Coal And The Electrical Utilities In The West

The author addressed a keynote session for all divisions at last October's SME Fall Meeting in Phoenix, Ariz. Discussing the competition from gas, oil, hydroelectric and atomic energy, he said that the market can only be wrested from them "by endeavoring to lower costs far beyond anything we thought possible a few years ago." He saw the rate of return for the industry as "grossly inadequate." Looking ahead, Mr. Lamm saw only a few extremely large generating plants being built. "Purchase of coal for such plants," he said, "will probably be confined to a single source on long-term contracts. Only those coal companies who are able to locate huge reserves, close to adequate cooling water, capable of being mined and transported at the lowest cost in relation to quality, will be able to compete. . . While the market for coal will be very large in terms of tons, it will be most selective and confined to a few transactions of very great magnitude. "Coal offers a proven and tried method of producing energy. The available strippable reserves of Western coal and mineable underground reserves offer the cheapest source of energy available. History will attest that coal has been a steady and stable source of energy. Up until recently, the energy market of the West has had to depend on natural gas which product has had a long and steady price escalation. Statistics show that, where coal is available, the price of gas is quite stable, but where gas is the only available fuel, it has traditionally followed a steady and upward price trend.