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Coal industry gears up to supply US with more energy

Coal could provide a silver lining in the still-clouded energy future of the United States. The coal industry doesn't claim to offer a solution on its own. But it does see coal as a stabilizing and increasingly important part of a "mix" with oil, nuclear, and other energy sources supplying both US and world needs.

The current US expectation of boosting coal production by one-third and tripling coal exports by 1990 is good news for the energy hungry economy and even better news for the US coal indutry, where supply still outpaces demand.

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As well, the coal industry insists that new technology already is able to ensure that increased cola use will not increase environmental problems, as critics charge. Instead, such advances as burning cola mixed with limestone (fluidized bed combustion) and coal gasification promise to answer the sulfur-dioxide emission problem without costly scrubber installations.

Coal producers estimate that all the right wheels are already in motion for expanding yearly US production and use from 830 million tons to 1.1 billion tons and exports from 73 million tons to more than 220 million within 10 years. According to National Coal Association projections, present commitments to new production and shipping facilities will provide a 278-million-ton export capacity by 1985. This would far exceed expected overseas coal demand and provide a buffer to protect against energy shocks caused by rapid rises in Mid-east oil prices.

AT a time of federal budget cutbacks, the best news of all coming from coal industry experts is that this helpful changes is taking place without government subsidies.

Currently the US government continues to pour billions into various energy projects -- but not into the traditional coal-mining and transportation areas.

This month the Great Plains Coal Gasification Project in North Dakota shifts into high gear, thanks to a $2.02 billion loan guarantee from the Department of Energy. Other federal money is being used to fill underground caverns with emergency oil supplies and to produce gas by burning underground coal seams.

Heavy government investment in experimental synfuel projects benefits the coal industry as a whole because these projects should open up new markets for coal. With more than 200 billion tons of economically recoverable coal in the United States, equal to more than a 200-year supply at current use levels, new markets are welcome.

Coal producers do want a government speedup in harbor dredging operations to enable larger ships to enter US coal ports and reduce congestion. But even in this case, the industry expects to pay for harbor improvements through user fees rather than by relying on government funding.

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Coal's pay-our-own-way approach is partly ideological -- a case of Republican businessmen opposed to accepting handouts. But it's also a practical approach by an industry that expects a surge in demand for US coal yet believes that government on its own will move too slowly to meet this demand at a time when federal spending is being cut sharply.

One visible example of the coal industry's optimism about its future and willingness to invest its own money in this future sits along-side the Mississippi River 80 miles south of St. Louis.

From a helicopter overhead, the Houston Natural Gas (HNG) Corporation's new Cora Coal Terminal looks like a model railroader's dream: a perfect oval of track, heavy locomotives, 220 coal hopper cars, and a chain of machinery linking the long storage area to strings of coal bargers being loaded at the river's edge.It all looks a little out of scale from the air only because these precisely laid-out pieces of equipment look too small to move such mountains of coal.

Yet in its first year of operation, HNG's computerized Cora terminal has moved more that 1 million tons of coal. According to terminal manager Joe O'Toole, everything is in place to move 15 million tons of coal a year through Cora.

Richard Conerly, HNG vice-chairman in charge of coal and marine operations, explains that HNG's $25 million investment in Cora is part of an overall mine-to-market coal-handling system designed to meet rapidly increasing coal demand. He expects most of this new demand to come from domestic and foreign utility companies switching to coal. Already the Cora terminal has long-term contracts to supply US utilities from Iowa to Florida and negotiations are under way with potential European customers.

To meet expected demand, HNG is also committed to a $55 million expansion of the Plaquemines coal terminal south of New Orleans to increase capacity there from 3.5 million tons to 15 million by end of 1982.

Mr. Conerly expects growth in coal demand to follow naturally because:

* Oil prices will remain high and Mideast supplies will remain "very precarious."

* Natural gas deregulation will allow "this premium product to set its own [ far higher] price."

* Nuclear energy development will suffer from "real political problems as a result of Three Mile Island accident."

The result, says Conerly, is that "coal being plentiful, we are going to end up with a national policy which will permit greater use of coal."

HNG's Cora terminal, Conerly explains, is well positioned to take advantage of the expected demand; it can handle railroad trains of coal coming both from Illinois mines and from Western mines. Cora and competing terminals nearby offer an efficient link with the Mississippi River system's 10,000 miles of waterways with access to 21 Midwestern and Sunbelt states and to overseas markets via Gulf Coast ports.

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