Growing world demand for U.S. coal couldn't be more embarassing to J. Ron Brinson. "It's like having your pants pulled down in public and discovering holes in your underwear," he said.
Brinson is executive vice president of the American Association of Port Authorities Inc., which thinks this country is frittering away primacy in world coal trade because it is moving too slowly to overhaul antiquated ports and dig deeper waterways.
"We've discovered we don't have the transportation network to handle it," Brinson said of foreign nations' increasing appetite for U.S. coal, especially "steam coal" used to generate electricity. "We've exposed to the world our inordinate ability for shooting ourselves in the feet."
The pain is felt on all sides. Labor leaders complain they are losing thousands of potential jobs in mining and transportation through the generally bumbling way in which domestic coal is moved to foreign markets. Coal exporters and importers moan that they are losing millions of dollars annually in demurrage charges because their ships are kept waiting at inadequate U.S. ports long beyond their scheduled loading times.
Coal buyers throughout the world are "waiting for the decisions the United States will make in regards to port development," said Willem Daniels, director of the North American branch of the Association Technique de l'Importation Charbonniere (ATIC), the French coal-buying consortium. "There is no doubt that if the United States doesn't tackle the problem quickly and efficiently, the other sellers will take advantage."
The problem can be described with numbers:
Total U.S. coal production last year was nearly 830 million tons, about 100 million tons less than the nation could have produced, according to officials at the National Coal Association, a domestic coal industry lobbying group. The United States sent overseas 72.8 million tons of the coal it mined in 1980. Export coal is excess coal. NCA officials said the estimated 100 million tons left in the ground last year remained there partly because the domestic industry is "port constrained" and had no way of moving the coal to foreign markets.
Coal importers are building larger colliers, coal-carrying ships, that individually can transport as much as 80,000 to 100,000 tons of coal over long distances. Such ships, about 174 of which are in service today, have deep-water drafts of 54 feet or more when fully loaded. But none of the 180 deep-water ports in the United States is greater than 45 feet in depth, which means that foreign coal buyers have to shop elsewhere or sacrifice efficiency and money by leaving U.S. ports with their ships partially loaded. e
Importing nations are planning new colliers that can carry up to 150,000 tons of coal, offering a 30 percent to 50 percent transportation cost advantage over the standard 60,000-ton ships now used to carry U.S. coal to Europe, according to a report this spring by congressional Office of Technology Assessment (OTA). The construction of such ships will increase pressure on the United States to improve its waterways if it wants to stay in the overseas coal business, which now represents 10 percent of the total import and export tonnage through all U.S. ports, according to the report.
Delay has become a costly growth industry within the U.S. coal export business. For example, ATIC ships waiting at the Hampton Roads port in Norfolk were losing $4 per ton in demurrage charges last year, and $10 a ton in demurrage fees for the first quarter of 1981. Daniels said waiting charges at Baltimore ports were even higher -- $12.50 per ton in 1980, and $19 per ton for the first quarter of this year.
The upshot, according to the Washington-based Transportation Institute, a maritime labor-management research group, is that U.S. export coal is as much as $20 per ton more expensive than that sold by the other five major coal exporters -- Australia, Canada, Poland, South Africa and the Soviet Union.
There are scapegoats aplenty for these difficulties, and the federal government is a favorite of Brinson and others who say the government is doing little to create more deep-water channels to handle the super-colliers moving into world trade.
"Congress has not authorized a single deep-water navigation channel of any size or dimension in the last five years. More than 20 such channels await final congressional approval," Brinson said. However, he said that because of the current wave of federal fiscal austerity, Congress is not likely to act soon, if at all.
Rep. Bob Edgar (D-Pa.), a member of the House water resources subcommittee, believes Congress should be skeptical about water projects, including those designed to move coal.
"Coal is a national asset," Edgar said. "I'm not as quick to say let's get rid of it as quickly as possible. Over the next 25 years, we're going to need a great deal of that coal."
Edgar sees irony in the push for improved waterway transportation of coal at a time when the federal government seems bent on dismantling Conrail, the tax subsidized freight railroad that also is used to transport coal throughout the Northeast and Midwest to shipping points.
The Reagan administration says the railroad is a hopeless money loser and that it should be broken up, and its component parts sold off to the highest bidder.
Says Edgar: "For Pennsylvania and West Virginia, and for much of the Midwest, the quick and abrupt elimination of Conrail would be a disaster to our small businesses and a catastrophe to our coal transportation system."
Conceding "regional bias," Edgar said he doesn't believe the government is behaving sensibly in spending $2.7 billion on the Tennessee-Tombigbee waterway project -- largely designed to cut three days from the time required to move coal from the interior of Tennessee to shipping points in Mobile, Ala. -- while allowing Conrail to deteriorate.
"Even the supporters of Tennessee-Tombigbee have to smile about that. It's a neat project," Edgar said facetiously.
Domestic waterway dredging operations are costly, time-consuming projects that, because of environmental, funding and legislative hurdles, can take up to 25 years to complete, according to the OTA report. "Many congressmen are leary of waterway projects because of these considerations," Brinson said. aHe also said he is well aware of the Reagan administration's call for "user-fee legislation" that could require shippers and other port users to carry all or substantial parts of bills for items such as channel deepening.
"The federal government's fiscal string has been jerked tight, not so much by Mr. Reagan, but by his mandate," Brinson said, referring to candidate Ronald Reagan's victory in last November's presidential election.
However, the Reagan administration is aware of the troubles affecting U.S. coal exports and soon will issue a policy statement offering possible solutions, according to Dennis Kass, executive secretary to the administration's Cabinet Council on Commerce and Trade.
"We have essentially completed work on a coal export policy statement," Kass said in an interview late last week. He said the statement "speaks to expansion of port capacity" and other actions that could be taken to increase the volume and efficiency of handling coal tonnage at domestic ports.
But Kass cautioned that the administration "is not talking about subsidies" in offering its proposals for port development.
"Our impression from talking to people in the industry is that subsidies aren't what many of them are looking for," Kass said. Instead, he said, in a statement confirmed by Brinson and others, many domestic port officials are more concerned about expensive port construction and waterway dredging delays caused by federal regulations.
Basically, according to the OTA report, extant federal regulations and procedures affect domestic dredging projects in the following manner:
A congressional resolution is issued directing the Army Corps of Engineers to conduct a study of the proposed project. By the time the corp's report moves through the bureaucracy's locks and circumnavigates its dams, an average of 9 to 10 years would have passed.
Congress must authorize and fund the project before construction can begin. The authorization/funding process takes another 6 to 7 years.
Execution of the project includes advance planning, design and finally construction. Add on another 8 years, according to OTA.
Accordingly, the administration is trying to determine how and where it can reduce regulations to allow ports and related facilities to be built at a faster pace, Kass said. He said the Presidential Task Force on Regulatory Relief "will give priority consideration" to rules affecting the U.S. coal export business
The push for more efficient coalports and deeper waterways inevitably affects environmental concerns.
In Carteret County, N.C., for example, some citizens have formed an environmental watch group to monitor coalport development at Morehead City.
"We're not against industry. We just want to see it done right," said Nicki Hooper, a member of the Carteret County Crossroads, the citizens environmental group.
Export steam coal, which requires substantial above-ground space for outside storage, is planned for Morehead City. However, Hooper and her colleagues say they fear that runoff rainwater from coal storage areas might pollute the nearby Newport River, an estuary. Crossroads members say they also are concerned about potential damage to local air quality from blowing coat dust.
The fact that coal frequently is taken to port on trains, which presents another worry for Hooper and her friends whho fear that their community will be plagued with long lines of trains waiting to dump coal at port.
"This is just not the type of place that can handle all of that," she said.
Maritime officials such as J. Parker Host, chairman of the Hampton Roads Maritime Association's commission on coal, place the blame for current U.S. coalport inadequacies on the element of surprise.
"We should have seen this coming," Host said of the boom in world demand for U.S. coal. He said foreign coal buyers, spurred by the rising cost and the decreasing availability of oil, began coming to the United States in 1978 on buying missions. Subsequent upheavals in the Middle East, such as the Iraqi-Iranian war that began last year, also increased demand for U.S. coal, Host said.
Major labor problems last year in Poland and Australia, the United States' closest competitors in terms of coal export tonnage, also increased foreign demand for U.S. coal. But, to borrow Brinson's phrasing, the U.S. coal industry again shot itself in the foot with another triennial strike by the United Mine Workers that has slashed domestic coal production in half and critically hampered coal export activities.
Host, in a fit of gallows humor, said the one benefit of the UMW strike is that it has reduced the heavy backlog of colliers waiting their turn at Hampton Road coal berths. "The strike has depleted our congestion," Host said in an interview last week. Before the walkout began March 27, "we had an average of 150 ships out there on a daily basis. We're now down to 48," Brinson said.
Hampton Roads is the nation's most active coal port, shipping 70 percent, 50 million tons of the 72.8 million tons sent overseas last year.
Host said he is not pessimistic about this nation's future ability to maintain dominance of the world coal trade. New coal port facilities are planned for Portsmouth, Va., by 1985, and private coal exporting firms like A.T. Massey Coal Co. Inc., of Richmond, Va., are moving ahead with their own coal port projects, Host said.