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fuel oil which may well be needed to offset the loss of natgas for electricity generation

How can the switch be made, how fast, and at what cost?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Oct 6th, 2005 at 11:47:52 AM EST
 There used to be quite a few generating facilities along the US EC from FL to New England that burned 0.3% sulfur to 1.0% sulfur fuel oil.  Many may well have had burners changed out to use gas (except in FL where gas is limited) or simply left idle.  If idle, they can re-start fast.  If they have to put oil burners back in, a few weeks.  

The turbine based stations cannot switch to fuel oil, but they can burn diesel/jet if they have tankage and liquid fuel injection facilities.  (I don't know much about US power stations so no idea if the turbine stations have liquids facilities.  I handled the Euro side of our biz.)  With gas at $84/bbl and diesel at $2/g=$84 that won't happen on economics, but if there is no gas for the power stations vs mom's furnace getting first call, you'll see liquid fuels burned.

Europeans had quite a few stations that burned HS and 1%,  Italy (ENEL) was a huge fuel oil buyer due to fierce resistance to nukes.  But the Irish, English, Danes, Belgium, France???(trying to remember who else I sold to) could and did burn HS when the economics suited.  There was an entire forward physical market based on 20KT parcels delivered Northern Europe basis a station in the Thames called Littlebrook (LittleBrook Lotto -- it died due to lack of interest about 1994).

There may be new pollution laws limiting burning HS on both sides of the Atlantic, but as we've seen, when people get cold those go out the window.

Swapping out burners is not a huge job.  What is more likely is that industrial natgas users just lay people off and shut down, leaving the gas for home heat.  At these prices, if you have a purchase contract for gas at $6/MMSCF and can sell it back at $14, you probably make more money just selling the gas back.

by HiD on Thu Oct 6th, 2005 at 01:20:40 PM EST
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