5 cost of delivered coal was as much as 86 cents per ton higher than that of rail-served plants of the same utility located at Ashtabula, 2 Avon and Cleveland, Ohio.2 Federal assistance for slurry pipelines, as for barge lines, would necessarily be viewed as a disincentive to investment. I would like, further, to address myself to the Committee's Question 18a, respecting the desirability of government's direction of coal from export to domestic use. I would emphasize that the export coal market is important to the United States and represents no threat whatsoever to the availability of coal for domestic use. I am sure the Committee is well aware of the prominence of this market in our balance-of-payments picture. This is certainly indicated by 1974 experience, which saw approximately 60 million tons of bituminous coal exported and $2.4 billion flow back into Another important aspect of this market is that the development of sources of export coal, which is coal of metallurgical quality, opens up reserves of coal not suitable for use in steelmaking, but ideal for boiler use. This is so because most coal deposits contain coal of varying chemical characteristics. 2Steam-Electric Plant Construction Cost and Annual Production Expenses, Federal Power Commission. 3February 24, 1975 Coal Exporters Bulletin, Coal Export Association of the United States, Incorporated. 6 As to domestic availability, the export market, as indicated, does not compete with the domestic market for steam coal. Export metallurgical coal is, because of its high coking and low volatility characteristics, not suitable for use as fuel except in specially constructed or modified boilers. Further, its price precludes boiler use. Even assuming, contrary to fact, that the two types of coal were competitive, the vast coal reserves in this country and the size of the export market clearly indicate that the latter poses no threat to domestic availability. I earlier indicated the size of identified reserves in West Virginia. For the country as a whole, the estimate of the U. S. Bureau of Mines is that approximately 433 billion tons of coal are within range of conventional mining methods.4 An export movement which in 1974 represented 10 percent of U. S. production does not threaten to dry up coal for domestic use. In summary, I can assure the Committee that N&W is capable of handling the return of coal tonnage lost to oil and gas conversion and confident of its ability to accommodate any 4Table 2, Demonstrated Coal Reserve Base of the United States on January 1, 1974, U. S. Department of the Interior, Bureau of Mines. 7 new tonnage which passage of S. 1777 would bring. While enabling itself to handle a doubled national coal production by 1985 would be a task of some proportion, that, too, will be done to the extent that such investment is recoverable. 8 North Jefferson Street Roanoke, Virginia July 1, 1975 24042 Jasrence 2. Darker Lawrence T. Forbes Statement of PENNSYLVANIA POWER & LIGHT COMPANY By JOHN T. KAUFFMAN, VICE PRESIDENT For The SENATE COMMITTEES ON INTERIOR AND On S 1777 June 1975 Messrs. Chairmen and Members of the Committees: We appreciate the opportunity to submit this statement on S 1777, "The National Petroleum and Natural Gas Conservation and Coal Substitution Act of 1975." Pennsylvania Power & Light Company is an investor-owned public utility which provides electric service in 29 counties in central eastern Pennsylvania. Our service territory includes about 2.4 million people or 20 percent of the population and 22 percent of the land area of the Commonwealth. Industries served include steel, electrical equipment, electronics, cement, anthracite coal mining, and other heavy and light manufacturing. We are primarily a coal fueled electric generating system, being one of the top five coal consuming power companies in the country today. We consume approximately 10.7 million tons of coal annually, of which we produce some 40 percent from our affiliated deep mines. In addition, we own eight fleet trains in which coal is transported from mines to our power plants. In brief, our system has made, and will continue to make, a major contribution to the domestic energy self-sufficiency objectives of S 1777. We are submitting this statement solely out of our concern with the applicability of S 1777's mandatory coal conversion provisions to our only oil-fired generating station, two new 1/ units we are now completing and bringing on the line. This plant, Martins Creek by name, is located on the west bank of the Delaware River immediately above Easton, Pennsylvania, on the easternmost edge of our service area. (These two new oil-fired units are in addition to 300 Megawatts (MW) of existing coal-fired capacity installed at this location in 1954, which we will continue to operate.) These new units have a capacity of 800 MW each, for a total of 1,600 MW. They were designed, built, 1/ We explain the unique reasons for the decision to construct this oil-fired capacity, made in 1969, later in this statement. |