The export front: US harbors push expansion
At times, the waters off Baltimore and Hampton Roads, Va., have looked as if a naval invasion was about to begin. Dozens of ships stand quietly marks time against their hollow steel cargo holds. There they wait for their turns to tie up at the piers to begin loading America's coal.
That these ships have sometimes had to wait several weeks to load the coal -- while costing their owners $10,000 to $20,000 every day -- has been seen as cause for both hope and frustration: The world is beating a watery path to the United States as an important supplier of energy, but the US has not been making it easy on its customers or itself.
All the pieces that would give the United States a shot at earning the title of "the OPEC of coal" seem to be there: abundant supplies, good location for world markets, and intentions to expand. A miners' strike in Australia last year and labor unrest in Poland caused a surge in demand for American coal. But with port facilities some said were 50 years out of date, the US struggled to fill orders.
What was needed, coal experts said, was less talk about what a great coal exporter the US could be and more action, particularly in the form of investment. Not only do ports need to be modernized and expanded, buit more mines need to be dug and railroads refurbished.
Projections that the US could dramatically increase its coal exports, from about 65 million tons in 1979 to as much as 190 million tons by 1990, would remain nothing more than projections unless massive investment -- mostly private , not government -- was made.
"It's not going to be leadership from government that gets these things done, " said Joseph C. Lang Jr., an economist with the Pittsburgh National Bank. "But it will be the marketplace. When I look at it, I don't see how the captains of industry can do anything but act."
Now, it appears some of those captains have begun to act. Expansion projects are under way or planned at some 45 ports and harbors that could boost effective US coal export capacity from 1980's 94.4 million tons to 277.8 million tons. (While the US did have excess coal export capacity in 1980, some of its ports, particularly in the East, were overlooked while some in the West were underused.)
Despite the clog, the US did manage to push out nearly 73 million tons in 1980, according to the National Coal Association. This was a 12 percent increase over the previous year. For 1981, the association projects 78 million tons of exports.
"The one bright spot right now is in the export market," notes Jack Kawa, a coal analyst with Wheat First Securities in Richmond, Va. "There is a capacity problem with the ports, but this is being remedied. There's a lot of new capacity going to come on stream in the next two or three years."
"We'll have the capacity by 1983 to ship an additional 150 million tons a year," affirms Carl E. Bagge, president of the National Coal Association.
Getting this done will be expensive. At Hampton Roads, a project to build a "coal superport" to handle 20 million tons of coal a year is expected to cost $ 80 million to $120 million.
In addition to Hampton roads, a number of other port expansion or improvement projects are under way or planned. Baltimore will add 17 million tons of capacity to its port and dredge its harbor to permit ships weighing over 100,000 tons. At present Baltimore cannot handle vessels larger than 70,000 tons.
The Port of Norfolk plants to add 8.3 million tons of capacity; New York will add 5 million tons; Wilmington, Del., will add 7.5 million tons; and Philadelphia is adding 6.5 million tons. East Coast ports will increase their effective annual capacity from 73.9 to 173.2 million tons by 1985, according to an interagency coal export task force report prepared earlier this year for the US Department of Energy.
On the West Coast, annual cost shipping capacity is expected to go up from 3 million tons a year to 49.6 million, and Gulf Coast port capacity will increase from 32.5 million to 55 million tons by 1985.
Because so much of this expansion has already begun, Mr. Kawa points out, the US will be in a better position relative to some of its competitors in the coal exporting business, which are just now undertaking expansion or will do so in the near future. "We've got a big infrastructure in coal that we built with 1976, '77, and '78 dollars. We've got the mines and we've generally got the rail capacity. A lot of other countries will have to spend in 1981, '82, and ' 83 dollars to add capacity."
One area in which the federal government does have an important effect on coal exporting, Mr. Bagge points out, is in dredging harbors that are too shallow for the much larger coal ships that will be sailing by the end of the decade. Many East Coast ports are limited to ships that weigh in at 40,000 to 80,000 deadweight tons. By 1990, much of the world's coal will be moving in vessels of 120,000 tons and larger.
To accommodate these larger ships, the coal industry wants the federal government to move quickly to process environmental and engineering studies that have to be done before dredging can begin.
There is also the questions of who will pay for the dredging. Mr. Bagge favors "user fees" charged to coal customers from around the world. "We think this is wholly reasonable, instead of continuing to rely on [congressional] appropriation methods that we had in the past, a system that's taken 20 years to make a decision on a port such as Baltimore."
In addition, Mr. Bagge would like to see Congress permit a process that would allow ports to win faster approval for dredging projects. The cost would be spread among all vessels that benefit from a deeper sharbor, not just coal ships.
A bill to permit three ports -- Hampton Roads, New Orleans-Baton Rouge, and Mobile, Ala. -- dredge at a faster pace was introduced last year by Sens. John Warner (R) of Virginia and J. Bennett Johnson (D) of Louisiana.