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Show UHiiitMiuniMaiffiifflmfHura Western Resources WRAP-UP lllllllllilllllllitllllillllllillllll HillllliiHi Western coal future Wednesday, November 18, 19S7 Veffisl h$Mt 3 by Helene C. Monberg. Vernal Express Washington D.C. Correspondent Western coal has emerged as a premier source of domestic energy, but it is having a rough time competing com-peting in today's glutted energy market, Fredrick D. Palmer, general manager of Western Fuels Association, Inc., told Western Resources Wrap-up (WRW) in an interview in-terview on Nov. 9. "There is a tremendous overcapacity, over-capacity, whether one is talking about coal, oil, natural gas, uranium or electric energy," Palmer stated. "On the demand side, following the scare over oil shortages in the early 1970's, great strides have been made in conservation of energy and in energy efficiency-more than we ever envisioned. "On the supply side, in the '70's the industry projected economic growth at much higher levels and the need for energy to be much greater than it turned out to be. We spend a fortune developing new mines and facilities. We'll be digesting our over-supply until the next century. Big power plants now cost a billion dollars to build. No new ones will be built for many years," Palmer stated. Western Fuels started from scratch in 1974 as a fuel supply cooperative. It serves 12 rural electric elec-tric cooperatives, 12 municipal power systems and nine other public power systems. Most are located West of the Mississippi River, but Western Fuels also has members in the Midwest and the South. It currently cur-rently operates two underground mines in Colorado and Illinois. It operates two short-line railroads, in New Mexico, and in Colorado and Utah. "This year, we will deliver coal to ten different power plants in seven different states. Total coal delivered from all sources" in 1987 by Western Fuels "will exceed 14 million tons,"Palmer told the Southern Minnesota Min-nesota Municipal Power Agency (SMMPA) in Bloomington, Minn., on Oct. 8. How are you managing to operate as a coal supplier in this era of energy glut? WRW asked Palmer. He replied, "We have had to change our operations radically. We have had to cut our costs to the bone in line with the realities of the market. We have had to renegotiate contracts. Without restructuring our debt, we have been able to cut costs of coal by $8 a ton. It hasn't been easy. Everyone likes to make a deal. It's a lot harder to revise a deal already made." Palmer claimed Western Fuels had become so accomplished at restructuring its operations that it started a new consulting business a year ago to advise others. It is strictly strict-ly a consulting operation, not a pitch to sell more coal, Palmer stressed to WRW. He discussed restructuring in his SMMPA speech on Oct. 8. "Ironically our greatest successes.. suc-cesses.. .have been in a time of energy ovcrsupply. Our ability to mix and match various members' needs has never been greater.. .Our knowledge of the industry cast structure struc-ture Is surpassed by none. This knowledge serves us in great stead in confronting the challenges facing our members as they strive to keep their casts down in a competitive energy market place." he sad. In some Instances, In-stances, costcutting has proved crucial to keeping Us members afloat. wr.sn;it (xal WcMern coal has emerged as a primary source of energy in this country In less than 3fl years, "During "Dur-ing the IM'S, the development of unit trains was influential In epeiiing tip the vast coal Iim!s t the Western 1'liilrd Stair," fliCofdinfi to the National Ciwl Av.n lati-n NCAt, The ti! rmtarg ttf U I'hiteJ States in the early 70's by the Organization of Petroleum Exporting Expor-ting Countries (OPEC) had an immediate im-mediate impact on domestic coal production. NCA's 1987 edition of "Coal Facts" stated, "Coal mines West of the Mississippi River exhibited ex-hibited a growing influence on the overall coal supply"; they accounted for 28 percent of the total domestic coal production in 1979, 30 percent in 1980, 26 percent in 1985, and 37 percent per-cent in 1986, when domestic coal production pro-duction totaled 890.3 million tons. Wenninger said Burlington is dickering dicker-ing "to sell a million tons of Western coal a year to the Pacific Rim countries. coun-tries. We have been talking to utilities in that area. We are looking at the possibility of building a reliable long-term market for Powder River Basin coal in Japan, Korea, Taiwan an Hong Kong. We would move the coal by rail from the Powder River Basin in Montana to Seattle, where it would be transported by ship" to the Orient, Wenninger told WRW. "We are talking to them about blending lower BTU-content Western coal with higher BTU Australian coal. The Pacific Rim countries have been concerned that inland transportation transpor-tation costs in this country are too high" to make export of Western coal feasible. "We have been quoting them our rates to prove to them that rail rates have fallen during the past three years." Wenninger stated. "It won't happen immediately, within the next year," he told WRW. He said this project is contingent on several factors, including the price of competing fuels, the value of the dollar, and economic activity in the Pacific Rim countries and in this country. Wenninger said BN is interested in-terested solely in shipping Powder River Basin coal by rail, not selling it for export. "I am sure Powder River Basin mines would be glad to sell their coal for export," he observed. RAIL RATES A CONTINUING PROBLEM The coal industry has long maintained main-tained the cost of moving coal by rail is to high. Moving coal by barge on the Missouri-Mississippi River System in the Mid-Continent and on the Columbia-Snake River System in the Pacific Northwest has had 'some impact on the rail rates of Western railroads, but it is limited," Harry N. Cook, president of National Waterways Water-ways Conference, In., told WRW on Nov. 6. Railroads in 1985 carried 58.4 per cent of all coal shipped in this country, coun-try, while waterborne transportation of coal accounted for 16.5 percent, ac cording to NCA. NCA said the remaining re-maining 25.1 percent was shipped by truck (13 percent), and by pipeline, conveyer, tram or other means (12.1 percent). Rail rates often account for half of the total cost of coal, and on some coal shipments they account for 70 percent or more of the cost, according accor-ding to Cook, Palmer and NCA. NCA estimates "85 percent of all rail coal tonnage is 'captive' to a single rail carrier" to move coal from mine to market, so "monopoly" rail freight rates have been a major issue in the coal industry in recent years, even though NGVs 13.16 Coal Traffic edition edi-tion indicated they have begun to stabilize. The U.S. Geological Survey estimates U.S. coal reserves total 4H3 3 billion tons, of which 2GI 1 million tons, or S3 percent, ere in the Western states including Alaska, U S. coal reserves account for two-thirds two-thirds of the free world's total supply and 2tf 7 percent of the total world supply of recoverable coal, Ihe largest reserve of any nation. aecor cling to lht World f'.nergy Conference. Con-ference. City comparison, the Soviet Union has M l percent of the wotld supply tif rrrtjvrraiite tvl reserves, and oil rich Saudi Aratiia has 24 per-rent per-rent of tlii! vcwrld' proven frlrnlrytn rer-rrve ) Montana f anK hr-l find Wyoming iv . 3 1 4h I C-o.'. ( , i Tit REMAINS OF A 1969 Pontiac sit in a field after the driver lost control and the vehicle went airborne air-borne for 114 feet. third behind Illinois as the states with the highest coal reserves. Other Western states with large reserves include Colorado, which ranks eighth, and Texas ninth, according to the Energy Information Administration. Administra-tion. NCA data indicate 37 of the 50 largest mines in the nation are Western surface mines; 20 are in Wyoming and Montana. Efforts are underway to move Western coal from the great Powder River Basin coal fields in Montana and Wyoming to markets primarily in the Southwest and for export to the Far East. A 273-mile coal slurry pipeline operates from a Peabody Coal Company mine on the Black Mesa in Northern Arizona to Southern California Edison Company's Com-pany's Mohave power plant in Southern Nevada. Four other coal slurry pipeline systems have been proposed in the West: from the Powder River Basin in Eastern Wyoming and Montana to the Seattle area in the Pacific Northwest; Nor-thwest; from the Powder River Basin in Wyoming to Las Vegas, Nev., and on to Los Angeles; from Southern Colorado to Houston, and from Northeastern New Mexico to the Texas Panhandle, according to the Slurry Technology Association. Construction of these proposed pipelines has been held up due to lack of rights-or-way. Palmer told WRW there is a continuing conti-nuing interest by coal producers and shippers to sell Western coal to the Far East. He said some industries in Japan and Korea are currently testing out Western coal on a "test-burn" "test-burn" basis -ie., they are experimenting ex-perimenting with small quantities of U.S. coal. In 1986 about 10 percent of the nation's na-tion's coal production-86 million tons- was exported, according to NCA. Palmer told WRW on Nov. 9 the most ambitious effort now underway under-way to export Western coal has been launched by Burlington Northern (BN) Railroad, a primary coal hauling haul-ing railroad which, at 14 6 billion tons, holds more coal reserves than any other entity except the U S. government. WRW subsequently confirmed this new development on Nov. 10 thru Mike Wenninger, BN'i top public affairs officer In Fort Worth. Efforts have been made in Congress Con-gress since 1332 to try to bring down the cost of rail csal hiprtients thru legislation. Western Furls Is baking legislation (S 4 end Ml SMI) pin. Sored by Senators, Dennis DeCon-cinl, DeCon-cinl, D Aril , and Alan Simpson, ft-Wya ft-Wya , in the Senate and by Itrps, Mike Synar, I) -Ok la , Dan Clirkman, D Kan , end Hank i',nnn. It Colo . in the H'Me Would make railroad ub Jed to private law iuiU for dfflsM by removing tbrir ftcmptinfi from ihcanti trust la s, Hearing begins on automobile homocide Reckless driver smashes car Nineteen-year-old Manuel R. L. Trujillo was cited for a number of traffic violations Nov. 10 in relation to a single car accident on 1980 South 1500 West. Utah Highway Patrol Trooper Roy Steen said Trujillo was south bound in a 1969 Pontiac on 1500 West at a high rate of speed. As the car crested a hill it went airborne about 114 feet. When it landed the right rear tire blew out causing the vehicle to go sideways into the bar pit. The vehicle flipped on to its top, slid through a fence, flipped back on to its wheels and came to rest in a field. The speed of the vehicle was estimated at 90 MPH at the time of the accident. Steen reported that the driver had been drinking and neither the driver or the passenger, Eric C. Cannon, 18, reported the accident. An individual jogging in the area notified the Highway Patrol about the accident as did the driver of a tow truck. Trujillo was cited with reckless driving, failure to report an accident, illegal consumption, failure to use seatbelt, no insurance and driving an unsafe vehicle. The passenger was also cited for not using a seatbelt. ATTENTION PERSONS WITH ALLERGIES & ASTHMA DAVID P. BURKLEY, MD FROM INTERMOUNTAIN ALLERGY & ASTHMA CLINIC CorS to Pocssve't cn a rrear t as s for lLe d.ipc;;s arvJ Iteaife-r.t d t a'Vg t d.-?a:-?. Ms s? paVerts si Vi f? :: el C n c. pntmprrt mad? tf t3"'" Sal U! Cif 9G3 ec85 s If you Nvs c.cr-s as o "'"5f r-? J to see a sr'.-' s!,t?9 rx-f-su't yz'stcn r i- .v9i. Testimony was taken last week from an out-of-town witness; the first to testify for a preliminary hearing in Circuit Court for William Francis Finney, III, who is answering automobile homocide charges. The testimony was given by Steven Leaton, who was a passenger in a truck involved in a fatal accident. The remainder of the hearing was rescheduled for Wednesday, Nov. 18 to allow for further court preparation. prepara-tion. Finney is believed to be the driver of a pickup that went out of control and rolled near Lapoint Sunday, Aug. 31, 1986. Nile Revere Fowles of Myton was killed in the accident. The defendant, defen-dant, who was recently extradited back to Vernal from the east, is also charged with bail jumping. Deputy County Attorney Randy Hudson questioned Leaton for more than an hour. Leaton told of the incidents in-cidents leading up to the accident and how he and several other young people peo-ple had been drinking on the afternoon after-noon of Aug. 31. He told how Fowles had been killed when the truck rolled and of his own injury that requried hospitilization. No other witnesses were called last week as the hearing was rescheduled. Among those who will be called to testify today are Trooper Tim Trujillo Tru-jillo and Sgt. Les Langford of the Highway Patrol, Shawndra Cuch, Finney's girl friend, and a number of others. It's for Everyone. I First Security Bank cordially invites the public to an openhouse honoring Vard Openshaiv upon his retirement Friday, Nov. 20 1 p.m. to 5 p.m.- Do Your Shopping and Keep Our Merchants Hopping. They'll Do the HchtloCivc You iKD the Service YouDmcne. SHOP LOCALLY Vernal Express CANDIES A family tradition at Thanksgiving 'Aft . 4, I I -7 fc I , Thanksgiving Slip-on Box 1 lb. VERNAL DRUG 51 C U.n. Ptxy 789 3106. CWl unU 7 00 mi mscnirTiON rxuvtRr Pef i!4 P'm;r! ok duly 1 19 OB Ci O r, Q73D QTXl) ilu am ran) iimiryucnro ( lltTD m Let Us Introduce Ourselves... We'll Be New to You... But we'll have MUSIC from People You Already Know Soon Everywhere. In theBasjn Advertisers Heserve Youf C-paC9fioworirMC'3.5 Call 7G3-C3G5 Fj id i u 0 o iiiG:a Gary (IDrilB 1 ViljuLLMi Hi I EBQ3DQ1 am iU |