Table 12.--Estimated strippable reserves of coal and lignite 1/ 2/ Bituminous coal reserves not estimated for Idaho, Montana, Nebraska, New Mexico, Texas, Washington, and Wyoming. Subbituminous coal reserves not estimated for Colorado and Oregon. 3/ Lignite reserves not estimated for Alabama, Kansas, Louisiana, and Mississippi. 4/ 478 million tons of bituminous and 3,387 million tons of sub bituminous coal reserves in the Northern Alaska Fields (North Slope) are included in the estimates even though an economic export market which is essential for exploitation, does not currently exist. 5/ Includes 179 million tons of undifferentiated subbituminous coal and lignite. Source: "The Reserves of Bituminous Coal and Lignite for Strip Mining in the United States (By Staff, Bureau of Mines)." Report on open file at BOM. Senator HANSEN. Mr. Chairman, if it wouldn't be inappropriate, I would like to observe that, in my State of Wyoming, I think it ought not to be unnoticed that some of the coal companies in that State have been very helpful in doing what they could to encourage the type of research from which I am certain will result new techniques and procedures that can be very useful. As an example of this sort of cooperation, the University of Wyoming this last September issued a research journal on strip-mining soil banks in Wyoming. The cooperative study was begun in 1964. They had in mind at that time two objectives and I understand back in 1964 the Kenner Coal Co. gave a grant of some $25,000 to the University of Wyoming. The objectives of that study were to determine the adaptability of native plant species and, also to determine the fertilization, mulching, snow fencing for water accumulation, and/or various mechanical soil treatments that would significantly affect vegetation, establishment, and growth. This report, in my judgment is very comprehensive and I am sure will be invaluable to surface mines and the West generally, in their land restoration work. We are proud of the fact in Wyoming we have had our own land restoration law for some time and it has been accepted in good faith by the mining industry. They have been very cooperative and as a matter of fact they have suggested a number of measures that have been since written into law that I think reflect the kind of rapport that must exist between industry and legislators if we hope to come up with workable laws. It is one thing to hear from people not involved in the business. I don't say those persons shouldn't be heard. I do say it is crucially important that an affected industry will be heard also. I think I have a little license to speak on that point because I was Governor of Wyoming and in my judgment some of the better legislation that was passed during those 4 years was legislation in which the affected industries or segments of society had made their input. I compliment the present Governor in trying to further perfect the legislation that we have on our law books, which I think will serve as a model for so many other States. I might also observe that the Wyoming Association is in the opinion that the reclamation of surface mine regulation activities remain the prerogative of the individual States and they have asked that I submit their statement for inclusion in the record of this hearing. I did this yesterday, but it seemed to me this might be an appropriate time to again just mention what was done yesterday. Thank you, Mr. Chairman. Senator Moss (presiding). Thank you, Senator. Thank you, gentlemen. I appreciate it. Our next witnesses will be in a panel, Mr. Joseph P. Brennan, director of Research and Marketing for the United Mine Workers of America, accompanied by Mr. Pnakovich, Mr. Wells, Mr. Shirley, and Mr. Turnblazer. Will those gentlemen come forward, please? STATEMENT OF JOSEPH P. BRENNAN, DIRECTOR OF RESEARCH AND MARKETING FOR THE UNITED MINE WORKERS OF AMERICA; ACCOMPANIED BY L. J. PNAKOVICH, PRESIDENT, UNITED MINE WORKERS OF AMERICA, DISTRICT 31; KENNETH F. WELLS, ILLINOIS STATE PRESIDENT, UNITED MINE WORKERS OF AMERICA; TOM SHIRLEY, INTERNATIONAL REPRESENTATIVE, UNITED MINE WORKERS OF AMERICA; AND WILLIAM J. TURNBLAZER, PRESIDENT, UNITED MINE WORKERS OF AMERICA, DISTRICT 19 Mr. BRENNAN. Thank you, Mr. Chairman. Messrs. Pnakovich and Wells, who are district presidents, were not able to be here today. I would like to ask permission, however, to file their statements as if they appeared. Senator Moss. That may be done; their statements will follow your testimony and any other statements you have. Senator HANSEN. Can I interrupt just a moment to ask a question of the former panel? I would think their response might be submitted in writing. Senator Moss. All right, you may do that. Senator HANSEN. Mr. Bagge, one of the large natural gas transmission companies is now negotiating with Algeria for a liquifying and transporting natural gas produced in that country to the U.S. east coast. Can you give us an estimate of the cost of such liquified natural gas delivered to the east coast as compared with the estimated cost of gas manufactured from coal? I would also like to ask if the price of natural gas at the wellhead, which now averages considerably less than the 20 cents per thousand cubic feet, in fact would decontrol from Federal regulations, wouldn't there be a tendency for the price of natural gas to seek its own competitive level with other fuels and thereby not only encourage the development of more natural gas but also hurry the development of the total coal gasification process? Mr. BAGGE. I would be very happy to submit the answer to those, yes. Senator HANSEN. Thank you very much. (The questions and answers follow:) QUESTIONS SUBMITTED BY SENATOR HANSEN AND ANSWERS BY MR. BAGGE Senator HANSEN. Mr. Bagge, one of the large natural gas transmission companies is now negotiating with Algeria for liquefying and transporting natural gas produced in that country to the U. S. east coast. Could you give the committee an estimate of the cost of such liquefied natural gas delivered to the east coast as compared with the estimated or projected cost of gas manufactured from coal? Mr. BAGGE. NCA has not prepared estimates of costs but has followed very closely evaluations which have been made by others. Referring to imported liquid natural gas from Algeria by El Paso Natural Gas Co., Mr. John Ricca, acting director, Office of Oil and Gas, Department of the Interior, stated: "The landed price is expected to be 63.94¢/MM Btu's at Cove Point and 68¢/MM Btu's at Savannah. These prices are subject to certain adjustments due to changes in ship construction costs and in operating costs. To this price must be added receiving, storage, regasification and transportation costs to the point of delivery inland. The ultimate delivered price will be somewhere near 95¢ to $1.00 per MCF-much more costly than our own supplies." We have seen a number of other such estimates and this one appears to be representative based on the current price of the gas being sold by the foreign countries and the estimated costs for tanker transport and vaporization of the liquid after it reaches U. S. shores. The probable cost of gas from coal is greatly dependent upon the costs of the coal and the development of improved technology. The situation was summarized by the National Petroleum Council in their interim report, U. S. Energy Outlook-July 1971, as follows: "Specific coal prices and quantity and location will result in varying costs from 90¢ to $1.10 per million Btu's for gas from western strip coal to $1.05 to $1.25 for gas from eastern shaft mined coal. "A series of new processes currently in the pilot plant stage offer potential savings in plant investment. The result could be a reduction in gas price from 8¢ to 12¢ per million Btu's in Syngas. These processes still require completion of the various pilot plant programs and demonstration of the new technology in a single full-size reactor train. These developments may be ready for commercial application in the middle of the 1970-1985 period." In considering comparative prices of various forms of supplemental gas, we want to call your attention to the matter of transporting the gas, because this could significantly affect the choice. Movement of gas by interstate pipeline costs approximately 2¢ per million Btu per hundred miles. This would make, from an economic standpoint, liquid natural gas more attractive in the coastal areas where it will be delivered by tanker, and gas from coal more attractive in inland areas where coal reserves are available. Senator HANSEN. If the price of natural gas at the wellhead which now averages considerably less, less than 20¢ per 1,000 cu.ft. in fact, were decontrolled from federal regulation, wouldn't there be a tendency for the price of natural gas to seek its own competitive level with other fuels and, thereby, not only encourage the development of more natural gas but also hurry the development of coal degasification? Mr. BAGGE. Yes, I believe that the decontrol of new gas prices would reinvigorate our natural gas supply base through the encouragement of increased exploration and development of natural gas. Of equal importance, decontrol of new gas prices would also encourage the timely development of a domestic synthetic fuels industry based mainly on coal gasification. Today, as a result of producer price regulation, we are experiencing a serious national shortage of natural gas and additional gas is not now available to the utility and industrial markets. The artificially low price levels which have been established by producer price regulation have failed to encourage the necessary level of exploration and development. Thus, we are not witnessing a massive effort by the gas industry to turn to synthetic gas from coal. The government has now committed itself to the development of a synthetic fuel industry to supplement natural gas supplies by the development, in this decade, of a synthetic fuel technology which will produce an alternative pipeline gas from our abundant national coal reserves. Coal is emerging as the feedstock for an entirely new synthetic fuel industry which, in turn, will provide the basis for maintaining the gas industry as a major energy source for the long term future. This recent development, however, has broadened the scope of the coal industry's traditional opposition to producer price regulation in the gas industry. If we are to provide an alternative source of energy to the gas industry with the expected development of synthetic gas from coal, it can only be achieved within the framework of a free market economy without the imposition of artificial price restraints such as presently exist in the natural gas industry. Capital simply will not be committed by the nation's coal producers to the development of a synthetic fuel industry if the threat of artificial producer price regulation continues to exist as a deterrent to its development. It is no answer to say to the nation's coal producers that the scope of the Natural Gas Act was not intended to encompass coal production because synthetic gas from coal was not contmeplated by the Congress when it enacted the Natural Gas Act. The producers and gatherers of natural gas which were specifi cally exempt from the Natural Gas Act can testify after two decades of price regulation following Phillips that even explicit assurances from the Congress are to no avail. The more recent decision of the Supreme Court in Southwestern Cable, which extended the Federal Communications Act to cover cable television even though the technology was unknown when the Communications Act was enacted, justifies the coal industry in seeking exemption for natural gas producers before it is willing to commit gas from coal to another generation of abortive and wholly counter-productive policies of artificial price controls. In the opinion of the coal industry, the producer's prices for natural gas should be freed from federal control. In this regard we enthusiastically endorse any legislation which would allow the wellhead price of newly discovered natural gas to be determined in the freedom of the market place and unfettered by federal regulation. Senator Moss. All right, Mr. Brennan. Mr. BRENNAN. Thank you, Mr. Chairman. My name is Joseph P. Brennan, I am director of research and marketing of the United Mine Workers of America. I wish to express the appreciation of the membership of our union to this committee for the opportunity to appear here today. With me are four representatives of the United Mine Workers who represent the broad geographic distribution of our membership. They are here to present specific testimony regarding the impact of strip mining on their particular areas and to respond to questions about these areas which may come from the various members of the committee. For the record, I would like to introduce these men. Leonard J. Pnakovich is president of district 31, with jurisdiction over the coal mines in northern West Virginia, with headquarters in Fairmont, W. Va. William Turnblazer is president of district 19, which covers a part of eastern Kentucky and Tennessee, with headquarters in Middlesboro, Ky. Kenneth Wells is president of district 12, representing the miners in the State of Illinois, with headquarters in Springfield. Thomas Shirley is an international representative of the United Mine Workers assigned to the Peabody mine on the Black Mesa, which is located near Kayenta, Ariz. At the outset of my remarks, I want to very firmly emphasize that the United Mine Workers of America fully recognizes that reforms in dealing with the ravages of strip mining are long overdue. As evidenced by the number of bills introduced in this session of Congress on this question, there is a growing public outcry for some form of regulatory action. The membership of the United Mine Workers of America has a direct and immediate interest in this question. They, together with their families, live in close proximity to coal mining areas. A sizable percentage of our members derive their livelihood from this type of mining and a great deal of revenue from it goes to the United Mine Workers of America welfare and retirement fund and the anthracite health and welfare fund, thus providing pensions, hospital and medical care, and widows and survivors benefits. Therefore, I submit that as a whole, the United Mine Workers of America has as close a vested interest in strip mining as any other group in the United States. We wholeheartedly support S. 2777. We believe this legislation will |