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<br />-,' . <br />" <br /> <br />o <br />-) <br />) <br />o_~ <br /> <br />, <br /> <br />AQUATRAIN <br />April 1983 <br /> <br />c.) <br /> <br />Section 5. <br /> <br />COAL: AMERICA'S MOST UNDERUTILIZED ENERGY SOURCE <br /> <br />The United States has an estimted 475 billion tons of known coal reserves. <br />This translates into about three centuries worth of supplies to meet domestic <br />coal energy needs. <br /> <br />To compete with the cost of coal on a BTU basis, oil prices would have <br />to drop to $8 or less per barrel. Furthermore, it is possible that known <br />oil reserves could be depleted within 50 to 100 yearsl and, with the downward <br />trend in nuclear-fueled electric utilities, energy derived from coal steps <br />to the forefront as America's one solid hope for a readily available low- <br />cost energy source. <br /> <br />However, coal must be able to compete economically with other energy sources <br />today if it is to be a fUlly developed energy resource in the decades to <br />come. <br /> <br />The main problem in further western coal development is transportation <br />costs. Under current rail freight rates, it is not economically feasible <br />to develop the low-sulfur, high-BTU coal holdings and leases in COlorado, <br />Wyoming, and Utah. As a typical example, coal mined near Craig, Colorado, <br />costs approximately $28 per ton at the mine mouth. Delivery of this same <br />coal to Long Beach, California, adds an additional $28 per ton in rail <br />freight charges--charges that result in a 100-percent increase in cost <br />to the customer (electric utilities)--charges that are ultimately passed <br />on to the consumer (the American public). And freight rates continue <br />to rise. This present inability to move coal economically coupled with <br />the current recession, has caused excess production capacity and an extremely <br />high unemployment rate within the coal industry in southwest Wyoming, <br />Colorado, and Utah. <br /> <br />Fully developed technologies to mine coal in a safe and environmentally <br />sound manner are already well established. Coal burning technologies <br />are developed, and pollution control techniques continue to progress. <br />However, unless a transportation system is developed to move coal economically, <br />much of our western coal will not be developed. <br /> <br />Conceptually, the proposed AQUATRAIN pipeline system could transport up <br />to 80 aillion tons of coal annually and provide substantially lower freight <br />rates than alternative delivery methods. This savings could for the most <br />part be passed directly to coal customers and consumers. <br /> <br />Should AQUATRAIN coal be exported, this low freight rate would make U.S. <br />coal competitive in the international market and give strong incentive <br />to Pacific-rim countries, such as Japan, to purchase u.S. coal. These <br />countries currently must pay a substantial additional premium for U.S. <br />coal above the cost of coal from other countries. AQUATRAIN's lower transport <br />rates could result in a positive ilIpact on the balance of trade by making <br />u.S. coal competitive in international markets. <br /> <br />17 <br /> <br />t- <br />