Coal industry likely to experience steady, if undramatic, growth
After its roller-coaster ride in the past decade, the coal industry is entering a period of relative calm. That, at least, is the view of Ralph E. Bailey, chairman of Conoco Inc., who was in Chicago during the weekend for the American Mining Congress, which opened its International Coal Show here Sunday. Mr. Bailey is chairman of the congress.Skip to next paragraph
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The outlook through the year 2000 is good, if undramatic, he said in an interview. Demand for United States coal will grow at ''a fairly even, steady rate. . . . Now we know that (America's energy future) is boiled down to the basics - it's oil, it's gas, it's nuclear, and it's coal.''
According to figures he cited in a new Conoco study, the use of coal will grow at an average annual rate of 3 percent. And by 2000, the study forecasts, coal will supply 29 percent of US energy needs, compared with 22 percent in 1982 .
That growth will come primarily in electric generation and at the expense of oil and gas, he says. The other winner is nuclear power. Although it has suffered recent reverses, nuclear power is still expected to contribute 7 percent of US energy needs by 2000, when the plants now under construction come on-line. Nuclear plants generated 4 percent of those needs in 1982.
Despite the expected growth in coal use, some obstacles remain, Bailey says.
''If we're going to have our supply of energy at a reasonable cost, we're going to have to increase our use of coal,'' he says. ''If we have to use the coal, we have to solve our environmental problems. The No. 1 problem is acid rain.''
Bailey argues that more work is needed to research the causes of acid rain before Congress passes bills forcing expensive plant renovations. ''By 1987, we ought to have these answers.''
His hopes of defeating several measures now pending in Congress were not helped, however, by reports released last week by two environmental groups.
Whereas Bailey argues that the problem is not a national crisis, the National Wildlife Federation reported that acid rain affected every state east of the Mississippi River, many Western states, and every province of Canada as well.
Another potential obstacle for the industry is the contract negotiations with the United Mine Workers of America (UMW), which opened last week in Washington, D.C. The current contract expires Sept. 30.
The bargaining between UMW's new president, Rich Trumka, and the chief negotiator of the Bituminous Coal Operators Association, Bobby R. Brown, is expected to be tough. Mr. Trumka has vowed to make no ''backward steps.''
Still, Bailey is hopeful: ''I think the likelihood for settling the contract (without a strike) is better than I've seen it for quite some time. . . . I just do not see the presence of what I would see as issues that should be difficult to resolve.''
Coal operators, weakened by a severe two-year slump, do not feel they have much to offer. The UMW, meanwhile, has problems of its own. The amount of coal produced under its national agreement with operators has fallen from roughly 80 percent many years ago to slightly over 40 percent now, Bailey says.