The purposes of on-site storage are to provide an uninterrupted supply,
to allow bulk shipments, and to take advantage of favorable market conditions.
Electric utilities maintain stockpiles of coal and petroleum to minimize
the effect of an interruption or curtailment in
fuel availability (for example, railroad strikes, coal-mine strikes, or
oil embargoes). Since gas is generally not stored, there are no stocks
of gas.
Coal is obtained
from three major coal-producing areas in the United States:
- Appalachian Region coal is mined in both surface and
underground mines located in Pennsylvania, Maryland, Virginia, West
Virginia, eastern Kentucky, Tennessee, Alabama, and Ohio. This coal
is bituminous in rank and of low-to-medium sulfur content. Its heat
content averages more than 12,000 Btu per pound. The coal is transported
primarily by train, barge, and truck to electric utility plants throughout
the Eastern United States.
- Interior Region coal is mined in both surface and underground
mines located primarily in Illinois, Indiana, western Kentucky, and
Texas. It is bituminous coal with a high percentage of sulfur and contains
approximately 11,000 Btu per pound. Most of this coal is delivered to
plants in the Central and Southeastern United States.
- Western Region coal is mined in Montana, Wyoming, Colorado,
Utah, North Dakota, Arizona, and New Mexico. It is delivered to plants
throughout the Western and Central United States. Over one-half of the
coal in this region is subbituminous coal that is low in sulfur content
(less than 0.5 percent) and contains approximately 9,000 Btu per pound.
Most of this coal originates in the Powder River basin of northeast
Wyoming and southeast Montana. Coal from this region is delivered by
train to plants as far east as Indiana and Georgia.
The cost of coal delivered to electric utilities can vary significantly
from State to State. Coal delivered to the New England Census Division
from the Appalachian coal fields may cost as much as $60 per short ton
due to transportation costs and the higher cost of producing eastern coal
(generally in underground mines). Environmental restrictions within a
State may require electric utilities to burn only the more expensive,
low-sulfur coal resulting in a higher delivered cost. In the West, especially
in the Mountain Census Division, coal-burning plants are often built close
to the mine thus reducing transportation costs. In addition, the cost
of mining coal from large surface mines located in the Western United
States is significantly less than that of underground eastern mines, resulting
in a delivered cost of under $15 per short ton for States such as Montana
and Wyoming. The cost of coal delivered to electric utilities in States
such as North Dakota, South Dakota, and Texas is well below the national
average because of the lower cost of low-grade lignite.
Petroleum. Although nationwide receipts
at electric utilities are less than one-half the volume of the 1970's,
several electric utilities in the New England area, New York, Florida,
and Hawaii still depend on petroleum for a significant portion of their
fossil fuel requirements. Receipts can vary widely from year to year at
electric utilities due to changes in the cost of petroleum. Fuel oil numbers
4, 5, and 6 (heavy oil) constitute the majority of all petroleum receipts
at electric utilities. Smaller amounts of fuel oil number 2 (light oil)
are also used by electric utilities primarily for start-up and flame stabilization
of the boilers. The cost of petroleum delivered to electric utilities
varies considerably from State to State. The most important factor in
determining cost is the type of fuel oil that is being delivered. States
receiving only low-grade heavy oil will show a delivered cost much lower
than a State receiving only light oil. Most of the petroleum delivered
to the New England, Middle Atlantic, and South Atlantic Census Divisions,
California, and Hawaii for use by electric utilities is the number 6 fuel
oil. The cost of fuel oil can also vary because of its sulfur content.
Electric utilities that are required to meet stringent environmental standards
must purchase low-sulfur fuel oil at premium prices.
Gas. Gas is used extensively as a primary
fuel throughout areas of the country where it is readily accessible (for
example, the West South Central Census Division and in California). Large
volumes of gas are also transported by pipeline to the Middle Atlantic
and South Atlantic Census Divisions. Gas receipts in these Census divisions
and in California can vary considerably from year to year because some
electric utilities switch between use of petroleum and gas in dual-fired
generating units. The highest volume of gas receipts at electric utilities
occurs during the summer months when demand for electricity peaks and
when there is a greater amount available to electric utilities because
of lower demands from residential and commercial consumers. In some northern
parts of the United States, receipts of gas at electric utilities are
limited during the winter months due to the priority for residential heating
and industry needs. Many electric utilities have the capability of burning
either petroleum or gas. The cost of the fuel is usually the determining
factor. One major advantage of gas over all other fossil fuels is that
it is a clean burning fuel. Therefore, some electric utilities use gas
in order to comply with environmental regulations.
Nonutility Facilities
Most nonutility power producers use fossil fuels in their production
processes--many are able to switch from one fossil fuel to another when
fuel supply is interrupted or when there is a price advantage in using
a different fuel. Other nonutility power producers use various renewable
energy sources or are able to switch from a fossil fuel to a renewable
energy. Although the majority of nonutility power producers generate electricity
using fossil fuels, those using renewable energy represent a large portion
of capacity. Many nonutility facilities use combustors that are able to
burn two or more different fuels simultaneously or their combustors can
be converted to burn different fuels. The adaptability of nonutility power
producers to using multiple fuel sources depends primarily on the type
of generating equipment available and on the economic conditions.
Endnote:
1More detailed information regarding fossil fuel consumption,
stocks, and receipts is accessible on the Internet at the following web
site addresses:
Contact: Robert Schnapp
Internet E-Mail: rschnapp@eia.doe.gov
Telephone: (202) 287-1787