Congress takes kindlier to coal slurry pipelines

Every Congress since 1962 has seen the introduction of bills to grant eminent domain to coal slurry pipelines - a right seen as necessary if railroads are not to block the pipelines. Every time, the bills have died, mainly as a result of opposition from railroads and from Westerners concerned about water.

This time proponents of the slurry pipelines - for carrying a fluid mixture of crushed coal and water - are more confident than ever before that this will be the year they will win on Capitol Hill.

A Senate Energy Committee aide who shares this optimism gives two reasons for it:

* ''There's been a great consensus reached on the need for protection of states' water rights.'' In previous Congresses, slurry proponents had been less willing to concede that water was an issue to be addressed.

* The Staggers Act of 1980, which partly decontrolled the railroad industry, ''has made people feel the railroads need active competition to hold down rates.''

Railroad opposition to slurry pipelines is as adamant as ever, but ''other bases of opposition have changed,'' the aide says.

And slurry proponents have been seeking to build broad public support for coal pipelines. Proponents say it is a cheaper way to ship coal to power plants, where the water is removed, than by rail and to hold rail rates down by threat of competition.

Stuart Serkin, director of congressional relations for the Slurry Transport Association, says of the legislation, ''We're counting on it going through this year.'' Though the House bill is a bit behind its Senate companion, both have cleared committee and are heading for a floor vote. A spokesman for the sponsor of the Senate bill, J.Bennett Johnston (D) of Louisiana, says a vote is expected before the Fourth of July recess.

This means the bills have come as far in six months of the current session as they came in 14 months of the last Congress, Mr. Serkin says; the railroads, which have used delaying tactics to stall the bill in the past, ''are having a tougher time doing it this time.''

But Richard E. Briggs, executive vice-president of the Association of American Railroads, says, ''My guess is that (the bills) won't pass. They've come out of committee before and been defeated on the floor. I think it will happen again this time.''

He forthrightly acknowledges economic self-interest to be a prime reason for railroad opposition to pipelines, but adds, ''Pipelines would compete on an unfair basis.'' Pipelines would serve only the biggest mines, and would ''skim the cream'' of commodity hauling. Unlike railroads, they would have no ''common carrier'' obligation to serve all comers, Mr. Briggs says. And farmers would be unhappy to see rail rates raised to cover the loss of coal-hauling business.

But Mr. Serkin argues the railroads won't lose business if pipelines are built; they'll just get a smaller share of new business.

Mr. Briggs counters that although coal production has ballooned over the past decade, increases for the years ahead look to be in the 2 to 3 percent range. ''So if pipelines are built, the business they get has got to come out of our hide.'' If the projected pipelines (see map) are built, it will result in the loss of some 70,000 railroad jobs annually, while making enormous demands on the country's capital resources, he argues.

(The AFL-CIO building trades department has backed the slurry bills on the grounds that they would create construction jobs, and slurry advocates insist that pipelines would expand coal markets, thereby creating mining jobs.)

On the issue of rail rates, Mr. Briggs maintains, ''In the 30 months since the Staggers Act (which decontrolled railways), the increases in rail coal rates have been half that of the 30 months previous.''

But Mr. Serkin cites the mothballed Ohio slurry pipeline as an ironic example of how pipelines can hold rail rates down. It functioned for a few years in the late 1950s and early '60s until the railroads undercut its rates. ''It shows what competition can do. The rail rates there are still close to those of the early '60s, because of the threat the pipeline could come back on line.''

Sen. Malcolm Wallop (R) of Wyoming is one Westerner who has come around to backing the pipeline legislation, now that he has been successful in attaching amendments to the Senate bill, S 267, to protect state water rights. ''He wouldn't have supported the bill without them,'' a spokeswoman for him says.

It should be noted that Wyoming is an ''upstream'' state; downstream senators , notably John C. Danforth (R) of Missouri, remain unconvinced that their water rights will be protected if upstream states, such as Wyoming or South Dakota, sell water to pipeline companies.

''We face the prospect of a water war between the states - a race to sell this precious resource to the highest bidder with little consideration for the later cumulative impact on farmers and other citizens of their states and the states downstream,'' Senator Danforth told a congressional hearing last month. He argued that states wanting to sell water out of state should be required to establish interstate compacts with the neighboring states with which they share surface or underground water resources.

Over in the House, Rep. Berkley Bedell (D) of Iowa has introduced a bill, HR 1749, that would require just that as a protection to downstream states. He has so far been unsuccessful in attaching this bill to the House eminent-domain bill , HR 1010.

Slurry advocates, meanwhile, despair of the interstate compact route as slow and tortuous and argue that existing law already allows a downstream state feeling wronged by an upstream neighbor to seek relief in the courts.

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