Longer Term Prospects for the Coal Industry

Abstract

H ISTORICALLY, there has been an amazing parallel between the coal and railroad industries. As measured by relative totals of energy consumed and by inter-city freight ton miles, both bituminous coal production (approximately 452 million tons in 1963) and railroad ton miles (preliminary 621.6 million in 1963) have declined sharply from their war time peaks of 557.6 million tons and 737.2 million ton miles respectively. In the past decade, competitive sources of energy, primarily petroleum and natural gas, have limited any important rise in coal consumption. Similarly, waterways, pipelines, airplanes and trucks have restricted the rise of inter-city freight ton miles of the Class I railroads. However, there are signs that these declines for both groups have not only been arrested, but even reversed, and prospects for continued gains are brighter than for many years past. Such has been the doleful history of these two industries for the past several decades. But since our emphasis today must be on the coal industry, we may properly ask ourselves, what of the future for this energy source? Are the favorable trends of the past few years likely to continue? We believe that the answer is undoubtedly yes, now that consumption losses of the railroads and domestic households have already been absorbed, and with utility consumption now 47% of national production, as compared with only 8% in 1933. This is particularly so since utility consumption alone may well reach 325 million tons by 1970, 425 million tons by 1975 and 550 million tons by 1980, equivalent in that year to some 67% of our estimated total U. S. bituminous coal production of 825 million tons, excluding exports, and the potentials for the latter are also considered excellent. Such production might well reach, at maximum, a level of 890 million tons and, at minimum, 700 million tons, but we believe our estimate of 825 million tons (excluding exports) is the projection most used by industry experts. Included in our consumption figures is the expected conversion of 75 million tons of coal into pipeline, gas and jet fuel. The composition of this total coal consumption (excluding exports) in 1980 might well take the following form: Million Tonis