'New coal' is building steam as American energy export
Denver — ''Coal is black, and it's beautiful,'' says Jim McJunkin, director of the Port of Long Beach, with a whimsical smile.
He made his comment here as the California port announced it was expanding to handle the growing tide of coal headed from the Western United States to Asia.
Both the $4 million commitment from the port and its partners and the comment reflect a transformation that has taken place in the image and prospects of coal , the ''King'' of energy sources in the 19th century. This shift has been predicted since 1974 but only now is building up steam.
''New coal,'' is the catchword that Carl Bagge, the flamboyant head of the National Coal Association (NCA), is using these days to emphasize these developments and to distance the industry from its past image: bitter labor strife and extreme air pollution.
In energy terms, coal is the nation's largest nonrenewable resource. According to the NCA, coal represents 81.7 percent of domestic recoverable energy reserves, far more than oil shale (7.2 percent), uranium (4.2 percent), natural gas (4.1 percent), and petroleum (2.8 percent). Last year the US consumed 760 million and exported 90.5 million tons of coal. The Electric Power Research Institute (EPRI) currently estimates that US coal consumption should triple by the end of the century to about 2 billion tons per year.
Coal lost its energy preeminence to petroleum early in the century for some rather simple reasons. Petroleum is a more uniform fuel and is cleaner burning: It does not contain ash and other extraneous material. It is more portable. Drilling and pumping is a cheaper and less labor-intensive process than mining.
But with petroleum reserves getting smaller and more new oil fields more difficult to find and more expensive to develop, coal is becoming increasingly competitive with its rival.
Reading the handwriting on the wall, US oil companies have moved aggressively into the coal market and now control 41 percent of the nation's nongovernmental reserves. More technologically sophisticated and better bank-rolled than traditional coal companies, big oil is playing a key role in coal's transformation.
These efforts are now bearing fruit. Modern technology, for instance, has made it possible to build a new coal-fired power plant in New England that emits only one-third as much air pollution as the older oil-fired plant it replaces, Bagge reports. This year 22 large coal-fired power plants are under construction , with a total capacity of 9,200 megawatts.
Another sign of the times was the go-ahead last month to fund the nation's first electrical power plant powered by gas from coal. Construction already has begun on this prototype plant in Barstow, Calif. This design is expected to cut pollution substantially compared with direct coal combustion. In addition, it is modular so utilities can expand gradually, as electricity demand dictates.
UScoal has been rediscovered in Europe and Asia. While the US long has exported a special type of ''coking'' coal used in steelmaking, it is only in the last three years that overseas trade in ''steam'' coal burned for energy has materialized.The Port of Long Beach, aided by the governors of Utah and Colorado , has formed a combine with several other US companies, including Union Pacific, and with C. Itoh, Japan's third-largest trading company. They are planning a new facility capable of handling 10 million to 15 million tons of coal annually, with an eye for the as-yet-untapped Asian market. ''Although US coal is currently $10 more expensive than Australian coal, delivered to Japan, we believe that it can become very competitive with lower rail rates,'' says Seiji Kobayashi of C. Itoh. Long Beach, Calif., and Sydney, Australia, are both 7,000 miles from Tokyo, but Australian coal mines are close to ports while the US coal the Japanese want is in Utah and Colorado.The Staggers Act, which partially decontrolled US railroads, has made it possible for them to enter into long-term contracts. Mr. Kobayashi, who is in the middle of contract negotiations with US railroads, says he believes rates low enough to open up the Asian market will result. While decontrol is working in favor of Western US coal companies, however, it has proved a major problem for Eastern coal. This is just one of a number of hurdles that the reviving industry faces.Financially distressed Northeastern railroads have increased their coal haulage rates by more than 180 percent, NCA's Bagge complains. Further, they are lobbying hard to put coal exports on the totally decontrolled list. ''Railroads are the only practical way to haul coal. If they get decontrol, they'll have us over a barrel,'' Bagge objects.While Eastern coal producers are suffering from the Staggers Act, their representatives appear to have won a recent round in revisions of the Clean Air Act. Thus far they have retained provisions that require a percentage reduction in sulfur emissions when coal is burned in a power plant, regardless of the sulfur content of the coal. Westerners have been trying to change this because they feel it discriminates against Western, low-sulfur coal.The coal industry as a whole was dealt a blow recently by President Reagan when the administration decided to oppose the granting of eminent domain to coal slurry pipelines. These pipelines can pump a mixture of coal and water over long distances; the coal industry sees them as a way to free itself from the railroad monopoly. However, slurry pipeline routes, such as those proposed from Wyoming to Missouri, cross and recross railroad rights of way. The railroads have been fighting them tooth and nail in the courts.On the other hand, Interior Secretary James Watt has been moving to give the industry greater say in determining where and how federal coal lands will be leased in future. He also is ready to give coal companies many more years to develop their holdings before the leases expire. These proposals have touched off strong opposition in Western coal states because they also would diminish the voice of the states in the process.