Coal shippers and public utilities yesterday resumed their annual plea to Congress to clear the way for coal-carrying interstate pipelines that would give them what they hope is a cheaper alternative to the railroads.
The Association of American Railroads fought back, with its president, William Dempsey, claiming that if the pipelines are built the railroads will suffer greatly and the price of shipping commodities other than coal will necessarily increase. Over the past decade, he said, the price of coal has increased more than the prices railroads charge to carry it.
At issue is legislation that would enable coal producers and utilities to construct pipelines carrying coal crushed and mixed with water to make a slurry.
There is only one coal slurry pipeline operating today. Those who want to build them find the way blocked either by states that question whether it is a good way to use water or by railroads who, the pipeline advocates claim, will not let potentially competitive pipelines acquire rights-of-way under the tracks.
"This is the second decade" of coal slurry hearings, said Rep. Morris K. Udall (D-Ariz.), chairman of the House Interior Committee, as he opened this year's round. The bill would make one major breakthrough: it would grant slurry pipeline companies the right of eminent domain, which would let them acquire rights-of-way whether the railroads like it or not.
Last year similar bills survived numerous committee tests in both the House and Senate but never got to a floor vote. The issue is regarded by both sides as too close to call this year.
"The thing that sticks in my craw," Udall said, "is the idea that the railroads can block their competitors."
An electric utility company, he said, could set up a power plant at the mouth of a coal mine, then run electric lines for hundreds of miles, crossing railroad tracks, highways and state lines without major interference. The same is not true of coal slurry, he said.
Carl E. Bagge, president of the National Coal Association, led a panel of complainers about the dangers of a rail monopoly. Most coal must presently move by rail at the very time the Interstate Commerce Commission is reducing its regulation of rates, he said, and this is "potentially the greatest redistribution of wealth since the graduated income tax."
Many in the packed hearing room giggled, and Bagge turned to the press table to say, "I don't think that's an overstatement. It's an attempt to get a little ink on our testimony."
Justin Moore, president of Virginia Electric and Power Co. (Vepco), said that his company and Transco Coal Co. had been attempting to build a pipeline from southwest Virginia to Hampton Roads, but that extensive railroad lobbying continued to block those efforts in the state legislature.
It's essential that the eminent-domain legislation be passed, he said, adding that with a pipeline Vepco could reduce utility costs by $66 million a year.
This year, as last, it was the railroads against the world. Proponents of slurry include utilities, consumer groups and trade unions, and all spoke in favor. Nonetheless, tough questions of state's rights and water rights remain to be resolved as the bill works its way through various committees.
The big lever might be utility costs. Rates for shipping coal by rail from Wyoming to a San Antonio utility have increased 300 percent in three years, according to testimony from the utilities, and those increases inevitably show up on home electric bills.
Rep. Richard B. Cheney (R-Wyo.), who has voted against slurry in the past, told Dempsey, "Wyoming is blessed with vast coal resources. Yet the transportation cost is increasingly the obstacle between our being able to develop them."
The San Antonio situation, Dempsey said, is unique.
"We'd love to ship coal to the West Coast for export to Japan," Cheney said, "but we can't."
"You've identified the problem," said Dempsey. "You're a long way from your customers."