The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1919-10-16
FUEL OIL MAKING
FURTHER |NROADS
IN COAL TERRITORY
New Orleans and Meridian
Close COntracts-Oil Jour-
mails Tell of Plans to Sup
plant Alabama Coal

Another market for something like 10000
tons of Alabama coal has gone glimmer
ing, it became known 4 yesterday in
Birmingham industrial circles.
The New Orleans sewerage and water
board has closed contract for fuel oil
for period of two years, at price of
7715 cents a barrel. The past consumption
of the board has been approximately
10000 tons of COAL which business has
largely gone to Alabama
AT the same time it became known,
though not officially confirmed, that the
Meridian Light and Railway company
has contracted for fuel oil on the basis of
s1.535 per barrel, delivered in Meridian.
Further details are not available but
this last move of the oil interests is
taken as showing that fuel oil is gain
ing inland as a competitor of coal, and
is literally at Birmingham's back door.
Figuring four barrels (42 gallons each)
as the fuel equivalent of ton OF coal,
the price of 71s cents for oil is equiva-
lent to a price on coal of s3.10 per ton, de-
livered, according to S. L. Yerkes, chair
of the Alabama Coal Operators associa-
ton.
THE freight rate on coal to New Or
leans is 81 per ton. Competition with fuel
oil at New Orleans says Mr., YerKes,
thus would leave the operator $1.10 per
ton for coal at the mine, or approx
mately AZ per cent of the cost of produc-
D. %t.o A
field today. The labor cost alone, per
ton, would be 50 to 60 per cent in excess
of the $1.10 figure. In other words. coal
produced at a cost of $3.50 to s270 per ton,
must pay a freight rate of 81 a ton to
New Orleans and compete with a price
equivalent to $40 on fuel oil.
1T is evident to all who care to investi-
gate that we cannot compete with fuel
oil on the coast" said Mr.. Yerkes, in
discussing the situation. 1.-THE operators,
moreover, are faced with the prospect OF
an increase, rather than a diminution.s1n
operating expenses. Labor alone demands
a so per cent increase.
1.-THE oil people themselves are telling
the story of growing competition every
week in their trade journals.
Recent developments in the Louisiana
field indicate that the Homer and Pine
Island districts near Shreveport, have
Just been touched, the high point in last
weeks oil developments being the bring
ing in of q 1900 barrel we'll near Homer
by the Standard Oil company. Production
from the Homer field at this time IS
limited by transportation, as no pipe lines
are now available, and railroad facilities
are such that tank cars, if available, can
not be used to any great extent, but the
future production from the LOUISIANA
field must be reckoned with more ana
more as competitive factor with coal In
the Mississippi valley territory, served
to a considerable extent by Alabama
COAL
"A tentative decision made by the inter-
state commerce commission on OCTOBER
q wherein rates we're materially re-
duced on fuel oil from both the Texas
and northeastern Louisian fields, IS very
likely to increase and intensity the com
petition of fuel oil with coal, not cnly
in Mississippi valley territory, but IN
other sections east of the MISSISSIPPI
river. The decision is one of the most
important and far reaching ever handed
down bv. the commission. In brief, the
decision reduces tank car rates so as 10
enable independent operators to compete
with Standard Oil controlled pipe lines.
The decision to some extent, comes as a
result of the shifting of production within
the past two yearsJthe production having
decreased in southeastern Kansas ana
northeastern Oklahoma fields, and having
materially increased in Texas and north
east Louisiana fields. The northeast Lou
isiana field from the standpoint of ran
competition to inland points, IS tnat
which we must fear most, with little nope
of any protection being given Alabama
coal against the continued competition Tor
years to come with Mexican fuel OIL
coming in by water