Even though natural gas is and will remain the company’sbackbone, El Paso Corp. CEO William Wise told energy executiveslast week that coal will play an increasingly “preferable” role asthe Houston-based company works to sustain its leadership positioninto the future.
Wise, speaking at the natural gas plenary session of CambridgeEnergy Research Associates’ CERAWeek 2001 in Houston, shared apanel with J. Larry Nichols, CEO of Devon Energy, Linda Z. Cook,CEO of Shell Gas & Power, and Bernard de Combret, directorgeneral of TotalFinaElf. Wise, however, was not the only CEO tomention coal as a viable option, however. Several generators at theCERA meeting also mentioned the possibility of considering morecoal plants in the future (see related story).
Even though El Paso’s production is growing, Wise said thatoverall, the company’s production, like other producers, has beenflat the past few years. Because of the flat production level, thecompany wants to remain flexible about its options to serve themarketplace, and coal would be just more thing to put into theenergy mix.
“We are up and that’s the exception,” Wise said. “We are seeingan infrastructure response because of the tight supplies, but wehave not yet seen the production up. We went up ’99 to ’00, butwe’re not sure about ’01.”
Just last week, El Paso announced it would spend $1.5 billion inthe next five years to build six liquefied natural gas terminalsfor North American markets (see NGI, Feb. 12). Building up the LNGbase and diversifying its energy products are all part of a largerplan for El Paso, and because of the “pressure on the incrementalsupply” of natural gas and the uncertainty of adequate natural gassupplies in the future, Wise said looking at coal as an option onlymade sense.
“If you take clean coal technology and apply it to waste coalyou will have an environmentally efficient energy that iseconomically sound,” Wise said. He listed coal’s disadvantages:more capital intensive, more labor intensive and not as “clean andneat” as natural gas. But coal has tax advantages and can be a”very attractively priced power product,” that actually costs lessto produce overall than natural gas, he said.
Of course, El Paso would not have to go far to increase its coalproduction. When it merged with The Coastal Corp., it picked upcoal mines, processing plants and coal loadout facilities fromholdings in Central Appalachia. The resources are located on majorrail lines with access to the large eastern utility market,industrial customers and cogeneration facilities. Coastal had beenmarketing steam and metallurgical coal from the operations and wasleasing coal reserves for development by independent producers.
“Coal would provide a significant solution to some short-termsupply,” said Wise.
Carolyn Davis, Houston
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