New-York tribune., 1919-06-28
BUSINESS NEWS BUREAU,
Tribune Building
I54 Nassau Street
Oil Supplantingg
Steam Coal as
Industrial Fuel
Mexican Crude Petroleum
Invades Seaboard Mar
kets; Tariff Advocated by
National Coal Association

Coal men throughout the United
States fear the effects upon the steam
coal industry of the substitution on
rapidly increasing scale of oil for
fuel. The industry. including repre-
sentatives of the men in the United
Mine Workers, is beginning to devise
programme for combating the ag-
gressiveness Of oil, which has been
tremendously heightened by the re-
cent booms in Mexico and Texas.
Four barrels Of oil yield the same
amount of energy as q ton Of bitumi-
nous coal. and it is understood that
Mexican fuel oil may be put aboard
tank steamers at about 19 cents a bar
rel and sold ct so to 20 cents q bar
rel. That would be equivalent to about
$3.50 ton Of coal. Bituminous coal
sells at an average of $2.75 a ton at
the mine and transportation to the
seaports constitutes a large addition
al cost.
Various units of the coal industry
are getting into communication with
one another, with a view to planning
8 nationwide publicity campaign in
behalf of coal, and the suggestion has
been made that q tariff wall be erect
ed against the inflow of Mexican oil
Factors in the Situation
c. E. Backus, president Of this
Clinchfeld Coal Corporation, of New
York, has drawn up report on the
situation as chairman of the fuel oil
committee of the National Coal Asso-
citation.
He attributes the menaced position
of the steam coal industry to the fol-
loving factors:
Increased cost of coal production.
due principally to the advance in labor,
but also to price of mining equipment.
Increased railroad freights from
mines to consumers.
Increased output from Mexican oil
fields producing heavy oils which can
be sold for steam purposes at low
prices.
Increased number of tank steamers
being built, and those now built being
released from war service, permitting
the movement of a greater volume of
oil from Mexican fields to the United
States
increase of production in Russian,
Rumanian and other fields that may
displace Mexican to some extent in
Europe and force that much more Mex
lean TO seek a market in the United
States.
"Your committee regards the unre-
stricted untaxed import Of fuel oil
from the Mexican fields. therefore, as
very serious and immediate menace
to bituminous coal and to the steam
sizes of anthracite.
With the existing rates of pay for
coal mining, with existing prices for
supplies and with existing charges for
rail transportation, all factors practi-
cally beyond the control of the coal
operator, the seller of Mexican fuel
oil. dependent for its cost practically
on the single factor of water trans
portation, is working at an advantage
that he has never enjoyed before. He
Is invading fuel markets in which he
could not have obtained a footing on
pre-war costs Of coal production and
transportation.
In addition to lower cost, fuel oil
appeals to many because it's use in
engines requires far less elaborate ma
chnery than coal. Oil is displacing
coal NEST rapidly, it is said, in the sea-
post towns particularly along the At
lantIc coast.
Protective Duty Urged
Mr.. Backus discussed the competi-
ton between coal and oil in respect
to prices as follows:
coil on contract has been offered
along the Atlantic and Gulf coasts at
various prices, which have been set in
oil probability as much on the basis
Of what is necessary to undersell coal
es on any diferential dependent on
the length Of the voyage from loading
ports. Fuel oil has been offered in
New Orleans at around 85 cents a bar
rel, delivered f. o. b. cars, and at s1.15
per barrel delivered in tanks at indi-
vidual consuming plants. At Southern
ports oil has been recently sold on
contract at little under 80 cents. A
statement has been recently made that
on q large contract with steady move
ment Mexican oil would be delivered
around 67 cents per barrel, this price
based, Of course, on full steamer car
goes and enough business to keep
ship running. The United States
Shipping Board has been buying oil
so II is reported. delivered in the tanks
Of the Shipping Board in the Now
York harbor, for 85 cents per barrel.
Even more striking Is the statement
that railroad which reaches tide
. iong.term contract (ten years. fox
fuel oil delivered at their point ter
m.nal for 81 cents per barrel.
On the rough ratio for four barrels
Of oil equalling gross ton Of the best
steam coal, and this if anything gives
coal tho advantage, present quotations
on crude oil at Atlantic and Gulf ports
are not much more than the freight on
coal 10 these points. 1t is specioux to
argue that this will reduce the price
OF coal. It will instead be more likely
70 reduce the production Of coal costs
and ultimately prices, unless there Is a
heavy cut In wages and material costs,
neither Of which seems probable in the
neaY future.
"Your committee feels that II tho
broad policy Of giving protection to
american labor 10 TO be continued
there should be duty imposed upon
inlports Of Mexican fuel oil into the
United States sufficient TO give ample
protection TO labor in the American
coai aelds"
Ii 1918 the bituminous eoAl output
of the United States wac bs58s3 900
tons. The capital invested in the in-
oustry exceeds $l,500,000 900 and the
nnfaber Of men employed totals 600 900
1sIgminens and anthracite coal eonsti-
srte S5 per cent Of all the freight
hauled by American railroads.