'Poor man's coal' -- lignite -- attracting new Gulf coast interest as fuel alternative

Lignite, long considered "poor man's coal" because of its low heating value, has become an important resource in America's search for energy alternatives to diminishing oil and natural gas supplies.

This low-quality coal is abundant along the Gulf of Mexico and in North Dakota, South Dakota, and Montana. Yet economics has historically favored other cleaner and more energy-efficient types of coal, leaving lignite largely unexploited.

That is changing. The use of lignite as a fuel for generating power now is rising dramatically -- far faster than coal in general.

"We've known about lignite for a long time, but we didn't take it seriously until the early 1970s," when the price of oil and natural gas began rising rapidly, notes an official with Phillips Coal Company in Dallas. Phillips Coal has a contract to sell lignite to Cajun Electric Cooperative of Louisiana for generating electricity in 1984.

"Lignite has become very popular in the last two or three years. For the next decade it will continue to grow at a very high rate," predicts David M. White, a lignite expert with the Texas Energy and Natural Resources Council.

Federal energy policy now requires electric utilities and industries to use less oil and natural gas as boiler fuels in favor of more coal.

Nationally, conversion to coal will be greatest in the gulf coast region, where utilities and industrial users have grown heavily dependent on once-cheap local supplies of natural gas and, to a lesser extent, oil. Sizable lignite reserves stretching from Texas to Alabama offer power plants and industrial facilities in this part of the country an attractive new energy source right in their own back yards.

Two factors encourage the use of indigenous lignite over types of coal in gulf coast states as well as in North Dakota: rising railroad rates for "importing" out-of-state coal and new air-quality regulations that do not favor burning Western low-sulfur coal as they once did.

Federal standards for coal-fired power plants were tightened last year so that all new facilities will need "scrubbers" to clean plant emissions. Previously, the Environmental Protection Agency required only that coal plant emissions have no more than 1.2 pounds of sulfur dioxide per million Btus (British thermal units) of fuel burned. Because of the low heating value and high sulfur content of lignite, plants using this fuel needed expensive scrubbers, adding 20 to 50 percent to their cost of construction. Plants using low-sulfur Western coal did not.

Now, emission standards call for a reduction in sulfur dioxide regardless of the initial sulfur content. This effectively requires scrubbers on all new facilities, making lignite economically competitive with other types of coal in terms of capital investment.

Since lignite is surface-mined, stepped-up production in Texas has caused some environmental concern over its impact on the landscape. However, Mr. White asserts that the soil and climate of eastern Texas, where lignite is found, ensures that "the land can be effectively reclaimed" as required by state and federal law.

Total coal consumption in the United States is rising at a sluggish rate, despite President Carter's goal of doubling domestic production by 1985. The National Coal Association forecasts output will increase a modest 1 percent this year, from 770 million tons in 1979.

However, lignite use, confined principally to Texas and North Dakota, is skyrocketing. In North Dakota, annual production has tripled since the early 1970s -- to an estimated 15 million tons last year. Texas lignite production has grown tenfold since 1970 -- to more than 22 million tons in 1979.

Texas Utilities Company of Dallas accounts for most of the lignite production in this state, but other utilities are making plans to use it. Houston Lighting & Power Company will build two lignite power generating units in 1985 and 1986. Two more lignite units are planned but no timetable has been set.

City Public Service of San Antonio has tentative plans to build a lignite plant some time in the late 1980s.

Outside Texas, Arkansas Power & Light in Little Rock has announced it will build two new lignite-fired generating units in 1988 and 1989.