Ranchers Join Fight To Limit Drilling at Otero Mesa

The Albuquerque Journal (subscription required) ^ | July 31, 2003 | Tania Soussan

[Dr Warmoose]

Oil is far too expensive to use as a fuel for electrical generation except under extreme or emergency conditions;

I really don't know where you get that information. I remember that the South Texas nuclear power plant was shutting down a reactor and that was why Austin customers were supposed to pay more for electricity. Articles galore show that oil is marginally cheaper than natural gas.

A very few antiquated oil burning power plants still exist nationwide but they are never used except on an emergency basis and are being phased out as rapidly as possible

Then what is this business with Florida having the majority of their plants capable of burning both oil and gas and only one burning coal (and the other is in Georgia)?

[BOBTHENAILER]

But this appears to be an issue of ranchers running livestock on BLM land not wanting oil companies to be able to exercise legal leases. That is not a private property rights matter, IMHO.

You're right, the complaining ranchers have "grazing leases" from the BLM. This is not a property rights issue.

If I remember the acres/steer ratio in this area it is around 160 acres per steer for feed purposes. In addition, if any of these ranchers did own their minerals, they would be falling all over themselves to see the production on their land. The wells in this area drilled and tested are well in excess of 1 million cubic feet of gas per day (1mmcfpd). At today's prices a rancher with minerals could stand to make between $12,000 to $20,000 PER MONTH, from a drill pad and access roads that would, at best, take up 1 acre for the pad and maybe an acre or two from the necessary two-track access/pipeline roads.

Anybody here think they can come close to that with livestock?

[FreeLibertarian]

I really don't know where you get that information. I remember that the South Texas nuclear power plant was shutting down a reactor and that was why Austin customers were supposed to pay more for electricity. Articles galore show that oil is marginally cheaper than natural gas.

Experience, many of those plants are using Control Systems that I designed and programed.

Shutting down a reactor is the type of unusual event that I refered to previously. As you can see from your link the price for electrical generation from nuclear power is much lower than other sources. "In cents per kilowatt-hour, averaged 1.45 for coal, 2.41 for oil, 2.84 for natural gas and 0.5 for uranium in 1999".

The Austin customers power bill went up because they were forced to revert to an older "legacy" base load plant that was not as efficent as modern units. Many legacy units were built before the 1973 oil crisis and are dual fuel (oil/gas) units. Those plants normally fire the units on oil for a short period of time at least once a year to insure that everything is in working order and to cycle the fuel oil through the storage tanks. This is the type of unusual event to which I previously refered. Running one of those units for an extended period of time certainly would raise the power bills.

Another factor in the operating cost that does not show up in the cost per BTU is the time required to bring a legacy unit online. Legacy units can require many hours to bring the boilers to operating temperature and then "roll up" the steam turbines. No electricity is produced during this period of time although fuel is being consumed. This cost is reflected in the cost per KWH but not BTU.

Then what is this business with Florida having the majority of their plants capable of burning both oil and gas and only one burning coal (and the other is in Georgia)?

The breakdown that you found does not show the mix of units at each site. Natural gas turbine combined cycle plants for base load operation and simple cycle gas turbines for peaking are now the industry standard. Those units do not burn oil but are often built at sites where existing oil/gas base load units are already in place. That is why your table shows those sites to be oil/gas.

The demand for gas turbines is so high that until a little over a year ago when the economy softened G.E., the primary manufacturer was gving a 12 year lag time between order and delivery. That has decreased recently but the wait time is still several years. In general as the new gas turbine units are placed in service the older oil/gas units are placed on reserve duty.

Many years ago FPL invested heavily in Nuclear Power for its base load operations. As you can see, they have a mix of nuclear, coal, gas turbine, and oil/gas units. The coal unit being in Georgia doesn't mean much. Florida Power & Light is building Wind Turbine farms in New Mexico and selling the power to PNM.

I can't remember the last time that anyone built a conventional base load oil/gas type power plant. As far as I know none have been built since about 1970. Those units are still in place but rarely used but I do know of three natural gas fired base load units built in 1941 that are in daily use. Those are a special case due to special circumstances. The recent increases in the price of natural gas have made the producers more willing to use oil for extended periods of time, almost doubling this year, but this is still a small percentage of overall consumption.

I beleive there may still be some strictly oil fired units still in service in the N.E. U.S. but I doubt they see much service.

As far as this all applies to the original Otero Mesa story the ranchers just want to insure that the drillers/producers don't destroy a very fragile ecosystem while bringing the natural gas to market. This can be accomplished by minimizing the footprint of the drill sites. Directional drilling techniques should do the job.

If the Otero Mesa was in full production tomorrow you might see your electric bill drop slightly but its effect on the US's oil consumption would be minimal at best.

Here are some links with more data if you are interested.

http://www.eia.doe.gov/fuelelectric.html

http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

http://www.fe.doe.gov/coal_power/special_rpts/market_systems/appc.pdf