George Ramsden's phone, by rights, should be ringing off the wall with urgent queries from business executives interested in converting their oil and gas burners to coal-fired units.
Ramsden is vice president for sales at Jervis B. Webb Co., in suburban Detroit, one of the nation's largest builders of coal-handling systems.
But Ramsden's Farmington Hill, Mich., phone is about as quiet as George Bouton's line here in Barberton, just outside Akron. Bouton is the manager of marketing for fossil fuel power generation at the Babcock & Wilcox Co., one of the two major manufacturers of utility boilers in the country.
A cornerstone of the energy program President Carter announced last April is a shift by many industries and utilities from burning scarce oil and gas to burning coal instead. Carter's plan - which may be far different than the energy program Congress finally adopts - provides tax and other incentives to encourage companies to burn coal instead of gas and oil.
By 1985, President Carter wants to save the equivalent of 2.4 million barrels of oil a day by substituting coal where oil or gas now is burned or would be burned in the future under normal conditions.
Executives of those companies like Bouton's and Ramsden's - that stand to profit by converting industry from gas and oil to coal - will not say that the President's goals are unreachable but say they have grave reservations that by 1985 non-utility users especially will burn as much coal as Carter wants them to.
Richard Dowd, until recently an energy specialist for the Congressional Budget Office, said that, while the 1985 goals are too ambitious, by 1990 the President's hopes seem more than attainable.
It is not that there is no interest in switching, according to Wallace Wilson, vice president of Continental Illinois National Bank in Chicago, it is just that the administration's planners have underestimated the ecological and economic costs as well as the complexities involved in coal conversion.
Ramsden said his company has bid on only one coal conversion project: a Celanese Corp. petrochemical plant in Pampa, Tex.
A.M. Frendberg, head of the utility boiler division of Babcock & Wilcox, said he has received no serious inquiries from utilities wanting to change back to coal after having shifted to oil gas. Louis Kovacs, who heads the firm's industrial and marine boiler division, said he had one phone call from an industrial customer who rapidly lost interest when he discovered the cost and complexity of trying to convert.
Combustion Engineering, Inc., Babcock & Wilcox's major competitor in the utility boilder field, said it is converting one 475-megawatt turbine 70 miles north of Tampa from oil to coal for the Florida Power Co. The conversion will cost $4.5 million for Unit 2 of the utility's Crystal River Power Station. Combustion Engineering built the boiler in 1965 to burn coal. It was converted to burn oil several years later.
That contract was signed last November, five months before Carter announced his program.
"We hear a lot of conversion and see a lot of writing about coal conversion. But we see little activity," Babcock and Wilcox's Bouton said.
There are two elements to coal conversion in the Carter plan: One is the physical shift of a plant now burning oil or gas as a fuel to burning coal. Ever since the 1973 oil embargo, the Federal Energy Administration has been looking for plants that could switch to coal and has identified more than 100, some of which already have done so. It has ordered none to do so, however.
The second element in Carter's plan envisions convincing industries and utilities that ordinarily would build oil-or gas-burning facilities to erect coal-burning plants instead.
Experts say the situation is different for utilities, where conversion of both types is well underway, than for other industries.
Utilities burn coal to make steam that turns turbines to produce electricity. Other industries may burn coal to make their own electricity, to produce steam used in the manufacturing process itself - paper, chemical and oil refineries are big "process" steam users - to heat their plants, or to apply direct heat to a product.
In steam industrieal uses, the coal is burned in boilers, a technology "we've had a long history of dealing with," CBO's Dowd noted. But many of the President's anticipated conversions will not be in boilers but in direct heating. That presents major technological and ecological issues never dealt with, Dowd said.
But even converting boilers to coal presents problems other than the massive ecological and financial ones already well known, say boiler makers and coal handlers. Something as simple as finding enough space for coal may present an insurmountable obstacle.
Utilities today burn about 75 per cent of all coal consumed in the country. Another 14 per cent is used by the steel industry, where coal is a major raw material. Industry consumed 10 per cent of the 621 million tons used in 1976, and households consumed the rest, a little more than 1 per cent. Carter wants the country to use more than 1.1 billion tons by 1985.
Bouton, Ramsden and their associates are not surprised that there is no flurry of interest from either utilities or industries. First of all, many utilities that easily can convert existing plants to coal have done so already, a move prompted by the Arab oil embargo, they say. And utilities long ago stopped planning facilities to burn oil or gas. Babcock & Wilcox's Frendberg said that his company has not had an order from a utility for a gas-or oil-fired burner in several years, although the company still is building some because of long lead times between orders and completion.
Second, all users - industrial and utility - are holding off as much investment as possible until Congress and the President agree on a cohesive energy policy.
If the utility industry already is on the path the President wants it on, other industries are not. A Congressional Budget office study estimates that, at the pace things are going, utilities will be burning 768 million tons of coal in 1985, only 9 million tons less than Carter's goal. But other industrial users will burn 206 million tons, well below the 360-million-ton level the President is hoping for.
Executives of what may be called the coal conversion industry - engineering firms such as Webb that are equipped to design and build the facilities needed to receive, store, grind and transport coal to the boiler, and firms such as Babcock & Wilcox that build the boilers (and will perform the often complex and expensive adjustments needed to convert them from one fuel to another) - are skeptical that the President's goals, and therefore the oil savings he envisions, can be met.
In the giant-sized boilers big electric utilities use, where the coal is pulverized to a talcum-powder consistency and sprayed through nozzies like oil, coal is an efficient and manageable fuel. Even so, the cost of installing coal-handling facilities runs into the millions of dollars, and the boilers must be much larger and are more expensive than similar-sized oil or gas units. In the smaller boilers used by many manufacturers to produce steam for processing or heating, coal may be a much less desirable fuel than oil or gas.
And the smaller the company, the more difficult the conversion - either of current or future capacity. "Many smaller companies have told me they will burn oil and gas as long as the government will let them, then shut down," according to Kovacs of Babcock & Wilcox.
The Congressional Budget Office echoes some of the sentiments of executives of the coal conversion industry. It says that the President's goal of switching 10 pe cent of present industrial capacity to coal is reachable. But the CBO report, which Dowd authored, said Carter's goal of getting 44 per cent of all future industrial capacity to burn coal is too ambitious.
The boiler makers and the coal handlers, however, say even converting 10 per cent of current industrial capacity to coal burning by 1985 will be difficult.
"You just can't go down and turn a couple of levers and convert an oil unit to coal as many people in government seem to think," noted Steve Barrett, manager of public and technical information for Combustion Engineering Inc.
Converting units now fired by oil and gas to coal is expensive, difficult and nearly always results in a facility that has less capacity and less efficiency, according to Wilson, of Continental Illinois.
And unless a boiler was designed to burn coal, it is almost impossible to convert, according to Frendberg. Only those units that years ago converted from coal to oil can be converted back.
Even if these units technically can be converted back to coal, the "problems which forced them to convert to oil in the first place are still there: usually stack emissions problems," Frendberg said.
Environmental pollution is not the only physical impediment to conversion, however. Many industries and utilities just do not have the space in their plants to convert to coal, even those that were burning coal 20 years ago.
In many cases, companies that shifted to oil or gas long ago erected new buildings where they used to store coal, noted William Mensch, chief engineer for bulk materials handling at Jervis B. Webb.
Even if the old coal-storage facilities are intact, they may no longer be big enough because the low-sulphur coal the companies now must burn has much less energy per pound than the high-sulphur, high-energy caol they could burn in the 1950s and 1960s, Mensch said. That means they have to use more coal to get the same steam output and need more storage space than they did 20 years ago.
"A lot of these companies are enclosed by surrounding stores and other buildings. There's nowhere to store the coal.That's a big deterrent to conversion," Mensch said. Furthermore, he said, because much of the future capacity will be built on the same site, space problems can bind just as heavily as they do in con version of existing facilities.
Not only, does a coal-burning boiler require more storage space for the fuel than does a gas boiler (which requires virtually none) or an oil boiler, but the coal unit requires more ancillary equipment - to catch the vast amounts of ash generated by burning and to capture large amounts of sulphur and other noxious gases given off in the burning process - and must be three to four times the size of an equivalently rated gas or oil boiler.
Furthermore, notes Wilson of Continental Illinois, while scrubbing units have been perfected to eliminate noxious gases from big boilers, "No one has succeeded in building stack gas scrubbing units for small building users."
Even if an industrial company can find the space, can meet environmental standards and can put up with a facility that turns out less steam than it did before conversion, finding the coal at a reasonable price is difficult.
Little coal is sold on the open market in the United States today; most is sold under long-term contracts - either to utilities or to steel companies. Coal companies generally open new mines only when a big buyer such as a utility is willing to contract for the entire output of the mine.
But only a few of the largest non-utility industrial users will be able to contract for the output of a mine (and get in on the other savings such as buying unit trains of 100 cars that do nothing but make round trips between the mine and the utility).
Even if the space and pollution problems can be resolved, changing the boilers themselves to handle different types of coals poses hurdles that usually result in a boiler that cannot turn out as much steam and cannot do it as efficiently as it did.
Nonetheless, despite the major hurdles to conversion cited by coal handlers and boiler makers, President Carter's understanding of the economics of coal is solid.
To insure an available fuel for the production process, utilities and other industries will have to rely more on coal. And, notes banker Wilson, they have been doing so in the utility field without mandatory rules, taxes or incentives other than normal economic ones.