Or do I go the full 3 hours to ensure max tenderness?
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You can halve the rest of the recipe too (though more onions will never hurt). Make sure you fit it snugly in whatever pot you're using. Other than that, I'd keep the cooking times about the same -- just keep a close eye on it to make sure it's not getting dry, and add more liquid if needed.
As long as you use a smaller pot, Dutch oven, pan you should be fine with the same time frame. I have my large Dutch oven for family meals and a smaller one for just the house. I lessen the materials but leave the timing to same.
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