In an effort to increase U.S. coal exports, Sen. John Warner (R-Va.) today unveiled a plan to deepen the shipping channel into the ports of Norfolk and Newport News within three years.
The $298 million dredging project, which requires congressional authoritation, would enable the Tidewater Virginia ports to handle "super colliers" -- coal ships up to 55 feet deep carring 130,000 tons of coal. "
Warner told a Virginia Coal Council meeting here the port dredging would help reduce the long lines of coal shipswaiting to be loaded at Norfolk. The waiting line has grown as long as 40 ships in the past few months as U.S. coal exports have soared.
Warner came to southwest Virginia --about as far from Tidewater as any place in the state -- to announce the project, because the state's coal miners around here are losing millions of dollars in export business because of shipping problems.
The Virginia ports handle about 75 percent of the United States exports of steam coal -- the kind burned in power plants and industrial boilers. Until two years ago, the U.S. exported only metallurgical coal which is used to make steel.
Because of the soaring costs of Middle East oil, Europe and Japan are rapidly converting their boilers to burncoal U.S. steam coal experts have jumped from almost nothing in 1978 to more than 2 million tons last year and are projected to hit 9 million to 12 million tons this year.
The explosive growth in exports caught the coal ports unprepared. Inability of the ports to handle more coal now is limiting exports.
The U.S. Army Corps of Engineers' plan to deepen the channel at Hampton Roads so bigger ships can use the Tidewater ports would help ease the congestion, but coal company officials here said their biggest problems are on land.
"The biggest bottleneck this year hasbeen the inability to load coal at our Tidewater ports," said W.W. Mason of Island Creek Coal Company, president of the Coal Exporters Association of the U.S.
Mason said the U.S. could lose as much as 2 million tons of coal exports this year because ports can't handle thebusiness.
Because the ports can't load ships fast enough, colliers must wait as long as a month to be loaded, costing the companies that buy the coal $15,000 to $20,000 a day while they sit idle.
The waiting charges add as much as $3a ton to the price of U.S. coal and make it difficult for Appalachain minesto compete with other coal-exporting nations. "By mid-1985, Hampton Roads is either going to build additional coal dumping facilities or the ports of Virginia are going to lose this business," warned J. Robert Bray, executive director of the Virginia Port Authority.
Bray said a study for the state agency shows the Virginia economy earns $18.42 on every ton of coal exported through the ports.
Bray said the authority is talking with several coal-producing companies about building new export facilities in the Norfolk-Newport News area. The plan under discussion calls for the authorities then to lease the coal piers to private companies to operate. The lease payments would pay off the state bonds.
The coal export facilities in Tidewater now are owned by two railroads. The Chesapeake and Ohio can ship about 23 million tons a year from its Newport News piers. The Norfolk andWestern docks at Norfolk can handle about 34 million tons a year.
Several coal companies have announced plans to build additional facilities.
Consolidation Coal Company, which last week signed an agreement to purchase the Canton Marine Terminal at Baltimore Harbor and build a new coal export port, is considering building additional export facilities in Tidewater Virginia, said Robert J. Friedrich, vice president of the Conoco subsidiary. Island Creek Coal Company and A.T. Massey Coal Company also are discussing building additional facilities in Virginia, company officials said.
Spokesmen for the two railroads defended their handling of export business before skeptical coal producers and saidthey, too, are considering new port facilities.
Mine operators also complained about congestion on rail lines between the coal fields and the coast, but the railroad people said those problems would be eliminated if the port jam-up were reduced.
Deepening of the Tidewater shipping channel to handle bigger boats has been discussed for some tim, but until now the plans called for a 10-year timetable.
The plan announced today by Warner would deepen the channel in two phases and provide a 55-foot channeloutbound within three years. Warner aides said the Virginia senatorfavors using money raised by the "windfall profits" tax on oil companies to finance coal export improvements.
The 55-foot channel recommeded by theCorps of Engineers would let the Virginia harbors handle all but thevery biggest coal ships now in existence. The Norfolk port is the deepest on the East Coast. The harbor can only be dredged to 55 feet, however, because it passes over an underwater portion of the Chesapeake Bay-Bridge Tunnel.