The Comeback of Coal

Some 760 billion tons of coal still lie beneath the U.S., and for a while it looked as if most of it might stay there. But persistent rumors of the coal industry's death, brought on by its own inefficiency and the threat of oil and gas. proved to be premature. Last week, as the National Coal Policy Conference met in Washington, coal company executives happily surveyed their expanding markets. It would have seemed absurd only a few years ago, but now they are expected to double their annual production by the end of the century, to 1 billion tons. The prediction was equally pleasing to another hard-pressed U.S. industry, the railroads, who have teamed up with coal in a partnership that is brightening both their futures.

Lower Rates. Automation has increased coal's efficiency vastly, more than doubling the miner's daily output, to 15 tons. Cheaper residual oil has hurt coal but failed to take away all its markets. Atomic energy, coal's glamorous bugaboo, has turned out to be more expensive than expected, and seems no serious threat for the immediate future. And with the use of electricity in the U.S. rising about 7% a year, electric utilities last year used a record 192 million tons of coal's 420-million-ton production. But nothing has helped coal so much as the determination of the railroads not to lose their $1 billion annual coal business.

When utilities started building right on the coal fields--because it was cheaper to transmit electricity than to ship coal--and when the coal industry itself began to talk of laying coal pipelines* to cut transporting costs, the railroads got busy improving their service. They modernized their equipment, studied the needs of the coal industry, began running fast, "unitized" freights of coal straight from mine to market, thus cutting much of the yard operations and interchanges that account for one-third the cost of all freight-car movements on eastern railroads. The eastern carriers only a month ago passed on their savings by cutting coal freight rates by a third, enabling coal companies to reduce delivery prices by 15%. In the first month after the railroads reduced their rates, Pittston Coal, the nation's third largest producer, picked up new orders for 2,000,000 tons.

Better Blends. A good example of the coal-rail partnership is the Norfolk & Western, which runs coal directly to port out of the rich Appalachian fields. In operation at Hampton Roads is the first of two units of N. & W.'s $25 million coal Pier 6, the world's largest coal-loading fa cility. Its huge conveyor belts are capable of carrying coal to ships at a maximum rate of 20,000 tons an hour. Among oth er modern improvements, the pier also "custom-blends" coal for customers, not unlike a careful mixing of Turkish and Virginia tobaccos: giant rotary dumpers empty four railroad gondolas simultaneously, and within minutes electronically mix the different coals into a desired blend.

With all this sudden attention to its needs, the coal industry has just about abandoned its interest in building the once promising slurry pipelines. The industry actually got around to building only one, but the mere threat of building more was enough to get it what it wanted from the railroads.

* Which carry a slurry of coal and water.

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