CHAPTER 7 THE WEST: COAL INDUSTRY'S NEW FRONTIER

• Jurisdiction: United States

Western Coal Development
(Mar 1973)
CHAPTER 7
THE WEST: COAL INDUSTRY'S NEW FRONTIER
Carl E. Bagge
President National Coal Association

The United States grew largely from east to west, pushing the frontier before it to find new resources to match expanding national needs and opportunities. The coal industry is now in a position to follow that national direction and enrich the nation's store of energy by major development of the coal reserves that lie in unparalleled abundance in the west.

Of course, there has been a coal industry in the west all along. But the region has not had customers for its coal in abundance to match its reserves. Geography has raised a serious problem for the industry—hauling coal in solid form over long distances can be an expensive proposition. So for decades the great manufacturing and population centers of the East and Midwest have relied on coal reserves closer to them than the great coal deposits of the West.

In addition, in many areas of the west, coal in recent decades was forced to compete against low-cost oil and natural gas produced in western fields. And finally, in many areas, cheap hydroelectric power from the great Federal projects supplied electric energy needs.

All of these factors kept coal from playing as large a role in the economy of the west as it did in the east.

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But times have changed. The coal industry has undergone a dramatic revival throughout the nation, and nowhere do its prospects look brighter than in the West. Big mining operations have come to the West, and from Washington state to Texas big new power plants are being built to burn coal. The development of huge coal-fired generating plants in the Four Corners area of the Southwest, to wheel clean power to major load centers as remote as Los Angeles, has dramatized coal's vital role in giving the West power parity with the rest of the nation.

But Western coal has more than a regional role to play in energy development. Environmental concern has placed a premium on low-sulfur fuels, and the great bulk of our low-sulfur coal reserves are in the West. That prized coal has started to move as far east as Chicago, with transportation costs beginning to appear more reasonable as air pollution regulations become more unreasonable and impossible.

Beyond the great contribution of western coal to direct power generation lies its promise as an enormous source of synthetic natural gas and oil. The American Gas Association sponsored an engineering survey of potential sites for commercial coal gasification plants. The survey identified at least 176 possible sites, and most of them were in the West. Such a plant, to produce about 250 million cubic feet of gas per day, requires a supply of about 6 million tons of bituminous coal a year, or a larger amount of

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lower rank coals. For the minimum 20-year life of the plant, this means a block of at least 120 million tons of uncommitted coal reserves, and perhaps as much as 200 million tons.

Coal gasification will certainly not be a western exclusive, but it is hardly surprising that the largely untapped coal deposits of the West have produced so many candidate sites for these big coal gasification plants. In fact, the first plant on this commercial scale could be built near Farmington, New Mexico. El Paso Natural Gas Company has already asked the Federal Power Commission to approve the construction of a 250 million cubic feet-a-day gasification plant, which would consume 8.8 million tons of subbituminous coal a year, in the Farmington area.

When coal gasification really takes hold, the coal industry must be ready to expand its production effort prodigiously, and the western coalfields will have to support a big share of that expansion.

But if the coal industry is to be strong enough, nationally, to carry the burden of supporting a new synthetic fuel industry on top of its obligation to maintain a substantial part of electric power supply, government must reshape many of its policies on domestic fuel production and use.

It is essential that a comprehensive coordinated national energy policy be developed to insure that a strong and healthy domestic energy industry is maintained.

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Coal, our most abundant energy resource by far, has been proscribed in many of its major market areas by air pollution control laws and regulations that limit its acceptable sulfur content well below the norm of nature and beyond the...