Coal - Trends in Coal Utilization and Their Effect on Coal Marketing

The day by day loss of industrial plants to gas and oil is chiefly by default. The coal industry is not selling its superior economy, safety, and other advantages to its customers. THE position of the coal industry has been affected by a wide variety of developments in the production and use of energy. The tempo of development and change has been increasing and the end is not in sight. Legislation is currently being proposed for commercial use of atomic power, and the employment of atomic energy in significant quantity will probably occur about the same time as the decline in production of petroleum and natural gas. But these developments are in the future and have little immediate effect on utilization and marketing of coal. While no one should try to suppress or retard the development of a new and economical source of energy, both the coal and private utility industry should be allowed to question how the nuclear power is to be used, who is to use it, and who is going to pay for it. The taxpayers have a monopoly on fissionable material and the knowledge to employ it. Any commercial use must stem from this source. It is not hard to visualize either taxpayer-subsidized private utility atomic power plants on one hand and super TVA's on the other. In view of the gains of gas and oil in the home heating field, it is interesting to compare the 1940 and 1950 census reports on the kind of fuel used for heating in occupied dwelling units. Table I shows that whereas coal provided 77 pct of the fuel for central heating (furnaces and boilers) in 1940, it was down to 45.4 pct in 1950. However, only about 1 1½ million units were lost in this 10-year period. In the non-central heating category, which principally includes stoves, the percentage declined from 39.2 to 25.6, but the units declined about 2½ million in number. The big increase was in heating units designed to burn gas and oil. Use of wood for central heating declined about one-third. Data on amount of fuels used for residential heating are not available, but information is on hand for residential and comnlercial space heating, see Table 11. Commercial space heating includes office buildings, churches, schools. and similar structures. The annual use of bituminous coal in these two categories declined about 1 million tons in the 10-year period. Other forms of solid fuel showed greater losses, except wood, which remained the same. Domestic stokers reached their high point in 1948 with about 1,200,000 in use. At the end of 1951 there were approximately 1,116,790 stokers in use. Conversions to gas and oil have been from hand-fired heating plants in the ratio of about 7 to 1 compared to stokers. In other words, for every one stoker which has been converted to gas or oil, seven hand-fired units have been converted to gas or oil. A bare recital of these data would indicate that the coal industry is holding its own reasonably well. However, 93.4 pct of the new homes built in 1951 were heated by gas or oil. Oil-burning equipment was installed in 37.8 pct and gas equipment in 55.6 pct of the new homes. This indicates that the public prefers gas when it is available, and that oil is second choice, with all forms of solid fuel apparently used when it is unavoidable. It must be pointed out, however, that during the period of rapid expansion of gas pipelines gas has been sold for house heating at prices that are in some cases actually lower than coal prices, or very nearly on a par. Gas has been sold at wells at far below the comparable price for oil produced from the same wells, and far below its actual worth. This situation is being remedied at the present time by increases in gas prices at the wells. For example, the wellhead price of gas in Texas averaged 7.494 per Mcf in 1952. In 1949 it was 4.59c per Mcf. This increase in price is being reflected in pipeline gas prices, and in most of the markets served by the pipelines the tendency is to get it out of the bargain basement type of sales. The American Gas Association estimates that at the end of 1952 there were in the United States about 11 million customers for gas house-heating, and the Association expects additional gains each year until around 18 million homes will be heated by gas in 1975. By 1975 there should be 60 million dwelling units to be heated in the United States, if dwelling units increase at the same rate as the population. If the gas industry heats 18 million dwelling units by that time, this still leaves 42 million units to be heated by some other fuel. If oil is used to heat 18 million dwelling units in that same year, 24 million would of necessity be heated by coal, coke, wood, electricity, or another fuel. The total number of dwelling units using coal listed in the 1950 Census was 18,776,000, so it would appear that coal has a chance at least to stand still in the tonnage sold for domestic use. In the first quarter of 1953, 2044 domestic stokers