Just after dawn, you can look across the gray, oily water, and there are the misty silhouettes of the coal ships, waiting. They ride high at anchor, empty. A warship, ghostly, glides past.
A vast fleet of coal ships from all over the world -- 122 of them, a modern-day energy armada -- has assembled near the nation's largest coal-loading port here and near the second-largest such port 160 miles to the north on the Chesapeake Bay at Baltimore.
America is and traditionally has been the world's largest coal exporter, but nothing like this has ever been seen here before. The ships are ravenous for American coal, and their masters are willing to spend nearly $100 million in waiting fees -- called demurrage -- to get their turn at the coal piers after an average of 35 days swinging at anchor.
Worldwide demand for U.S. coal exploded unexpectedly after crude oil prices doubled in 1979. Talking to coal company executives, shippers and coal pier operators here and elsewhere, one can sense the growing intensity of their energy anxiety.
According to the recently published World Coal Study organized by Prof. Carroll L. Wilson of the Massachusetts Institute of Technology, the United States "has the opportunity with its enormous coal reserves . . . to break the world's energy stalemate by becoming the Saudi Arabia of coal exporters."
America's reserves of coal are measured in hundreds of years' supply at current production rates. According to the World Coal Study, technically and economically recoverable reserves are large enough to support 1979 production rates for another 250 years and are five times the world-proven oil reserves. Moreover, new coal reserves are rapidly being discovered.
From time to time, some of the ships move. They nudge up to giant piers where 12,500 railroad cars of coal from the mines of West Virginia and western Virginia sit in marshaling yards waiting to feed the powdery, flaky, lumpy coal into the holds of the ships.
There are plenty of railroad cars full of coal and plenty of ships, but the great moving belts and gnashing machines on the piers can't work fast enough. For every two ships that load and leave, three arrive.
Massive capital investments are planned to build more coal piers here and elsewhere, but the construction will take years. Meanwhile, the ships wait.
At an average of $20,000 a day in demurrage, the 35-day delay adds $700,000 to the price of a ship's cargo -- $14 a ton on top of $60 a ton for the coal on the pier, a 23-percent price increase.
Still, they stay. In the careful words of France's official coal buyer, Philippe Julienne, "We diversified our supply." He means that the American coal is there, an assured if expensive supply at a time when there is a war in the Middle East's oil fields and when coal and dock strikes have just ended in Australia and Poland, two big coal-exporting countries.
"What you're looking at in those ships out there is the whole transition of the world away from oil," said Bernhardt Wruble, a top U.S. Energy Department official and director of its interagency coal export task force, known as ICE.
Here in Tidewater, Virginia, it is the dawn of the Coal Age.
Coal now provides 25 percent of the world's energy. In America, we get 19 percent of our energy from coal. According to the World Coal Study, coal can provide two-thirds of the energy needed to fuel the world's economic growth over the next 20 years if coal production triples and exports expand.
Your brain can get numb on figures like that, but consider the fleet of ships out there. They can take on a total of 6 million tons of coal, the equivalent of 13 percent of all the coal the United States exported in 1979. There's enough energy in that much coal to provide most of the electricity for the Washington area for almost a year.
Back in 1947, the United States produced 630 million tons of coal, but by 1961 that production figure dropped to 402 million tons because oil was so cheap and readily available. The 1973-74 Arab oil embargo changed all that, and by 1975 U.S. coal production was above the 1947 figure.
Last year, America produced 776 million tons of coal, and this year the projected figure is 825 million tons -- a 6 percent increase. According to the National Coal Association, which represents coal-mining companies, the nation has an excess production capacity of 100 million tons that could almost immediately be brought from the ground. The association says total U.S. coal production can be doubled in 10 years.
That excess production capacity helped hold coal prices to modest increases of about 10 percent last year while oil prices soared. Earlier in the 1970s, it was a different story: Coal prices nearly tripled after the panic brought on by the Arab embargo, and it took them two years to drop again. Of course, by now they have climbed back up and steadied near that post-embargo peak.
America's overseas coal exports increased an amazing 41 percent this year to a projected 65 million tons -- more than $3 billion worth -- and experts say this 1980 figure could have been double last year's if it hadn't been for the bottleneck at the ports. The United States also has been exporting about 20 million tons a year to Canada, a figure that has not been changing much.
Most of the overseas exports -- 50 million tons -- are moving through this port. The nation's overseas exports may increase five-fold by the year 2000, but the experts who make such projections are wondering now if they aren't a bit modest.
Everybody knew that demand for U.S. coal would grow sharply during the 1980s. "But nobody expected this," said Richard Culbreth of the Virginia Port Authority. "It's like the whole lid blew off."
"They scream," said "X," a coal trader. "They scream and shout over the phone. This morning it was some guy from Scandinavia. He was shouting, 'Why do you let this happen? Why can't the vessel get in sooner? Why can't it load?' Well, I guess they have to vent their frustrations somewhere."
X doesn't want his name or the name of his company used because he has some nasty things to say about the railroads -- the Norfolk and Western Railway Co. and the Chessie System -- and he says he's afraid they'll retaliate.
He thinks the railroads, which own and operate the coal piers, are getting rich off this crisis and are reluctant to make the huge capital investments that could bring it to an end.
"It's ridiculous, it's hurting everyone except the railroads," he said.
The railroads, for their part, say X and companies like his are part of the problem. X is a coal broker who, like a real estate broker, arranges deals between sellers and buyers, taking a commission.
X and his company just got into the business a year ago, when the Iranian oil crisis was at its height, and it began to look as though coal was the coming thing. That's when the lineup of ships first began forming here.
To the railroads, X and a score of other new brokers are little more than speculators whose presence adds enormous new complexity to the loading of ships at the coal piers. The new complexity slows things down, they say.
Aubrey Tatum can show you why.
Early on a recent morning, Tatum, the assistant superintendent at the Chessie System's coal piers at Newport News just across the waters of Hampton Roads from here, gestured toward his two big coal piers and frowned.
What he said seemed almost unbelievable. At the two piers, there was space for three big coal ships to load. But that morning only one ship, the Maersk Triton, was there loading. Near the other two loading areas, idle crews whiled away their time.
"This dock was available at 8 a.m., and it will be available at 4 p.m. with another crew assigned, but there's no boat that can take the coal," said Tatum, indicating one of the piers. "We're just not loading to capacity."
With 122 ships out there waiting for coal, and 5,500 railroad cars full of it in his marshaling yards, Tatum said the thought of idle crews and empty piers makes his teeth chatter. Here's how it happens:
Most of the coal being exported here is "metallurgical" coal for use in steel mills. This coal comes in hundreds of varieties and must be mixed railroad car by railroad car as it is loaded into the ships. The result, like blended tobacco, is precisely suited to the needs of each buyer -- important in making steel because the coal becomes part of the steel.
So when a ship pulls up to the pier to be loaded, Tatum can't simply fill it with coal from particular cars in a particular order, and this requires a massively complex jockeying of coal cars in the marshaling yards near the piers and all the way back up the tracks 200 miles to the mines in the mountains of West Virginia. Computers aid in the jockeying.
In the past, a ship was loaded with cars under arrangements made by one or two coal brokers. But with the explosion of demand, four or five brokers may be involved in loading one ship. What is happening, typically, is that four of them have their coal cars on hand to load as needed, but the fifth may be a laggard. He may be a small broker, and his coal cars may still be up in West Virginia somewhere. Or his coal may still be in the ground.
So the ship can't be loaded. Bedlam results. People get angry, and Tatum is left with 5,500 cars of coal jamming his yard to capacity while he is missing just that right mix of cars that would make everything go smoothly and quickly.
In other words, a bottleneck. The system is overloaded. The computers can't handle it.
As a stopgap, Tatum partly loads some ships. "We have a partial load for many of the boats. If I have an 800-car boat and 300 of the cars on hand, we'll bring her in and dump and then take her and put her back in the river. Then we'll bring her back when we get some more of the right cars."
Here, across Hampton Roads from Tatum's piers, the Norfolk and Western Railroad's coal pier No. 6 is the world's largest 1,800 feet long and feeding coal into the holds on 96-inch-wide conveyer belts at the rate of 16,000 tons an hour. The pier loaded 23 million tons of coal last year and is expected to load 25 million this year. The pier and another nearby were built in the early 1960s to serve the growing Japanese coal market.
The piers are fed from a vast coal-car marshaling yard where 7,000 boxy red and black, open-top cars sit side by side, their mounds of coal undulating into the distance like black desert dunes receding into the gray mist of the sea.
The pier is fed by an array of 32 tracks called a "barney yard." One at a time, the coal cars roll down one of those tracks, pulled by gravity toward the pier. At a certain point, they are automatically slowed to just the right speed -- about 3 mph.
Each car passes over a scale that weighs it while in motion, through an infrared thawing shed used in cold weather, then on down to the pier where its average load of 88 tons of coal is dumped on the conveyor belts. The blending here of metallurgical coal is so sophisticated that, for example, one car can be made to dump its coal over a prolonged period so it may be mixed evenly with a different type of coal in three other cars that is dumpted more rapidly.
The coal arrives in these yards in 225-car trains, rumbling down the mountain passes from the coal mines. It takes two or three such trainloads to fill a ship, and when the empty trains head back for the hills they consist of only 180 cars each -- all that the engines can pull up the mountain grades.
Allen B. Childress, a cheerful young executive who adopts a professional air when he talks about coal, ran these piers for the N&W for seven years before he went off to New York last November to become the railroad's director of international coal and ore traffic.
"We didn't know this was going to happen, nobody knew it was going to happen," Childress said of the current crisis. In fact, one of the first things Childress did in New York was help prepare a forecast of coal exports that almost immediately was proved far too low.
"Wham, overnight the damn thing came to a head," he said. "The ships were coming in. We realized that people were going to coal . . . We don't think the demand will go away, but we hope it will ease to the point where there will be a better flow and scheduling of vessels."
The crews of the coal ships are everywhere apparent.
Like their ships, they are men from all over the world -- England, Japan, France, Italy, Germany, Spain . . .
Nicolaos Milas, captain of the Garbis, which was anchored off Annapolis for a month, said the wait dampered the spirits of his 42 crewmen, who used lifeboats to go ashore.
Surprisingly, Annapolis businessmen are said to be upset about this sort of thing. The sailors are ruining the dockside "ambiance," United Press International reported.
The long-term demand for U.S. coal in the years ahead will be not only for the metallurgical variety but also for something called "steam" coal, which is burned in electric power plants. The demand for U.S. steam coal has suddenly strengthened, particularly in Europe, where electric power companies are converting from oil to coal willy-nilly in the wake of last year's 100 percent oil price increase.
Last year, for example, France bought only 200,000 tons of U.S. steam coal; this year the figure will be 4 million tons, half of all the coal France buys here.
While U.S. exports of metallurgical coal are up 28 percent this year, the comparable figure for steam coal shows a sixfold increase. The total amount is still small -- just over 5 million tons -- but the future for such exports is bright.
The great thing about steam coal, experts say, is that you don't have to do all that mixing at the pier. You just run the cars up to the pier and dump the coal into the ships. Or better yet, you can establish huge ground storage facilities near the piers.
So most of the plans to expand the nation's coal exporting capacity over the next few years include ground storage:
Near the Chessie piers in Newport News, Massey Coal Co. plans to spend $60 million renovating an abandoned pier and installing ground storage. The pier should be loading 10 million tons of coal a year starting in mid-1982.
Here in Norfolk, Massey announced last week that it will join with other major coal companies in building a new $100 million coal export terminal that can handle 20 million tons a year after 1983.
In Baltimore, Consolidation Coal Co. plans to spend $140 million to acquire and refurbish an old pier that will handle 10 million tons or more a year. In addition, Island Creek Coal Co. plans to spend $20 million on a ground coal storage facility in Baltimore.
Other new coal facilities are planned elsewhere on the East Coast, but these are the biggest plans so far.
"We think there's going to be a tremendous demand for steam coal," said Consolidation Coal's public relations manager, Herk Hamm.
President Carter went to Venice last June and joined the heads of the world's other industrialized countries in pledging to double the use of coal by 1990. This, they said, is to "break the existing link between economic growth and consumption of oil."
One cornerstone of the government's effort to promote coal use is called "utility backout legislation." This means helping U.S. electric utility companies switch from oil to other energy sources, mainly coal. At a cost of $10 billion, this is expected to save 1 million barrels of oil a day by 1990. The legislation to accomplish this is now before Congress.
ICE, the federal government's interagency coal export task force, will make its report to the president later this year. It is expected to recommend legislation that would fund the Army Corps of Engineers to dredge and deepen the country's coal ports.
If this port were dredged from 40 to 55 feet, for example, the coal piers here could accommodate coal ships that could take 100,000 tons of coal or more each. The average now is 50,000 tons. Dredging wouldn't speed the loading of ships -- only more piers can do that -- but larger ships would significantly cut overseas coal transportation costs and make U.S. coal more competitive.
As in all panic situations, the number of ships waiting out there is augmented by psychological factors that may bear no relationship to long-range demand for U.S. coal.
"It's very expensive to restart a steel mill after you've closed it down, so you'll pay to keep your inventory levels up," said Wilson Browning, a private agent who makes the shipping arrangements for much of the coal that moves through this port.
Wruble, the U.S. Energy Department man, said: "That line at Hampton Roads is very funny. Not all those ships have firm contracts to haul coal. There is a shipping glut right now, and that's an inexpensive port to put in at. You can get a place in line and perhaps pick up a coal contract. If you were a shipowner with no cargo this might be a nice place to put in. That accounts for a bit of the line."
This is speculation, of course. The world of shipowners, charterers, buyers and sellers is a very, very private one.
In any case, a lot of big American coal companies are putting hundreds of millions of dollars on the notion that most of the demand out there is there to stay.