N ‘ , ;~‘: a~;!R _ .-.r , ‘ -—.;~.'-5‘ .- ‘"5. u’ 1:’ :i‘ fyéffifiafii i§%?Ji&% (‘A ;'; (‘*3 La ;c+, 13%;: I'_B —— SOOCM .__.i> ‘~' " "" M 1.: ‘ - V‘). . A M’ - . \ ‘d\__.: g ',g I Issue, Brief Novgggag ST. LOUHS. M0. _‘... ,> I RESEARCH IIIlIIHml[Wmflfl[[iIE]@ifljifl@?j[iIjjflflIiimlIll! LIBRARY OF CONGRESS CRS- I IBBOO94 UPDATE-O2/l7/82 JSUE DEFINITION The United States has enormous reserves of coal -- energy which could be used abroad as well as at home to offset the need for OPEC oil. In recent months, perhaps as a result of the latest oil-price shock, great demand for coal exports has arisen. Although the U.S. has traditionally exported metallurgical coals, this new demand is for steam coal, and the level of demand has caused back-ups in our few coal exporting facilities, as well as problems on inland rail systems. There is no physical reason why steam icoal cannot be handled at facilities designed for metallurgical coal loading. The construction of facilities expressly designed for handling steam coal, however, would be considerably more efficient than moving utility coal through existing facilities. Likewise, dredging major" U.S. harbors “and shipping channels to a minimum of 55 feet would enable exporters ‘to accommodate larger Colliers and would enhance the U.S. position in future world coal markets. Such a massive expansion (and subsequent operation and maintenance costs), however, will cost billions, an amount that the coal industry may not be able to generate without approaching financial institutions. In the absence of long-term contracts (the equivalent of collateral) between U.S. producers/exporters and overseas consumers, financial institutions may perceive the whole prospect as an unacceptable risk. The Federal Government could accept the financial responsibility for all or part of port improvements and O&M costs, but the current policy (consistent with budget cutbacks) is to put public projects on a pay-as-you-go basis and to retire Federal debt by assessing a "users fee." This approach also has some inherent problems, not the least of which is ssessing the users fee equitably. The Federal Government could elude ‘the problem itself by making the funds available and by "authorizing". State .or local governments to assess the fee in the best way possible. Any way -- Federal, State, or local -e the proper authority must decide if all ships pay the fee, only coal ships pay the fee, or if only ships requiring the deeper channels for navigation pay the fee. Any approach, regardless, is bound to displease some category of shipper. On a regional basis, the assessment of a users fee will tend to favor high-traffic, well established ports that have considerable "momentum" in the coal export business. These would include most of the ports on the East and Gulf coasts that cater to the European markets. It may be desirable for the U.S., however, to establish West Coast ports, especially if Pacific Rim importers shift'to deeper-draft vessels that cannot navigate the Panama Canal. Without any such constuction, a major shift to larger vessels by Japan, Taiwan, or Korea could mean a partial loss of that market to the Australians or South Africans. Since West Coast coal exporting is in its relative infancy and volumes are still low, users "fees "could very well represent a larger percentage of the shipping costs per “ton. Consequently, new coal ports will benefit to the extent that Congress decides to provide non—reimbursable funding for improvements. It is important to note, however, that to the extent that world coal movements shift to larger vessels, the east and west coast ports of the United States will not be in direct competition with each other. Each can have its own market. BACKGROUND AND POLICY ANALYSIS Two distinct types of coal are exported from the U.S. -- "metallurgical -oal" which is used in steelmaking, and "steam coal," which is used primarily for the generation of electricity by ultilities. During the past l8 months, CRS- 2 IBBOO94 UPDATE—O2/l7/82 the export demand for U.S. "steam coal" has increased drastically and unexpectedly. The major portion of the increase has come from Europe: countries that are trying to convert from imported OPEC oil to coal from morl reliable sources. While the demand for metallurgical coal may not be sustained over the long—run, the demand for steam coal appears likely to increase significantly at least until the turn of the century or until the U.S. and coal importing nations bring renewable energy sources on—line. According to the National Coal Association, U.S. coal exports are expected to increase 42.5% from 45.6 million tons in 1979 to 65 million tons in 1980. There is, however, no certainty to these projections, leading some potential actors to remain cautious. ‘Although the coal mining industry is currently experiencing an idle capacity of over 100 million tons annually and could easily meet this burgeoning demand, the coal export facilities appear incapable of moving the larger volumes of coal through the ports, causing almost intolerable delays and demurrage charges of as much as $6.00 per ton. Also, with the rising cost of bunker fuel, the shipping industry is converting to larger Colliers that require deeper channels. If the U.S. is to capture its share of the projected demand increases for steam coal, its ports must be able to accommodate these larger ships. At issue is the level of government involvement necessary or desirable to facilitate exporting coal. Possible Federal options include: (1) dredging shipping channels; (2) aiding the construction of new loading facilities; (3) standardizing the grades of coal to eliminate confusion and secrecy among shippers; (4) allowing railroad ownership of coal; and (5) creating a coal co-operative to serve the interest of small mining companies. The United States has long been a net exporter of coal.r As early as 1914, exports (including those to Canada) of U.S. coal totalled over l7 million tons or about 4% of the total production for that year. The percentage of coal exported remained relatively constant until about 1950 when exports rose to consistent levels of about 10% of total U.S. production. During 1978, however, this percentage dipped when the United States exported 39.8 million tons (including Canada) out of a total production of 665.l million tons. Excluding Canada, exports totalled 24.6 million tons. Most of the coal exported thus far has been "metallurgical" coal. The term metallurgical coal is a misnomer. Generally, there is no one coal that has all of the desirable characteristics for the production of coke and, subsequently, iron. In order to prepare a batch of coal for blast furnace use, different coals, each of which may possess one or more of the desirable characteristics for steelmaking, are blended prior to being placed aboard ship for export. Each of the constituent coals may be called "metallurgical coal," or the final blended product may also be called "metallurgical coal." This is an important part of the overall picture of the problems currently being experienced by the coal exporting industry, since it complicates the procurement and coordination of various types of coals that may go into the production of the finally blended and loaded metallurgical coal.r The percentages of export coal designated for metallurgical purposes from 1974 are contained in the following table. Year 9 Percentage of U.S. export coal used for Metallurgical purposes l974 86.1% CRS- 3 IB80094 UPDATE-02/l7/82 1975' 78.6% 1976 80.5% 1977 78.0% 1978 75.7% with the projected increases in steam coal demand abroad, however, the percentage of U.S. coal exports that will be used for the production of steam is very likely to increase in the coming years. Unfortunately, the coal exporting industry has been caught unprepared for the increased demand. Additionally, the loading and shipping of extremely large quantities of steam coal through facilities that were originally designed t0 handle blended metallurgical coal has caused bottlenecks. Future Export Demands for Steam Coal One of the more recent major studies on projected steam coal demands ‘is that prepared by a multi-national group under the direction of Dr. Carroll Wilson of the Massachusetts Institute of Technology. Entitled Coal: Bridge t0 the Future, the study concluded that "coal Will have tO supply between one-half and two-thirds of the additional energy needed by the world during the next 20 years, even under the moderate energy growth assumptions of this Study. To achieve this goal, world coal production will have to increase 2.5‘ to 3 times, and the world trade in steam coal will have to grow 10 to 15 Lmes above 1979 levels." This growth is the result of major shifts by European countries from tenuous supplies of Persian Gulf oil to more reliable supplies of American, Australian, and South African coal. Of the countries participating in the study, however, the United States is clearly perceived as the "swing" exporter of coal, i.e., the ‘country that will be able to contribute the greatest percentage of coal to the international exchange projected to the year 2000. This could greatly aid a producing industry that currently has idle capacity in excess of 100 million tons annually. In addition to the obvious relief to a beleaguered country that an increasing demand for coal, from whatever the source, would offer, rising exports, especially to Europe, would have other strategic and economic benefits. According to the June l98O issue of Coal International (a Zinder-Neris, Inc., publication), the approximate customs value of bituminous coal exported to the EEC for the first four months of 1980 was $46.64/ton. If this level of export is sustained over the full year, the customs value of coal exported to the EEC would amount to about $1.6 billion. Therefore, if the amounts of coal exports projected by the World Coal Study group headed by Dr. Carroll Wilson do materialize, the balance of payments benefits to the U.S. could be significant. Finally, it is extremely important for European countries to establish alternative energy supplies in view of recent developments in the Middle East. Countries particularly likely to be affected by a supply interruption from Iran and/or Iraq are France and Italy. A recent Library of Congress report (The Oil Market Impact of the Iraq-Iran anflict and its Potential Expansion. Library of Congress report. Oct. l3, I980) states that 3l% of the supplies of oil received from the Middle East by France and 21% of Italy's Middle Eastern supplies were from Iraq. It would CRS- 4 IB80094 UPDATE-02/17/82 appear that each of these two countries is making a conscious ;effort to decrease its vulnerability to Mideast oil. For example;~:duringfi,April 198“ the exports of coal from the United States to France amounted to 666,99v short tons, an increase of 94% over the 343,510. short tons for the corresponding period in 1979. Exports to Italy during %Apri1 amounted to 574,983 short tons, an increase of 37% over the 420,358 short tons exported during April, 1979. Although the European customers are under increasing pressures to convert from oil to coal, they still have some reservations about the reliability of supply from the U.S. According to the WOCOL study the U.S., under current expectations, may be able to provide 125 to 200 million metric tons of coal equivalent (mtce) annually, and with a maximum effort, could be responsible for contributing 350 mtce per year by 2000. In the study, a metric-ton-of—coal-equivalent is the same as 2205 pounds of coal rated at 12,600 Btu's per pound. Although most of the coal that will be exported, according to DOE, will probably rank in the neighborhood of 24 to 25 million Btu's per ton (which factors out to 12,000 to 12,500 Btu's per pound), for any coal that has a lower; heat value such as sub-bituminous or lower ranks of bituminous, a larger physical amount.° of coal would have to be mined, transported, shipped and burned in order to equal the ton-of-coal-equivalent used as the international standard in the WOCOL. For each mtce of coal that the United States is expected to export, add 10% in order to convert this amount to short tons of coal, assuming all of the coal exported will average 12,600 Btu's per pound. Therefore, the projections made in WOCOL of the U.S. contributing 125 to 200 million mtce by the year 2000 could be translated into the U.S. producing and exporting from 137.8 to 220.5 million short tons of coal. The "estimated maximum potential" of the United States of 350 million mtce would then equate to approximatelvq 385.9 million short tons of coal exports by the year 2000. Just ti difference between the mtce and short tons in the example of "estimated maximum potential" is the equivalent of about 50% of the current U.S. coal exports of 70 million tons. The current surge in demand,. however, may represent many European customers replenishing depleted stockpiles and may, therefore, be a temporary surge in an otherwise gradually increasing long-term demand. European customers are now coming off the heels of two supply interruptions, one in Poland and the other in Australia. In addition, the existing United Mine Workers contract is scheduled to expire at the end of March 1981. If a major portion of existing stockpiles were consumed during the Polish and Australian strikes, coal consumers may have little time to replenish their stocks for peak winter demands prior to another interruption. Ramifications of the WOCOL Study and Some of the Present Port constrictions In order to move economically the coal exports projected by the Wilson group, both ships and port facilities must become more efficient. At present, the fleet of colliers averages in the neighborhood of 50,000 to 60,000 dead weight tons (DWT) per ship with a draft of approximately 40 feet. To move the tonnages projected, however, both the exporting and importing nations will be required to upgrade their ports to accommodate lmuch larger vessels that draw significantly more but which are more fuel efficient. Although there have been instances in which some of the existing U. facilities have accommodated colliers in excess of 100,000 DWT, ships of this size cannot be fully loaded on a regular basis. The free movement xof large vessels to ports in Chesapeake Bay may be restricted by the depth of the CRS- 5 IB80094 UPDATE-02/17/82 bridge/tunnel at the mouth of the Bay. Any vessel drawing more than 55 feet would require;the lowering of the tunnel or some other accommodation. A more '‘able alternative may be the design and construction of offshore loading yiints that will; accommodate considerably larger vessels without their actually having to enter the Bay. Coal could be moved by conveyor or slurry to offshore loading points and loaded directly. This type of facility would be especially useful for loading steam coal which, unlike metallurgical coal, requires little or no blending. Other proposals include dredging the Mississippi River channel upstream to Baton Rouge to accommodate coal fields in the Interior Basin and those in the Eastern Powder River Basin in the event that sub-bituminous coal should ever seriously enter the export market. Regardless of the coal fields serviced, constructing shipping facilities that deal exclusively with steam coal would relieve current and projected stress on existing facilities that specialize in blending and loading metallurgical coal. In the absence of a more efficient system, the U.S. may lose its share of anticipated demand growth to other netsexporters including Australia, Poland, South Africa, and the yet unquantifiable potential of the People's Republic of China. In June 1980 the Maritime Administration (MARAD) in the Department of Commerce published a report on National Port Assessment 1980/1990. MARAD concluded that 15 new coal berths would be required to handle additional coal export traffic by 1990. The estimated construction costs for these new berths differed depending on the regional location of the facilities. Those estimates are contained in the following table. Estimated Construction Cost Factors For Representative Seaport _Terminal Facilities (1977 Dollars) Region of the Terminal Facility Coal/Ore/Other Dry Bulk Atlantic Coast $21,650,000 Gulf Coast 21,517,000 Pacific Coast 10,520,000 Great Lakes 34,164,000 Source: National Port Assessment 1980/1990, an Analysis of Future U.S. Port Requirements, U.S. Department of Commerce, Maritime Administration, June 1980, from Table 7. Based on these figures, the average costs of construction for a coal berth is approximately $22 million. Therefore, the total approximate cost for the construction of the 15 new berths anticipated by MARAD necessary for the Indling of coal traffic would be approximately $330 million, depending of course on the location of the. berths as outlined in the above table. spokesmen for MARAD have indicated that the estimated cost for the dredging CRS- 5 IBBQOQ4 UPDATE-O2/l7/82 of the shipping channels in the Hampton ‘Roads areap isVcurremtly $250-300 million. This would deepen the channel to about 55 feet3*“theL*maximum the would be allowed by the restrictions of the Chesapeake°=Bay*’bridge/tunnell- Baltimore, the other major coal exporting facility, ism currently restricted by a depth of 42 feet and would like to increase the depth of the lharbor to 50 feet. Similar to Hampton Roads, the cost of dredging estimatedi by MARAD would be approximately $250-300 million for the complete upgrading of the harbor. MARAD did indicate that other carriers would benefit from the dredging of the shipping channels and harbor facilities. ConsequentlY» the total cost for the dredging of the ports would have to be allocated among the several commodities, in addition to coal, that would benefit. In addition to the need for dredging and upgrading of the port facilities, other shortcomings of the current system have been identified and solutions to these problems have been proposed. Among these criticisms are: l. The maintenance of a veil of secrecy (among buyers, middlemen, and producers) over the exporting business in" order to protect the economic interests of several levels of brokers; 2. The unnecessary expansion in the number of classifications of coal in order to enhance this veil of secrecy and attribute an artificial uniqueness to coal from each producer; ‘ 3. The monopolization of the export infrastructure (both rail transportation and facilities) by a few large exporters at the expense of many small independent operators who are denied access to the ports; and ‘ 4. The statutory provision of the Interstate Commerce Act known gas the "commodity clause," which prohibits railroads to own coal they are transporting. The complete process of mining, transporting, and exporting coal has become highly involved. From the time that a ton of coal leaves the mine, as many as six intermediaries may be involved with the movement of the coal before it reaches the final consumer. This may include domestic brokers (U.S.), freight forwarders, transshippers, vessel charter agents, import brokers, and foreign brokers. Each of these functions adds to the cost of coal although most do not involve the actual handling of the product, only the coordination of the handling. It may be possible to eliminate some of these functions. It is presumably in the best interest of each of the parties to maintain a proprietary relationship with their business contacts on either end of their function and to promote the belief that their function is indispensable in the movement of coal from mine to consumer. This approach has resulted in a veil of secrecy descending on all of the associated actions of coal exporting to the point where many of the intermediaries have assumed code names and have attached code names to the individual mines from which they broker coal and to the actual coal. Because each of the brokers has created a name for a particular kind of coal from a particular mine, the exporting-industry now has over 800 classifications, many of which apply to coal from the same seam. The solutions to this development that have been proposed include establishing standard classifications for export coal that would. allow coal from one mine to be substituted for coal from another mine or producer. CRS- 7 IBBOOQ4 UPDATE-O2/l7/82 Generally, this approach would greatly simplify the paperwork and processing for a shipmemth;¢EurtQermcre, it would tend to eliminate the artificial niqueness that each of the intermediaries has attached to coal from the ,nes which he sebVes_as a broker. Also, since the production from each mine would fall intoistandard classifications, there would be no need for the intermediaries to protect their sources of supply for coal with certain characteristics. Consequently, much of the secrecy surrounding the coal exporting business could be eliminated. In conjunction with this, the operators would be motivated to establish coal cooperatives in which each operator would be credited for his contribution to the cooperative effort and the prospective buyers could approach the co-op as a single sourch of supply. The co-op could also establish its own tipple or washing plant, thus eliminating the need for the small independent operators to rely on the facilities of the majors. with a central collection and shipping point, rail sidings could be justified, larger volumes of coal could be .shipped from a central point, and the case for extension of unit-train freight rates to small independent operators would be strengthened. This leads to the third criticism of the existing system, the monopolization of the rail transportation system and the loading facilities by the larger major members of exporting associations. Virtually all of the actual port facilities in the United States are either owned or operated by railroad companies. The following table contains the list of loading facilities and the owners or operators. *TBL Loading facility Location Owner Operator C&O-—Coal Pier No. 14 Newport News Chesapeake & Chesapeake & Ohio RR Ohio RR C&O-—Coal Pier No. l5 Newport News do. ‘do. N&W—-Coal Pier No. 5 Norfolk Norfolk and Norfolk and Western RR Western RR N&w——Coal Pier No. 6 Norfolk do. do. CurtisBay Coal Pier Baltimore Baltimore and Baltimore and Ohio RR Ohio RR Conrail Coal Pier Baltimore Conrail Baltimore Con- tracting Company Port Covington Baltimore. Western Western Coal Pier . Maryland Maryland Railway Railway at I Mcnufsie Terminals Mobile, Ala. x Illinois Central CRS- 8 IB80094 UPDATE-O2/l7/82 gr >-~ ~z. .4. r‘- »«."r‘ '~», '13 5.’. 13‘ $3. .. Gulf Railroad .. ¢_ . ,.. H .4 ‘ F“ l, \ ma nu \ '1'‘ Br ts- - Pier 124 Philadelphia Conrail N5E€HEFH”Ebn- gtnacting,Co. . .1». J‘ . ". H . -.J' r ':‘. :1, Pier 18 Philadelphia Conrail Conrail £TBL Charges have been made that some of the railroads owning and operating the loading facilities have extended preferential treatment -to their larger customers, especially those who are members of exporting associations. It is difficult to either substantiate or refute this claim. One pnopoeed solution to this problem is the creation of a publicly owned and operateducoal loading facility that would provide services withouturegard to thesesizezaaffiliation of the individual producer. Furthermore, the construction of several thousand coal cars by non-rail interest would allow the allocation of these cars to independent producers without usingTthe“;nail-car permitting system currently in effect by the major railroads. This permitting system has been? usedw:te§*inventory eand:¢control the rolling-stock of the major railroads andehas been qcriticizedrgduring recent Senate hearings on the coal export problem. Interestingly, much of the criticism during the hearings came from one of the larger coal producers and one of the major exporters. If one of the "majors" is dissatisfied with the current "car-permit" system, considering the leverage 'iti3§s capable of exerting, the difficulty for the small operators to obtain an adequate number of cars may be more extreme. Very often, larger mining ncompanaes, after extracting the choice coal from the seams, abandon active mining and contrac the mining to small companies that come in and remove whatever coal may be left. Charges have _been made that, in instances such as these, the railroads, in an effort to curry favor with the larger miningwcompanues, deny direct access to their system by the small independents by "pulling the switches." This action, in which the railroads remove the switch tracks to the sidings thatrhad originally served the mine, forces the independents to approach the company they are contracting with in order to use its rail facilities for shipping. The small operators would best be served by the retention of the sidings and spur lines with perhaps the creation of marshalling yards to serve as a central collection point for their output. yIn addition ,gtm:= perhaps eliminating some of the congestion at the actual export sites, the construction of marshalling yards might enable the railroads to extend unit-train rates to producers who would otherwise have to addi the higher single or multipleecar rail rates to the delivered cost offitheir*cnal. Finally, it has been suggested that much of the confusion associated with the collection, coordination, and exporting of coal would be eliminated by simply allowing the railroads to take possession of the coarwgthey are shipping. Under the current ICC commodity clause, railroads are prohibited from engaging in suchmpractices. Amending the clause to permit the ownership of the coal would allow the railroads to gather coal from the many mine operators, classify the coal (based on the needs of the foreign importers), =and blend the coal accordingly. This might eliminate the practieeibof going 4through~the various levels of agents and transshippers that tendrcue confu A and complicate the movement of the coal. Rail ownership of export coal, according to witnesses at the Senate heaings, is one of the options ithat is currently under consideration by the Coal Export Task Force under the CRS- 9 IB80094 UPDATE-O2/l7/82 direction of the Department of Energy. 2,)“: 4. .. . ijor Developments V». In May l980, President Carter established a task force to study the problems associated with the exportation of U.S. coal and to make appropriate recommendations. The Task Force consists of the following Government departments, agencies and officials: The Departments of State, Interior, Commerce, Labor, Transportation, and Energy; the Assistant to the President for National Security Affairs, the Department of the Army (Corps of Engineers),r the, Office of Management and Budget, Council of Economic Advisors,mCouncil on Environmental Quality, Environmental Protection Agency, and the Export—Import Bank- TAISO. participating is, Ambassador ‘Owens, who currentlysservesaas+the-U.$-; TradetRepresentative. h~OUTLINE OF:THE WORK GROUPS The membership of the Task Force has been divided into work groups which are to concentrate on*the“different components of the problem. These work groups and their membership are presented below: .1, , . K.’ .4. .: ._" . ‘ is: :work Group 1 I I Task Force Members supplyaand Demand 3 Department of Energy I .Department of Interior Inlandwflransportation 3 Department of Transportation Department of the Army through the Corps of Engineers Ports and Ocean Department of Commerce, MARAD Army Corps of Engineers .t~\ '1 p ., .,. < .-u .. 4-.- Marketing and Business Issues Department of Commerce, International wk ~ Trade Administration Internationai“Coopenations Group Department of Energy Department of State»» Environmental Impacts and Issues Department of Interior W Department of Energy in‘ cm». Accobdimg to the Department of Energy, the co—chairman for ‘each of ,the orking groups will serve on the Executive Secretariat of the entire ,Task Force. Zoqfii ,~ ‘I CRS-l0 IBBOO94 UPDATE~O2/I7/82 .4. Legislation in the 9stfi”tbfib£és%“f -v< . ,~«. ~- bfs.;32g7 (Warner): T Ports and Navigation Act of l980.}_The findings and? fiffiposesj section of the bill explains that the presentp depth ‘of harbdrs engagéaf in the exportation of coal is inadequate and the improvement of these harbors is in the national interest. The purposes of the legislation are to“ provide for these improvements on an expedited and priority basis, otherwise known as a "fast track." Finally, in anticipation of protracted litigation" resulting from the initiation of any projects, the legislation seeks‘ to iestablish a uniform judicial review process. T The ports targeted for improvement include: Norfolk Harbor andiéehannels, Virginia; Mobile Harbor, Alabama; and New Orleans and Baton §Quge,qEouisiana. Each of these ports is to be dredged to a minimum of ‘55 ‘feet: Note: Establishing a minimum depth of 55 feet_fqr the Virginia channels may create some problems accommodating the Qnesageagé .§§y‘fTunnel”,wn§5fi”f£sT‘not much deeper. In order to expedite the cdnduct if“ tfie"jprojéd§§;1”tfie” Chief of‘ following the date of enactment of tHé5:ncE,:“ ?*ffnal~“énvfronmenEal impact statement (EIS) intended to satisfy"allfof tfiex3PPI§cablefiprdvisigns ‘of the National Environmental Policy iAct“ and%“dtherg"relat§dN envirdnmgntal laws. Congressional approval of the impact: statement ’wguld‘jbej afigsmatic unless rejected by a concurrent resolution “dfffcongressfi*witfiinjf50fjcalendar days following receipt of the Ei§. _ . }mLMd “V T 5“”’;x‘7 fig‘ ”T'T::T v». fix .~ g, _..-s v ‘ .» ,... ,. ‘r L- ., .. . ' ‘ . ‘R A. n , ». J " . - ~ 7'‘ , 4 I - , .— . ‘T i nu‘, 8;: -, -m -‘ p— ~ r. . : ~ -. i -v ‘ - < - ~ ~ :.-' 54- . on . . ~.r— ” 'v . ' - in nf-.. -.. Engineers of the Army is required gdisubmitflfiéd *Qqngre§§7"i§ithin,?5ne year F The bill 3:50 authorized’ tfiéf cniéf Sf“ éfig§gé§r§“jt§fi.§§rry“9§ut othe a';' projects for the improvement of waterfi %‘ fharbdrsi and rivers ifithey are: ‘w- .- ' remit H y; :w:; ” " in :5 vi: a*;au “£3 E’; , . :. ii ‘ L. r- , ..¢ vv-._ ~ . P... - .. « Lzfi , . — . -. ‘ow .‘ ;_ 1 \.J .- 2 ... determined to be econqmic§lljflju§€if:e§ afi§h_b H lengineeringlyfeasible,“andfdthgrwise*§ufficiént”Q.3‘ "to in§ure the safe énd effi5ient7c6nduct:of defensef‘ t.1§’i;1I.'i$I:'?<>g.I“T.‘t'-l=‘='\~‘—"'%.<,>“Tf‘.1l' iiireiqfi ’ “ 7‘ ;u=;’1.~ .. ‘ .-V 1:‘: ‘.7 .: .- x»» .4. ‘ ‘:1-' ' ' ‘ .. - e 1 . ;:: .2’; ‘=5 t’.-3.. 15L i‘= $132 21‘ Note: The use of the word‘"ané"'técnnicaiiygréfifiifeékl that to be eligible, a port, harbor, waterway”or"other‘ conveyance cannot singularly engage.in the conduct of“ "foreign or domestic": ‘ contingent upon the facility engaging in“botfip gvgw foreign and domestic commerce._ ‘”‘ Tv—7%‘°*‘“Q 93 *¢onmerce.> Eligibilitygwbuldfbelb - .. . - ,..k\ _.,..r 5.; v, - u... M .,.~ ‘'51,! E V -. . -v. Jhar «*1 .. . . .~ _ -» . v i v p ,s -1‘ >u ‘ ~. 7 IV’ - _n ,~- -;4 -1, v . 1 ) . _ . . 1.1 * ta 1 7 nl,‘ ,- 6‘, ~,.‘ 4,... ~..1 ‘I—l V’ A‘ & The bill: also “reguires the preparation of‘jany én%i%nnfi%h%a1 impact statement, the final version of which must be submitted to “pon9re§sr within ’n§ yéar:§d1r9w;ngjEn§‘d5te of submission of tneffiraft %%§iwf%imfi;aT”fto the preceding requiregéng; the final EIS would be automati%ailyj“approve%L unless $P@9ii¥¢éliY 3§$%P§r9§§df§§ congress (by concurrent; ?é§9:fit1%h§? wfifihin 60 ¢éi¢§§%f.駥s féii9wi§9,§;bhié§ion» ' , ;-..;.*”i.1“:i iCii The 5ili7is?%ui%é$s%e%i?iE in;the kinds of legaljthaiienges:f%§§@: can be made. First, claims challenging the validity of thew act must “ne‘ brought within 60 days following its enactment. Second, claims challenging the adequacy of an EIS prepared pursuant to the provisions of the “wet “must be, made within 50 days following congressional approval or disapproval “of t. El§1““Third,"claims alleging that any actions under the provis§on§f%fithe Act will result in the denial of constitutional rights must be brought within 60 days fOllOWiIl9 the action that precipitates the claim. CRS-ll IB80094 UPDATE-O2/l7/82 In order to expedite any adjudication, the legislation requiresi that the court of appropriate jurisdiction, provide for "hearing at the earliest assible date, and that“€he”action"shall take‘ precedence over all other Fmatters pending on the docket of the district court at nthat time." Furthermore, to insure no interruption of the improvement projects priorj to the final ruling, the bill provides that no injunctive relief be part of the final judgment of the court. ‘Finally, with regard to funding, although the bill provides that any of the port improvement projects can be .entered into in cooperation with non-federal interests, no specific suggestions for cost sharing are offered. Section 8 of the bill, however, states that whatever funds necessary to carry out the purposes of the bill will be appropriated to the Secretary of the Army. F LEGISLATION,L statement s. as §eag56i9nf” Ports improvement Act of l98l¢ fiimilar to S. 3247 of the 96th Congress, this bill specifically [lists tfie ;ports that would be deepened to and maintained at a_minimum5ofa§§ feet, Sltyincludes Norfolk, Virginia; Mobile, Alabama; Baltimore, Maryland; and Philadelphia, Pennsylvania. All of these cities are currently engaged infiand.have historically been active in coal exports.;;ih:addition to the aforementioned cities, the bill also provides for the deepening ofiportsfin Charleston, South Carolina, and New York, N.Y., neither.Qf;which¥has,beenRheavily engaged in the exportation of coal. As with the earlierwlegislation, S; 68 contains provisions for the cooperation of the Federal Government and non-federal interest in the conduct of the rojects although it,dO€§$flQt include any provisions for cost—sharing between the public and firiyate seétqgsgfp Further, the sectionp of the bill that provides for"thé"Secretary'of“€he Army (through the Chiefi of Engineers) to engage in projects as negessaryr(other than those specifically mentioned), is more limited in scope tngiggfigtiggggaifiéa in_S.r 3247. S.‘ 68 states "the Secretary of the_fArmy.g§is gnerésym authorized to Mdevelop, improve, and maintain the Nationfs harbofs?at_such;dépths and dimensions.%g? as determined to be feasible (emphasis addéd)ZW SI 3247 of‘ the“ 96th tcongréss, however, expanded the application of this concept to include harbors, waterways. and other related;cofiv§yances. with regargftpfffinding, S. 68 suggests that any such work is to be conducted at Federaiflexpénse and that sums are to be authorized in order to carry out the purposesrof the‘ Act. Other sums cant be” expended by the Secretary of the Army for the purpose of conducting advanced engineering and design stydi§§ in conjungtion with the projects authoriged in the bill. o Althoh§hfE;j68 ape5“p;ovide for the preparation bf 39 efivirgfimental impact _mJ3:S)ito§beEsubmitted within one year of the da§g;§f"éhactment, the bill lacks other provisions establishing a time limitkgorfithej"acceptanceg_or rejection of the EIS or for the automatic approval in the ev3n§‘tha§ ggfiggggg chooses not to take action. Furthermore, the bill c¢n%ains“‘ha tféauiféméfitg for "fastvgrackdhg" any litigation arisingffrom the approyalwprfiinitiatign of any projegis pursuant to the provision of the,A§t,é "‘ ” ?£vC*m“ T???‘ C? :::n::w erect Portswwnd Navigation Improvement Act of 1981. S. .202 Wish virtually identicalgtpithe legislation introduced in the 96th Congress, S, 3247ée °The CRS-l2 L». 1. .4 ,4 . A “ IBBOO94 UPDATE-O2/l7/82 , F. .r . gr, ‘ 393?: 1x3; fi£VC1‘§E?%WYP”" only major difference in.the two bills is mhe dasignattmmsmfiatmethambors that would be included in thd program. 3?whereasf S-ataaéhznspacififldafryertargete‘ Norfolk,TMobile, New Orleans; and Baton?Rougahamdfemoluded;CnamresEon,i Sout / Carolina;vS..202 specificarly lists Charlestqn and axcludesfiqtne aother four harbors.“ In all other aspects, such a mfasmeerackflng,%:judrcials:pndcedures, preparation of environmental impact statements, Federal/non-federal cooperation, and funding, the two pieces of legislation are the same. S. 576 (Moynihan) %%National“Harbor Improvement Actfi‘of~ 19815:; S. 575fl£t3keS .aX slightly differentfi approach toe the improvement of zeoal-exporting .;marbors and facilities» The legislation is much: more “invorvedaJcandrqzinstead of specifically naming the harbors thatuwouldfibeusinvolvedfi inietheiiimprovement iprogram, it privides for the creation ofieanehlntereagency:HarbonreDevelopment Task Force" to further-study»the situation andfitonsmakescnecommendations for specific exporting faciiitiesnand the actidnsathat wourdsjbe +fi§ken;»to make improvements. hThe Task Force would be composedioffithe fdllowingrmembens:wseopefiaries of the Army, Transportation,iEnergy;;InteriorpwCommerde;;andathe Admnistfator of the Environmental Protection Agenoy;¢*The improvementsZzreeommended7 by the Task Force would be?doneIin;increments:ofi5+;;lG4; andfil5=year periods. The actual selection?of thefspecificiportsltofibe”improved9would£benFmadeTWby the President basedflon the findings of the Task Forcefl Jazesaj ea: 39 is .L3j-;,S;Tr;$w£ ififiij Following recommendation of the President, the findings of the Task Force would be forwarded to the Committee on Public works and Transportation of they House and the Committee on Environment and Public Works of the Senate Congfiess*wouldfihave 45?days£of6"continudfiélsession"'in whidhfiithmightg object to#theifindingsiof7thei$ask:Forceiandwthe Presidentyfiotherwise fthefi findings and?recommendatmons?wouldwbefoonsidered apPFOVed§%Efi%E gm ;§W” . *, his .5fi0?&$E if ;:;%E;:: Lfiifilyfifmfi E: smnfzv pesos; : ii» .iosisfi3 . fi$The?mechanism:forvfuhdingflofwthefiprogeets islcohsiderablyf motezflelaborate thahéthose cohtaihedfinfi otherbflegislationfaandxiprovidesfi forxioQst—sharing between Federal and non-federal interest. The %first::ofrnthe;:twofi methods provides for the Federal Government to finance the projects with 25% of the costfibeingemepaid byfinonéfederal interest notilaterithanitwentyaiyears after the date ofscompletiohcof the projectafifflnterest on;the;25%:trépayment would be determined by?theJSecretary“ofPthe Treasuryii Theiseéonflnimethoa“ is more ihwo1ved€and“may present sbmefdifficultiesfinideterminingftheifairiushare of ‘u p ‘T the cost to Federal and non-federal interestsa-¢ai #Q4@73@ gs rsh:i;c~ OIL s K: . ‘ r -~ g . v _\.. .v.~ «.7 hr ’ %4A direct:quotéfifromfiihesbillvis usefu13in?explainihgLthehmethodology. . . ‘ . A . \ -. u- E v o... ‘:5 j in 1 f , (Q -.4, , ‘V\ F... ‘ .- .~, r~ 3 F» ‘ ’ Jv." _,, .5 S3 -3% .1. -3 - «.2 V1 .13‘ A. ~..«‘ ‘-‘_ .131 L.‘ : .. .’-'.'v 5." m~ .. .' .A \..‘ ~ .. ., '4 ». -4 . .. .. .» s.. .. .,.~ .1. . V‘ ‘‘.’r‘ L.‘ ..s',« A «'1. u..., .. 5-" my "’ fl ”' f‘ ' '1‘ F’ ""‘-. "" 7 "'~,.': '* 5' ~" ’ 3"; A "’ ~"“ .2‘ *’ . r ~.: "‘ "". ~~‘ “ ' ' ’» ‘ r *" E: ‘'4 "¥ ‘ "' rs :3 «' st L.’ w ‘ X ..r 4... .-.' an). ;...I’ . . . ...- ~». ~. -1-» Na .. I ~. .3 '~ .... ... .; '11! ‘ .! n‘ ‘I ;b .. “L V V '.. 5...‘ J. n.- .1 9 ‘. ,, 4,. SEc¢ibm?6(m0K4QKB)2fl;th%fi¥aymemt‘byimhh Fede¢a1eGowérnmenta' fpfia share bfismthfitonstrmctibnxcosts, whichmehare bearsethe samefiprbportiomfibf tme;hon+$ed@ral.%hare asithefiprbpbrtabmv abféthéfiadfidtimmadrflepthipfkthefipfoposedfharbprfimpxbvement which is most cost effective bears to the additional depth Iwhdthdi$‘théfitonmrbllungvnph-Eederalfidnmmrest d@s1res1;H-: -. .— ,5 -- ,u-. gn ..... _.- ,3». '4‘ J _ pa 17 - 7’. ...__ .; . H , .. ,\ M , ‘war - O‘! Y ’ p ‘ ,.J‘3..~.. I‘ « .. Lt: '_-.-. \ "~. ;:...~." .,'F}.,4 _. . r v -f¢I‘i‘.-..~'::~L‘v 9-4 ., ,-. ~, , .- w- .‘ ; \~ -ha ‘ u v Q!’ no‘ WV “-" %93i%p1ymexpflEfinefiq31f;xm@$most chem e$fe£mive'depth ofaa ha¢bor9fi% 50 feet buththevfifieirédfifieptmcJbyfmon-federa&*fihwerest$)£is 55 Tfeetsniimfin vwhatev costs are lincurrédéity’ maintaining the deeper~ channel twwulaonbé split proportionately between the Federal and non-federal interest. This concept within the legislation may be extremely difficult to apply and could cause CRS~l3 IB80094 UPDATE-O2/l7/82 some controversy over who should pay and in what amounts. This same problem could ari$as@ver:sectron‘l0i:of, the *legislation,: which provides fOE- the r intenanceyofethe improvements.. Under this plan, *the; Federal- Government x lld assume the cost of maintaining the improvements for the first 36 months following;the completion of the “project- Thereafter, the; cost.}wouldi,be. shifted gradually to the non-Federal interest until the share was ‘ultimately 50/50. Mn; 2; S. 809 (Stafford, by request) Official Title: A bill to require recovery of certain expenditures of the U.S. Army Corpsvof Engineers for operation, maintenance, and construction; of deep drafittcnannels and ocean and Great Lakes ports of the United Statesr and* to authorraeisuch contruction on specified circumstances. ,This legislation does notmspecifically provide for the improvementcof any coal ports,-and does. not limitvdredgingsor harbor improvement to those exporting coal, but extends the application of;port improvement to all, ports, including those on the Great Lakes:e;The tnrusteof the bill;isato outline ;the; procedures for .the_ reimbursement of the Federal Government for any improvements made in any such ports. The payback requirement would apply after Oct. 1, l982, and would generallysrequire*the.reimbursement overitheslifeerof the project, not to exceed Sdvyears. :The;legislation:would requireian interest rate established with respectgto that of outstanding marketable; obligations ;of the United states butrdoes not require the interest to be equivalent to; that off these instrumentste:Maintenancegof.the channel, harbor, and port improvements would be handled by the Federal Government? without the need. forguany further congressional authorizations. ,.l ,.:., , _,..' _,_; _‘S. 8lOoi$taffoGd} T em: 4“ ' ,Inland;waterwayxUser Eee*Actie£al98l;:lThe*usersr fees: established, under the legislation wilT:be:basedeon:the foll0Wing~criteria:¢Xl);the ganticipated Federal expenditures on behalfrefethet inlandéhwaterwayyrsystemagandr.various segments thereof; (2) expected volume of commercial traffic; (3) seasonal and other repetitive peak demandsxfor useaoffithe inland Waterways;m£4);congestion at variousapoints; and (5)aanyeothergfactorsnthatsthe Secretarytef. the ;Army finds reasonableaandiequitable.gr; The biilwalsosprovidesxfortfullf recovery" Of» operation: and zmainteflancei costs alongawithvconstruction costs, with interest,: over, a; period: not. to exceed 50 yearsefromstheedate of initial movement Of&thrQughftffiffiC§ypfilliof the fees coliestednfrpm users are to be placed inathe Inland;waterways;=Trust, Fund established by earlier legislationnie . we , gqm Mgjewfi Failure;tbgpay~any5usernfees prescribed under the.Act::shadl;;subj§Ct¢ the violator to a fine of not more than $10,000 for each day the waterway is used in violation. Further, violators will be prohibited from using the waterway system durdagntherperiodaof violationnw<:Th£" legislation icbmtains specific cost assignment eguidelinesi for; different; categprififi evofg simprovements. Improvementggvhbweyery for the Mississippi River Zanflfirfifibutfitifisz would be provided frpmwtflfiaproceedfi of the;Trust Fund maantadnpfisbygmhenfisers fees. giuei ;g:: r :;a 25; *3 ¥“.~i 3 ;:Qe?T3 33.? flafim 3; fimjfi“ The definitfipn$£©f inland;waterways»is very;broadaandgincludesgell inland and intracoastal waterways of the United States with an authorized depth of foprteen; f§et;:orJ less -(excluding.1prifiately.etomfitructede~amdgzmain$aimed vannelSJ- n£miike1many of the other pieces of legislationyvaihifiwryarticulamg bill doesjnoxispecifically name any coal ports to be dredgedantrsq emf atra; ‘,3; E 3"’ ‘”" ‘* . . . .. . ~ ; »"‘ L ' ~~= *' ‘ " - 1 5%. 5: I. ., ~r cRs¥14 A IB80094 UPDATE-O2/l7/82 S. 828 (Johnston) Ports and Navigation Improvement Act of 1981. ;After§the§§£nding$that ma1_. of the Nation's harbors and ports are inadequate, {HE fiurfidses“ of the bill charge thersecretary ofqthe Army tozdifiect Specific port improvements: on an expedited basis, including the following;; Norfolk rflarmorf andvgehannels, Virginia; Mobil Harbor, Alabama; and New Orleans and Baton Rouge,. Louisiana. In addition, the Secretary of the Army is further directed to conduct other port improvements econommeally.:justified,;;engineeringLy. feasible,“ and essential for national defense or ;knterstate% and internationalajcommerce pursuant to the Act. The four specifically mentional arelfio bétiredged to a minimum depth of 55 feet. The Act further provides for the preparation of an environmental impact statement prior to the initiation of construction of each of the prot improvements, but to be completed within one year following the date of enactment of the Act. Following the completion of the EIS, Congress has 60 calendar days to disapprove the EIS by concurrent resolution; otherwise no action will constitute approval. The bill also provides for the design and planning of terminals, berthing areas, shorage, and transfer. facilities at the harbors and ports authorized by the Act with the provision that a reimbursement plan be devised between the non-Federal interest and the Secretary of the Army prior to the initiation of the project. Similar to other legislation, the Act provides that any judicial challenges to the ports improvement program be limited to the following areas: (1) claims alleging the invalidity of the Act (must be brought within 60 days following the enactment of the Act); (2) claims alleging that any action to carry out projects and improvements authorized by the Act will deny rights under the Constitution of the United States or that such action is beyond the scope of authority conferred by this Act (must also be made within 60 days following the related action). All complaints not brought within the appropriate ti; periods will be barred. Claims must also be brought to the court of appropriate jurisdiction in the area where the pport improvement is to. be located. Finally, this court is restricted from granting injunctive relief unless that relief is part of the final judgement of the court. Any ireview of a final judgment, decree, or order of such district court may be had only upon direct appeal to the Supreme Court of the United States. HEARINGS U.S. Congress. House. Committee on Interstate and Foreign Commerce. Subcommittee on transportation and Commerce. Coal transportation problems in the Midwest. Hearing, 96th Congress, 2d session. Dec. 17, 1980. Washington, U.s. Govt. Print. Offo’ 1930. 125 pa "Serial no. 96-238" LRS8l*l882 U.S. Congress. Senate. Committee on Energy and Natural Resources. Coal exports. Hearings, 96th Congress, 2d session. Sept. 16, 18-19, 1980. "Publication no. 96-159" LRS8l-1548 CHRONOLOGY OF EVENTS O9/l6/80 - O9/l9/80 -- Hearings on coal exports held by Senate Committee on Energy and Natural Resources. CRS-15 IB80094 UPDATE*O2/17/82 ;DITIONRL5REEERENGETSOURCES ShermaHpmReX£@fi@iBafufihewfutwrfi;of-coal‘ports.?*Watér‘sp@ctfum, V;?13, ~Win§gp lgagaafg 415,133-22,.g,‘g.T « , ~J;w:y L 1 ' ’ LRS‘8_,Q -gj.]_,79I_-T_-‘,5 - ‘ ‘ ‘ ' weltypfiG&&s; From shore ta shore, the export coal fev@r Spreads. “ rmr;RaiIway age;"v+ 182, Mar;a9,~l98l: 26-30%* * ‘ me§fi»u,S8l—r888“a '«v»v+ ‘“v"%~‘~ M (“H J "- ',, ..r ~.:-- ..., L§El<‘RARY QF VVASHINGTUN UNlVERSiT‘Y T 8T. LOUIS — MO.