The president of the Seafarers' International Union told a Senate subcommittee yesterday that the United States is forfeiting millions of dollars in international coal trade, and is running the risk of losing future foreign coal markets, because it has no comprehensive coal transportation policy.
"In 1979, this country spent nearly $5 billion on foreign transportation services," partly because domestic port and shipping facilities were too inadequate to handle the 64.7 million metric tons of U.S. coal exported that year, said Frank Drozak, who is also president of the Maritime Trades Department of the AFL-CIO.
The money paid to the foreign-flag ships to carry coal and other "crucial bulk commodities" is money that "leaves our country permanently" and "minimizes the gains received" on international coal sales, Drozak said in testimony before the Senate subcommittee on economic policy at a hearing in Baltimore.
He said the "upcoming coal trade will provide the United States with opportunities to achieve . . . stimulation of our economy and the enhancement of our national security through energy independence. . . ." But the nation must make a financial commitment to improve its railways, inland waterways, ports, and commercial, ocean-going vessels if it is to take advantage of the growing international coal market, Drozak said.
Coal accounted for 37 percent of world energy production in 1960, but dropped to 18 percent by 1977, according to a report by the Washington-based Transportation Institute, a management association representing 174 U.S.-flag shipping companies.
But the institute said rising oil prices reducing availability of oil supplies has increased world demand for coal, and that coal will costitute between 25 percent to 32 percent of the world's total energy use by the year 2000.
"To seize the opportunities before us . . . the United States must become a competitive and reliable supplier" of coal, the union leader said in a statement that struck some domestic coal industry sources as being ironic.
A source at the Washington-based National Coal Association, an industry lobbying group, agreed with Drozak's contention that the U.S. isn't exploiting "idle capacity in the coal industry" because it doesn't have the wherewithal to ship larger volumes of mostly steam-gathering coal overseas. But the current strike by the independent United Mine Workers against eastern coal producers, where much of the domestic steam coal is mined, is also hurting foreign buyers' confidence in the reliability of U.S. coal suppliers, the NCA source said.