The International Energy Agency is putting the final touches on an agreement that could sharply increase U.S. coal exports to Europe and Japan, reducing those areas' oil imports half a million barrels a day by 1985.
Expected to be unveiled at the IEA ministerial meeting next week in Paris, the agreement also would commit the 20 IEA-member countries to limiting the construction of new oil-burning electric power plants.
If successful, the IEA plan could double coal consumption in the industrial countries by the year 2000, and increase the international coal trade sevenfold by the end of the century, according to a source close to the IEA.
"Increased coal consumption will moderate the demand for OPEC oil, and lower the pressure on rising oil prices," he said.
The IEA program, which has been under study for two years, is targeted at placing oil imports from the Organization of Petroleum Exporting Countries (OPEC) with imports of steam coal from industrial nations such as the United States, Canada, and Australia. There also is a potential for further coal imports from non-OPEC countries such as South Africa and Mexico.
A report issued by the IEA last year, "Steam Coal: Prospects to 2000," concluded that additional coal burning in the industrial countries would free natural gas which, in turn, could be substituted for oil imports.
The combined effect of increasing coal use and substitution of natural gas for oil, the IEA said, could reduce imports to industrial countries by 1.4 million barrels a day in 1985, 3 million barrels a day by 1990, and 7 million barrels a day by the year 2000. The combined oil use of the industrial nations is now about 31 million barrels a day.
The IEA study also found "in all cases coal is more cost effective than oil for power generation, and in many instances, coal is more cost attractive than nuclear."
As the world's leading coal producer and exporter, the United States stands to benefit from the IEA agreement, which is not legally binding.
Last year the United States exported 40 million tons of coal, capturing 24.8 percent of the international coal market, and earning $2 billion from foreign sales. By comparison, the nation spent $48 billion on oil imports, most of which came from the Arab-producer dominated oil cartel.
National Coal Association President Carl Bagge says that currently the United States has from 100 million to 150 million tons of unused coal production capacity annually.
Coal executives such as William W. Mason, president of the Coal Exporters Association and the Island Creek Coal Sales Co., say that increased coal exports would benefit the domestic industry and help put some of the 13,000 coal miners who are now unemployed back to work.
A senior administration official, however, stressed, "We do not view this exercise as a U.S. team coal export drive."
Energy Secretary James R. Schlesinger will represent the United States at the two-day ministerial meeting in Paris that begins May 21.
Administration officials say that negotiating the agreement has posed obstacles for the IEA member countries.
Importing countries such as Japan, heavily reliant on oil imports, want assurances from potential coal exporters such as the United States that export controls would not be imposed. The Japanese also wanted assurances from potential exporters such as Canada that foreign investment in coal export projects would not be blocked.
The Australians, whose production and potential for exports have risen dramatically over the last years, also have asked the IEA countries with sheltered domestic coal industries, such as England, not to place protectionist tariff barriers on their coal.