Wednesday, October 31, 2007

Hey guys,

So I looked at Ron's email and Gabe was right, that was the price to switch solely to coal (not what we want!). I emailed him again and it would be more that 5 million dollars to switch to all natural gas. So I will look at other rations to decrease GHG while still using some coal--ouch!

Here is what the email said:

The $101,400 refers to replacing the natural gas we actually used with coal. To reverse this - e.g. switching from coal and natural gas to all gas would be a lot more expensive. To replace the 25,863 tons of coal would require 542,592 MCF of natural gas at current unit price of $10.98 per MCF or $5,957,660!Our actual energy cost for steam was $1,937,974 (coal $1,468,492, natural gas $469,482). To produce it all with coal would be $1,569,892 (coal $1,468,492 + equivalent coal for gas $101,400). To produce it all with natural gas it would be $6,427,142 (natural gas $469,482 + equivalent gas for coal $5,957,660)

As you can see, the total cost is about 3.3 times the original cost and why such a radical shift in the fuel used for steam production is such a huge economic decision!

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