Date: 1982-01-29
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. recently the Government of West German. entered into an unprecedented agreement with the Soviet Union to purchase. over a 25year period. approximately $44 billion of natural gas. to be delivered via a 3.500 mile pipeline extending from western Siberia to the SovietCzechoslovak border. The construction of this pipeline. at an estimated cost of $10 billion is expected to be the largest single busineis transaction ever conducted between East and West. The German Government and other Western European nations view this venture as a necessary diversification of energy resources. especially given Europes dependence on oil - from the volatile Middle East. The Reagan and Carter administrations both sought to dissuade our industrialized allies from proceeding with this venture. in the fear that the gas pipeline would give rise to Europe. an dependence on the Soviet Union for energy. with attendent consequences in the conduct of Western foreign policy. In response to the imposition of martial law in Poland. President Reagan properly embargoed American sales to the Soviets of equipment and technology instrumental to the construction of the pipeline. In discussions with European officials. there. has always been a recognition that the development of alternate sources of energy that would reduce European vulnerability to Soviet supply interruptions was still vitally necessary. Chief among those alternative resources is American coal. which can re-. place imported oil in factories and powerplants at a considerably lower cost. A series of comprehensive studies of the world coal situation have predicted massive increases in coal trade over the next two decades and a large U.S. share of that future market. These trends have already been confirmed by an astonishing growth in coal exports. which totaled 90 million tons in 1980a 39percent increase over 1979. Coal now supplies more than 25 percent of the worlds energy. during the next 20 years. coal will supply onehalf to twothirds of the additional energy required worldwide. Such expansion of the world coal trade holds great potential for the health of our economy. in general. and for our balanceoftrade picture. in particular. But more than wishful thinking will be required to make this potential a reality. A well focused and defined governmental role in coal export policy will be critical to meeting our coal export goals. At the conclusion of the sevennation economic summit meeting in Tokyo in 1979. the heads of state of Canada. West Germany. France. Italy. Japan. Britain. and the United States agreed to increase coal use and production as much as possible. In an effort to build on that pledge. the same seven nations issued a communique at the conclusion of the 1980 Venice economic summit stating several points: First. that coal use and production be doubled by 1990. second. that longterm commitments by coal producers and consumers be encouraged. andthird. that the economic infrastructure in both exporting and importing countries be improved to insure the targeted supply and use of coal. These commitments built upon a determination by the International Energy Agency. of which the United States is a member. that industrialized nations should. to the greatest extent possible. undertake the wholesale substitution of coal for oil. The IEA has urged coal producing and importing nations to adopt policies facilitating coal development and usage. In concurrence with these policies. the Carter administration formed the Interagency Coal Export Task Force to study world coal supply and demand projections and to make recommendations to guide U.S. coal export policy. The task force made a number of suggestions on how to advance American coal trade. including Government sponsorship of bilateral and multilateral consultations between major coal trade partners. the establishment of a permanent U.S. international coal trade delegation. and the creation of a Federal office to monitor and promote the development of coal exports. These initiatives were only part of a broadbased program to increase domestic coal production. improve the necessary transportation infrastructure and establish a political climate that would be reassuring to coal importing nations. To date. all that has been done on this front by the Reagan administration is to transfer responsibility for coal export policy from the moribund Department of Energy to the Department of Commerce. It sometimes appears that meritorious policies are rejected out of hand merely because they originated with the previous administration. In this instance. all the momentum that had been. building toward an articulated and meaningful coal export policy has now been dissipate. The absence of any such policy by the Reagan administration jeopardizes the Nations trade position and could seriously impair the future of American coal as an international energy resource. As witnessed by the Soviet gas pipeline deal. U.S. coal export policy will have an imporant effect on the energy security of our Western European allies. as well as on our economy at home. There is widespread agreement within the coal industry that the U.S. coal export market will not expand to its full potential unless our Nations harbors are deepened to permit the entry of the new generation of colliers now coming into service. New colliers of 150.000 tons or more are expected to offer a 30- to 50percent transportation cost advantage over older. smaller ships. thus making American coal a more economically attractive source of energy. Americas port facilities are antiquated. as evidenced by the long lines of ships waiting to load at Baltimore and Hampton Roads. the two largest U.S. coal ports. These sites were designed to handle small volumes of metallurgical coal used in steel manufacturing. rather than large volumes of steam coal used in utility boilers. With estimates that U.S. coal exports might reach 200 million tons by 1990. it is certain that necessary improvements must be immediately undertaken. The cost of dredging Baltimore. Hampton Roads. New Orleans. and Mobile ports to a depth of 55 feet is at least $1.5 billion in 1980 dollars. Improvement of other ports seeking the coal export business could exceed $4 billion. These costs did not fit into the Reagan administrations budgetcutting plans. no matter what economic and trade benefits would accrue. The administration submitted to the Congress and supports legislation which would require port authorities to privately finance 100 percent of the costs of dredging harbors to depths greater than that which now exists. Such an approach reflects a complete reversal of policies which have guided waterway development for the last 150 years. Full Government responsibility for dredging is considered by some to be an unnecessary subsidy to private industry. Undoubtedly. in this day of competing interests for a shrinking Federal dollar. the role of the Government in financing new port construction and improvements must be reexamined. In these times. it is appropriate that shipping companies and their customers should bear some significant portion of the dredging costs along with the Federal Government. But it is equally appropriate to argue that port improvements should be viewed in terms of national. rather than exclusively private. interests. Some of the benefits of this activity do not accrue to specific parties. but to broad regions of the country. to the Nation as a whole. and even on an International scale. to U.S. allies and foreign policy interests. Some Federal responsibility may be critical to the initiation and completion of these projects. When speaking of local interests. coal exports have particular importance to the West Virginia economy. Last year West Virginia produced 44.1 million tons of coal for exportsalmost 50 percent of all coal exported. That translates into thousands of Jobs and millions of dollars in State and local tax revenues. There are no deepwater ports in the great State of West Virginia. but administration policy on these issues is of great significance to our economic future. Without a coherent positive policy. the United States could lose a substantial share of the future coal export market. We cannot afford to allow that to happen. I ask unanimous consent that an article from the December 14 issue of Fortune magazine be inserted in the RECORD.