What is the Future of Coal?

I have been asked to give you the National Coal Association's (NCA) view of the future of the coal industry. However, before discussing the outlook for the future I would like to set the stage by taking a brief look at how the industry has changed over the last decade. In 1977 the coal industry was in the midst of a period of steady growth. Although most of the gains in the early and mid 1970's occurred in the west, the industry was still predominately eastern, with eastern production accounting for 76 percent of the 697 million total tons produced in 1977. The labor force was nearing a high - at over 220,000 workers, and the number of active mines was also at a decade high of over 6,000. Productivity on the other hand was at a low. The average miner produced 1.80 tons per hour, and labor relations were also at a low point. Projections for coal's future were very optimistic, mainly because of the unprecedented growth in coal use by the utility industry. In 1977 the 477 million tons of utility coal accounted for 68 percent of U.S. coal production, and the utility industry planned on 129,000 MW of new coal-fired capacity over the next decade. Consumption of metallurgical coal at coke plants was the second largest market at 78 million tons; the industrial and residential market consumed 70 million tons and exports were at 54 million tons. But in retrospect, a lot was happening in 1977 that signalled many changes in the coal industry: - Amendments to the Clean Air Act were passed, which required that utilities take an entirely different approach to meeting New Source Performance Standards at new plants, and required that standards be set for industrial boilers as well; - the Surface Mining and Reclamation Act became law; -electrical generation, despite the optimistic forecasts, was nearing the end of a period of close to five percent annual growth; -1977 ended and 1978 began with the longest coal strike in U.S. history. -crude oil imports in the U.S. reached an all time high as did both total consumption of petroleum products in the U.S. and oil consumption at utilities. The high level of oil imports set the stage for the oil price increases of 1979 and 1980 which resulted in an immediate increase in demand for coal, not only in the United States, but world wide. Labor strikes in Australia and Poland sent foreign buyers to the U.S. literally in droves, and quickly made the U.S. a force in the world steam coal market. The U.S. coal and transportation industries responded to this overwhelming potential demand for coal. In a very short time, the capability had been developed to mine and transport the 1.2 billion tons of coal that forecasters said would be needed by the mid 1980's. What was not anticipated was that the economic effects of sharply higher oil prices would dampen demand for energy, especially for electricity, as quickly as we have seen; that coal industries in other countries would respond as rapidly as the U.S. coal industry, and at a rate