A New Source Of Energy For Texas - Western Coal

I am Alfred E. Michon, Vice President- International for Burlington Northern Inc. I work for BN's holding company and my responsibilities include co-ordinating the activities of our eight subsidiary companies as they relate to international commerce--an increasingly important aspect of the overall business of our company. Until last April, I was President of the Fort Worth and Denver and Colorado and Southern railroads, subsidiaries of BN. Prior to that, I headed the marketing and pricing area of BN's coal transportation business. Based on my experience in the energy industry, both domestic and international, I would like to discuss the world-wide trend towards the reliance on low-sulfur coal in lieu of natural gas and oil for the generation of electricity. Since pontification on the energy scene world- wide is best left to consultants with scenario-spitting computers, let me in- stead emphasize this trend through two examples. First I will describe the regulatory and economic factors which have encouraged the replacement of natural gas by low sulfur coal as a boiler fuel in the US. BN's investments in track and equipment were instrumental in this conversion. Secondly, I will show how this same combination of factors has created a large demand for steam coal in the Far East. Again, our company's strategy is to facilitate conversion to coal overseas through timely and sufficient investments.