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S. 318
TO FACILITATE THE NATIONAL DISTRIBUTION AND UTILIZATION

OF COAL

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LIBRARY OF GOVT

Printed for the use of the
Cornmittee on Energy and Natural Resources

U.S. GOVERNMENT PRINTING OFFICE

98-969

WASHINGTON : 1989

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

COMMITTEE ON ENERGY AND NATURAL RESOURCES

J. BENNETT JOHNSTON, Louisiana, Chairman DALE BUMPERS, Arkansas

JAMES A. MCCLURE, Idaho WENDELL H. FORD, Kentucky

MARK O. HATFIELD, Oregon HOWARD M. METZENBAUM, Ohio

PETE V. DOMENICI, New Mexico BILL BRADLEY, New Jersey

MALCOLM WALLOP, Wyoming JEFF BINGAMAN, New Mexico

FRANK H. MURKOWSKI, Alaska TIMOTHY E. WIRTH, Colorado

DON NICKLES, Oklahoma KENT CONRAD, North Dakota

CONRAD BURNS, Montana HOWELL T. HEFLIN, Alabama

JAKE GARN, Utah JOHN D. ROCKEFELLER IV, West Virginia MITCH MCCONNELL, Kentucky

DARYL OWEN, Staff Director

D. MICHAEL HARVEY, Chief Counsel
FRANK M. CUSHING, Staff Director for the Minority
GARY G. ELLSWORTH, Chief Counsel for the Minority

(II)

COAL DISTRIBUTION AND UTILIZATION ACT

THURSDAY, APRIL 20, 1989

U.S. SENATE,
COMMITTEE ON ENERGY AND NATURAL RESOURCES,

Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. J. Bennett Johnston,
chairman, presiding.
OPENING STATEMENT OF HON. J. BENNETT JOHNSTON, U.S.

SENATOR FROM LOUISIANA The CHAIRMAN. Good morning. Today the Committee will hear testimony on S. 318, the Coal Distribution and Utilization Act, which would facilitate the construction of coal slurry pipelines by providing Federal eminent domain authority.

I have introduced this bill because I believe it would enhance competition, improve our position in the world marketplace and put people to work. This is legislation whose time has come as was dramatically illustrated just last month, when a jury awarded the now-defunct ETSI pipeline $1.04 billion in damages against the Santa Fe Southern Pacific Railroad for blocking its coal slurry pipeline project.

The railroads had refused to grant ETSI pipeline needed rights of way across railroad lands in violation of the antitrust laws. My bill addresses the problem of obtaining rights of way for coal slurry pipelines by providing for Federal eminent domain authority.

A report issued by the National Coal Council states that the total cost of transporting export coal is the most significant factor affecting the international competitiveness of the U.S. coal industry. The Energy Information Administration estimates that by 1995, coal pipeline rates would be anywhere from $12 to $20 per ton less than railroad rates.

Domestic utilities are now buying coal from countries such as Colombia and Australia. In other words, it is more cost-effective for them to buy this coal from half way around the world than from our own coalfields.

These imports hurt both industry and labor. According to EIA estimates, increased coal imports in 1995 will result in a loss of 2,500 jobs and $389 million in business revenue and the picture is equally grim when it comes to exports. The U.S. has historically been the world's leading steam coal exporter. However, EIA projects that by the year 2000 we will fall to fourth place in exports.

The high cost of coal transportation is a problem that could and would be remedied through the construction of coal slurry pipe

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