Midwestern States thereby displacing domestic coal and the labor required to produce and deliver the coal.

The lines that move this foreign fuel in this country to our markets have available to them the right of eminent domain as provided in the Natural Gas Act. In addition to the Canadian gas already flowing into the Midwest fuel market, we note that in the March 26 issue of the Oil and Gas Journal a 36-inch pipeline for the importation of natural gas from northern British Columbia into the midwestern part of the United States is being planned. If this line is built for the movement of gas into the United States, the lines in this country would have available to them the right of eminent domain. This gas too would displace coal produced in this country.

It is certainly in the interest of our country in the development of our own natural resources for Congress to grant to any coal pipeline that qualifies under the proposed legislation the right of eminent domain the same as it has done for natural gas lines. It would be a great injustice to permit a line marketing a foreign fuel which would displace coal produced in this country to use the right of eminent domain and at the same time deny that right to a pipeline transporting American-produced coal.

I am also appearing here today on behalf of National Coal Association, a trade organization of bituminous coal operators of the United States whose members produce and market approximately twothirds of the total commercial bituminous coal mined in this country. At the last meeting of the board of directors of this association, held on March 16, 1962, the board expressed itself as being in favor of a Federal right of eminent domain for coal pipelines. It recognized that without this right coal pipelines would not be built. In the opinion of the board, coal pipelines have a place in the broad coal transportation pattern if they can lower the delivery cost of coal. All of those actively engaged in the production and marketing of coal recognize that this product should not be denied the use of pipeline transportation in its competitive struggle with other fuels, particularly foreign residual oil and natural gas.

I thank you for the privilege, Senator.

Senator KEATING. Mr. Elfred, I note on the first page of your statement you say:

In the opinion of our company the introduction of the coal pipeline offers another means of delivering coal to certain markets at lower costs.

May I ask you to what markets and how much lower cost?

Mr. ELFRED. Well, Senator, I have to be frank and tell you I don't know. I am just hoping that it will be a lower cost, so we might be able to get our product to a consumer at a cost below that now which it is costing us.

Senator KEATING. Do you have any hard evidence or solid figures of any kind to indicate how much cheaper coal can be transmitted by pipeline than it is now transmitted?

Mr. ELFRED. No, sir. We have consulted with the Consolidation Coal Co., the testimony you have heard from Mr. Love, where the original decrease in cost to Cleveland was $1 per ton. I can see and envision places where we would not save any money by movement by pipeline, and I can envision places where we would be able to save

money.

Senator KEATING. Do you have any factual data which would indicate that the use of coal pipelines would increase the consumption of coal?

Mr. ELFRED. Only in that no-no factual data, only the place we would increase would be the recapturing of a business which we lost which is sold to a consumer at a price below cost.

to gas,

Senator KEATING. You mean by reducing your costs you would thereby be able to supplant that source?

Mr. ELFRED. That is correct.

Senator KEATING. That would only happen if you did in factwere in fact able to deliver coal at a lower cost.

Mr. ELFRED. That is correct.

Senator KEATING. Does the National Coal Association, whom you represent, embrace any particular geographic area, or does it cover the whole country?

Mr. ELFRED. It is national.

Senator KEATING. Thank you.

Counsel?

Mr. BAYNTON. Mr. Elfred, does your company have any interest in any coal slurry mine patents?

Mr. ELFRED. No, sir.

Senator KEATING. Thank you, Mr. Elfred. The next witness is Mr. Lynn, vice president, Island Creek Coal Co.

Mr. Lynn.

STATEMENT OF A. L. LYNN, VICE PRESIDENT, ISLAND CREEK

COAL CO.

Mr. LYNN. My name is A. L. Lynn. I reside in Huntington, W. Va. I am vice president, planning and development of Island Creek Coal Co., whose headquarters are also in Huntington. Island Creek operates mines in eastern Kentucky, southern West Virginia, and southwest Virginia. Its production, which approximated 11 million tons in 1961, is sold in all markets normally served by the southern coalfields, including export.

Mr. Chairman, before approaching the next paragraph of my statement, which will be brief, and in the interest of brevity, the position of our company can best be understood if you allow us to adopt the general economic testimony previously given by Mr. Love and Mr. Elfred, pertaining to conditions in the coal industry.

Island Creek Coal Co. supports the proposed legislation which will give the right of eminent domain to coal pipelines. Oil and gas produced in West Virginia, as well as in other States, already enjoy the right of eminent domain and move freely to markets by use of pipelines.

Oil and gas are strong competitors of our West Virginia coal, especially on the eastern seaboard, and are a serious threat to our markets in the Central States and in the Southeast. Yet at the present time, because of the absence of eminent domain, coal is denied the privilege of competing with these other fuels by use of pipeline transportation. The proposed legislation, in and of itself, will not build a pipeline. It will merely assure the coal industry that, where coal can be delivered cheaper by pipeline, it will not be denied the use of such facilities.

In other words, the pipeline will come into being only when such a mode of transportation will deliver coal cheaply and competitively with oil and gas.

The economic existence of West Virginia-and surrounding coal areas-is dependent upon developing and marketing its natural resources, of which coal is the most abundant. If West Virginia coal is to compete with other forms of fuel, it must have available the lowest cost means of transportation, whether it be railroad, river barge, or pipeline, and it must not be denied such opportunities. The enactment of the proposed legislation will provide the coal industry with equal opportunity to compete with other forms of fuel using pipeline transportation.

Thank you, Mr. Chairman.

Senator KEATING. Mr. Lynn, the Interstate Commerce Commission has advised the committee that railroads can provide special integrated trains and make substantial reductions in rates by doing that.

Do you agree with that? And if you do agree, do you think there would still be a need for pipelines if the railroads did this?

Mr. LYNN. First, Mr. Chairman, the railroads are to be congratulated on their efforts in the interest of the integrated train. They have made certain progress, they are at the present time publicly announcing intentions of additional progress.

I think they will be very successful. We are very encouraged with the outlook.

If the integrated train becomes even greater in its advantages of reduction of transportation costs, than the forecasted advantages of the pipeline, as I have said, the pipeline won't be built.

Our interest is how to get it from the point of mining to the point of consumption. If the railroads can do the job for us, as they have done in the past and keep coal competitive with other forms of fuel, my answer is "God bless them."

I think we need both.

Senator KEATING. Now of course if you had once built the paralleling pipeline, it would be too late then for you to make an economic decision not to get into that?

Mr. LYNN. I assume at the time the decision would be made, it would be like the decision that must be made when we open a new coal mine or build a new preparation plant or the railroads invest millions of dollars to a service track to one of our mines. Each involves many millions of dollars. It is generally predicated upon an estimated life of from 20 to 40 years.

Our company is at the present time engaged in developing a mine in southwest Virginia, at a cost of $15 million, the railroads are making very heavy expenditures in the interest of bringing in rail transportation to that community.

It is going to be, in our opinion, the first of many such mines. But we are doing it on a 40-year belief that that product is going to continue to find national and world acceptance. We have to make those decisions. That is a part of being in business, I am afraid, Mr. Chairman.

Senator KEATING. Does counsel have any questions?

Mr. BAYNTON. Does your company have any interest in patents involved in this?

Mr. LYNN. None whatsoever.

Senator KEATING. Thank you very much.

Mr. McCormac, vice president, Niagara Mohawk Power Corp.

VOICE. Mr. McCormac notified me it would be impossible for him to be here today and wondered if he could appear here tomorrow morning.

Senator KEATING. I am informed that we have a very long witness list tomorrow, longer than today's and it would not be possible for him to be heard tomorrow, but we will certainly hear him at some stage of the proceedings.

VOICE. Mr. McCormac was here last week and did not appear, and was unable to make it today, but can come at a later date.

Senator KEATING. Well, he certainly-I am a Senator and I shall certainly see to it that if possible he has a hearing before this committee. If he cannot have a hearing, I shall have to be convinced as to why.

Mr. BAYNTON. May I say off the record

(Discussion off the record.)

Senator KEATING. I will come here personally to hear Mr. McCormac and preside for that purpose, if he would prefer to be heard orally rather than to file a statement. He is, of course, free to file a statement. But if he would like to appear in person, and no other members of the committee can be here to hear him, I will make it a point to be here and preside and hear Mr. McCormac testify.

VOICE. Thank you very much.

Senator KEATING. You can assure him of that, although it is not possible apparently for him to be heard tomorrow.

VOICE. Thank you very much.

Senator KEATING. We will now recess the committee until tomorrow morning at 10 o'clock.

(Whereupon, at 11:50 a.m., the committee was recessed, to reconvene at 10 a.m., Tuesday, May 3, 1962.)