-use efficiency willo c c u r (o th e r th a n w i th r e sp e c t to th eautomobile) over the next 25 years unless thegovernment takes additional actions? Inother 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 unitoutput) that approach the figures projectedby the ERDA Plan for 1985. Given presentprices plus an (assumed) active Federal

program to accelerate conservation, wouldERDA expect significantly greater gains inend-use efficiency than assumed in Scenario1?

3. What plans exist to refine demand projec-tions? How are they related to projectedpopulation growth and composition, in-dividual income, and other demographicfactors? Is the data available sufficient tod e s c r i b e p r e s e n t e n e r g y c o n s u m p t i o npatterns, let alone project future demand?

4. Has ERDA based its planning and establish-ment of priorities on consideration of theeconomic and environmental implications of reduced demand (conservation)?

CHAPTER V 185



5. Does the ERDA Plan p lace too much 6 . There a re several nat iona l energy models a temphasis on “creating” energy choices and several Federal agencies, notably ERDA andnot enough on evaluation of energy options FEA. W h a t c o n t i n u i n g c o o r d i n a t i o nfor “trade-off” between options? arrangements should be made to ensure

maximum productivity y an d minimumduplication of effort?

BACKGROUND

The ERDA Plan uses a “scenario” approach tocalculate national consumption and associateddemands for oil and gas imports under variousassumptions. Five scenarios are examined, plus abaseline called “no new initiatives” (Scenario O).In Scenario O, ERDA assumes that currentconsumption patterns continue to the end of thecentury in all end-use areas with the singlee x c e p t io n o f a 4 0 -p e rc e n t imp ro v e me n t inaverage new car efficiency by 1980, The resultingtotal 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], con-sumption patterns will surely continue in theyears ahead to shift toward lower demandgrowth, This is largely due to “lagged response,”w h ic h m ea n s t h at a c on s um er ’ s u l ti m at eresponse to changes in real energy price occursover a period of up to 10 to 15 years, and that onlya small percent of the total response is evident inthe first year following a price shift. Therefore,Scenario O does not provide a realistic baseline. If

the baseline demand scenario is unrealisticallyhigh, the importance of reducing imports and,therefore, the urgency of the need is to increasesupplies and reduce demand is inflated.

Conservation Scenario 1 (Improved Efficien-cies of End-Use) assumes only very moderateimprovements in use. For instance, an average10-percent improvement in appliance efficiencyis assumed by 1985. Such levels of improvementare sufficiently conservative that a very modestnational effort can probably achieve the scenario,In fact, it is not unlikely that the shift to higherefficiency assumed in Scenario 1 will occur

simply in response to price increases which havealready occurred. Similarly, the effect of the high“baseline” in Scenario O is to overstress theurgency of the need to expand domestic suppliesin order to hold down imports. Therefore, ERDAshould use more realistic parameters for the

baseline and conservation scenarios on which tobase future program plans and priorities,

In addition, ERDA’s projections are based oninsufficient data and exclude such factors as theinherent economic and environmental advan-tages of improved efficiency, The BrookhavenNational Laboratories models were used toevaluate the supply/demand picture for 1985 and2000. Inputs to these models include end-usedemands. The model then estimates energyconversation an d supply t ec hn ol og ie s t o

minimize cost . E n d - u s e b e h a v i o r a l a n dtechnological changes are not adequately includ-ed in the model. For example, the demandassumptions in the conservation scenario of theERDA Plan project changes in the efficiency of end-use devices but do not consider the effects of design, control, and operational changes, or theinfluence of the price mechanism. These ares igni fi cant o mi ss ions , p a r t i c u l a r l y i n t h ebuilding sector.

A more useful approach would include the useof a predictive demand model to evaluate therelated economic and environmental benefits

associated with reduced consumption. Thesehave a significant multiplier effect in reducingsupply requirements; a barrel of oil saved willoften reduce supply requirements by more than abarrel. A similar situation exists for economicconsiderations. For example, as conservation isapplied to building heating and cooling, capacityrequirements are reduced, providing dollarsavings. The la tter are further increased byoperating energy cost savings over the lifetime of the buildings. The direct reduction of environ-mental impact also provides energy savings.

The development of a data base on energy use

patterns as well as improved predictive models isessential to energy demand projections, futureprogram planning, and conservation evaluation,ERDA, in conjunction with other Federal agen-cies, should undertake the development andrefinement of these data and methods.

186 CHAPTER V



—

7. Design Methods and Standards

ISSUE

Energy conservation efforts in the building and consumer products sectorrequire 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 andconsumer product sector, two major tasks must be accomplished. First, the designprofession must be provided with improved design methodologies, as traditionaldesign procedures do not place adequate emphasis upon energy considerations. Afundamental reorganization of the design process and the development of newenergy-sensitive analytic tools is required. Second, realistic energy standardsand/or energy budgets must be established as design guidelines. Data on existing

energy use patterns in the buildings and consumer products sector must beanalyzed in order to develop a ra tional basis for new standards. Finally ,fundamental questions as to the form energy standards should take must beresolved, 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 thes ta n d a rd s a n d /o r e n e rg y b u d g e t s a n d to educational effort necessary to reorient designdetermine 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 andimproving performance evaluation techni- consumer products sector?ques?

3. How will standards be applied to diverseclimatic areas and energy use patterns?

BACKGROUND

In most instances, energy use data, improvedmethods of analysis and design, and the basicelements of realistic standards do exist. How-ever, as the building and consumer productsindustries are fragmented and have very diverseneeds, the data are scattered, and the energy-sensitive methods of analysis and design arefrequently not well understood. While manyprofessional societies and manufacturing

associations have already adopted standardswhich, if applied uniformly, would contributesignificantly to energy conservation, these ef-

forts have not, in many cases, been coordinated;thus, standards and design procedures within theindustries are not consistent, Some standards areprescriptive or specify component performance.Some standards have been proposed for “energybudgets.” The General Services Administration

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has developed a target budget for new officebuildings. Standards and guidelines for existingbuildings have received even less attention,

A definite role for ERDA exists in this area of concern. Without the development and dis-semination of reliable methods of analysis, aswell as the adoption of reasonable and uniformstandards, energy conservation efforts will befrustrated. Moreover, architects, engineers, and

many of the small industrial concerns in thissector are unable to support the major researchefforts necessary; thus, a strong lead by ERDA isrequired.

Development of standards should be ap-proached with great care, Prescriptive standardsthat specify components and systems will tend tofreeze the state-of-the-art of the then existing,energy-using mechanical and electrical systems,On the other hand, performance standards whichestablish broad energy goals within a frameworkof human needs for comfortable working andliving e nv ir on me nt s w i ll a l l ow d e s ig n

professionals and the building industry thela t i tude needed to deve lop innova t ive andefficient solutions.

The issues relating to the establishment andimplementation of energy standards are asfollows:

Are the data on the energy requirements of buildings and various consumer productssuffic ient to provide a realist ic basis forestablishing standards?

Wh a t fo rm sh o u ld su c h s t a n d a rd s t a k e ?

Should they be prescriptive or performancestandards? Will voluntary standards suffice?

How should these standards be promulgated?They must become an integral part of buildingcodes, conditions for mortgage loans, and soforth, or they will not be effective,

O nc e pr om ul ga t ed , h o w w i l l a r c hi t e ct s ,engineers, and inspectors be trained? Whatmanuals need to be developed to a id im-plementation?

D o d es i gn er s h a v e t h e a n a ly t i ca l t oo l s

necessary to assure that their designs meet theintent of energy standards, or is an educationaleffort 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 justifiableby market economics and national need, demonstration projects must be developedfor use in all sections of the Nation, ERDA’s plans for the implementation of existing technology for energy conservation in buildings and consumer productsappear inadequate: in addition, i t is evident that ERDA is not spending a sufficientportion of its resources on the research of new energy conservation technologywhich 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 airdemons t ration programs place suffic ient conditioning systems?s t re ss u po n in su lat ion a nd o the r e ne rgy - 5. If current refrigerants prove to have adverseconserving instruments that must compete forthe same capita 1?

e nv i ro nmen ta l effects, w ha t a r e t h epossibil i t ies 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 humanfactors in order to reevaluate the thermal andvisual requirements for comfort, health, andsafety ?

BACKGROUND

The ERDA Plan does not appear to givesuffic ient a ttention to the need to developp ro g ra ms d e s ig n e d to d e mo n s t ra te c u r re n tenergy conservation technology to the public.

C o n g r e s s h a s l e g i s l a t e d a d e m o n s t r a t i o nprogram for solar heating and cooling, Perhapsthat program could be modified to include moreexplic it ly architectural design and thermalengineering, so essential to the economic viabili-t y of solar utilization.

Many of the technologies required to enable

major conservation in the building and consumerproducts sector now exist and can bedemonstrated and brought into the marketplacemore rapidly than solar power systems.

In the near term, the barriers to implementa-t ion are primarily nontechnical. However, futurenational energy goals can best be met only by aprogram that includes sustained conservationefforts. Great long-term gains may be achievedthrough an appropria te investment in basicresearch, The present ERDA plan gives little

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consideration to basic research re levant toconservation technologies. Examples of areaswhere new technologies may provide additionalenergy savings in the building and consumerproduct sector are (some of them are in ERDA’sPlan):

Thermal energy storage systems compatiblewi th c o n v e n t io n a l h e a t in g a n d a i r c o n -

ditioning equipment.Development of more the rmal ly e f f ic ien tbuilding materials: improved insulation; glassproduct-s; and selective surf solar radiation control.

Research on human factors,adaptability to their thermal

ace materials for

such as people’senvironment.

New approaches to high efficiency appliances,including lighting.

Chemically stable fluids for heating and airconditioning applications, having useful ther-

mal properties.

Until recently, efficiency of energy consump-tion in buildings was of little concern to thearchitect, builder, or consumer. The ineffectiveuse of buildings contributes to their inefficientuse of energy-based systems. The redesign andreplanning of existing buildings (especially the24 billion square feet of commercial and in-stitutional buildings) poses a major challenge tothe Nation’s design professionals. R, D&D mustbe done for both new buildings and retrofittingexisting buildings. It is likely that the research

which permits the new building contractor toinsta ll energy effic ient systems will not bedirectly transferable to the retrofitting of oldstructures. Therefore, it is good to note thatERDA will initiate research in FY 76 designed todetermine how buildings can be retrofitted in acost-effective manner.

In terms of the specific programs in the ERDA

Plan the following observations are made:De mo n s t ra t io n s o f e n e rg y c o n se rv a t io ntechnology in buildings and solar heating andcooling demonstrations, should be more close-ly coordinated; demonstrations shouldemphasize the total building system.

The delay of construction and evaluation of minimum energy buildings until 1978 andnovel building design until 1980 seems un-necessary.

Research into new building materia ls andsystems should be accelerated.

More emphasis should be placed on research of lighting systems and cost-effective ways toreduce energy use in present lighting systems.

A program for the evaluation and demonstra-tion of energy storage in buildings as anadjunct to conventional heating and coolingshould be developed in the near term as a wayto respond to time-of-day electrical rates,

Research on the energy efficiency of energy-intensive consumer products should be inten-sified 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 thenontechnological barriers to energy conservation in building construction.

SUMMARY

The technology to permit substantial reductions in energy expenditures oncommercial and residential buildings is currently available. New technologies anddesigns promise cost-effective reductions of energy to operate buildings of 60percent or more. However, five primary nontechnological barriers impede thisobjective and require R, D&D to provide ways to overcome them:

q The minimum first-cost syndrome. . Industry and consumer resistance.

q Antiquated local building codes. . ERDA’s budget control procedures.

q Poor system design.

QUESTIONS

1.

2.

3.

4.

What are the barriers to more rapid implemen-tation of existing technologies in buildings?What is the role of ERDA relative to:

Ž Industrial accep tance o f technologiesdesigned to foster energy conservation.

. Financial incentives for design and con-struct ion of more energy-efficient struc-

tures (e.g., life-cycle cost rather than first-cost analyses)?

How can building codes be modified topromote energy conservation?

How can the design processes be redefined tooptimize the building and its energy system asa whole?

What research has been done, or is planned, toidentify barriers to consumer and industrial

a cc e pt a nc e o f m i ni m um l if e -c y cl e c os tdecisions in housing and appliances?

5. What incentives will be most effective ingaining consumer acceptance?

q

q

q

Must incentives vary with socioeconomicfactors?

What meaningful incentives can be iden-tified for the commercial sector?

Would incentives vary with type and size of commercial organization?

6. What steps are being taken to assure theNation that the research results of ERDAprograms for energy conservation in buildingsand community systems can be promptly andeffectively utilized by design professionals?

BACKGROUNDThe technology which can save substantial (20 q

to 30 percent) energy in commercial and residen-tial buildings in a cost-effective way is alreadyavailable . Five major factors are presentlyinhibiting conservation in buildings:

First-cost Syndrome, There is still a feelingamong many builders that buyers are notwilling to pay for the extras that will savethem substantial amounts of money in the longrun. Under present f inancing conditions,

CHAPTER V 191



buyers effectively use a very high discountrate in home purchase decisions regardingmo r tg a g e v e r su s o p e ra t in g c o s t s . In th ecommercial sector, most financial considera-tions have the net effect of encouraging thelandlord to make the lowest possible capitalinvestment. As a result, builders in both theresidential and commercial areas tend to use

materials and building techniques that costleast in the short run and to ignore operatingcosts. Therefore, a major ERDA effort shouldbe directed toward undertaking the researchand educating the public, lending institutions,a n d b u i ld in g o wn e rs w i th r e g a rd to th eopportunities to make cost savings throughretrofitting o r sp e c ia l me a su re s i n n e wbuilding construction which save energy.Where possible, new construction should belife-cycle costed; that is based on minimumtotal cost of mortgage plus operations andmaintenance. Research should also be done to

determine how both builders and buyers canbe made aware of the advantages of life-cyclecosting.

q Building Codes and Standards. There are twoproblems with existing building codes in theUnited States. First , they are inconsistentfrom community to community, thereby mak-ing the introduction of new concepts on anational level difficult. Second, many buildingcodes and construction standards were notdeveloped with energy conservation in mind.ERDA should study this “constraint” uponenergy-efficient buildings so that strategies to

overcome this problem can be developed,q S y s te m De s ig n . De s ig n e r s sh o u ld r e g a rd

energy conservation as an integral part of theo v e r a l l b u i l d i n g design, W hi l e so meprofessional architectural and engineeringfirms are already active in energy conserva-tion design programs, the great majority havenot yet been adequately prepared to undertakethe challenges posed by energy conservationin designing new communities and buildings,or redesigning existing communities andbuildings. A major program is required top ro mo te th e e f fe c t iv e u t i l i z a t io n o f th e

research results which Federal agencies andERDA, in particular, will produce.

q lndustria l and Consumer Acceptance, Verylittle research has been done to determine thebarriers to industry (producers, builders, andprofessionals] and consumer acceptance of new conservation techniques and to deviseincentives which could be used to overcomethese barriers. Some of the barriers to industryacceptance may include: lack of knowledge,lack of proper retraining, capital constraintsand improper regulations. In addition, in orderfor new energy conservation in buildings andconsumer products to be fully integrated intosociety, an effort must be made to understandthe barriers to acceptance of these items by thefinal consumers. It is important that the finalconsumer understand the implications of energy conservation in the home. In order toovercome these barriers, incentives whichshould be considered would include retrainingprograms for industry personnel, tax credits,tax writeoffs, accelerated depreciation, andguaranteed loans. Research is necessary inorder to determine precisely which incentivesare most effective for the different sectors of t h e b u i l d i n g i n d u s t r y a n d t h e v a r i o u ssocioeconomic segments of our society.

q ERDA’s Budget Control. The review of ERDA’sprogram generated a concern regarding theadequacy of AEC-type budget control andcontracting procedure when applied to thefragmented, small business components of thebuilding industry. AEC’s control procedureswere designed to deal with large corporationscapable of carrying the capital outlays re-quired. AEC then reimbursed the firm in-volved when the equipment, construction, andso forth were completed. Those problems canb e o v e rc o me b y e s ta b l i sh in g a l t e rn a teprocedures app l icab le to the segmentedbuilding industry, ERDA may wish to es-tablish procedures wh ic h wo u ld h e lp toeliminate the need for short-term capital asone of the major non-technological barriers todemonstration of energy conservation,

192 CHAPTER V



10. Need for Thermodynamic Analysis

The ERDA Plan does not describe how the agency plans to identify areas withthe highest theoretical potential for industrial energy conservation and to assess thepractical feasibility of implementing programs in these areas.

SUMMARY

Prior to establishing research priorities in industrial energy conservation, adetailed assessment must be made of the amount and form of energy used inindustry 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 energysavings. 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 istechnologically possible. Such considerations must enter ERDA’s programplanning activities early in the cycle to assure ultimate utilization of researchresults.

QUESTIONS

1. What efforts are planned by ERDA to establishpriorities for R, D&D programs in industrialprocesses?

2. What procedures will ERDA establish to

evaluate the nontechnical (economic, environ-mental, etc. ) aspects of energy conservationtechnologies i d e nt i f i e d b y a t h e o r e ti c a lminimum energy consumption analysis?

3. How does ERDA propose to utilize existing“minimum energy” analyses (e.g., the FEAstudies of Energy Use Data for Nine In-dustries]?

4 . Do adequate methods p resen t ly ex is t topredict accurately the effects that a proposedchange in some industrial plant might have on,say, jobs or air quality?

BACKGROUND

For any industrial process, well-establishedenergy accounting procedures can show at whatpoint in the manufacturing sequence energy isconsumed, how much is consumed, and in what

form. However, such procedures will not indicatethe theoretical minimum energy consumptionrequired, thermodynamically, to carry out theprocess. In evaluating the energy conservationpotential of a process, it is therefore necessary todistinguish between the conventional energy

losses which occur in process operations and thetheoretical energy losses inherent in any processinvolving thermal energy. For example, conven-tional energy losses are due to mechanical or

fluid friction, to heat losses through the walls of equipment, or to waste steam being exhausted toambient air or process cooling water. Theoreticallosses, on the other hand, are those which areinescapable in any given process even with thebest engineering and operating practices. These

CHAPTER V 193



losses are imposed on the process by the SecondLaw of Thermodynamics, which deals with theimpossibility of the total conversion of heat towork, Thus there is a definable theoreticalminimum energy requirement for performing agiven process. The potential for energy conserva-tion for that process is a function of thattheoretical minimum energy requirement and thee n e rg y a c tu a l ly r e q u i re d in ma n u fa c tu r in g

plants,In performing a “minimum energy” analysis itmust a lso be recognized that energy loses“quality” or capacity for performing work as itpasses from stage to stage in a manufacturingplant. The usefulness of the energy in 30000 Fflame is greater than that in a stream of wastecooling water at 100° F, even though the energyrelease, in terms of Btu per hour, may be the same.The concept of “cascading” energy from stagesrequiring high grade energy to those requiringlo we r g ra d e e n e rg y i s v e ry v a lu a b le a s aconservation o p t io n i n many industrial

processes.Once the theoretical potentia l for energyconservation is established, the problem of implemental ion o f e n e r g y c on se rv at io nstrategies must then be addressed. While theERDA Plan cites the identification of energysavings opportunities as a major ERDA role,little is said about the problem of feasibilityanalysis to determine the acceptabili ty of aproposed solution, For example, “cascading” of

heat uses may save a lot of energy but couldrequire a capital investment too large to beeconomically feasible.

In the near term, energy conservation goals inindustry may be met by what might be termed“housekeeping” measures, that is , re la tivelysimple fixes to energy-wasteful equipment ando pe ra ting p ro ce du re s, S u c h me a su re s h a v ealready accounted for energy reductions of 10 to

15 percent below levels of a year ago, by manycompanies, with some companies reporting evenbetter results. In the longer term, however, majorprocess revisions and equipment replacementwill be required. These changes will, in mostcases, necessitate large capital expenditures,which must be justified in economic as well asenergy terms. In some cases, environmental andsocial factors will also influence these decisions,

ERDA should include the development of toolsfor feasibility y analysis as a part of its comprehen-sive plan; these should encompass economicmodeling of industrial processes under varying

energy cost assumptions, and environmental andsocial impact assessment methodologies. Thesetools will be of value not only to industry but alsoto ERDA itself in the selection of projects with ahigh probability of success. Furthermore, suchmodels would be useful as policymaking tools,since they would permit policymaking agencies(such as Federal Energy Adminstra tion, forexample) to study possible alternative incentivemeasures 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 partof the industrial conservation “program are not well defined.

SUMMARY

Conservation strategies as defined by ERDA can take two forms:

q Conservation of energy by increasing efficiency of end use.

q Conservation of scarce resources, such as oil and gas, by substituting otherenergy sources, such as coal, nuclear, or organic wastes. Although ERDA isobviously aware of both of these options, the plans spelled out in the industrialsector do not clearly distinguish between them. ERDA should examine thepotential and the impacts of fuel substitution in various key industries, and

formulate the specific R, D&D strategies required, Possibilities exist for theproduction 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 proveto be an economical substitute for oil and natural gas in many applications. Inthe mid-to-long term, as advanced electric generating technologies reachcommercialization, industries may shift to electricity for process heat and steamgeneration. With research and development, high-capacity high-temperatureheat pumps may be able to provide process heat with an efficiency comparable tothat of direct fuel firing,

Questions

1. What potential does ERDA project for the use 3. How will ERDA assess the potential of directof coal as a substitute for oil or gas in the nuclear heat and steam generation as a validindustrial sector? What programs are propos- option for conserving limited fossil fuels?ed to achieve this potential?

Z. How will the research being performed underthe Assistant Administrator for Fossil Fuelsbe 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 processpossibilities 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 industrialalthough new technologies, such as fluidized bed boilers or fu r nac es is ano the r im por tan tcombustion, would greatly aid in assuring that possibility as discussed in the fossil section. This

CHAPTER V 195



option depends on the economics of the variouscoal conversion processes, such as the produc-tion of low-Btu gas for industrial furnaces. Whilemuch R, D&D is underway in this general area,specific applications in the industria l sectorshould be investigated, with appropriate par-ticipation by the industries concerned,

A number of studies have been carried out todetermine the feasibility of direct use of nuclear

heat for process applications. The operatingtemperature limit of light water reactors restrictstheir area of potential use to process steamgeneration. Because of the economic advantage of large scale operation in nuclear plants, it wouldbe necessary to site a number of large customersin close proximity to the nuclear plant, This is thescheme pursued by Consumer’s Power and DowChemical in Midland, Mich.

Technology is available to uti l ize organicwastes to generate steam; this, in fact, has beendone in the pulp and paper industry, the chemicalindustry, and others, The principal barriers to

further implementation are socioeconomic andshould be studied.Another long-range opportunity for efficient

provision of process heat will be the developmentof high-capacity high-temperature heat pumps toa b so rb h e a t f ro m lo w- te mp e ra tu re p ro c e ssstreams and deliver it to higher temperaturesections of the process. This concept will requirea program of research in thermodynamic proper-t i e s o f p o te n t i a l wo rk in g f lu id s , ma te r i a lphysical properties, and process optimization, tobe carried out via a coordinated government

industry effort. The potential gains are signifi-cant. For example, a heat pump designed toabsorb heat from one stream at 3000 F and deliverit to a stream at 600 0 F c o u ld th e o re t i c a l lytransfer more than three times as much heat ast h e e l e c t r i c e n e r g y r e q u i r e d t o d r i v e i t .Realistically, if 60 percent of this theoreticalperformance were achieved in practice, the heatpump would still provide over twice as muchheat input to the process as direct e lectricheating. With advanced electrical generationsystems offering efficiencies in excess of 50p e rc e n t , h e a t p u mp sy s te ms c o u ld th u s b e

competitive with direct fossil or nuclear heatsources 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 analternative to new conservation research.

SUMMARY

The ERDA Program proposes new research in a number of areas in whichtechnological innovations are already either under development or in operation inforeign countries. The adoption of such innovations should normally take priorityover new research initiatives, since the former are cheaper and can impact faster o nindustry. Successful utilization of certain technologies may eliminate the necessityfor research in peripheral areas which bear on the same basic problems.

W hi le a do pt io n o f t e c h no l o g y de v e l op e d a b ro a d m a y s i mp l i f y t h etechnological research problem, a number of institutional barriers may have to be

overcome before successful implementation can be accomplished.

QUESTIONS

1 . What p rov is ions have been made in the 3 . What p rovis ions wil l ERDA make fo r theERDA Plan to assure that we utilize, to the funding of cooperative R, D&D programsfullest possible extent, energy conservation with government agencies of foreign coun-innovations developed in other countries? tries? What value does ERDA place on such

2. What sorts of institutional restraints mightimpede the use of foreign technology inattacking some of our own problems? Does

the ERDA’s Plan include provisions forseeking to ease these restraints?

*

cooperative ventures?

BACKGROUND

While the need for energy conservation mayseem new to the United States, where domesticresources have been relatively abundant, conser-vation in many areas of the world, in particular,Western Europe, has been a way of life fordecades, The need to preserve scarce resources

has fostered many innovations in energy conser-vation, and a wealth of experience is available(see Appendix). For example, Germany andF r a n c e h a v e u s e d m u n i c i p a l r e f u s e a s asupplementary fuel source in industrial heatingfor many years; these installations provided the

primary basis for much of the design of the well-known Union Electric/St. Louis project. It isnoteworthy that this project has proceededimmediately to commercial scale without requir-ing expensive and time-consuming pilotoperations.

Another example is a system of active loadcontrol used by electric utilities in West Ger-many, in which high-demand appliances may beremotely controlled by signals sent out over thedistribution network. If the system is shown tobe attractive for use in this country, the im-

CHAPTER 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 f ac t or s, a nd d i s s e m i n a t i o n o f t h eon new systems designed to fulfill similar objec- technology, These functions might be carried outtives. 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 industryapplications (soaking pits, etc. )

Oxygen enrichment of copper smeltercombustion air

Dry coke quenching for integrated steelplants

Energy recovery from blast furnace gasesby use of turbines

Use of noncoking coals in blast furnaces

Higher efficiency slab reheating furnacesin steel plants

Ore pelletizing processes for preparationof blast furnace feed

Agricultural, aquacultural, and districtheating applications using industrialwaste heat

Cement plant roller mill developments

Improved solvent recovery processes forsynthetic rubber precursors andsynthetic fiber intermediates

Use of cold in LNG for freezedrying, coldstorage, and air separation plants

Use of electrical induction heating toreplace gas-fired furnaces in heattreating applications

Techniques for electric utility plant loadleveling

Recovery of low-grade waste heat usingfreon 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 andinstalled 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 theGranges 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 grindingJapan (Ishikawajima Harima Heavy Industries]

* Manyof 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 choiceof 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 coaland nuclear fuels proceeds, additional electric transmission and distributioncapacities will be needed. This increased capacity must be economically justifiableand environmentally acceptable, The ERDA transmission program does notaddress directly the relative benefits and difficulties of the successful developmentof various candidate technologies.

QUESTIONS

Do the priorities in the ERDA program take 3. If s up er co nd uc t in g s y s t e m s p r o v einto account the relative probabilities of technologically feasible, has ERDA deter-success of the various transmission alter- mined how they may be practically inte-natives? grated into the power systems?

Has ERDA assessed the economic, reliability y, 4. What is the justification for Federal expen-a nd ma in te na nc e p ro blems a ssoc ia te d w ith d itures in el ec tr ic al t ra nsmiss io n an d di s-commerc ial u t i l iza t ion o f c ryogen ic and tribution research? Is this area not adequate-superconducting transmission lines in com- ly covered by research in the private domain?parison with less complex alternatives?

BACKGROUND

As increased transmission capacity is neededwithin the Nation’s electric systems, existingtechnologies may be unsuitable for satisfying thedemands. Additional overhead l ines may beunacceptable for environmental and land usereasons. ERDA has, therefore, begun programson overhead a .c . and d.c . transmission, andunderground transmission including supercon-d u c t in g t e c h n o lo g y , Ho we v e r , th e r e l a t iv e

emphasis and the likelihood of success of variousapproaches being pursued are not made clear inthe ERDA plan.

A.c. overhead transmission is the method ingeneral use today for delivering large blocks of power over long distances. The expected trend

toward large generation parks, large distancesfrom loads, will require higher transmissionvoltages to accomplish this energy transfereconomically using a minimum number of lines.

Overhead d.c , transmission has proved aviable alternate to a.c, in many situations and it isgenerally more efficient and ecologically moreaccept able, in that, large ambients electro-magnetic fields in the vicinity of the lines do not

exist. To take full advantage of d.c, transmission,technology must be advanced beyond the presentp o i n t - t o - p o i n t t r a n s m i s s i o n t o a l l o w f u l lnetwork advantages as well as transmission athigher voltages,

Underground transmission at higher voltage

2 0 0 CHAPTER V



and capacity levels is virtually nonexistentbecause of the high cost . Systems must bedeveloped so underground transmission canprovide efficient transmission at a reasonablecost from rura1 to urban and city areas in acontinuous pattern.

The possibilities now evident for these ad-vances are (1) conventional cables with im-proved cooling, (z) compressed gas insulatedcables, (3) resistive cryogenic cables, and (4)superconducting cables. While several of these

possibilities appear very attractive, the cost of research a n d p r o t o t y p e c o n s t r u c t i o n a n ddemonstration is very high, hence this is animportant ERDA responsibility,

I n g e n e r a l , o v e r h e a d a . c . t r a n s m i s s i o ntechnology holds the highest promise for costeffective transmission, but environmental andother constraints, such as land use, demand thatnew alternatives be developed to provide optionsfor 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 cost-

effective way to save energy.

SUMMARY

The problem of meeting large peak demands in electric power systems affectsboth the fuel consumption and the total capital investment required for generatingplants. Energy consumption is affected because peak demands are met with autility’s least efficient generating units (i. e., those units kept off-line until neededfor peaking), or by units such as gas turbines which have a low capital cost and lowefficiency. Furthermore, large coal and nuclear units are not well-suited forpeaking service; hence, peaking service is most commonly accomplished with gas

and oil consuming equipment. Equally important, capita l , materia ls, andmanpower of the very kind needed for energy resource development, are conservedwhen 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 theend-u se point may be controlled through the use of utility-operated remote controlson large consumption devices, by thermal storage at the use point, and by electricalstorage in substations. Peak demand, which is more costly than average demand,may also be controlled through the use of rate incentives to encourage moreuniform energy consumption, While some relevant experience exists in the UnitedStates and abroad, further technological, economic, and social evaluation is neededto achieve widespread implementation.

QUESTIONS

Have alternatives to central station energystorage been considered in the ERDA Plan toreduce power generation requirements inelectric power systems?

How soon might active load control systemsbe made available in the United States andwhen implemented, what impact might suchsystems have on system load factors, gas and

oil demand, and capital requirements for newelectric peak power generations?

What technological, economic, social, andlegal barriers exist which would impede theinstitution of rate structures designed toencourage better load management by con-

CHAPTER V 2 0 2

sumers? What incentives do utilities have toimprove efficiency through load manage-ment?

4. Does ERDA have a well-defined role instudying the feasibility of time-of-day pric-ing?

5. What are the implications of time-of-day and

seasonal pricing on various sectors of theeconomy?

6. Have public awareness schemes, such asprominent electric meters in homes, beeninvestigated as possible incentive programsfor load leveling?



BACKGROUND

Load leveling or “peak shaving” hasin the United States only for very large

been usedindustrial

customers, while it is practiced on a broader scalein Western Europe, Australia, and some othercountries. Because the load characteristics of other countries are sometimes quite different

from those in the United States, it is difficult toe s t ima te wi thou t ca r e fu l ana lys i s t he t o t a lpotential savings due to load control. It is clear,however, that present use patterns are costly, interms of both energy and capital; and further-more, the form of energy used for peaking isusually gas or oil, our scarcest resources. Oneapproach to the problem is to provide somemeans of storage, such as batteries, which can becharged during off-peak hours and used as asupplemental power source during peak hours.The alternative approach, and one for whichmuch of the basic knowledge is either available

or near at hand, is to control load at the end-usepoint rather than simply providing the means tomeet an uncontrolled load. This may be done byfitting on-off controls t o major en erg y consumingdevices, such as large air conditioning com-pressors and electric water heaters, which can beremotely act ivated for short periods by thegenerating utility or by automatic timing deviceswhen total system loads exceed desired levels.This may usually be accomplished with almostnegligible effect on the service delivered by suchdevices.

Another approach to load control is to devise atime-dependent rate structure which encouragesusers to spread their utilization of energy outover the day (e.g., to avoid use of clothes driersduring the afternoon). This can be accomplishedby t ime-of-day pricing to motivate off-peak

energy use and flattening of the load curve.In addition to direct savings in energy, time-of-day and seasonal pricing would save substantialcapital cost outlays for the electrical companies.As demand is leveled around the day and year theutility companies will be able to operate with ahigher capacity factor. It has been estimated thatas much as $50 billion could be saved in theUnited States over the next decade throughactive load management* or by reducing the rateof new construction required to meet growingpeak loads; but this projection lacks substantiveeconomic analysis.

Both active and passive control strategies needresearch, testing, and evaluation before broad-scale implementation can be realized. Encoding,metering, a nd sig nal ing devices m u s t b edeveloped and evaluated; incentives for passivecontrols will need evaluation through the use of econometric models, which also need furtherdevelopment . Technologies tha t wi l l enablecustomers to respond productively to suchchanges 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 forsuccessful commercialization.

SUMMARY

ERDA’s program in automobile, truck, and bus research emphasizes thedevelopment and demonstration of major hardware systems (e.g., gas turbine andStirl ing engine-powered automobiles, f lywheel prototype car, hybrid buspowerplant, 60-mile range electric car, etc. ) using state-of-the-art technology. TheERDA Plan gives no indication that payoff is likely to result from such R, D&Dthrough the commercial introduction of more energy efficient vehicles, Obstacles

which blocked the commercialization of the proposed systems in the past are notaddressed, and therefore, it seems doubtful that these technical, economic, orenvironmental impediments will be removed by the proposed R, D&D programs.ERDA should focus its attention less on production prototypes and more on long-term, basic supporr ting technologies.

QUESTIONS

1. How does ERDA establish its priorities in 3. What is the likelihood that these programsadvanced automobile technology?

—

will lead to the successful commercializationof alternativesengine?2. Why does ERDA concentrate so much of its

effort on the development and demonstration 4 . W h a t i m p a c tof prototype vehicles?

programs have

BACKGROUND

The major thrust of ERDA’s conservationprogram on highway vehicles appears directedtowards the development and demonstration of hardware. The list of projects on the developmentof powerplants as possible alternatives to the

spark-ignited engine is broad: gas turbine,lightweight diesel, Stirling cycle, battery andflywheel powered vehicles, Most, if not all, of these technologies have been extensively studiedin the past, either in this country or abroad, andhave been found to possess serious problems thatblocked their commercial introduction in this

to the internal combustion

wi l l E RDA’s a u to mo t iv eon the energy problem?

country. While the cost of energy and theseriousness of the present energy problem canchange the importance of various options, ERDAhas not shown why the likelihood of successfulcommercialization of any of the projects propos-ed is appreciably greater now than in the past.T h e E RDA p ro g ra m d o e s n o t id e n t i fy th eobstacles which continue to impede their in-troduction, nor how they propose to addressthese factors.

Most experts in automobile technology feelthat at the present level of funding, ERDA is

CHAPTER V 204



destined to cover much of the same ground thathas a lready been studied by industry. Themarket conditions have not changed sufficiently,nor is the depth of research and developmentsufficient to create a serious competitor to theinternal combustion engine.

While a Federal R, D&D program in advancedautomobile technology can make a valuablecontribution to meeting national objectives in

energy conservation, it appears unwise for theprogram to focus on production prototypeshaving to compete in the marketplace against thepresent, highly optimized automobile. A morerealistic and useful approach would be to engage

in a stable long-term program with an emphasison supporting, supplementing, and stimulatingR, D&D efforts in the private sector. While this isa l e ss g l a mo r ou s s t r at e gy t ha n pr o to t yp edevelopment, it is more likely to yield significantresults in the future, The programs should focuson the early stages of development and on thoseareas where technological advances could makea n imp o r ta n t imp a c t o n fu tu re a u to mo t iv e

systems. ERDA is presently engaged in some of these types of projects, such as those on ceramicmaterials for gas turbines and the sodium-sulfurbattery, but, overall , the program lacks theappropriate emphasis and balance.

CHAPTER V 205





it can carry out without ERDA’s assistance. Someof ERDA’s currently planned demonstrationprograms can and are being done by industrybecause they are close to or at the commercializa-tion stage.

In those instances where ERDA’s programs aresimilar to programs previously carried out byindustry, ERDA should provide industry withincentives to divulge its previously unreported

findings without having to relinquish any vestedpatent rights. Many industry programs are notcarried through to commercialization because of technological d i ff i cu l ti e s o r unr ewardingeconomics. Now that the cost of energy has risendrastically and energy efficiency has become amore important criterion, these programs arereceiving r en ew ed a tt en ti on . H ow ev er , t heoriginally developed information regarding theseprograms may not be available in the technicalliterature because of the stigma associated withnegative results and unsuccessful programs,This information may now prove extremely

useful to an organization start ing a “new”program in one of these areas.Specific examples of industria l programs

which were not commercial successes and weren o t e x te n s iv e ly r e p o r te d in th e t e c h n ic a l

l i terature include the continuously variabletransmission, heat storage devices, and rotaryengines. There are probably many other ex-amples obtainable via careful inquiry into priorindustry knowledge of areas now receivingre n e we d a t t e n t io n b e c a u se o f th e i r e n e rg yconservation potential.

Excellent examples of technology transferfrom government to industry exist, such as the

NACA program, predecessor of the NationalAeronautics and Space Administration. The keyorganizational features of this program were the joint committees, which helped to define theprogram, and the steering committees, whichmonitored the progress and output, therebyfacil i ta ting rapid technology transfer whereappropriate.

The present ERDA program in the transporta-tion sector represents, in effect, the transfer of anexisting program fro m th e E n v i ro n me n ta lProtection Agency (the American Association forthe Promotion of Science program), When the

program was in the Environmental ProtectionA ge nc y, i nd us t ry r e v i ew e d i t s ou t p u t an dconcluded that the program had not yie ldedsignificant results.

CHAPTER V 2 0 7



17. Nonhighway Vehicle Transportation Program

ISSUE

ERDA presently has no program for energy conservation in the nonhighwayvehicle transportation sector.

SUMMARY

Although railroads, pipelines, waterways, and airplanes carry many of thepassengers 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 systemsstudies to identify the areas of greatest potential fuel savings. In addition toperforming this analysis, ERDA must possess the capability to cooperate with and,in some instances, coordinate the efforts of other Federal agencies toward energyconservation in this sector.

QUESTIONS

10

What plans does ERDA have for the assembly Z . What specific systems studies are under wayof a data base for nonhighway transportation or contemplated for the evaluation of fuelsystems? savings potential in this sector?

BACKGROUND

It is estimated that some 25 percent of the fuelconsumed in the United States for transportationis in the form of petroleum used for nonhighwaysystems, These uses include oil, gas, and slurrypipelines as well as rail, water, and air transportsystems, In addition to direct fuel savings fromimproved efficiency, modal shifts and improvedload factors offer economically feasible im-provements in energy usage.

In order to identify areas in which substantialfuel savings are possible and to develop im-plementation strategies, research should beginimmediately toward the establishment of an

adequate data base and toward the systemsanalysis of existing transportation networks,Both a cross-sectional and a time-series data baseare required to delineate present fuel consump-tion patterns and to give baseline informationagainst which improvements can be measured.

208 CHAPTER V

Systems studies are needed to identify oppor-tunities for significant improvements and toevaluate proposals such as:

Modal shifts, for example, from highway towater transport for bulk materials, and fromhighway to rail for passengers

A d v a n c e d technology, f o r e xa mp l e,highspeed ground transportation for bothpassengers and freight

Multimodal terminals for both passengersand freight

Federal transportation grant programs andother proposed schemes for Federal par-ticipation in nonhighway transport R, D&D

Modifications in transportation regulationsto give higher load factors, for example, inpassenger airlines and other improvements,



It is important that ERDA avoid duplicating necessary that ERDA develop the capability tothe work of industry and of other agencies, such assess fuel usage, determine opportunities foras industrial locomotive development and the improvement, coordinate its conservation effortsNational Aeronautics and Space Administration with other programs in industry and govern-or the Department of Transportation research ment, and stimulate the development of newand development in air transport. Because of the technology where needed.h u g e p o te n t i a l fo r sa v in g s , h o we v e r , i t i s

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 programelements. . . to advance energy conservation technologies including but not limitedto productive use of waste, including garbage, sewage, agricultural wastes, andindustrial 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 isuse of wastes? the appropriate ERDA role in the area of

R, D&D in energy and resource recovery frommunicipal solid wastes?

BACKGROUND

ERDA has a statutory requirement to conductR, D&D for solid waste energy and resourcerecovery. Principal waste energy sources aremunicipal solid wastes, biomass waste , andorganic sludge. Currently, municipal wastes arebeing burned with coal to make electricity in onecity; in another, these are burned to producesteam and to chill water for district heating andcooling. Authoritative projections indicate thatthe annual contributions to national energysupply from the burning of municipal wastes

.

could be about 0.5 Quad in 1985 (maximum 0.8Quad). Although the amount seems relativelysmall, it equals that of geothermal potential forthe near term, Indirect but nonetheless signifi-cant additional energy savings can be made fromrecovery of materials (e.g., aluminum, iron) fromthe nonfuel fraction.

There exists a question of whether ERDA isgiving sufficient attention to solid waste energyand resource recovery R, D&D. While the ERDAFY 76 budget shows token consideration ($300 K)

CHAPTER V 209



for these activities, ERDA-48, vol. II does not improving reuse and recycling systems, produc-discuss them. Successful R, D&D in this area will ing further savings of energy, and reducingexpand the amount of resources available for environmental impact, since the collection andenergy production; cause less pollution of land, separation process for municipal wastes wouldair, and water; and as an added benefit, help fa c i l i t a t e a g g re g a t io n o f v a r io u s k in d s o f diminish the volume of waste to be discarded, In materi als. ERDA’s progra m shou ld re flect aaddition, such a program can also be helpful in higher degree of concern for this area,

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Chapter VI

Environmental and Health

Task Group Analysis

211



A. ENVIRONMENTAL AND HEALTH TASK GROUP

MEMBERS

Prof. Stanford S. Penner, Chairman, Universityof California at San Diego

Mr. Frederick R. Anderson, Environmental LawInstitute

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 atAustin

Dr. E. Linn Draper, University of Texas at Aust in

D r . J a m e s G r u h l , Massachusetts Institute of Technology

Dr. Char les Krei t ler , University of Texas atAustin

Dr. William Thilly, Massachusetts Institute of Technology

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B q

1.

2.

3.

4.

5.

6.

ENVIRONMENTAL AND HEALTH TASK GROUP

ISSUES LIST

Environmental I m p a c t s o f H i g hVoltage Transmission Lines . . . 217

The environmental and safety impacts of

high voltage electrical transmission lines arenot sufficiently known.

Ground and Surface Water Contam-ination From Surface Mining . . 218

Research on the potentia l environmentalproblems from surface mining is inadequate,particularly in terms of impacts on groundand surface water quality.

Energyl

Consumption and Inadver-tent Cimate Modification . . . . . 220

More needs to be known as to whether long-term environmental impacts of increasingworldwide energy use can lead to detrimen-tal or irreversible climate modification.

Variance on Environmenta l Stan-dards During Development . . . . 221

p re se n t e n v i ro n me n ta l r e g u la t io n s w i thregard to the functioning of environmentalc o n t ro l e q u ip me n t a re in a p p ro p r ia t e toeffective technology development at the pilotplant level.

Energy Model ing and Data Bank Requirements . . . . . . . . . . . . . . . . . 223

It is not clear from the ERDA Plan andProgram that critical needs in energy model-ing procedures and the associated datar eq ui reme nt s a r e f u l l y r e c o gn i z ed an daccepted by ERDA,

Site and Technology-Specific Natureof Cause-Effect Relationships InEnvironmental and HealthImpacts .*. **** **** *.** .**. e** 225

Simple extension of energy systems model-ing capabilities to the regional discrimina-tion l e v e l w i t h expanded emissionscategories will not yie ld a valid impactprof ile fo r energy technology dec ision-making.

7.

8.

9*

10.

11.

12.

Integration of Environmental,Health, Social, and InstitutionalResearch Into Technology

Programs . . . . . . . . . . . . . . . . . . . . . 227ERDA’s presentation and discussion of environmental, h e a l t h , s o c i a l , a n d i n -s t i tu t io n a l r e se a rc h in d ic a te s a l a c k o f integration of this research into ERDA’stechnology program,

Energy Impacts of Air and WaterPollution Control Regulations . 229

The interactions between the energy, en-vironmental, and economic effects of Federal,S ta te , a n d lo c a l a i r a n d wa te r q u a l i ty

standards are not sufficiently understood.Competing Demands for Water inWe ster n River Basin s . . . . . . . . . 231

The limited availability of water in areassuch as the Colorado and Missouri Riverbasins will force systems evaluation of netbenefit from energy and non-energy ac-tivities which depend on water,

Need for Social Research in OffshoreEnergy Programs . . . . . . . . . . . . . 2 3 3

Social and institutional research is needed toidentify potential constraints on the deploy-ment of offshore energy facilities,

Effect of Public Attitudes on ProgramImplementation . . . . . . . . . . . . . . . 234

ERDA’s plan for energy research, develop-ment and demonstration does not includeresearch on the effect of public attitudes andv a l u e s o n implementation of ERDA’sprograms.

Pro ram Focus in Fossil Fuel

Health Effects Research . . . . . . . 236

The ERDA Program of research on the healtheffects of fossil fuels covers a broad range of biological re sp o n se s a n d p o l lu ta n t e x -posures. Some research areas do not appearto be relevant to ERDA’s mission,

CHAPTER VI 213



13. Inadequate Inventory of Skills andT ech n i q u e s in H e a l th E ff ect sResearch . . . . . . . . . . . . . . . . . . . . . 239

A broad-based research effort is criticallyrequired in both university and Federalfacilities to develop improved techniques forevaluation of health impacts from coalCO mbustion and conversion.

14. Atmospheric Sulfates as a PotentialConstraint on ERDA’s Fossil Fuelprogram . . . . . . . . . . . . . ..........241

Suspected health hazards of atmosphericsulfates may result in air quality standardswhich would constrain ERDA’s programsbased on coal.

214 CHAPTER VI



C. INTROD UCTION

The Environment, Health and Safety section of this report contains discussions of issues in thetitle categories which relate to more than one of the energy research and development areas in theERDA organization or which are general to thewhole topic of energy research and developmentfrom the purview of environmental, health orsafety considerations. Environmental and healthissues specific to individual technologies orenergy resources are discussed in those sectionsof the report, with cross reference as appropriateto this section.

The issues identified in this section fall intofour major topical areas: environmental impactsof alternative technologies; systems aspects of environmental impact assessment; institutionalproblems relating to environmental, economicand social issues; and health factors relating toenergy resource development and applications of energy systems. The principal conclusions deriv-ed from this work are briefly summarized in thefollowing paragraphs.

Technology Issues

The ERDA Plan is heavily weighted toward

electrification of energy-consuming activities.Implied in this emphasis on electrification is arequirement for extensive addit ions to theelectrical transmission network and a shift tou l t r a h i g h vo l t a ge t r a ns m i s s io n t o r edu ce ”transmission losses. While interest and programobjectives concerning biological , health andenvironmental impacts of high voltage transmis-sion technology are stated in the ERDA program,no explicit scheduling or resource informationappears in the ERDA documents to relate thoseprograms to the schedules and decision points inthe h igh vo l t age t r ansmis s ion t echno logyprograms (Issue 1).

In resource recovery and mining, only limitedattention is being paid to mining and associatedground-water pollution, with inadequate effortdevoted to the definition of hydrological baselinedata (Issue 2). Potentially irreversible climate

modificat ion on a global scale is a r isk of continued efforts to meet increases in energydemand. ERDA has not developed a program toexamine the relat ive heat reject ion and at-mospheric pollutant emission consequences of new technologies, especially the “inexhaustible”but highly inefficient processes, and their poten-tial impact on global climate balance (Issue 3).

Environmental quali ty regulat ions in theirpresent form are designed to protect the environ-ment and the public health by l imit ing theemission of pollutants from potential sources.The necessary programs to develop new energytechnologies and the envi ronmenta l cont ro ltechnologies associated with them could beseverely 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 Programthat critical needs in energy modeling proceduresand the associated data requirements are fullyrecognized and accepted by ERDA (Issue 5),There are serious quest ions concerning the

impact on air quality of the addition of newenergy faci l i t ies to the exist ing f ield of airpollution sources. Simple extension of energysystems modeling to the regional level will notyield a valid assessment of potential environ-mental impacts (Issue 6).

The ERDA Program document contains anextensive description of proposed activity inenvironmental, health, social and institutionaltopics. Almost all of this description occurs in thesections of the report devoted to Environmentand Safety and Systems Studies. Discussion of these topics in the sections of the report devotedto technology development generally consisted of one-line statements recognizing the existence of apotential constraint. There was no reference tothe environmental or health research programs inthe schedules appended to technology-orientedsections. Interviews with ERDA personnel

CHAPTER VI 215



yielded the strong impression that the statedobjective of integrating the environmental con-trol research into the technology development isat present illusory. Given that environmental,health, social and institutional problems arelikely to impose serious constra ints on im-plementation of ERDA’s programs, much betterintegration 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 inthe next few years may impose significant energycosts or environmental impacts in categorieswhich are not encompassed by the regulatingagency. There has been no systems evaluation of the interact ions between environmentalregulations and their total effect. This is a validand important area of inquiry for ERDA whichhas not been addressed (Issue 8).

The problems of water availability for coalconversion to liquid or gaseous fuels, shale oil

retorting, electrical generation by any means andother energy oriented activities will have tocompete with other uses for water in water-shortareas (Issue 9). These same activit ies anda ss oc ia te d mi ni ng a n d wa s t e ma n a ge m e ntoperations may impact water quality in the sameareas, thus potentially affecting agriculture anddomestic and municipal water supplies.

Social and Institutional Issues

The entire discussion of interagency activitiesin the Program document indicates poor coor-dination between ERDA and other agencies and

equally poor definition of jurisdictional respon-sibility in critical areas of cooperative effort onpotential environmental, social and institutionalproblems. These problem areas will probablypose the most serious constraints to implementa-tion of ERDA’s programs in several technologyareas and may jeopardize the achievement of ERDA’s goals if not properly addressed in atimely manner (Issues 8, 10, and 11),

Health Effects Issues

At this t ime, the adequacy of a ir quali tyregulations concerning sulfur dioxide is beingquestioned [Issue 14). The complex interactionbetween sulfur oxides and other constituents inthe atmosphere, natural and man-induced, is thesubject of extensive study by EPA, ERDA andothers. The outcome in terms of sulfate standardsfor protection of public health and environmental

quality is unknown, but could have a seriousconstraining effect on achievement of ERDA’sPlan, which relies heavily on coal in the near andintermediate term. The health programs relatingto potential new chemical intrusions from coalconversion and oil shale programs, some of which may be potent carcinogens, were alsoquestioned (Issue 13). In the general area of health studies, there is little evidence of a seriouseffort to define the relative priority betweenprograms. There are also indications that ERDAis involved in programs which do not relate to itse n e rg y miss io n a n d n e e d s to r e a sse ss th e

usefulness of other programs in terms of thevalidity of the results these programs will yield(Issue 12).

216 CHAPTER VI



D. ENVIRONMENTAL AND HEALTH ISSUE PAPERS

1. Environm ental Impacts of High Voltage Transmission

Lines

ISSUE

More explicit program planning is needed to relate High Voltage TransmissionLine 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, environ-mental, and health impacts of high voltage transmission technology, it does “notpresent explicit scheduling or resource information to relate such programs orfindings to the schedules on decision processes of its high voltage transmissiontechnology programs.

QUESTIONS

1 . Wha t po t en t i a l e f f ec t cou ld t he ERDA Z . At what level, in what facilities, with whatbiological , environmental and health in- manpower, and under which ERDA divisionvestigations have on the contracting and will the environmental, biological, and healthimplementation milestones shown in ERDA’s research on high voltage transmission bet echno logy p rog ram schedu le fo r h igh performed?voltage transmission?

BACKGROUND

Along with the possibi l i ty of developing the nearby environment may induce internalelectrical 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 isty 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 theseelectromagnetic field gradients imposed by the p r o d u c e i m p a c t s o n t h e n e r v o u s s y s t e m ,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 environmentalgas production are not adequately known. Con- research results into the technology program issideration of such effects is a vital element in the essentia l for valid program evaluation anddesign, construction and installation of high decisionmaking.voltage electrical power transmission systems.

2. Ground and Surface Water Contaminat ion From

Surface Mining

ISSUE

Research is inadequate on the potential environmental problems arising fromsurface mining, particularly in terms of its impacts on ground and surface waterquality.

SUMMARY

Large-scale surface mining of fuels to the extent necessary to meet ERDA’senergy 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 watersof sulfates, nitrates, ammonium, acids, and trace metals from strip mines andreclaimed areas.

The type of pollutants generated can vary from area to area depending upongeology, topography, and climate. The development of predictive models toevaluate 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 surfacemining operations in the West on ground andsurface water quality in the Missouri andColorado River basins?

2. What impacts will changes in ground andsu r fa c e wa te r q u a l i ty f ro m la rg e sc a lesurface mining operations have on farmingand ranching in the West, and on forestry,agriculture, and municipal water supplies inthe East?

3. In what geographic areas is it necessary toreplace topsoil to insure the productivity of

218 CHAPTER VI

the land, and in what areas will replacementof topsoil be unnecessary?

4. To what extent and in which areas willmining-induced water pollution limit energydevelopment?

5. Which agency should take the leadership rolein research relating to environmental im-pacts of surface mining operations, and whatshould be its relationship to other Federaland State agencies?



BACKGROUND

The ERDA plan to increase the production of coal, lignite, and shale oil fossil fuels will requireextensive increases in surface mining operationsin both the East and the West. These strip miningoperations can significantly alter, through ex-posure to the a tmosphere and rainfall , the

geochemical environment of the overburdenmaterial that remains after the coal is extracted,Chemical changes which can occur include theoxidation of pyrites to sulfuric acid, ferrous iron,and sulfate ion; oxidation of ammonium ion tonitrite and nitrate ions; leaching of trace metalsfrom the overburden; and the dissolving of cationic and anionic constituents from coal andsoil, which increases salinity levels. The possiblerelease of radioactive isotopes and trace metalc o n s ti t u e nt s f ro m u r a n iu m s ur fa ce mi ni ngoperations poses an additional problem in SouthTexas and the Rocky Mountains.

T h e p ro b le ms to be faced vary withgeographical regions, acid mine drainage bring agreater problem in the East and salt leaching agreater problem in the West. Environmentalconcerns so far have primarily centered on acidmine drainage in the East. There has beeninadequate concern for the effect of large-scale

surface mining on groundwater quality and thepotential pollutants that can be leached fromreclaimed areas. The large scale centamination of ground and surface waters from surface miningoperations is a problem which is not easilyamenable to existing control technology. The

adverse effects on ground and surface waterquality can impair subsequent use of the waterfor farming and ranching, forest productivity,and municipal and domestic drinking watersupplies.

Predictive techniques need to be developed toassess, prior to their initiation, the potential forgenerating pollutants from specific surfacemining locations. Extensive data are available onbackground levels of groundwater and surfacewater quali ty and geochemical make-up of overburden material, Some data are available onthe impact of reclamation and surface mining,

but these data sources are widely distributedthrough numerous State and Federal agenciesand universities, The collection of these dis-persed data, plus the collection of necessaryadditional information, will permit a nationwidedetermination 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 climatemodification caused by increasing worldwide energy use over the long term.

SUMMARY

Changesconsumptionpotential for

in ra infall and temperature associated with increased energyhave been observed in specific localized areas. Evaluation of thelarge scale changes in climate caused by escalating energy use

requires a better understanding of the Earth’s ultimate capacity to assimilate man-made heat, While the ERDA plan paid some attention to the relation betweenenergy 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 loadingsassociated with worldwide energy use representpotentia lly significant influences on local,regional, and worldwide meteorological con-ditions. Although every energy productionmethod ERDA is considering could add to thisloading, large scale climate change processes arenot now sufficiently well understood to makequantitative predictions, The need for betterunderstanding of these processes, however, isemphasized by the relatively short time periods(one to two centuries) which may becharacteristic of the initiation or termination of ice ages.

During 1970, average worldwide, man-madepower densities amounted to only 0.054 w/sq.m.By contrast, solar-energy input into the outeratmosphere is 340 w/sq. m of which about 158

220 CHAPTER VI

w/sq.m is initially retained in the atmosphere orinitially absorbed on the surface of the earth.Power release densities associated with humanenergy use have exceeded the average normalsolar power input in some metropolitan areas formore than a decade, in some cases by substantialmargins (Moscow by about a factor of 3 and inManhattan by more than a factor of 6 during the1965-68 period). By the year 2000, such heavilyindustria lized areas as the Ruhr Valley inWestern Germany will produce thermal loadsover a wide region which exceed the normal solarinput by about a factor of 10, while new powergeneration from nuclear farms, currently beingconsidered for implementation, will generatethermal loads that are 100 times larger than“normal. ”



4. Variance on Environmental Standards During

Development

ISSUE

Present environmental regulations on the functioning of environmental controlequipment 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 difficultand uncertain as the development of any other technology. The present regulatoryclimate in the United States does not provide for pilot plant development programsas 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 tocommercial use. This presents a risk of abandoning potentially viable energytechnologies because faulty performance of experimental environmental controlequipment compromises (the proof-of-process) results obtained in pilot planttesting of the basic energy technology. ERDA should address the question of theenvironmental risks and ad hoc mitigating measures which may be appropriate inpilot level development. With the Congress and the regulatory agencies, ERDAshould explore the advisability of special regulations for pilot and demonstrationfacilities.

QUESTIONS

1. What consideration has ERDA given to pilot 2. Have the possibilities for flexible environ-plant development problems which could menta1 re g u 1 a t i ons a nd n ecessaryresult from the parallel operation of ex- precautions for experimental facilities beenperimental energy-associated and environ- explored by ERDA with other agencies suchmental control equipment? as EPA?

BACKGROUND

T h e d e v e l o p m e n t h i s t o r y o f f l u e g a s

desulfurization methods shows that develop-ment of ancillary environmental control equip-ment can be as difficult and traumatic as thedevelopment of the basic process itself. It isalmost axiomatic that the scaling up of a processfrom the typical laboratory experimental level toa facility size which can begin to demonstrate the

commercial economics of the process involves

significant further development effort,Shale oil retorting facilities, coal liquefactionand gasification processes and other majorenergy facilities of the sort contemplated inERDA’s programs commonly exhibit problems of process stability or equipment durability, Suchproblems do not emerge in laboratory-scale

CHAPTER VI 221



experiments. These must be overcome before theprocess can be applied at the very large scalesrequired t o make production facilities commer-cially feasible.

Beyond encountering development problems inexperimental large-scale energy facilities, thereis the equal probability of coming upon similarproblems in associated environmental controlequipment. By definition, this equipment willhave to be tested on the same scale as thoseexperimental energy facil i t ies. The paralle loperation of all the equipment together is likelyto exhibit further problems. It makes sense to besure that the primary processes in the technologya re t e c h n ic a l ly v ia b le , wh e th e r o r n o t th epollutant control equipment has been perfectedor its integration into the overall operation hasbeen achieved. The construction of demonstra-tion plants with a ll environmental controlequipment installed, but with the capability todecouple the control equipment, will provide theoption to continue testing the technical processshould problems be encountered with the control

equipment. P i lo t p la n t o p e ra t io n w i th a n dwithout the environmental control equipmentwill also demonstrate more clearly the true effectof such equipment on the total process. Thisinformation would be valuable in later researchand development activities.

Any plan to operate a demonstration-levelfacility in the manner described above wouldrequire careful analysis of the level of environ-

mental insult which uncontrolled operationwould produce . Also requ ired would be theprovision of auxiliary equipment to protectagainst significant or irreversible environmentaldamage, risk to health or impact on activitiessurrounding the facility. Operation with sub-standard environmental controls would furtherrequire special provisions in environmentalregulations to permit temporary non-compliancewith emissions standards. Such provisions arenot presently available to ERDA. The responsibleformulation of flexible environmental standardsfor experimental facilities would assist ERDA inachieving its goals.

2 2 2 CHAPTER VI



5. Energy Modeling and Data Bank Requirements

ISSUE

It is not clear from the ERDA Plan and Program that ERDA fully recognizes andaccepts critical needs in energy modeling procedures and in the associated datarequirements.

SUMMARY

Linear models, such as the Brookhaven Reference Energy System, used forprojecting the ERDA scenarios can easily incorporate probabilistic measures of theaccuracy of environmental information. Probabilistic calculations would give amore meaningful projection of future demand as well as pinpoint data which areimportant 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 haventechniques, grouping of compounds results in, for example, the collection of allhydrocarbons in a single category. This procedure facilitates the collection andmanipulation of data, but makes conclusions based on such data suspect, becauseof 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 sophisticatedtechniques than those currently at hand. Several energy models are beingdeveloped around the country. It would be desirable for ERDA to interface on acontinuing basis with these other activities so as to compare the sensitivity of modeling results to a lternative techniques and data bases. Consistency of projections from alternative models does not guarantee accuracy. However, in theabsence 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 theERDA Plan based on the best estimate of these values, or is there some conservatismfactored in to reflect the Administration’saversion to the risk of energy shortfall?

2. What are ERDA’s plans to incorporate intheir modeling efforts information on thelevels of uncertainty associated with en-vironmental data?

3. The postulating of alternative scenarios isonly one of several methods of treating the

uncertainties associated with the develop-ment of new technologies. What methods willERDA use to display the sensitivity of theirresults to changes in the assumptions usedand to uncertainties in the environmentaldata?

4. In view of the number of independent energysystem models that are being developed,what plans does ERDA have for makingalternative projections?

CHAPTER VI 223



BACKGROUND

The availability of assured supplies of energyin the future is important to environmentalquality. If there is an energy shortfall, there willbe pressure to relax environmental controls toalleviate the shortage. In order to avert suchenergy shortfalls, it is necessary to know in

advance the level of energy demand.One way to bracket future demand is toconstruct several scenarios for future events,such as those presented in ERDA-48. This isuseful in that it shows common features of futureactivity even when the assumptions about futurebehavior are quite different. The difficulty withthe alternative scenario approach is that it isdifficult for decision-makers to assess the mostlikely conditions from the several scenarios. Byestimating the probability of commercial successof various technologies, and using estimates of accuracy of various data, it should be possible

not only to develop the environmental conse-quences of the several scenarios but also topredict the l ikelihood of occurrence of thesituation the scenario projects.

The development of probabilistic scenarios of future energy demand will give decision-makersa view of alternative future effects and theirprobability y of occurrence. This will be useful forchoosing among alternative courses of action.The construction of the scenarios will also pointout shortcomings in th e d a ta r e q u i re d fo r

forecasting and will serve as a guide for dataacquisition.

As the ERDA health effects research programsadvance to the point of yielding usable dose-effect information, i t w i l l b e n e c e ssa ry tocontinually improve the quality and quantity of

t h e r e s i d u a l m a t e r i a l s d a t a u s e d i n t h eBro o k h a v e n e n v i ro n me n ta l d a ta b a se , T h eeffluent categories will eventually have to bed i sa g g re g a te d to th e p o in t wh e re d a ta o ndifferent compounds are collected separately. Insome c as e s t he n e ce s sa r y i nf o rm at i on i savailable; in other cases this disaggregationexercise will point out important gaps in existinginformation,

Adverse environmental impacts stemmingfrom future energy generation strategies can beminimized if demand levels as a function of timeare accurately known. To predict most accurate-

ly, one should make energy system projectionswith a variety of types of available models. TheERDA Plan relies solely on the BrookhavenReference Energy System, This energy model is agood, national, sta tic model, but i t cannotcontend with situations that are dynamic. Thereare regional and dynamic models that can beapplied to yield other ideas about the future of theenergy system and its environmental conse-quences.

2 2 4 CHAPTER VI





—

well-aimed health effects studies. To be useful,however, the systematic analyses must model thereal environmental degradation and not justnational or even regional tota ls for tons of emissions.

It is, unfortunately, extremely difficult to makesystematic environmental impact assessments.Reducing impacts to a common denominator,such as dollars, results in the loss of much

necessary decision information. A possibleformat for the presentation of information is amatrix of options and effects.

The Matrix of Environmental Residuals forEnergy Systems (MERES) system is a good firststep toward the use of the matrix modelingconcept. However, it deals only with the totalemissions of the scenarios modeled. Simplemodeling can grossly mislead any attempt to setemission standards for the protection of theenvironment or the public health. A seriousinadequacy of the MERES effort is its failure tofactor in the variations between regions and

locali t ies in terms of dispersive potentia ls,a tmospheric chemica l t r a n s f o r m a t i o n s ,background concentrations of pollutant species,

or the nature and density of populations exposedto pollutants. While it is possible in principle toperform a scale-up of regional experience inpollutant loading to obtain better indications of total environmental degradation, such an ex-trapolation from existing regional conditionspresents serious difficulties, The addition of newtechnologies and new facility sites will changeboth the configuration of pollutant sources and

the mix of pollutants input to the environment. Itwill therefore be necessary to include site-specific characteristics in any model to be usedfor predictive analyses in the interest of energydecisionmaking processes.

Definition of alternative specific site types forenergy facilities will make it possible to morerealist ically treat si t ing constra ints such asclimatological and demographic characteristicso f po we rp la nt e nv ir on s. A t t en t i on t o t h echaracteristics of specific potential sites willfacilitate the development of an inventory of potential sites for energy facilities. It would then

be possible to develop sites in the inventory asthe need arises with minimal adverse environ-mental effect.

2 2 6 CHAPTER VI



7. Integration of Environmental, Health, Social, and

Institutional Research Into Technology Programs

ERDA’s presentation and discussion of environmental, health, social andinstitutional research indicates a lack of integration of this research into its R, D&Dprogram.

SUMMARY

To maximize the effectiveness of research on environmental, health, social andinstitutional constraints, the results of that research should be available before thewidespread implementation of the technology. The ERDA implementationschedules do not present environmental and health research timelines in parallel

with the technical milestones. Further, the specific plans for environmental andhealth-related research, tailored to the individual technologies which will bepromoted, are not detailed and discussed in the technology program statementsprovided in volume II.

The fa ilure of volume II to define environmental , health , social andinstitutional problems which could constrain specific technology programs is asignificant oversight. The oversight is emphasized by the established obligation of Federal agencies to consider potential environmental impacts at the earliest time intheir planning processes. Explicit priority is given to analysis of environmentaland social consequences of energy technology deployment in Section 5 (a) (z) of theFederal Nonnuclear Energy Research and Development Act of 1974. Because of thelack of specificity of the environmental activities defined in ERDA’s technologyprogra m descripti ons, there is no guarantee that the necessary environmental

research and assessment will be conducted simultaneously with energytechnology development.

QUESTIONS

1. How does ERDA plan to integrate environ-mental analyses into the development of atechnology so that they are incorporated indecisionmaking as each discrete step is takentoward commercialization of the technology?

2. Although the National Environmental PolicyAct and the Federal Nonnuclear EnergyR es e ar c h a nd D ev e lo pm en t A ct bo t hemphasize timely analysis of environmentaland social consequences, why is there little

3.

4.

detailed discussion of either in volume II’stechnology program statements?

W ha t p ro po rt io n o f E RD A’ s p ro po se dbudgets for technology programs will bespent on environmental, social economic, andinstitutional analyses?

What rationale was used to schedule theenvironmental and health research requiredfor assessing the suitability of emergingtechnologies?

CHAPTER VI 227



BACKGROUND

Whenever a potential environmental problemrelated to a developing technology is identified,the maximum integrat ion of environmentalcontrol technology into engineering design isrequired throughout the long process of bringingan energy technology to commercially provenlevels. Otherwise, costly “add-on” modifications

may be neces sa ry a s r egu la to ry ac t i on o rnegative public reactions begin to constrain thedevelopment process. Adequate continual en-vironmental research, beginning at the earliesttime in ERDA’s planning process (as detailed involume II), is necessary through specificallytailored and detailed projects in order to achievethis goal,

‘l’he NEPA environmental impact statementprocess already calls on Federal agencies to takeenvironmental factors into account at the earliestpossible time in decisionmaking. Federal courtdecisions, foremost among them being the

Scientists’ Institute case, have required thatenergy research and development programs becovered by impact statements. But the issueraised here goes beyond the impact statementpreparation process (although not beyond theNEPA mandate to agencies) to recognition thatthe env i ronmen ta l r e sea rch componen t s o f overall technology development should actuallyb e w r i t t e n i n t o p l a n n i n g a n d b u d g e t i n gdocuments as integrated and systematical lydeveloped items.

The present s tructure of ERDA does notprovide sufficient incentive for the technology

divisions to incorporate at a meaningful levelenvironmental control technology into their totaldevelopment activities. The Environment andSafety Division (AES) is ERDA’s reservoir of expertise in environment and health research,and is responsible for coordinating these ac-tivities with other agencies. However, the linksbetween AES and the technology divisionswithin ERDA appear to be inadequate to ensurethe necessary integration of its concerns into theactivities of other ERDA divisions.

The discussion of program strategy in theEnvironmental Control Technology section of

ERDA-48 makes the point that “most of thecontrols technology development funding as well

as the manpower resources will be provided byprog ram un i t s u n d e r t h e A s s i s t a n t A d -ministrator for Conservation, Nuclear Energy,Fossil Energy, and Solar, Geothermal and Ad-vanced Energy. ” However, a careful reading of the various sections of the program volumeshows very clearly that the only substantive

discussion of needs for environmental, health,social and institutional research is housed in theEnvironment and Health, Safety and Systemssections of the report. In the discussions of technology programs, the references to thesetopics are generally restricted to single sentenceswhich state the potential existence of an (un-characterized) problem or the need to develop“environmentally acceptable” technology.Further, the schedules attached to the technologysections show only the technology developmenttimelines and milestones. Finally, the interviewswith ERDA personnel which took place in the

course of the OTA review of the ERDA Plan andProgram yielded the information that allocationof funds, staff assignments, and program defini-tion by the technology-oriented divisions in theareas of environmental, health, safety, social,and institutional research were ill-defined at bestand apparently nonexistent at worst.

A possible solution for this apparent derelic-t ion by ERDA lies in reorganization of ther el at io ns hi p b e t w e en t h e E n v i r o nm e n t an dHealth Division and the technology-orienteddivisions. The technology divisions should berequired to discuss in detail—and schedule—the

necessary research on items which may con-strain the technology development t for whichthey are responsible. Since it is apparent that thetechnology divisions do no t now have thenecessary staff capabil i t ies to sat isfactori lyaccomplish such an integral program definition,the y will e it her have to develop that capability orturn to the Environment and Health Division toprovide it. The latter course may be preferable, asit could lead to a more integrated organizationalstructure in ERDA. The cross-linking of projectorganizations and specialty staffs has workedwell in private industrial corporations and may,

i f u n d e rt a ke n i n E RD A, en ha nc e E RD A’ scapability 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 ofFederal, State, and local air and water quality standards are not sufficientlyunderstood.

SUMMARY

The enactment and enforcement of air and water pollution control regulationscan have substantial impacts upon energy consumption requirements and solidwaste generation. These potential impacts will become increasingly important inthe future with the decreasing availability and increasing cost of fuel suppliesand/or disposal sites. These complex interactions are not presently recognized by

existing regulations, which tend to treat air pollution, water pollution, and solidwastes as separate problems unrelated to potential energy consumption re-quirements. Environmental protection and energy consumption optimizationtrade-offs are needed,

QUESTIONS

1. What changes need to be made in existing protection a n d e n e rg y c o n su mp t io n a tFederal, State, a n d lo c a l a i r a n d wa te r specific sites, and by whom should they bepollution regulations regarding the trade- explored?offs between environmental protection and

3. What improvements are needed in existingenergy con sump t ion?air pollution and water pollution control

2. What are the proper criteria for obtaining technologies to minimize potential energyoptimum balance between environmental cons u m p t i on ?

BACKGROUND

At present, policies which regulate discretedischarges of effluents are based on applicationso f ultimate control technology at or prior to pointo f discharge, Such stringent controls of both

atmospheric and a qu at ic d is ch ar ge s a renecessary in some cases, but no technical basisexists for their wholesale application as present-ly administered. These effluent controls mayrequires significant energy penalties, which resultin not only additional fuel consumption but also

added air pollutant and solid waste generation,Requirements for controls are better establishedon a technically-based optimization of environ-mental protect ion and energy consumption re-

quirements,Comp1iance wi th b o th th e F e de ra l Wa te rPollution Control Act Amendments of 1 9 7 2(Public Law 92-500] and the Clean Air ActAmendments of 1970 can have significantimpacts on energy consumption. Public Law 92-

CHAPTER VI 229

60-411 0 - 75 - 16



500 established the requirement that closed cyclecooling technology be applied in all thermalpower installations prior to 1985, a goal basedupon the best available technology. This lawwould eliminate thermal input to the aquaticenvironment where aquatic systems could nottolerate additional thermal increases over all orpart of an annual cycle, In such cases, the onlypresently available alternative is the installation

of cooling towers. In the majority of existingfacilities extensive study has failed todemonstrate adverse changes as a result of thermal discharges. Most important environ-mental results, such as biocide effects andentrainment and impingement o f a qu at icorganisms associated with the recommended andpresently applied control technologies, can beminimized by proper modification of facilitydesign.

Cooling towers function by transferring heat tothe atmosphere through evaporative transport.Associated with this process is the potential for

climatic changes and the concentration of solidswhich ultimately require disposal.It is important to recognize that cooling towers

possess associated environmental disbenefitsand do not always have demonstrable benefits,and that they further impose a significant energy

penalty (5 to 20 percent) on power generationfacilities,

The proposed zero discharge requirements onwastewater treatment facilities can also causesubstantial increases in the energy consumptionnecessary for water pollution control, resultingin increases in air pollutant emissions and solidwaste generation. The dewatering and disposalof large quantities of solid waste sludges

generated by air and water pollution controldevices impose similar secondary environmentaland energy penalties. Existing nonregenerativeflue gas desulfurization systems at coal-firedpower plants also impose energy penalties andgenerate large amounts of solid waste sludges.Energy penalties of 5 to 20 percent can resultfrom lime or limestone sulfur dioxide scrubbingsystems in terms of increased gas pressure dropsand stack reheating, liquid pumping, sludgedewatering and transportation. Large quantitiesof sludge require major nearby land areas fordisposal or transportation to distant landfill

sties,The need exists for analytical tools to providefor optimization of environmentalprocesses to minimize overall adversemental impacts,

controlenviron-

230 CHAPTER VI



9. Comp eting D emands for Water in Western River Basins

ISSUE

The limited availability of water in areas such as the Colorado and MissouriRiver basins will force systems evaluation of net benefit from energy and non-energy activities which depend on water.

SUMMARY

1.

2.

3.

Large amounts of water wil 1 be required from available ground and surfacewater supplies in the arid Rocky Mountain states for energy production operationssuch as coal and oil shale mining, slurry pipeline coal transportation, minemouthelectric power generation, coal and oil shale conversion to gaseous and liquid fuels,and environmental management of strip-mined areas and spent shale disposalareas. Extensive implementation of these projected energy production activitiesmay adversely affect water quantity and quality for agricultural use in the same

river basins. Development of geothermal energy resources, e.g., in the ImperialValley, could result in either further water demand and water quality impact or inthe production from saline water of a supplementary source of freshwater foragricultural use. Extensive analysis of the total system activity in these riverbasins will be required to ensure that the proposed energy development activitieswhich are actually implemented will result in a net benefit to the country.

QUESTIONS

What is the maximum amount of water whichcan be made available for energy production

in the Missouri and Colorado River basinswithout jeopardizing agricultural operationsand other industrial or public demands forwater?

What impacts upon water quantity and waterquality will occur in the Rocky Mountainstates from varying levels of energy produc-tion, and what impacts will these have onagricultural production and resultant foodprices?

What are the relative environmental, energya n d e c on o mic t rad e-o ff s of min emo uth

4.

5.

processing of coal to electrical energy orsynthetic fuels in the arid Rocky Mountain

states as compared to alternative transporta-t ion to water-abundant areas a long theMississippi River or Gulf of Mexico forsubsequent processing?

What is your estimate for the potentia lproduction o f d e s al i n at e d w at e r fromgeothermal resources in the Imperial Valleyof California by the year 2000?

What plans does ERDA have for the construc-tion of integrated regional development plansl ink ing seemingly d i s p a r a t e e n e r g ytechnologies?

BACKGROUND

To meet the Nation’s energy requirements, the extensive coal, shale oil, and uranium resourcesFederal 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 thepossible construction of a significant number of coal-fired electric power plants, coal gasificationand liquefaction plants, water slurry pipelines,a n d sh a le o i l p ro c e ss in g fa c i l i t i e s . T h e sefacil i t ies will have significant impacts uponavailable supplies of acceptable quality water forfarming and ranching unless steps are taken toprovide for proper development. Possible alter-

natives include the transportation of coal towater abundant areas for subsequent processingand extensive in-place water treatment andrecycling.

Geothermal resource d e v e lo p me n t in th eImperial Valley of California is currently receiv-

ing considerable attention from a number of industrial, governmental, and university groups.The importance of integrated regional develop-ment for the Imperial Valley is now recognized b ya number of people. But the close connectionbetween the potential for water desalination,using geothermal energy, and proposed energyresource development in the Upper ColoradoRiver Basin has not only not been emphasized, it

has not even been mentioned in the ERDA plans,Similar arguments apply to other river basins inwhich major energy development programs arecontemplated, Integrated regional planning byERDA is necessary to ensure that its energyprograms 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 thedeployment of offshore energy technologies.

SUMMARY

Major problems in new offshore development are presented by the social andinstitutional constraints to developing offshore oil and gas production, nuclear,and fuels transportation facilities. One current major research need is to examinenew 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 insti tutionally related research 2 . What research is be ing conducted on newprograms does ERDA have for evaluating plans or arrangements for oil spill clean-up?offshore oil development?

BACKGROUND

T h e p r e s en t e nv ir on me nt al r es ea rc h i m -plementation program does identify research onof fshore technologies in five areas: (1)

collaborative efforts on hyperbaric medicine fordiver safety, (2) new environmental programs todeal with oil well drilling, (3) criteria for offshorepower plant siting, (4) aquatic chemistry of pollutants and (5) oil spill prevention and clean-up procedures and techniques. Although theabove areas are important, a specific effort isneeded which would focus on the social andinstitutional constraints to developing offshoreoil , gas, nuclear, a n d fu e l s t r a n sp o r ta t io nfacilities. Such a research effort requires an

interdisciplinary group study of the full range of potential impacts and effects and alternativesocial and institutional arrangements.

Because this problem deals with both theme a n s b y wh ic h o f f sh o re a re a s a re ma d eavailable and the way in which technologies aredeployed and standards are developed andenforced, the funding and oversight for thisresearch would be an interagency effort. Thisresearch would be directly applicable to consid-erations of innovative siting, leasing, standards-setting, and enforcement procedures, some of which are subjects of current legislation.

CHAPTER VI 233



11. Effect of Pub lic Attitud es on Program Imp lemen tation

ISSUE

ERDA’s plan for Energy Research, Development and Demonstration does notinclude 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 qualityof life, and what characterizes important threats to the human environment,greatly affect what Government actions people will support as well as theincentives and disincentives to which they will be willing to respond. ERDA’s plandoes 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, conserva-freedom of choice of lifestyles, how doesERDA propose to do research on the effectthat different levels and kinds of energyconsumption will have on lifestyles?

Ho w wi l l E RDA p re se n t th e n e c e ssa ryresults of research on public attitudes so thatagencies and other policy makers can make

judgments about what the public will accept

tion regulations, and environmental con-trols?

3. How well do the environmental impactswhich ERDA proposes to predict for varioustechnologies reflect the concerns that peopleactually have about their environment? Whatresearch is planned to discern public at-

titudes on environmental issues?

BACKGROUND

The desires and values of the public are asfundamental to energy development as is theavailability y of fuel resources, capital, manpower,etc. Yet, ERDA’s research plan and implementa-tion program anticipate few studies of attitudeswhich will affect energy choice, For example:

1. The ERDA Plan recognizes as a national goala need to maintain choice among life styles.To relate energy technology to life styles, itwill be necessary to know what levels of energy consumption are essential for qualityof life for people of different regions, with

234 CHAPTER VI

different backgrounds, incomessize. Much more must be known

and familyabout those

energy use activities which are simply amatter of habit and superficial convenience,Similarly, attitude research would help toidentify the energy consuming activit ieswhich are important to certain ways of life.

Z. The implementation of ERDA’s Energy Plana n d e n v i ro n me n ta l c o n t ro l s imp l ie s a naltered relationship of the Federal Govern-ment to private industry and to State andlo c a l g o v e rn me n ts . A t t i tu d e s h e lddifferent publics about the proper role

byof



Government

may serve to impede the growth vironmental impacts of energy developmentof Federa1 Govern men t functions or channel are poorly related to the attributes of theirFederal Government action into certa in se t t in g to wh ic h p e o p le a re se n s i t iv e .acceptable implementation techniques. Ef- Research in this area is necessary,ficient implementation of the plan requires 4. ERDA’s mission includes promresearch in this area. understanding of science. This

3. E n v i ro n me n ta l q u a l i ty i s a fu n c t io n o f be performed adequately onlypeople’s perceptions and values. It may be attitudes ab ou t e ne rg y tecthat the quantifiabie and measurable en- researched.

oting publicfunction canwhen publichnology 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 abroad 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 healthplaces great emphasis on basic biological mechanisms of response, Certainimportant areas, such as biological screening, carcinogenesis and mutagenesis,and epidemiological studies, appear to be inadequately emphasized, while otherareas, such as research on recovery, treatment, and development of radio-pharmaceuticals, may well be unnecessary under the primary mission of ERDA’shealth research program. The program description gives little detail as to which

pollutants will be given highest priority, or on how the results of health effectsresearch will be integrated into the decision process as to which alternative energytechnologies to develop. To meet these research demands, there is a critical need forthe training of additional cell- and tissue-culture experts, toxicologists andepidemiologists.

QUESTIONS

1.

2.

3.

Which pollutants will be given highestpriority for evaluation under the variouscategories o f fo ss i l fu e l h e a l th e f fe c t s

research and by what criteria does ERDAassign these priorities?

What is the purpose in ERDA’s mission of research on treatment of and recovery fromhealth effects?

How will ERDA’s health research program,which is largely directed toward animalmodels, evaluate known adverse effects onhuman health which cannot yet be modeledwith animal experiments?

4.

5.

6.

What plans does ERDA have for trainingprograms to provide the additional man-power needed for their proposed healtheffects research programs?

If ERDA obtains positive results on screeningfor detrimental effects of a fossil fuelproduct, how will the results be validatedwith respect to human populations?

What plans does ERDA have to evaluate thesafety of substances in humans, once theyhave successfully passed through the animalscreening system?

BACKGROUND

ERDA’s FY 1976 program plan for research on million (including pass-through funds) to bethe health effects of fossil fuels provides for $32.5 nearly evenly divided between research directly

2 3 6 CHAPTER VI



applied to the health effects of fossil fueltechnologies ($16 million). These funds wereprogrammed as follows:

I.

(1)

(2)

(3)

(4)

(5)

(6)

[7)

(8)

II.

(1)

(2)

(3)

(4)

Technology-OrientedObjectives Million $

Screening for hazardousagents . . . . . . . . . . . . . . . . . . . . .

Fate metabolism of hazardous agents . . . . . . . . . .

Pathophysiological effectsincluding respiratorytaxicology . . . . . . . . . . . . . . . . .

Carcinogenesis . . . . . . . . . . . . . .Mutagenesis and develop-

mental effects . . . . . . . . . . . . .Molecular and cellular

mechanisms . . . . . . . . . . . . . . .Recovery from and treatment

of pollutant-induced healtheffects . . . . . . . . . . . . . . . . . . . . .

Epidemiological studies . . . . . .

SUBTOTAL OF I . . . . . . . . . . . .

Supporting Research

Research on criticalorgan systems of response .

Improved bioassayscreening 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 followingissues have been identified:

(1) Selection of Pollutants: It is not clear whichpo ll ut ant s w i l l be e va l u at e d un d e r t h evarious research approaches listed above.High temperature combustion processesusing most fess i 1 fuels result in widespreadpopulation exposure to sulfur and nitrogenoxides, while ex po su re t o polycyclic

hydrocarbons, generally associated withcancer induction will be more 1 i m i ted torelatively small occupational groups, Lowtemperature combustion reverses thispattern. In general, emissions of heavy and

trace metals from energy sources tend to add

(2)

(3)

(4)

relatively small increments to populationexposures, whereas food chains and waterpresent much larger avenues of exposure.

Research on medical treatment: The ERDAhealth program includes research on medicaltreatment, that is, methods to remove metalsfrom the body or to detoxify chemicals in thebody. The rat ion ale forth is research program

in an agency whose mission is the develop-me n t o f e n e rg y t e c h n o lo g y i s u n c le a r .Recovery and treatment may be inherentlyoutside the scope of ERDA’s health researchresponsibilities.

Epidemiological studies: Animal modelshave been notoriously ineffective in predic-ting human response to long-term low levelso f h a z a rd o u s a g e n t s , p a r t i c u la r ly th o seassociated with chronic degenerative non-cancerous diseases such as coronary heartdisease, e mp hy se ma , bronchi t is, andarthritis. Air pollution studies have shown

tha t e l d e r l y p er s o n s w hi ch ch ro ni cdegenerative diseases are among the mostsucceptible segments of the population withrespect to community levels of air pollutants.These findings were derived through exten-sive epidemiological investigations; primaryair quality standards are largely based onepidemiological information. Since animalmodels of chronic degenerative diseases willprobably not be developed in the near-term, itappears that ERDA’s health program wouldbe enhanced by placing considerable y greateremphasis on systematic epidemiolog ical

research on population and occupationalexposure to fossil fuel pollutants.

Screening for hazardous agents: ERDA hasprogrammed $1.9 mill ion for systematicbiological screening of hazardous agents inprocess streams and effluents from variousfossil fuel energy technologies, and another$2.4 million to improve methods of detectionand monitoring for damage to human pop-ulations. A large portion of the $1.9 million

systematic screening effort is devoted toscreening for mutagenic and carcinogenic

agents. This program is smal1 relative to thenumber of pollutants associated with fossilfuel technologies. T O d a te , mo s t o f th erecognized a d v er s e h u m a n r e s po n s e s t ofo ss i l fu e l p o l lu ta n t s h a v e b e e n n o n -cancerous. Many more insidious potential

CHAPTER VI 237



hazards are known to exist . Sulfur andnitrogen oxides have exerted their primaryeffects on respiratory a irways and lungtissue in the form of causing or contributingto the development of acute and chronicrespiratory diseases, including asthma,bronchi t is , and emphysema. How ERDAproposes to incorporate these known andpotentia l adverse health effects into i ts

systematic screening program is unclear.

(5) P a t h o p h y s i o l o g i c a l E f f e c t s I n c l u d i n gRespiratory Toxicology: This program islargely designed to o b ta in d o se -e f fe c trelationships from toxicological studies onanimals. Inhalation studies will be emphasiz-ed. How the dose-effect data obtained fromanimal studies will be extrapolated to man,so that the information can be used to controlor 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 conversionon human health. A broad-based research effort, in both university and Federalfacilities, is critically required to develop improved techniques for evaluation ofhealth impacts from coal combustion and conversion.

SUMMARY

The Health Studies Section of ERDA-48, volume II, emphasizes research in thearea of longterm effects of coal-related pollutants. This emphasis on cancer andbirth defects is most appropria te , since coal-related pollutants are knowncarcinogens and mutagens. The program, however, appears to stress traditional

long-term animal experimentation. This approach cannot yield relevant data intime for decisions about national energy prerogatives. The program also suggeststhe use of recent research developments in the field of animal cell genetic assays.These show great promise as relevant bioassay systems and should receive greateremphasis. An intensive broad-based effort should be used in both data acquisitionand innovative fundamental research. A significant increase in both the scope of the related ERDA research organization and the university production of trainedresearchers will be needed to meet the research program requirements.

QUESTION

What plans does ERDA have to stimulate the activities; especially in the fields of mam-availability of trained researchers with skills malian genetics and cell biology?other than those represented by former AEC

BACKGROUND

T h e p r ima ry p u b l i c h e a l th ju s t i f i c a t io npresented in ERDA-48 for research in the area of coal-related pollutants is damage to skin andrespiratory systems. The probability of “secon-

dary site for damage” for latent diseases, such ascancer and birth defects, is mentioned but not “emphasized. Emissions from all steps of coalprocessing release known lipid-soluble cancer-producing substances which are readily diffusedacross membrane barriers.

No data is available regarding the effects of coal-related pollution on human cancer and birthdefects. There is in the public health researcharea a strong historical preoccupation with

respiratory dysfunction. However, if the ap-propria te cri teria for establishing priorit iesencompass severity and magnitude of effects andthe urgency of information acquisit ion, thestrong emphasis on respiratory disease over themore insidious (but later appearing) effects, such

CHAPTER VI 239



——

as cancer and congenital disorders, is difficult tounderstand. The reorientation of preexistingAE C p ro g ra ms to the s tud y o f co a l- r el a te dpollutants implies that this step will give ERDAthe technical competency required. No mis-conception could be more damaging to ERDA’sh e a l th r e se a rc h e f fo r t th a n to a ssu me th epresence of adequate scientific manpower in pre-existing facilities. The most careful scientific

review of the “reorientation” process should becarried out by non-ERDA oncologists (cancerresearchers) and geneticists to identify areas of competence and suggest which areas must beimplemented by university or other Federallaboratories. This point is doubly importantbecause the “retraining” process may delay thenecessary health assessments and will certainlyprevent the rapid entry of young researchersbecause of the priority accorded to existinglaboratories. In addition to the redirection of current research personnel, a significant increasein the training of new researchers through the

university systems w ou ld a pp ea r to benecessary. The training process using currentuniversity facilities will require the better part of a decade to implement and will take a realisticspecification by ERDA of the manpower needsand the desired university response through the1980’s.

As an example, the study of enzymatic reac-t ions i nv ol ve d i n metabolizing aromaticpolycyclic hydrocarbons to powerful cancer-causing species is not represented in presentERDA facilities. However, strong programs inthis area e x i s t a t McArdle Laboratory,

Rockefeller University , MIT, and La RocheLaboratories, which could contribute to thenecessary studies. The pattern of this example isrepeated in other specific research areas.

The Health Studies Section of volume II showsa strong emphasis on animal studies in t ox -ecological research on the effects of exposure topollutants. The statement that “no mammal is asufficient model for man” is a well-documented

toxicological fact won by decades of comparativestudies in drug metabolism and DNA repair. Thestated intent in the ERDA program to add severaladmittedly inappropriate studies of nonhumanspecies in order to gain data relevant to man isclearly illogical as well as expensive.

This tradit ional toxicological emphasis isinappropriate in a program demanding relevantdata for a large number of coal-linked pollutantsacting singly and in concert. The data from wholeanimal studies simply would not be available intime to guide decisionmaking in choosing amongthe various energy scenarios. Several years are

required for evaluation of single substancesusing present FDA procedures. This part of theproposal seems to be planning research to fitexisting facilities rather than fitting the publichealth needs,

To circumvent this difficulty, the encourage-ment of research in human genetics using thetechniques of cell biology may offer a realisticsolution. This approach is proposed by ERDA,and reflects well on the breadth of their proposedresearch, but its relative importance could bestrengthened in the proposed program.

2 4 0 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 qualitystandards which would constrain ERDA’s programs based on coal.

SUMMARY

Questions have been raised concerning whether sulfate concentrations (as anindex of SO2 transformation products) throughout the mid-west and northeastmay 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. Thereare considerable uncertainties about the concentration and chemical nature of atmospheric sulfates which are hazardous to health. Improved information on therelation of toxicity to sulfate concentrations is required to set ambient air qualitystandards. If the present fears are supported by scientific findings, standardscould be set which would severely limit further energy development programsbased on coal as a primary fuel, on direct utilization of geothermal resources, andon approaches to reduce automotive emissions. Immediate and concentratedattention to this area would help to resolve the existing uncertainties. Some of theenergy goals set by ERDA, if pursued in the absence of the necessary health effectsinformation on atmospheric transport and transformation of sulfates, may notrepresent an achievable objective.

QUESTIONS

1. What priority has ERDA set on resolution of 3. What is t he percei ved need for f unds t othe 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 effortsand elsewhere?

between ERDA, EPA, and other agencies 4 . How would a moratorium on additional inputinvolved in sulfates research? of sulfur-bearing compounds to the a t-

mosphere from new facil i t ies affect theERDA Plan?

BACKGROUND

Sulfur dioxide has long been recognized as a be controlled nationwide. Sulfur dioxide was onepollutant of major concern, and has been singled of the first pollutants for which national ambientout as one of the air pollutants most necessary to air quality standards were established, A con-

CHAPTER VI 241



certed effort was carried on from 1970 to thepresent to substitute low sulfur fuels for highsulfur coal and fuel oil. Significant reductions insulfur dioxide emissions were achieved.

When the a ir quali ty standard for sulfurd io x id e wa s e s t a b l i sh e d , i t wa s g e n e ra l lyrecognized that SO 2 was an index for the class of pollutants emitted largely by fossil fueled powerplants. Particularly in the animal toxicologicaleffects area, SO2 gas alone did not appear to havegreat toxic potential at ambient or near-ambientlevels. Yet epidemiological studies revealedsignificant correlations between ambient SO 2

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 otheroxidation products of S0 2 caused an irri tantresponse in guinea pig lungs at much lowerconcentrations (20 to 100-fold” lower) than SO 2

gas alone. Further, the irritant potency of SO 2 gas

was increased 3- to 4-fold in the presence of highhumidity, suggesting that the conversion of SO 2

to sulfuric acid aerosol greatly enhanced thebiological reactivity of the sulfur oxides. Theseexperimental findings have been confirmed byothers.

T h e s e a n i m a l s t u d i e s a r e s u p p o r t e d b ypreliminary epidemiological results obtainedfrom EPA’s CHESS program. Among the variousair pollutants measured, including SO 2, totalparticulate, NO 2 and suspended sulfates, con-centrate ions of the latter group of atmosphericpollutants were associated with daily aggrava-

t ion of asthma and of cardiopulmonary disease inthe various study areas. Daily concentration of S O2 a n d to ta l p a r t i c u la te d id n o t r e v e a l apattern of increased symptoms with higheratmospheric concentrations of these substances.

The association of adverse health effects withsuspended sulfates was tentatively shown evenin communities where existing primary airquality standards for SO 2 and total particulatewere met,

There is growing recognition that the existingair quality standard for sulfur dioxide is inade-quate, What is needed is formulation of airquality standards for the atmospheric transfor-

mation products of SO 2. As a scientific basis forthis standard, a better understanding of theatmospheric chemistry of S0 2 t r a n s fo rma t io nproducts is necessary, as is the ability to measurethese specific products in the ambient a ir .Further, the relative toxicities of these transfor-mation products will have to be assessed in orderto determine which are more hazardous to health.These findings sh o u ld b e su b s ta n t i a t e d insys te ma tic h u ma n ep ide mio log ica l stu die s.T h e se in v e s t ig a t io n s r e q u i re th e a b i l i ty togenerate specific sulfur oxide compounds forstudy and the ability to measure their concen-

trations in the ambient air. Finally, it is necessaryto elucidate the atmospheric factors that affectthe ra te of transformation of SO 2 i n to mo rebiologically reactive compounds.

A concerted research program of health andenvironmental studies of a tmospheric sulfuroxides could produce the basic, though minimum,amount o f health information within three years.The National Academy of Sciences pointed outthat “improving the available information aboutthese aspects of sulfur emissions has an expectedvalue on the order of hundreds of millions of dol lars a year” (Air Qua l i ty and S ta t ionary

Source Emission Control, a report by the Com-m i s s i o n o n Natural Resources, NationalAcademy of Sciences, prepared for the Commit-tee on Public Works, U.S. Senate, Serial No. 94-4,March, 1975, p. xxxvii).

2 4 2 CHAPTER VI



To gain a broader concensus than is achievableby physical panel part icipation alone, OTAcontacted a group of organizations with a request

that appropriate personnel review and critiquethe ERDA-48 volumes I and 11. The list of organizations as shown in Table 1 was chosen torepresent both a spectrum of interests and a

ATTACHMENT I

OUTSIDE CRITIQUES

variety of expertise in the broad subject area, andto complement those capabilities presented onthe working panels.

Of those contacted, the organizations markedby asterisk were able to part icipate. Theircontributions follow in alphabetical order byorganization, 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 Institute1801 K Street, NW.Washington, D.C. 20006

*American Public Power Assoc.

2500 Virginia Avenue, N.W.Washington, D.C. 20037

Babcock & WilcoxPost Office Box 1260

Lynchburg, Virginia 24505

*Building and Construction Trades Dept.AFL-CIO815 16th Street, N.W.

Washington, D.C. 20006

Coal Research Bureau

University o! West VirginiaMorgan town. West Virginia 26505

Coal Research ProgramGarrett Research & Development Co.1855 Cassion RoadLa Verne, California 91750

(Combustion Engineering, Inc.1000 Prospect Hill RoadWindsor, Connecticut 06095

*Consumer Federation of America1012 14th Street, N.W.Washington, D.C. 20004

*Edison Electric Institute90 Park AvenueNew York, New York 10016

*Environmental Defense Fund1525 18th Street, N.W.


Environmental Quality LaboratoryCalifornia Institute of TechnologyPasadena, California 91109

Geological Society of America3300 Penrose PlaceBoulder. Colorado 80302

Institute for Government ResearchUniversity of ArizonaTucson, Arizona 85721

*Institute of Gas Technology3423 S. State StreetChicago, Illinois 60616

Lake Powell Research ProjectDept. of Planetary & Space SciencesUniversity of CaliforniaLos Angeles, California 90024

*National Association of Electric Companies1140 Connecticut Avenue, N.W.Suite 1010Washington, D.C. 20036

National Gas Association

113017th Street, N.W.


Scientists’ Institute for Public Information30 East 68th StreetNew York, New York 10021

*Sierra ClubMills TowerSan Francisco, California 94104

United Mine Workers900 15th Street, N.W.Washington, D.C. 20005

United Nations Association of the USA34 5 E 46th StreetNew York, New York 10003

Union of Concerned ScientistsP. C). BOX 289MIT Branch StationCambridge, Massachusetts 02139

ATTACHMENT I 243



AGA American Ga sAssoc ia t ion

F. Dona ld Ha r t

President

1515 Wilson Boulevard , Arlington. Va 22209Telephone (703) 5242000

J u l y 2 1 , 1 9 7 5

Mr . Emilio Q. DaddarioD i r e c t o rOffice 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, appre-

ciates 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 docu-

ments 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 extremelydisappointed 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 require-

ments 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 an 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

V o lu me I , T h e P l an , a n d t h e d r a f t o f Vo l u m e I I ,P r o g r a m I m p l e m e nt a t i o n , a r e c o mp r eh en s iv e d o c um en t s

w h i c h f o r m a g o o d b a s i s f o r c r i t i c a l r e v i e w . A t t h eo u t s e t , t h e m a j or c r i t i c i s m a n d p r ob l e m w i t h t h e o v er –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 comprehen-

sively 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 coop-

eratively, 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 elec-

trolysis and thermochemistry; storage, transmission and

distribution of gas; improved efficiencies of residential

and commercial appliances; improved efficiency of indus-

trial 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.

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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 InferredRange 322 – 655 TCF Undiscovered Recoverable Resources

761 -1094 TCF Total Range

If the me a n o f th e Un d i sc o v e re d Re c o v e ra b le Re so u rc e si s c a l c u l a t e d , then the above figures b e c o m e :

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 . O n P a g e s - 4 u n d e r “ALL THE NATIONAL ENERGY TECHNOLOGYGOALS 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.

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ATTACHMENT I 249



We agree t h a t t h e s e c on d p r i m a r y i n t e r e s t s h o u l d b e on

t h e p r o d u c t i o n o f s y n t h e t i c g a s f r o m c oa l a n d o i l s h a l e .

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 elec-

trolysis 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 inexhaus-

tible 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 withTable 4-3 on Page IV 5, and Scenario III on Page S–5 should

be methane from biomass, hydrogen from water, and Improvedelectrification 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 techno-logies which should be pursued vigorously and which could

be demonstrated in the 1985-1990 period, become commercial1990-2000 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. Theseshould 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 requiredin commercial scale coal conversion plants have

never been designed, built and tested in the very

large sizes required.)

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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 r isks in the high–r i s k d e m o n s t r a t i o n a n d n e a r – c o m m e r c i a l p l a n t s . T h e F e d e r a lGovernment 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 con-

sistent 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 bechanged 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 AmericanGas 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, s h o u l d i n c l u d e M a t e r i a l s R e s e a r c ha n d C o m p o n e n t D e v e l o p m e n t c o n s i s t e n t w i t h 6 . a b o v e .

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 technologiesinvolved 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 researchto 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 Hydrogasi-

fication 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 andapproach 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 technologyrequires design modifications which must be tested and demon-

strated in this country on American Coals. This is the

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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.”

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ATTACHMENT I 253



V o l u m e I I

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 expandedas 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.

D e m o n s t r a t i o n P l a n t s

A goal of one high-Btu gas demonstration plant is in-

sufficient and shortsighted. Every effort should be madeto 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 thepreliminary design step were eliminated and an all-out effort

made in detail design and construction, the 10-11 yearschedule 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 stimu-

lation 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 Gasifi-

cation Pilot Plant Research Program issued a report entitled,

“Mechanical Development Recommendations for Commercial Scale

Coal Gasification Plants” on October 15, 1973 which recommendsresearch 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

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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

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256 ATTACHMENT I



equipment suppliers. Proprietary positions will be sought

which will delay dissemination of new information. Elimi-

nation of the proprietary positions will slow the develop-

ment of hardware.

Conservation in Buildings and Consumer Products

Objectives

Under near term to 1985, a 20% reduction in energyconsumption 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 tha t the base case is the“ s t a t e – o f - t h e - a r t ” b u i l d i n g e n v e l o p e .

A major effort has been made by ASHRAE in development

of Standard 90. I f t h i s S t a n d a r d i s i m p l e m e n t e d b y l e g i s l a -t i v e a c t i o n , t h e 3 0 % r e d u c t i o n i n e n e r g y c o n s u m p t i o n m i g h tb e d e m o n s t r a t e d d a i l y . 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 develop-

ment 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

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60- 411 0 - 75 - 18



on-site fertilizer manufacturing. In this Energy Storagesection, 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 futureit has the possibility of becoming a base load energycommodity. The first major problem is the economical pro-

duction 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. Bothshould 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. Thisshould 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 scalefor several years on improving industrial process efficiencies.

We would welcome the cooperative support of ERDA. We urgecooperative implementation of projects in the next Plan.

-12-

258 ATTACHMENT I



ROBERT A.GEORGINE, president

PETER FOSCO, Is t 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

H A R O L D J . B U O Y , 8 t h V i c e P r e s i d e n 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 qWASHINGTON, D. C. 20006

(202) Dlstrict 7-1461~ D — - - - . . . . .

August 12, 1975— . — - .

—. —-... — —-._— ~

Mr. Emilio Q. DaddarioDirectorOff ice of Technology Assessmentu. S. Congress


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 andConstruction Trades Department, AFL-CIO regarding ERDA’ s NationalPlan 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 vitalinterest in energy-related matters. The energy crisis is not

only a crisis for our members in their roles as consumers, butit is also a crisis for them as workers. It is for this reason

that the Building Trades is pleased to have this opportunity tooffer its comments on ERDA’s comprehensive assessment of thiscountry’s energy situation.

From the standpoint of the Building Trades, ERDA’s mixed

strategy of necessary options is a realistic and practical evalua-tion of our worsening energy situation. We have long been on record

in support of increasing our energy supplies, particularly throughthe increased utilization of coal and nuclear energy, while atthe 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 wouldlike to briefly comment on one of several potential constraintsof implementation identified in your report, namely, manpower.

It is true that the proportion of construction labor presentlyemployed for the erection of energy-related facilities is a smallfraction 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 courseof providing badly needed energy-supply facilities.

As stated in ERDA’s report, reliance upon natural marketforces to balance the demand and supply of labor is generally a

ATTACHMENT I



safe strategy. We can count among our 17 affiliated internationalss o m e o f t h i s c o u n t r y ’ s b e s t m a n p o w e r t r a i n i n g p r o g r a m s . This factor,coupled with “the dynamic character and mobility of the labor force . . .[A]nd the lead time anticipated by the Plan” should minimize large-scale problems.

However, it is conceivable that regional and local labor forceimbalances might develop. The labor requirements for energy facil-ities are rapidly escalating. Our estimates now show that each1000 megawatt nuclear plant alone requires a peak construction site

work force of 2,000 to 3,000 workers. B e c a u s e o f t h e l a r g e c o m p o n e n to f s k i l l e d l a b o r r e q u i r e d o f t h e s e p r o j e c t s , c e r t a i n a r e a s o f t h ec o u n t r y m i g h t h a v e l a b o r s h o r t f a l l s .

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 tradesin particular, would be more than able to supply any manpowerneeds. We would like to suggest that the possibility be exploredof developing regional information systems on impending construction.Knowledge of a region’s construction schedule would enable localunions to gauge their apprenticeship programs to expected demand.

We don’t want to see our unions involved in training programscreated in the wake of energy hysteria which are unnecessary andsuperfluous.

The chief obstacle to compiling such a system will be thefact that manpower demand in a region will not simply be a functionof upcoming energy projects; it will be a function of all construc-tion. Any information system will have to take account of theregion’s entire construction schedule.

Finally, the Building Trades Department suggests that implemen-tation of any activities designed to meet projected manpower require-

ments include close consultation with the Building Trades. ERDA’sdescription of its manpower development program makes no mentionof the allied building trades. Yet, it is these trades in conjunc-

tion with contractors and private sector employers who have spear-headed our industry’s various training programs. We regard thisas a serious omission.

In closing, the Building Trades Department wishes to commendERDA on its National Plan. Hopefully, the Plan is truly a blue-

print for our future energy well-being.

With best wishes, I am

RAG/lr

260 ATTACHMENT I



1 0 1 2 14th STREET, N.W. q

LEE C. WHITE, CHAIRMAN

SUITE9 0 1 qWASHINGTON, D C 2 0 0 0 5 q( 2 0 2 ) 7 3 7 3 7 3 2

ELLEN BERMAN DIRECTOR

Mr. Emilio Q. DaddarioDirectorOffice of Technology AssessmentSenate Annex, 119 D Street, NE


Dear Mr. Daddario:

A c t i o n .-—, -

-- --

— - - - - - - -

— —-—- -- -.

1 have had a chance to review briefly the recent Energy Research

and Development Administration report, and have some comments thatI hope will be helpful. Although it is obviously an ambitiouseffort, it does not adequately encompass several important issues.Recognizing the inherent difficulties in developing a comprehensiveand positive energy program, Congress authorized ERDA to survey thecountry’s needs and problems. The recently released report details

many of the numerous difficulties which lie ahead. The statedsolutions, however, merely reinforce our deepest concerns withoutnecessarily providing a direction or, for that matter, much hope.

Reflecting the residual influence of the old Atomic Energy Com- mission, ERDA emphasizes nuclear reactors and describes high hopesfor fast-breeder reactors. However, the same pages containing theseaspirations bear disclaimers that reactors are terribly intricate

and cannot possibly be completed until the next century. Neverthe-

less, the money recommended for atomic research is astronomicallylarger than the amount designated for solar energy research, perhapsthe most available, safest way to solve our energy problems. Thereis nothing necessarily wrong with this, but one gets the uncomfortablefeeling that we are not pursuing alternatives at a lusty enough level.

In addition, “environmental restraints” on the potentially hazardousnuclear energy development are only mentioned in oblique, mutedterms. Although our national security and environmental health

might be at stake as this research develops, ERDA did not find itnecessary to outline precautions. It is nearly inconceivable thatthe authors of the ERDA report would believe any new energy researchshould go forward without due concern for necessary precautions andenvironmental safeguards.

ATTACHMENT I 2 6 1



—

Mr. Emilio Q.July 2 2 , 1 9 7 5Page Two

Daddario

Perhaps such oversights--if they are oversights--could be preventedif 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 citizen-oversight committee on a regular basis. No such reporting mechanism is detailed in the ERDA report, although it is of considerableimportance.

The authors of the ERDA report have only discussed the use of waste materials in terms of environmental control. In fact, the actualconversion of waste material, including everyday garbage, may providea valuable energy resource. This omission may be another indicationof the authors’ bias towards centering energy and energy-relatedresearch around nuclear development.

The ERDA report explains that the development of new resourceswill be shared by both the public and private sectors. However,there is no explanation of the turnover from the government to industryor for the sharing of original costs. There is no explanation of whowill do original research. No mention is found in the report’s

pages of the need for competition in the research and developmentaspects of new energy resources and equipment. Obviously, suchquestions must be answered before any plans for development can betaken seriously.

The task before us is not easy. The establishment of ERDA and itsefforts to map out our future energy needs and programs are basicallyencouraging. We hope, however, that some of the above suggestionswill be helpful.

Thank you for the opportunity to comment.

Sincerely,

262 ATTACHMENT I



N A T I O N A L A S S O C I A T I O N O F E L E C T R I C C O M P A N I E S

SUITE 1010, 1140 CONNECTICUT AVENUE, N W

W A S H I N G T O N . D . C . 2 0 0 3 6

D A V I D R T O L L 2 0 2 1 2 2 3 . 3 4 6 0

M A N A G I N G D I R E C T O R

AN D

G E N E R A L C O U N S E L July 22, 1975

Mr. Emllio Q. DaddarioD i r e c t o rOffice of Technology AssessmentWashington, D.C. 20510

Dear Mr. Daddario:

T h a n k y o u fo r y o u r l e t t e r o f Ju n e 2 3 , a d d re sse dto Mr. Guy Nichols, Ch a i rma n o f th i s Asso c ia t io n .

W e a p p r e c i a t e y o u r i n v i t a t i o n t o c r i t i q u e t h etwo volumes re la ting to ERDA’s National Plan for Energy

Research, Development and Demonstration.To present a c om p o s i t e c om m e n t a r y f r o m i n v e s t o r -

o w n e d u t i l i t i e s , w e h a ve p r ep a r e d ou r c om m e n t s in c ol la b or a -

t i o n w i t h t h e E d i s o n E l e ct r i c I n s t i t u t e i n N e w Y or k C i t y .

T h e i r c r i t i q u e d o e s i n c l u d e o u r c o m m e n t s a n d s h o u l d b e

r e c e i v e d b y y ou s h o r t l y .

S i n c e r e l y , /

w“ David R. Toll

ATTACHMENT I 2 6 3



J u l y 2 4 , 1 9 7 5

Thank you for your June 2 3 , 1 9 7 5 letter which providedthe Edison Electric Institute with the opportunity to submit com-

ments to the Office of Technology Assessment on ERDA’s EnergyResearch, Development & Demonstration plans and programs. As the

principal association of the nation’s investor-owned electricutility companies, EEI is vitally concerned with steps taken bythe Federal government to advance the technology that will insure

an adequate supply of energy for the United States in the yearsahead.

We note that the objective of the review that OTA willsubmit to the House Committee on Science and Technology, theSenate Committee on Interior and Insular Affairs and the JointCommittee on Atomic Energy is to “identify and discuss thosequestions concerning the programs presented by ERDA that arecritical for Congressional attention because they represent unre-solved, controversial, or overlooked areas.” Our analysis of thetwo E RDA d o c u me n ts h a s b e e n f ro m th i s p o in t o f v ie w . W e f i n dthat while the overall ERDA outline is, for the most part, c o m -

plete and comprehensive, in certain critical respects relatingto the science of generating, transmitting and distributing

electricity, it is unbalanced, out-of-focus and inadequate. EEIwelcomes the opportunity to have its views on these crucial weak-nesses included in the OTA review that will be called to theattention of key legislative bodies.

EEI commends ERDA for its comprehensive analysis ofthe country’s energy situation and outlook that has resulted inthe “National Plan for Energy Research, Development & Demonstration:Creating Energy Choices for the Future.” The significance of thisundertaking is even more noteworthy in view of the fact that ithas been formulated in the absence of a strong, coherent nationalenergy policy. In lieu of such basic policy, we endorse the sound-ness of the five “national policy goals” used as a focus for theERDA program.

2 6 4 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 needsand conditions. This would be done by periodic up-dating of theinitial plan. We take this occasion to suggest that through theElectric Power Research Institute an electric utility industryadvisory group of high technical management level representatives

be organized to work with ERDA on a continuing basis. Similargroups from other industries may also be of assistance. Without

strong and active industry involvement, technology assessmentsand 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 developmentof this concept. Chapter VI of Volume I classifies the LMFBR con-cept along with solar-electric generation and controlled nuclearfusion as technologies whose potential contribution to the nation’senergy 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 repeat-edly before Congressional committees and other government bodies,there is no single energy related research effort that holdsgreater promise for insuring adequate reliable electricity supplyfor the American public than the breeder reactor program. The

importance the electric utility industry attaches to developmentof 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 re-

search should be accelerated to the extent that funding can be

used effectively. It would be a serious mistake, however, to dothis by slowing down development of the LMFBR and delaying the dateat 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 thecountry’s needs, research effort must be directed at a combinationof technologies rather than toward a specific area. This conclu-

sion 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 im-

ports of oil and gas required by each of these scenarios to theyear 2 0 0 0 in this “paper and pencil experiment,” the “Combinationof all Technologies” scenario is found to be superior.

ATTACHMENT I 265



Mr Emilio Q Daddario - 3 - J u l y 2 4 , 1 9 7 5

Although the rationale for the selection of this methodology is not entirely clear, the ERDA conclusion that tech-

n o l o g y s h o u l d b e a t t a c k e d o n a l l p r o m i s i n g f r o n t s i s r e a s o n a b l e .EEI takes exception, however, to Scenario III which is the“Intensive Electrification” case. Scenario III examines how “thetotal energy picture would be affected by an intensive shift to

electrification, with (1) maximum use of all sources to generateelectric power and (2) maximum reliance on electricity for end-uses.” With certain assumptions included, although basic dataare lacking, the results of this scenario are shown to be lessdesirable in terms of net imports of oil and gas in the year 2000than do all other cases with the exception of the “No New Initia-tives” scenario. To suggest that it is undesirable to move towardgreater electrification, based on indigenous fuel reserves, isinconsistent with achievement of the country’s energy goals.

Not only is the scenario method of analysis open toquestion, its implied and stated conclusions relative to the futurerole 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 effi-ciency of our energy transportation system.

A final comment is concerned with the discussion inChapter VII of Volume I dealing with the responsibility of indus-try in achieving national RD&D goals. The recent organization ofthe Electric Power Research Institute stands as evidence of theelectric utility industry’s recognition of the important part ithas to play in this government-industry cooperative effort.Investor-owned electric utility companies will continue to meetthis vital responsibility. The industry agrees with ERDA thatthe “private sector” should “Interact strongly with the Federalgovernment in developing the economic, technical, safety, andenvironmental aspects of the National Plan for Energy RD&D.”

EEI points out, however, that while on occasion, as stated in theERDA Volume I, industry should “Play the major role (financiallyand technically) in large demonstration and near-commercial pro-jects,” there are instances when the cost of a technicallyadvanced demonstration plant will extend beyond the ability of anindustry. In these instances, such as the Clinch River BreederReactor plant, the Federal government appropriately should

provide financial assistance that will make the R&D results avail-a b l e t o a s s i s t i n m e e t i n g t h e n e e d s o f t h e p u b l i c .

Sincerely yours

Presidentc c : Messrs S L SibleyF W LewisChauncey Starr

266 ATTACHMENT I



ENVIRONMENTALDEFENSEFUND 162 OLD TOWN ROAD, EAST SETAUKET, N.Y. 11 733/516 751-5191

July 1 7 , 1 9 7 5

Mr. Patrick Gaganidze

Congress of the United StatesOffice of Technology Assessment


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 2 6 7



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. an d

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 ever-

lower 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

.

2 6 8 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 extra-

polation 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 theadvice 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 ini

theU.S. economy. Indeed, the overwhelming majority of federally-.

q

funded agricultural research is directed towards increasing thecentralization 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 goa l 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 develop-

ment program without any discussion of what is going on in the rest of the world. Weare 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 w c 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 2 7 1



.

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 le SS indicated in the future as a result of significant techno- -

logical change, the ERDA budget is badly skewed towards a program that offers speedyq

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 byProfessor 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 . c o a l . 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

t he domestic coal i n d u s t r y . 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





—

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 in-

stitutional 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 commer-

cialization.

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-siteeconomies 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 l oad management and pricing reforms discussed earlier as well as the promise

of dispersed technologies such as fuel cells -- which can be sited quite C1O Se to modcst

demand centers thus avoiding transmission cost-s.

5. Conservation. M O St of the goals in this gcncral category are certainly- — —

laudable but will probably be achieved quite speedi ly 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 l i t t l e 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 t O 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 t a l e n t .

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 outrightintellectual 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 criticismhere. Instead, the reader is referred to the Book of Prophets: Chapter 26, Verse 11.

278 ATTACHMENT I



I N S T I T U T E O F G A S T E C H N O L O GY q 3 4 2 4 S O U T H S T A T E S T R E E T q I I T C E N T E R q C H I C A G O , I L L I N O I S 6 0 6 1 6

July 21, 1975

Mr. Emilio Q. DaddarioDirector, Office of Technology Assessment


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 o f t h e n a t i o n ’ s m a j o r e n e r g y r e s e a r c h o r g a n i z a t i o n sw o r k i n g b o t h f o r t h e g o v e r n m e n t a n d i n d u s t r y , w e b e l i e v e t h a t t h i si s a do cu me nt o f ma jo r i mp or ta nc e . I t s h o u l d r e c e i v e c o n s t r u c t i v ei n p u t s f r o m a l l s e c t o r s o f t h e n a t i o n .

To this end D r . Derek Gregory, the IGT staff and I have giventhe document a very serious review. We hope to be able to serve asimilar role in the future.

Very truly yours,

Jack HueblerSenior Vice President

JH/klf Action —.- . . . . .

— --- . .

—. —

A F F I L I A T E D W I T H I L L I N O I S I N S T I T U T E O F T E C H N O L O G Y

ATTACHMENT I 279



REVIEW OF “A NATIONAL PLAN FOR ENERGY RESEARCH,DEVELOPMENT AND DEMONSTRATION"

Overall Comm ents

The document is comprehensive and intelligently put together. There “

is an excellent summ ar 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

ar e 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 recomm endations 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 so la r

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..

I N S T I T U T E O F G A S T E C H N O L O G Y

280 ATTACHMENT I



——

Page Two

There is considerable discussion of the resources of gas, petro-

leum 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.

Th e summary (page 5 -8) calls for industry to "Play the major role

(f”inancially and technically) in large demonstration and near -comm ercial

projects" and to “Comm ercialize 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.


ATTACHMENT I 2 8 1



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.

I N S T I T U T E

ATTACHMENT I

O F G A S T E C H N O L O G Y



P age F o u 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

a re 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

ca n 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.

I N S T I T U T E O F GA S - T E C H N O L O G Y

ATTACHMENT I 283



Page Five

Oil Shale

Th e plan only refers

retorting needs research

to in-situ recovery technology. Aboveground

and the production of pipeline gas presents a

great developmental opportunity.

F ue l s F rom B iom ass

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 al though some direct comm ercia l appl ica t ions are

i m m e d i a t e l y p o s s i b l e , a great deal of R, D&D is needed. A thorough investi-

gation is required

p r o c e s s e s .

G eo the rm al.

The program

of where solar” augmentation can be applied to industrial

*

objectives, a s clas sified by time periods, are reasonable.

The exploration and assessment efforts described under Strategy (1) are

insuf f i c i en t ly com prehens ive . The Government should ensure that an appropr ia te

level of effort is applied to advanced geophysical exploration sciences and

techno log ies . For example, we understand that the U. S. S . R. is already using

an MHD magnetic pulse generator for geophysical hydrocarbon exploration,

and i t seems reasonable to question whether this or comparably imaginative

techniques might be applicable to geothermal exploration. Even though the

credibil i ty 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

del ineate geothermal reserves of the var ious types .

I N S“ T I T U T E O F GA S - T E C H N O L O G Y

284 ATTACHMENT I



Page s i x

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. M o r 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: Dub in-Mind ell-Bloome Assoc. New York) ha ve sh own bothq

technical feasibility of significant energy reduction by retrofit or new.“

design and cost ef fect iveness .

Adequate technology for additional energy reduction by utilization of

dsolar energy has been demonstrated abroad (Australia ) for certain

commercia l bui ld ings .

Problems of implementation by private sector due to lack of awareness,

insti tutional barriers, and cost of collectors, can be overcome by a

continuous and vigorous government supply of such R, D&D activit ies.

. enhanced by broad educational init iat ives, in cooperation with other

I N S T I T U T E

. .


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

a t reasonable cos t .

-Development of cost effective methods of retrofit of existing installations

of spa ce 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 f lue. A more cost effective and safe

approach would be to increase by retrofi t approaches the seasonal efficiency

of ut i l iza t ion of space and water heaters by such means as to reduce the

burner -off t ime losses of condit ioned air . While such approaches are known

( f lue dam pers , p roper s i z ing , m odula t ing burne r s ) , t he re i s need to e s t ab l i sh

the magnitude of their potential for energy conservation in order to demonstrate

cost effectiveness to the homeowner.,.

E lec t r i c C onver s ion E f f i c i ency

The program is vital ly needed but the approach is weakly stated and

i n c o m p l e t e . Improving the energy conversion efficiency should occupy the

highest governm ent priority sine e it is one of our best m cans of conservation-

making existing fuel reserves (both fossil and fission) las t longer.

i

Th e s t ra tegy discussed seems to consider superf ic ia l ly the severe

materials problems and l imitations encountered by some advanced energy-,

.

conver s ion sys t em s . The E lec t r ic Conver s ion Al t ern a t ive S tudy (E C AS )

is mentioned. This program represents a good start in the direction of

asses sing a d v a n c e d s y s t e m s . However, care should be used in interpreting

I N S T

286 ATTACHMENT I

I T U T E O F G A S T E C H N O L O G Y



Page E ight

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

distr ibution system) have not been considered equitably. This bias should

be recognized and proper attention should be given to fuel cells. Fuel cells

are not Carn ot cycle limi ted and, therefore , sh ow th e bes t potent ia l for

a c h i e v i n g t h e s t a t e d 5 5 % efficiency when combined with a gasification plant.

E lec t r i c P ow er T ransm iss ion

The approach is sound. No mention is made of the problem of addressing

t r ansm iss ion over longer d i s t ances than a re now typ ica l . D i s t r ibu t ion sys t em

improvements are included in the Objectives, but are omitted from the

Implemen tat ion Program . Cryogenic sys tems are limi ted 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 t ransfer requirements wi l l inevi tably 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, i t must be recognized that physical laws probably impose a rather

t ight ceil ing on how much present performance can be improved before”

rapidly diminishing re turns are fe l t . Such barriers can not be realist ically

overcome by shift ing development costs from rate -payers to tax-payers..


ATTACHMENT I 287



Page Nine

The Federal Role should fall largely in this scientific field

on the potentia1 conservation of al l r es our c es ( land, aesthetics,

wi th emphasis

public health

and sa fe ty , e t c . ) r a the r t han p r im ar i ly m a te r i a l s r e sources . A s an exam ple , “

the NBS should continue or expand its research on cryogenic and superconducting

ma te r i a l s , b u t th e e l e c t r i c u t i l i t i e s a n d th e i r su p p l i e r s sh o u ld t r a n s la te th e

f indings into transmission l ine technologies and should be al lowed 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 transportat ion technologiess.

The Federal R&D agencies have much to offer and their potential contributions

are too valuable to be unnecessari ly 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. Object ives

to produce prototype automobiles with 60, 100, and 200 mile ranges can beo

met today, and do not need research, if this is al l 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 addit ional qualif iers on goals should be clearly stated as they are vital ly

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.


288 ATTACHMENT 1



Page Ten

The general comm ents on implementat ion makes the impl ic i t assumpt ion

that electric vehicles will have an overall favorable impact on the national

energy and economic s itua t ion. Some overall sys tems ana lys is and a corn.

pa r ison wi th th e a l terna t ive non elect r ic , nonfoss il fu el vehicle should be made.

This is missing both here and in the “T ranspor t a t ion E f f i c i ency” p rogram .

There is an overlap of effort in the Stirling engine program discussed

in this program plan and also in the "Transportat ion Efficiency" plan.

Some definite procedure for coordination of these two efforts is required.

Many of the technologies discussed in the electric -rai l t ransport section

a re a lr eady in u se in o the r coun t r ie s . The p lan qu it e co rrect ly em phas izes

a s tud y of exis t ing foreign t ra in s ys tems. The s tudy shou ld a lso encompass

a review of research in progress by fore ign laborator ies a imed a t e lec t r ic

ra i l t rac t ion. It is to be hoped that the reference to "th i rd ra i l” e lec t r i f ica t ion

also implies overhead catenary electrif ication, which is the more usual wa y

of supplying power to modern rai l systems.

E n e r g y Storage,

The program is needed, and is well presented, but with some omissions,

over laps , and conf l ic ts .

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, onlysmall 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


ATTACHMENT I 289

60-411 0 - 7 5 - 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 comm issioned.

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 implementa-

tion plans, are not specifically mentioned in the objectives. There seems to be

no reason why e lect romagnet ic receives specia l recogni t ion.

There is some concern that the hydrogen storage objective includes

“transmission and utilization systems as a substitute for petroleum and natural

gas fu e ls . “ This work is mu ch needed and jus t ified , bu t the words here imply

a far greater impact than merely an energy 6to 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 .


290 ATTACHMENT I



Page Twelve

Industrial Energy Efficiency

This important area has been the subject studies by A. G. A. and several

g a s companies a t IGT for the past several years. The program has been

very successful but could profit from financial support by ERDA.

F

T r a n s p o r t a t i o n E f f i c i e n c y

An excellent ly la id out program. More comprehensive and logical tha n

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 refuell ing operations. There i s some

concern that the emphasis on hydrogen in this program is not backed up by

adequate emphasis e lsewhere in the plan on hydrogen product ion, t ransmiss ion,

and distr ibution technology. Specific mention of hydrogen as an aircraft fuel

is not made, while i ts l ight weight makes i t specially advantageous in this

appl ica t ion.

Studies of hydrogen transmission in pipelines must be coordinated with

the hydrogen program in the “Energy Storage” plan, and there must be a

paral le l compar ison to the a l ternat ive of e lec t r ic power t ransmiss ion.

T he p rogram repea ted ly s t r e s ses noncryogen ic onboard hydrogen s to rage .. .

This implies that cryogenic storage has ei ther been ruled out or does not need

R&D. Neither assumption is just if ied, but whichever has been assumed should

be stated.


ATTACHMENT I 2 9 1



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. )

Fus ion /--

The Tokam ak- type fus ion r eac to r deve lopm ent p rogram appea r s t o 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 i t 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 i t .

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

o n t e ch n o lo gic a l, e co n om ic , safety, or other grounds. The need for a deliberate

approach to CTR development has been documented

for a res t ra ined approach to laser fus ion has not .

B r e e d e r R e a c t o r s

to our satisfaction; the need

We support the near - term objective as stated, and include the

CRBR, the PCTF, and poss ibly some other major fac i l i t ies wi thin:’.

w ork .

I N S T I T U T E O F

;

FFTF, the

this frame -

G A S T E C H N O L O G Y

292 ATTACHMENT 1



—

Page Four teen

The mid-term objective is loosely constructed, as we believe its should

be at this time. Unnecessary Federal comm itments to LMFBR

commercialization, as distinct from technological development, should be .

held in abeyance whi le a l ternat ives are being aggress ively evaluated. In-

tensive efforts should be applied to the preparation and continuous updating

of r ea l i s t i c , i n t eg ra t ed , ene rgy deve lopm ent schedu les and p rogram s 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 f ive 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 “di rected toward a l laying the publ ics .

c on c e r n s ” b u t , r a t h e r , to wa r d e n s u r in g s a fe t y. P u b l ic r ela t io n s a r e im p o r t a n t ,

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 hea ded for oblivion a nd the cou ntr y‘s importa nt nu clear en ergy program

will be even further emasculated. Please obli terate such words and concepts!

We believe i t is not yet t ime, and 1978 may be too soon, for a commitment

to construction of a near-comm ercial LMFBR (NCBR) as a follow -on to the

CRBR. Before endorsing such a commitment, we would want to

prehensive energy development budget showing i ts impact.

We support the limited attentions to the GCFR, LWBR, and

as outlined.

Converter Reactors

see a com-

MSBR activities

The near -term objectives stated are appropriate national goals but we feel

t h a t t h etime has

come for the electric utilities to collect further needed LWR


ATTACHMENT I 293



Page F i f teen

development funds from rate -payers rather than tax-payers. We sympathize

with their f inancial 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

t o show profi ts on the LWR segment of their businesses, with a strong market

demand on the hor izon. 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.

e l im ina t ing any unnecessa ry governm enta l obs t ac l es to p rogress .

We do favor Federal support (including financial support) of mid-

term 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

essen t i a l , non - e l ec t r i c ene rgy fo rm s . Syst em s w ork w i l l be cost ly, bu t i t

should include the ear ly s tudy and demonst ra t ion of the coupl ing of the VHTR

cool and loop to seve ra l im por t an t i ndus t r i a l hea t absorb ing p rocesses . It is

not clear that this essential activity has been assigned a suitably high priori ty.


294 ATTACHMENT I



Page Sixteen

Attention should also be given to adaptation of the HTGR for the purpose

of H 2 or synthet ic fuel manufacture . Analysis of industrial applications of

process heat o ther than in H 2 or Synfuel should be included. Iron and steel .

and cement and s tone indust r ies in par t icular should be inves t igated.

Use of process heat is not included in the “Problems” or “Implementation”

p r o g r a m . One part icular addit ional problem is that of coupling the HTGR coolant

loop w i th indus t r i a l hea t - consum ing p rocesses , and adapt ing the reactor to accept

the return of coolant st i l l 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 examinat ion a t ERDA and should be cont inued.

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

Pplanning.

The whole program effort is too heavily emphasizing the production of

elect r ic i ty , 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 i t is st i l l at the study

sta tus , and has a long term of impact , and presumably because i t has no

n e t energy supply impact in the long run, it received the lowest ranking in

n a t io n a l p r io r i ty .In the Glossary section, hydrogen energy is defined as

-.. “


ATTACHMENT I 295



Page Seventeen

including non-elect rolyt ic

i t s s torage and t ranspor t .

methods of hydrogen production and methods for

Speci f ic ment ion of the e lect rolys is process , and

of the utilization of hydrogen, is not made. In discussion of the need for

increases in the capacity of energy transportat ion systems, rai l movement

of coal and pipeline movement to f luid fuels and slurries is discus seal , but

no mention is made of the increasing needs to move either electrici ty 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,

al though the use of hydrogen energy, bulk electric storage systems, and fuel

cell generation are discussed in the plan as developable technology options).

I N S T I T U T E

296 ATTACHMENT I




SIERRA CLUB Mills Tower, San Francisco 94104

Sierra Club Research

July 1 6 , 1 9 7 5

Jon VeigelCongress of the U.S.Office of Technology AssessmentWashington, D.C. 20510

Dear Mr. Veigel:

I have carefully read the two volume ERDA decision document: “A NationalPlan for Energy Research, Development and Demonstration: Creating EnergyChoices for the Future .” The document reflects a major conceptual im-provement over earlier work, such as “project Independence.’! The presen-ta tion of supply a lternatives a llows a c learer public understanding of exactly what the federal government plans to accomplish in the next fewy e a rs . I t i s a s t r aig ht forward p rese nta t io n o f t ec h no log ica l o pt io ns .

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 tofollow through on the recognized realization that energy is not unlimitedand tha t p rices wi l l be h igh . Fu ture ana lysis shou ld t rea t a b roader rangeof social choices which can achieve improvements in the quality of life.

Research, development and demonstration might also be spent on social. demon-stra tions such as l ifestyle changes in addition to energy conservation re-search 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 fa ilsto explain the following:

1) How much these drastic supply goals will cost America - whatare 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/VeigelJuly 16,

-

Page Two

4)

5)

6)

7)

1 9 7 5

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 captu re the profit from the output.

I a m particularly concerned over the presentation of the time tables con-tained in Volume 2. The process for making these plans and the conditionswhich would lead to a sequence modification are not specified. I wouldthink that the public interest would be well served by a description ofexplicit 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, howwould America phase out the existing stock? One wonders what the economicdistinction is of dependence on foreign oil over which we have little controland dependence on a questionable technology which becomes so dominant thata phase out is impractical. Energy independence should be analyzed in thecontext of social protection from unexpected events of all sorts. One even

might wonder whether the oil import uncertainty is as major a policy concernas the technological failure potential. As a start, an analyses mightshow the national consequences of a loss of expected energy supply for eachsource of the technologies in this ERDA document for each yearinthe

planning process. Thus, the energy policy which chooses the source andtiming of energy exploitation would implicitly consider the uncertainty ofavailability. 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 highcost of a drastic, rapid curtailment of energy use.

Underlying all my comnents is a concern that the proposals for R,D,&D willnot be responsive to economic, social and environmental factors. If re-seach is pursuedto obtain a supply goal and the goal is achieved, we arenot automatically assured that resources will be used efficiently or thatfederal funds have not been wasted.

2 9 8 ATTACHMENT I



Andersen/VeigelJuly 16, 1975Page Three

Again, I would like to congratulate the authors ondecision document. The problem is to now convincethe supply strategy is not an ultimate solution to

and to expand the scope of future federal researchoptions.

.

a m uch improvedthe governmen t thatth e energy problem

to include social

I am interested in cooperating directly, and in greater detail, in theearly stages of future ERDA decision plans. Please consider the ad-vantages of professional resource economics input from research organi-zations such as Sierra Club Research.

Sincerely,

Stephen O. AndersenResources Economist

S OA / c L G

cc: Sid lbglewer

ATTACHMENT I 299



A M E R I C A N P U B L I C P O W E R A S S O C I A T I O N

. 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. SAKERShrewsbury, Massachusetts

ALDO BENEOETTITacoma, Washlngton

EARL F BRUSHLansing, Michigan

STANLEY R. CASEFort Collins, Colorado

WILLIAM H. CORKRAN, JR,Easton, Maryland

NORMAN E. DIETRICHAustin, Minnesota

CHARLES E. DUCKWORTHGarland, Texas

A. L. EDWARDSGrand Haven, Michigan

JOHN C. ENGLEHamilton, Ohio

JAMES P FULLERMuscatine Iowa

JAMES L. GRAHLBasin Electric Power

Cooperative, IncBlsmarck, North Oakota

CALVIN R. HENZEMemphls, Tennessee

PATRICK J. HESTERRockville Center, New York

WARREN D. HINCHEEBurbank, California

W. G, HULBERT, JRPUD #1 of Snohomish County

Everett, Washington

W. BERRY HUTCHINGSBountiful, Utah

ALAN H. JONES

McMinnville, OregonMAX E, KIBURZ

Loup River Public Power DistrlctColumbus, Nebraska

C O McINTOSH, JRLakeland, Florida

JAMES L MULLOYLos Angeles, California

A J. PFISTERSalt River ProjectPhoenix, Arizona

JOHN POLANCIC

Rochelle, Illlnois

V G SCOGGINNashville, Tennessee

JAMES O SHERFEYBristol, Tennessee

EARL SWITZERMacon, Missouri

J B THOMASON

South Carolina Public

Service AuthorityMoncks Corner, South Carolina

MITCHELL W TINDERFrankfort, Kentucky

MARlON R ULMERJonesboro, Arkansas

DENNIS VALENTINECalifornia MunicipalUtilities Association

Sacramento, California

DONALD VON RAESFELDSanta Clara, Callfornia

GEORGE W. WATTERSClark County Public Utility District

Vancouver, Washington

LOUIS H WINNARDJacksonville, Florida

WALTER R. WOIROLPUD #1 of Chelan County

Wonctchoe, Washlngton

3 0 0 ATTACHMENT I

Washington, D.C. 20510Action #

Dear Mr. Daddario: —.

I appreciate the opportunity for the American PublicPower Ass ociation to comm ent on th e En ergy Research andDevelopm en t Adm inistra tion’s Nationa l Plan For Ener gy Resear chDevelopment an d Demons t ra t ion . We hope that the Office

of Technological Assessment and Congress will find ourcommen ts u sefu l in an alyzing ERDA’s stu dy.

APPA represents more than 1,400 local public powersystems in 48 States, Puerto Rico, the Virgin Islands andGuam. 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 Angeleswith over 1,000,000 meters. Local public power systems havea generating capacity of about 40,000 megawatts.

Local public power systems seek to provide adequate andreliable electric service at reasonable price and in anenvironm enta l ly accep tab le m an ner . S ince n a t iona l ene rgy

research and development will certainly be a factor in theability of these systems to obtain their goal, APPA hascommented to ERDA on both the national energy research anddevelopment 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 criteriaon which to base energy systems priori t ies. Many of thesecriteria appear in Chapter X of Volume I of A National PlanFor EnerF or R esea rch , D eve lopm ent & D em ons t r a t ion as unreso lvedi s s u e s .

Net Energy : ERDA should have considered net energy in formu-

lat ing a na tiona l energy plan for R&D. Net energy is a yard-stick with which to measure the energy output for a givenenergy input, and it provides one measure of the relativeattractiveness of competing energy systems.

cos t : While ERDA claims to have considered costs in formingtheir national plan, there are no cost figures in either

Volumes I or II of the National Plan. It seems to me that



Emilio Q. DaddarioJuly 24, 1975Page 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 approachto the development of a national plan. This approach would highlight the regionalnature of most energy technologies, identify resource rich areas, and point out theunique environmental problems associated with each region. With this additionalinformation, one could optimize the energy-mix for each region and determinewhether a given region is likely to be energy rich or poor, in terms of meetingits energy needs. This information would indicate the amount and type of energyto 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 todevelop non-water consumptive technologies for electrical generation.

Another area of concern is what we view as the lack of sufficient input by theuser of the energy system to be developed. It is essential that users, regulatorsand other local governmental officials understand and plan for the energy systems

being developed. The user should be involved in the planning, design and speci-fications 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 anddemonstration 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 ResearchInstitute mandated by Congress will be run by a contractor (see our enclosed letter toDr. Teem).

Fuel Cells: This is a technology barely mentioned in the ERDA National Plan, andyet it represents a technology in which private industry has spent over $100 millionover the past 8 years. The technology is non-polluting at point of use and may beoperated 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 withsolar 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 3 0 1



Emilio Q. DaddarioJuly 24, 1975Page Three

Althou gh th ere is m u ch we like in ERDA’sformulation of such a plan should incorporate

National Plan, we believe that thethe 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/dtEncl.

302 ATTACHMENT



——

AMERICAN P U BLi C POWER AS SO CIATION

2600 VIRGINI A AVENUE NW WASHINGTON DC 20037 q 2021333-9200

April 29, 1975

Mr. Roger W. A. LeGassie

Assistant Administrator for

Planning and AnalysisUnited States Energy Research

& Development Administration


Dear Mr. LeGassie:

I appreciate the opportunity which you have affordedthe American Public Power Association to contribute to

ERDA’s formulation of a national energy research and deve-lopment 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 elec-

tricity but purchase power from other utilities. APPA member

utilities provide 10% of the nation *s electricity with a gen-erating capacity of 39,508 megawatts.

Local Public Power systems seek to provide adequate and

reliable electric service at reasonable price and in an envi-ronmentally 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 technologieswill be available for commercial operation for various levelsof R&D effort. Then, for a given date, those energy technologies

which are available and acceptable would be optimized in terms of:

ATTACHMENT I 3 0 3



Mr.. Roger W. A. LeGassiePage 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 opportunityto introduce as much diversi ty 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 start ing point , comparisons should be made between (a) the u s e ofrelat ively inexpensive generation in one region with transmission to another regionand (b) the use of more expensive generation within a region as given in the regional 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 gen-

erations of the technologies being developed and their fuel cycles should beassessed. This assessment, coupled with the prevailing public attitudes towardswhat 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 quan-

tities of new equipment replacement parts and fuel to obtain the quickest possible

3 0 4 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 wasc r e a t e d , i t must define i ts goals so that if those goals are met the problemswhich led to its formation would be solved. A clearly defined approach to m e e t -

in g these goals should be developed and followed, along with the philosophicalunderpinning for this policy. The policy would represent the administra tivelymost effic ient means of applying the “principle of least action”, which is reach-ing the desired goal in the shortest period of t ime, w i th th e g re a te s t p o ss ib leeconomies 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 indecision-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

T W O ways of looking at the projects to which ERDA will be devoting its effortsare: (a) the nature of the work performed and (b) the time-frame in which tech-nologies will be brought to commercial operation. T h e k in d s o f a c t iv i t i e s th a t

ERDA labs and ERDA contractors will be involved in appear to be basic researchmission-oriented R&D, and proof-of-concept experiments. A re a so n a b le a l lo c a t io nof 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 toprovide 15% of the available funding for projects l ikely to be brought to commercialoperation in 25 years or more, 45% for projects commercially available in less than10 years. There will obviously be a great deal of Overlap between long term projectsand basic research as there will between near term projects and proof-of-concept

d e m o n s t r a t i o n s , b u t b y s i m u l t a n e o u s l y m e e t i n g b o t h s e t s o f requirements, b a l a n c e

w i l l b e a s s u r e d . I t s h o u l d b e n o t e d t h a t l o n g t e r m b a s i c r e s e a r c h w i l l p r o v i d e a

n e e d e d poo l of m a n p o w e r t o d r a w u p o n d u r i n g t h e d e v e l o p m e n t p h a s e .

ATTACHMENT I 3 0 5

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 andand 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 gas-

ification process means increasing either strip or deep mining to povide thesame amount of energy. Gasification should be compared with other ways of obtain-

ing 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 test-

ing a 75 MW power plant with an MHD generator u s ing natu ra l gas . S tud ies ind ica t e

that the nitrogen oxides can be controlled by using a fuel-r ich mixture. . Sulfur

oxides would react with the alkali seed material to form compounds recovered by thee l e c t r o s t a t i c p r e c i p i t a t o r s . For economic reasons the alkali metals must be re-covered and a by-product of that is control of sulfur. With a s team turbine as

the second stage of power production, the discharge of waste heat into the cooling

water would be well below that of any exist ing steam power plant . If a gas turbine

is used for the second stage, the need for cooling water is removed. U nfor tuna te ly ,

to reach the required temperatures for MHD, auxil iary heating or an oxygen enriched

atmosphere i s 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 aswell 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 significantportion of t h e nation’s energy needs over the next forty years. In c e r t a in r e g io n sof the country, i t may become a major method for generating electric ity . The PacificNorthwest, is heavily dependent upon hydro power, which currently provides about 14%o f th e n a t io n ’ s e l e c t r i c i ty . While the development of new hydro sites cannot keeppace w i t h pro jec ted e lec t r ica l demand , many previously marginal sites could be de-veloped, existing sites could be redeveloped for increased capacity, and bulb-type

turbines should be developed for use both in hydro projects and possible tidal in-stallations. On a net energy basis no method of electrical generation is as favor-able as hydro.

306 ATTACHMENT I




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.

themtion

Development and use of solar technologies over the next 25 years could allowto take their place along side hydro as a major factor in electrical genera-

during 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’.’ Itsapplication will be limited unless new ways of tapping geothermal fields are per-

fected 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 de-

termine 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 andare 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 3 0 7




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; and4. export market potential (including reducing imports).

I believe the projects and evaluation scheme I have outlined meets thoserequirements in a rational way.

Sincerely,

Alex Radin

AE:mls

3 0 8 ATTACHMENT I



June 17, 1975

1707 H Street, N. W.Washington, D. C.

Dear Dr. Teem:

T h e s e c o m m e n t s on the role of theInstitute mandated by the Solar Energy

Solar Energy Re s e a r c hResearch, Development

and Demonstration Act of 1974 are a response to an ERDA requestfor views published in the June 3, 1975 Federal Register.

The American Public Power Association is a national serviceorganization representing more than 1,400 local publicly ownedelectric utilities in 48 s t a t e s , G uam , the V i rg in I s l ands , A m er -ican Samoa and Puerto Rico. Because our membership i s in teres tedin providing adequate amounts of reasonable priced, rel iable elec-t r ic i ty in an environmentally acceptable man ner , APPA ha s a su b-stantial interest in the development of economical solar energy

systems to generate electrici ty or to supplemen t e l e c t r i c @.With a membership as geographically diverse as ours, APPA isinterested in most forms of solar energy uti l ization.

we be l ieve the ro le o f the Ins t i tu te shou ld be to fac i l i t a teth e u t i l i z a t io n o f so la r e n e rg y , a n d th a t th e In s t i tu te sh o u ld b eorganizationally separated from other ERDA solar activit ies. TheIn s t i tu te sh o u ld fo c u s on R&D on those system components whichare unique to solar energy. Related work in fie lds such as mater-ia l sc ience should be contracted to other agencies or resear Ch

o rg a n iz a t io n s . T h e In s t i tu te sh o u ld h a v e t e s t f a c i l i t i e s a tappropria te si tes for testing all fores of solar energy, and shouldbe the national lab for solar energy.

S y s te m a n a ly s i s a c t iv i t i e s o f th e In s t i tu te sh o u ld in c lu d ethe development of Conceptual designs for solar systems which aret i b l e w i t h o f f t h e s h e l f n o n - s o l a r c o m p o n e n t s . T h e In s t i tu teshould evaluate overall system performance and establish system,component and materia l standards for solar systems. 1t should a lsodevelop designs which are responsive to the concerns of an economicgroup 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 3 0 9



Page Two

A communications division in the Insti tute should compiledata in and provide information from a solar energy bank, as we11as function as a public information office .

I hope that you find these comments useful.

S incere ly ,

Alex Ra d i n

~ j b k

3 1 0 ATTACHMENT I



ATTACHMENT II

ERDA AND THE CONGRESSIONAL ACTS

This section weighs issues regarding ERDA’sPlan and Program against provisions in twoCongressional Acts, The purpose is to compareERDA’s direction with Congressional intent.

The specific issues used in the comparison arethe 16 major issues identified by OTA’s Over-view Task Group. These are explained in detail inChapter I.

The laws applied as yardsticks are (1) theF eder al N onnu cl ear Energy R es ea rc h a ndDevelopment Act of 1974 (PL 93-577), and (2) theEnergy Reorganization Act of 1974 (PL 93-438).

The first law established the comprehensiveFederal program for energy R, D&D, and thesecond law established ERDA and designated itas the lead agency in the program.

1. The Nature of the National Energy Policy

Goals

I s s u e : The national energy policy goals asstated by ERDA deserve review and clarification.

The R, D&D Act: Sec. 3(b)(l): “The Congressdeclares the purpose of this Act to be to establishand vigorously c on du ct a comprehensive

national program of basic and applied researchand development including but not limited todemonstrations of practical applications of allpotentially beneficial energy sources and utiliza-tion technologies within the Energy Research andDevelopment Administration.”

Critique: ERDA’s Plan sta tes five n at ion al

energy goals to which energy R, D&D should

con t r ibu te . S u m m a r i z e d b r i e f l y , t h e y a r enational securi ty and policy independence , . . a

healthy economy. , . preservation of life style

options , , , aid to world s tab ili ty. . . an d pr otec-t ion of the environm ent.

These goals and the emphasis among themwarrant careful Congressional review.

S uch r ev iew w ould seem im por t an t f i r s tbecause the goals provide the policy framework

for ERDA’s Plan an d Program . Unless t h ere is

agreement between the Administrat ion and

Congress on these fundamental policy guides,serious disagreement and delay could well occurwith respect to ERDA’s establishment andimplementation of the R, D&D effort.

And Congressional review would seem to takeon additional importance when the great poten-tia l impact of priorit ies among the goals isconsidered. For instance, ERDA’s emphasis onthe goal of self-sufficiency as opposed to the goalof environmental concerns will have majorconsequences for future quality of l ife andeconomic well-being. Similarly, the emphasis on

self-sufficiency rather than internationalcooperation will have major impacts on ourforeign policy.

2. Overall Level of th e Federal Budget for Energy

R, D&D

I s sue : The overall level of the Federal budgetfor energy R, D&D (about $2.3 billion for FY 1976)was largely an outgrowth of decisions made priorto the Arab oil embargo, and should be re-examined.

The R, D&D Act: Sec. 2(c): “The Congress

hereby finds that the urgency of the Nation’senergy challenge will require commitmentssimilar to those undertaken in the Manhattan and

Apollo projects; it will require that the Nationundertake a research, development, and

demonstration program in nonnuclear energytechnologies with a total Federal investment

which may reach or exceed $20 billion over thenext decade.”

Critique: The scale of the present Federal

energy R, D&D program appears heavily in-fluenced 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 oilembargo, was geared to an $11 bil l ion 5-year program of energy R, D&D.

The second factor is the $20 billion, 10-

year guideline supplied by Congress in Section

3 1 1



2(c) of the energy R, D&D Act, as quoted above.

The proposed Federal energy R, D&D bu dget isnow with in the guidelines s et forth by th e Dixy

Lee Ray Report . However, in view of the

coun try’s post-emb argo emph as is on en ergyindependence, i t is by no means clear that this

bu dge ta ry fram ework i s a dequa te .

As p ossible a ltern atives, ERDA sh ould prepa re

R, D&D programs for higher overall budget

levels, e.g., $2 0 b illion an d $ 30 billion for th e 5 years beginning FY 1976. (It sh ou ld be no ted tha t

the Congressional guideline cited above providestha t the bu dget might reach or exceed th e ten-

year $2 0 b illion level, )

3. The International Aspects of ERDA’s Plans

and Programs

I s s u e : The ERDA program does not placesufficient e mp h a s i s o n international con-siderations,

The R, D&D Act: Sec. 6(b)(2) establishes abasic objective for the R, D&D program. “Thisprogram sh all be designed to ach ieve solutions tothe en ergy sup p ly and ass ocia ted env ironmen ta lproblems in the immediate and short-term (to the

early 198 0’s), middle-term (the ea rly 1980 ’s t o

2000 ), an d long-term (beyond 200 0) t ime inter-

vals, 1n formulating the nonnuclear aspects of

this program, the Administrator shall evaluate

the economic, environmental , and technologicalmeri ts of each aspect of the program.”

Critique: If ERDA’s program is to achieve

solutions to energy problems, its concern shouldreach beyond our national borders. In today’sinterdependent world, the goals of energy in-de pen de nce , e c o no m i c w el l - b e in g , a n d e n-vironmental quality are unlikely to be fulfilledwithout considering international factors.

In i ts overall p lan, ERDA identifies suchinternational considerations. But in i ts im-plementing program, it barely recognizes them.

Under a program truly designed to solveenergy problems, ERDA might well launchvigorous research efforts with respect to the

global environmental e f f ec t s o f energy

generating technologies; the management of energy supply technologies significantly affect-ing the seas; the joint creation of targets of energyconservation among the major energy consumernations,

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 morefully 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 develop-

ment of all energy sources, it is necessary to

establish an Energy Research and Development

Administrat ion to bring together and direct

Federa l ac t iv i t ies re la t ing to research and

development on the various sources of energy, to

increase the efficiency and reliability y in the u se of

energy, and to carry out the performance of other

functions, including bu t not limited to the Atomic

Energy Commission’s military and production

activities and its general basic research ac-

tivities. 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 stron g mand ate asthe lead energy R, D&D agency with responsibili-ty to int egrate an d coordinate na tiona l efforts,

However, the ERDA Plan indicates a timidity

in accepting this leadership. It is not evident inthe Plan whether a comprehensive framework isbeing established t o perm it ERDA to perform th erole.

The consequences could be cost ly ,For ins tan ce, three separa te 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 wil l be

su ccessfully developed,

And withou t coordina tion, a gencies concerned

with di f ferent e lements of a g iven energytechno logy m igh t w ork a t c ross purposes ,R egu la to ry r equ i r em ent s m igh t c l a sh w i th

economic policies; technological priorities mightconfl ic t with environmental s tandards.

3 1 2 ATTACHMENT II



5. Cooperation Between ERDA and State and

Local Governments

I s s u e : Success of the ERDA Program willdepend in large measure on close and continuouscoordination with State and local governments.The ERDA Plan does not indicate procedures ormechanisms for accomplishing this coordination.

The R, D&D Act: In Sec. 8(D)(l)(A), ERDA is

instructed to establish procedures to insure thatFederal energy R&D assistance addresses the fullrange of energy problems—from extraction toend-use—in various regions under “real life”conditions. “The Administration shall, within 6months of enactment of this Act, promulgateregulations establishing procedures for submis-sion of proposals to the Energy Research andDevelopment Administration for the purposes of this Act. Such regulations shall establish aprocedure for selection of proposals which (A)provides that projects will be carried out undersuch conditions and varying circumstances as

will assist in solving energy extraction, variousareas and regions, under representativegeological, geographic, and environmental con-ditions . . .“

Crit ique: If the Federal R&D program is to berealistically c o n c e iv e d a n d e f fe c t iv e ly im-plemented, an objective emphasized by Congressin the above provision, full State and localparticipation would seem essential.

For instance, the success of energy programswill depend heavily on appropriate water alloca-tion, reasonable land use regulation, realistictaxing policies, consistent environmental con-

trols, and ultimately, on public acceptance. In allof these areas, State and local levels possessstrong capabilities and valuable experience.

In its language, the ERDA Plan gives recogni-t ion to the need for a strong State and local role.But in its specifics, the Plan does not provideprocedures or mechanisms for accomplishingthis participation.

6. Near-Term Energy Problems

Issue: ERDA’s Program gives very l i t t le

attention to near-term (next ten years) energy

problems.

The R, D&D Act: Sec. 6(b)(2): “This program

sha l l be des igned to achieve solutions to theenergy supply and associated problems in theimmediate and short-term (to the early 1980’s),middle-term (the early 1980’s to 2000), and long-term (beyond 2000) t ime intervals. In for-

mulating the nonnuclear aspects of this program,

the Adm inistra tor sh all evalua te the econom ic,

environm enta l , and techn ological meri ts of each

as pect of the pr ogram . ”Critique: Rh etorically, E RDA’s Plan recognizes

the n eed to addres s th e Nation’s imm ediate,

practical energy problems, as well as th e bas ic,

longer term ques tions . In fact , th e plan ’s firststra tegic e lemen t is to “insu re adequ ate en ergy to

mee t near - te rm needs u n t i l new energy sourcescan be brought on line. ”

An d s pecific aims ar e cited in E RDA’s n ear-term program: Enhanced gas and oil recovery,

direct us e of coal , more n u clear rea ctors , sh ift ingdemand away f rom pet roleum, and increased

conservation practices .But these intentions are not reflected in the

“bottom line”- in th e actu al ERDA bu dget. Of the

agen cy’s tota l FY 19 76 b u dget of ab ou t $1 .8

bill ion, th e only items relevant to th e next d ecadeare $80 m ill ion in fu nd s for energy su pply efforts

and less than $7 mill ion 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

resea rch in addres s ing the N a t ion’ s ene rgy

problems.

The R , D & D A ct : Sec . 5(a)(2): “The en-v i ro n me n ta l a n d so c ia l c o n se q u e n c e s o f aproposed program should be considered inevaluating its potential. ”

C r i t ique : ERDA’s program plans, budgetary

commitments, and professional staffing do notse e m to g iv e a d e q u a te p r io r i ty to so c ia l ,economic, environmental, a n d b eh a vi o ra lresearch needs, even though the Congressionalmanda te makes c lea r tha t ERDA is g ivenresponsibility beyond “technological” R, D&D.

“Nonhardware” research is needed for twor e a s o n s : ( 1 ) t o b e t t e r u n d e r s t a n d t h erelationships of energy and the quality of life,and (z) to identify nontechnological constraintsto increased energy supply or reduced energydemand.

For instance, the Nation’s energy R, D&D effortis confronted with this major issue: The socialconcern and community resistance which havebecome associated with virtually every energysupply technology.

U n le s s t hi s “nonhardwar e” ques tion—theattitude of the public—is examined and carefully

ATTACHMENT II 3 1 3



weighed in evaluating energy options, massiveinvestments in new energy supply or conserva-tion technologies may never bear fruit.

8. Balance Between Supply Versus Demand

R, D&D

Issue: ERDA’s Program overem ph as izes su p-ply technologies relative to energy consumption.

The R, D&D Act: Sec. 5(a)(l): “Energy conser-vation shall be a primary consideration in the

design and implementation of the Federal non-

nuclear energy program, For the purposes of this

Act, energy conservation means both improve-

men t in efficiency of energy produ ction an d u se,

and reduction in energy waste .”

Critique: Most of the programs inherited’ byERDA 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, un-

derestimating long range potential.

In weighing the long-term advantages between

“supply” and “consumption” technologies, ERDA

should give fuller consideration to cost-effec-tiveness, time to pay off, environmental benefits

and costs, and demand on resources.

9. ERDA’s Basic Research Program

I s s u e : The goals of ERDA’s basic researchprogram have not yet been established. Con-siderable effort is required to organize a perti-nent program of basic research.

The R, D&D Act: Sec. 3(b)(l): “The Congressdeclares the purpose of this Act to be to establishan d vigorously c o nd uc t a comprehensive

national program of basic and applied researchand development.”

C r i t i q u e : Applied R, D&D aside, ERDA’sprogram for basic research has largely beeninherited from the agencies which i t incor-porated.

For instance, in the FY 1976 budget, virtuallyall the basic research funds are devoted tonuclear power and high energy science.

While these activities are important, the basicresearch program should be organized to betterreflect the needs and objectives identified inERDA’s R, D&D Plan,

For instance, there is a need to strengthen basicre se a rc h e f fo r t s in n o n n u c le a r a sp e c t s o f

materials, co mbus ti on, f u e l c h e mi s t r y , e n -vironmental processes, social sciences, and otherdisciplines pertinent to the non-nuclear ERDAprograms,

10. Commercialization

Issue: The development of effective commer-cialization policies and procedures is not ade-

quately addressed in the ERDA Plan,(a) The R, D&D Act: Subsections 5(b)(l) and

(2):

“(l) Research and development on non-

nuclear energy sources shall be pursuedin such a way as to facilitate thecommerc ia l ava i lab i l i ty o f adequa tesupplies of energy to all regions of theUnited States.

“ ( z ) I n d e t e r m i n i n g t h e a p -propriateness of Federal involvement inany particular research and developmentu nd er ta king , th e Admini s t ra tor sh a l lgive consideration to the extent to whicht h e p ro p o se d un de rt ak in g s at is fi escriteria including, but not limited to thefollowing:

“(A) Th e urgency of public need forthe potentia l results of the research,development, or demonstration effort ishigh, and i t is unlikely that similarresults would be achieved in a timelym a n n e r i n th e a b se n c e o f F e d e ra lassistance.

“(B) The potential opportunities fornon-Federal interests to recapture theinvestment in the undertaking throughthe normal commercial uti l ization of

proprie tary knowledge appear inade-quate to encourage timely results,

“(C) The extent of the problemstreated and the objectives sought by theundertaking are national or widespreadin their significance.

3 1 4 ATTACHMENT II



“(D) There are limited opportunitiesto induce non-Federal support of the

un der tak ing th rough regu la to ry ac t ions ,

end-use controls, tax and price incen-

tives, public education or other al ter-

n a t i v e s t o d i r e c t F e d e r a l f i n a n c i a l

ass is tance .

“(E) The degree of risk of loss of inves tment inherent in the research i s

high, and the availability of risk capital

to the n on-Federal enti t ies which m ight

otherwise engage in the field of the

research is inadequate for the t imely

developm ent of th e techn ology.

“(F) The magnitude of the investmenta p p e a r s t o e x c e e d t h e f i n a n c i a l

capabilities of potential non-Federal

par t ic ipants in the research to suppor t

effective efforts. ”

Crit ique: The need for ERDA attention to “non-technical” concerns is well illustrated by thequestion of marketability.

For research supervised by the Department of Defense or NASA, there is little question of “acustomer” for a new product or process. Theagenc ies’ own needs usua l ly wi l l guaranteeacceptance of the R&D results.

But the “market” for ERDA R, D&D output willbe both diffuse and, in some cases, poorlydefined, The potential outlet for the results of successful programs may range from largeenergy companies to the local homeowner.

Thus, it would appear that ERDA will need toundertake special efforts to insure that it does notdevelop products or processes that simply “won’tsell.”

Such protection could be provided in part byincluding comprehensive industrial and con-sumer participation in the planning phase of newprojects. These groups probably would have thebest perception of society’s requirements and themarketability of R&D output,

ERDA’s Plan does not recognize or recommendthe utilization of this type of input into itsd ec is io nmak in g, a l th o u g h th e R , D&D Act

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 uti l ize various

forms of Federa l a s s i s t ance and pa r -

ticipation which may include but are notlimited to—

“ ( 1) j o in t F ed er al -i nd us tr y e x-perimental, demonstration, or commer-cial corporations consistent with theprovisions of subsection (b) of this sec-tion;

“(z) contractual arrangements with

non-Federal participants including cor-p o r a t i o n s , c o n s o r t i a , u n i v e r s i t i e s ,governmental entities and nonprofit in-stitutions;

“(3) contracts for the constructiona n d o p e ra t io n o f F e d e ra l ly o wn e dfacilities;

“(4) Federal purchases or guaranteed price of the products of demonstrationplants or activities consistent with theprovisions of subsection (c) of the sec-tion;

“(5) Federal loans to non-Federalenti t ies conducting demonstrations of new technologies; and

“(6) incentives, including financialawards to individual inventors, suchincentives to be designed to encouragethe participation of a large number of such inventors, ”

C r i t ique : Another major problem involved inbringing ERDA programs to the commercialstage is that of “blurred competitive horizons. ”

For example, although it is possible to estimatefairly accurately the cost of producing gasolinefrom oil shale, the oil-exporting nations canalways lower the prices of oil to undercut thepotential market. Thus, the construction of shale-oil extraction and refinement facil i t ies willdepend on some form of Federal subsidy.

Projects of this type may, therefore, neverreach “commercialization” in the purest sense. Itmay in fact be desirable for the government toform special public agencies, such as Amtrak, tomanage 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&DAct clearly provides the authority for wide-ranging study and use of Federal incentives andparticipant ion.

ATTACHMENT II 3 1 5



11. Resource

Issue: It is

Constraints

essential that careful attention begiven to assessing energy resources, since theyrepresent a ss um pt io ns b a si c t o t he E R DAprogram plan.

The R, D&DAct: Sec. 4(a): ’’The Administrator

shal l review the current s ta tus of nonnuclear

energy resources and cur ren t n onnu c lea r energy

research and development activit ies, includingresearch and development being conducted byFederal an d n on-Federal enti t ies; . . .“

Cri t iqu e: Incorrect a ss essm ents of the Nation’senergy resource base cou ld resu lt in h u ge was tein the ERDA effort.

For ins tan ce, overestimates could lead to th e

development of a new energy infrastructure thatwould qu ickly run out of fu el.

Yet there is still a great deal of uncertaintyregarding the n atu re an d extent of our en ergy

resou rces. Est ima tes vary widely for na tu ral gas ,

o il , coa l, an d u ran ium .

Clearly, ERDA should give high priority toimprovements in th e methods u sed to es t ima te

energy resource potentia l .

12. Physical and Societal Constraints

I s sue : Numerous physical, institutional, andsocial constraints may limit the orderly develop-ment and implementation of the ERDA energyPlan.

The R , D & D A ct : Sec . 6(a ) r equ i r e s t he

preparation and annual updating of the ERDA

R, D&D Plan . It also contain s the stipu lation that

the Plan be solution-oriented:

“ S u c h p l a n s h a l l b e d e s i g n e d t oachieve—

“ (1 ) s ol ut ion s t o i m me d i at e a ndshort-term (to the early 1980’s) energysupply system a n d a s s o c i a t e d e n -vironmental problems:

“(z) solutions to middle-term (theearly 1980’s to 2000) energy supplysystem and associated environmentalproblems; and

“(3) solutions to long-term (beyond

2000) energy supply system andassociated environmental problems. ”

Crit ique: The above provision would appear tobe critically important. It mandates an R, D&D

effort directed not towards a means, such as new

h a r d w a r e , b u t t o w a r d s a n e n d – w o r k a b l eanswers to energy system problems.

The distinction is essential to make. Because of the pervasive nature of the energy problem, thesolutions will only partly involve technology.They will require as well the identification andanalysis of a myriad of nontechnological factors.

For instance, there are key institutional andsocial considerations: Manpower, capital needs,

information access and dissemination, regionaland community impacts of mining.

And there are crucial physical factors: waterrequirements, materials limitations, air pollu-tion, land use, and net energy.

With Section 6(a), ERDA appears to havestrong authority to comprehensively addressthese potential constraints, “

In its overall response, however, ERDA hastaken a much narrower view, It concentrates ondeveloping the technologies, This approach isapparent across the full spectrum of the ERDAR, 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 mayproduce a wide range of new technologies,without providing the wherewithal to implementthem in the “real world.”

And it poses a key policy choice: If thecongressionally directed solutions-oriented ef-fort is to be carried out, ERDA should broaden itsapproach . . . or the job of addressing the “non-hardware” issues should be assigned elsewhere,

13. Overemphasis on Electrification

Issue: The ERDA Plan appears to lean toward

an overemphasis in electrification. This lack of

diversi ty, especial ly in the long-term “inex-

haustible” sources, may not be the most effective

approach.

The R, D&D Act: Sec. 6(b)(3): “The Ad-

ministrator shall assign program elements and

a ct iv it ie s i n sp ecific n on nu clear en ergy

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. ”.

C r i t i que : B reede r r eac to r s , so l a r - e l ec t r i c

sys t em s , and fus ion r eac to r s a l l have bas i c

ch a r a ct e ri s ti cs i n co m m o n : A l l a r e ca p i t a l-

inten sive, have a low fuel cost, and are produ cers

of electricity.

ERDA’s emphasis on these as the three major

316 ATTACHMENT II



“inexhaustible” energy sources for the long-termposes serious concerns.

For instance, there may not be suffic ientprivate capital to support almost total reliance oncapital-intensive energy technologies. As aconsequence, massive Federal subsidies might berequired.

And while electricity has advantages, there aremajor uncertainties with respect to its complex

generating systems. The concerns include en-vironmental impact and the danger of equipmentmalfunction or sabotage.

ERDA’s heavy emphasis on electrif icationR, D&D should be thoroughly reviewed now,before long-range alternatives are lost by default.

Other possible approaches include productionof synthetic fuels by solar or nuclear energy,increased emphasis on hydrogen and biomassfuels, and expanded direct use of solar, geother-mal and other direct heat sources.

While these approaches do not appear to haveth e u l t ima te p o te n t i a l o f th e ma jo r “ in e x -

haustible,” they could be vital ingredients in thefuture energy mix.

14. Methodology and Assumptions Used in

Developing the R, D&D Plan

Issue: The ERDA Plan relies on a methodologya n d a ssu mp t io n s fo r d e v e lo p in g R , D&Dpriorities which appear to bias the prioritiestoward high technology, capital-intensive energysupply a lternatives and away from end-usetechnologies.

The R, D&D Act: Sec. 3(a): “It is the policy of the

Congress to develop on an urgent basis thetechnolog ical capab il it ie s t o s u p p o r t thebroadest range of energy policy options throughconservation and use of domestic resources bysocially and environmentally acceptable means. ”

Critique: E R D A r e l i e s o n a n u m b e r o f questionable assumptions which tend to distortits R, D&D priorities, overemphasizing someoptions and neglecting others.

These assumptions include the following:

q ERDA’s projections of future U.S. energyoptions assume the same set of final demands.

The possibility of major reduction in energygrowth because of higher costs is not taken intoaccount;

q In calculations of the capital needs for newenergy supply systems, consumer costs are notincluded, This could result in overoptimistic

projections of the society’s ability to pay forexpensive new energy technology;

qERDA assumes that the strategy of improved

efficiency in the “end use” of energy—in thehome, in transportation, etc.—will have signifi-cant value only for a limited period, after whichthe agency expects exponential energy growth to

resume.

Based on these assumptions, ERDA justifies itsheavy tilt towards the high technology, capital-

inten sive ener gy options wh ich h opefu lly wou ldproduce massive new energy supplies .

In fact, simpler, less-expensive technologies

may prove to be essentia l , major components inth e Nation’s en ergy fu tu re, Th is wou ld be

especially so if energy growth permanently

slows and the availability of capital and key

na tura l resources is pe rma nen t ly cons t ra ined .

15. ERDA Management Policy

Issue: ERDA’s pres ent m an agem en t policiescould h inder a chievemen t of its goal ,

The R, D&D Act: Sec. 4(b): “The Administratorshall formulate and carry out a comprehensiveFederal nonnuclear energy research, develop-ment, and demonstration program which willexpeditiously advance the policies establishedb y th i s Ac t a n d o th e r r e l e v a n t l e g i s l a t io ne s t a bl i s h i ng p r o g ra m s i n specific energytechnologies . , ,“

Crit ique: Present ERDA management practiceshave three recognizable flaws. These could serveas serious drawbacks to the agency’s effective

implementation of the R, D&D program.The problems are as follows:

q Internal project management tends to imposeexcessively detailed restric tions on R, D&Dprograms;

q Project management delegated to outsideagencies o r f i r m s h as b e e n a w a r d ed t oorganizations having excessively detailedmanagement structures. The result has been aloss of ERDA program control;

q Systems analysis— an important tool—has

been used excessively in lieu of actual, ex-p e r i m e n t a l t e s t i n g o f t h e f e a s i b i l i t y o f technologies,

At this early stage of ERDA’s development,these difficulties could be easily remedied. As anew agency, ERDA has excellent opportunities to

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Documents

An Analysis of the ERDA Plan and Program