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Chicago & North Western Railroad to provide financial

support, which will allow them to preserve their one-half

interest in the joint rail line serving that large area,


to build a

new rail line connecting with Union Pacific.

This venture involves in excess of $ 300 million and will

provide Powder River Basin mine operators with alternative

rail service and the benefits of competition for their


Although the rail industry currently has the capacity

to haul substantially more coal than it presently carries, I

know there is concern about the ability of some eastern and midwestern roads to accommodate larger volumes involved with

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rail infra-structure that can accommodate heavier loads.

Significant evolutionary change within the rail

industry also will enhance its ability to serve the coal


The current round of mergers and consolidations

1,8 a particularly important development that will result in a stronger industry and in expedited movement of freight,

producing related economies.

The Staggers Rail Act, passed

last October, is an important step in regulatory reform,

also will strengthen the rail system by speeding programs of

modernization and encouraging the development of new services that will greatly benefit the coal industry.

An important feature of the Staggers Act 18 the

provision encouraging railroads and utilities to enter into


long-term contracts.

Such contracts should provide a

degree of certainty, which I believe would be welcomed by

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I might add that it is our belief that the huge

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flexible and reliable rail transportation can and will compete successfully.

The second hurdle that I mentioned was

the formation of

a national energy policy and also reform of unnecessary and

costly government regulations.

It is my belief that our national energy policy should

be neither pro-coal nor anti-coal; neither pro-nuclear nor

anti-nuclear; neither pro-oil and gas,

nor anti-oil and gas;

but rather pro-common sense and pro-competitive.

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long-term interests of the coal industry.

Nor has it served

the national interest.

For coal to prosper, natural gas

must be deregulated and the restrictions on the use of coal,

which have had the effect of favoring other fuels, must be

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development of a synfuels industry; but, frankly I don't know of a better or more efficient way to move toward


energy independence.

This process will be hindered, however, as it has

been in recent years, if we do not reform and eliminate

unnecessary and costly government regulations.

One area

that requires immediate attention is the Clean Air Act.


some of you know, I chaired the Business Roundtable's

Environmental Task Force from January 1978 through January

of this year, when Ralph Bailey of Conoco assumed this

heavy responsibility.

The primary efforts of this task

force were devoted to the Clean Air Act and recommendations

for its modification.

I firmly believe that a sound coal

policy must begin with careful revision of that Act.


legitimate goal of achieving and preserving air quality can

be met without many of the procedural and administrative

obstacles which are now part of the law and the regulatory

morass incident to it.


In revamping the Clean Air Act it is crucial that we

emphasize a

cost effective approach to air quality control.


There is a great deal of evidence to suggest that many of

our regulations are terribly inefficient.

In many cases,

the same air quality benefits could be achieved through far

less costly programs.

One example is the Prevention of Significant Deteri

oration (PSD) program which, as you know, applies in areas

of the country where air quality is already better than that

required by the national health-based standards.


program, with its complex array of "increments" and regional

air classifications, should be substantially revised and


Air quality can be preserved more simply by

use of sound engineering practices and a good measure of

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air quality, and by causing delay in construction of newer,

cleaner plants, they may even work to delay air quality


A streamlined approach would do much to help

industrial planning and cut construction time, and cost.

Finally, the Clean Air Act must be revised to provide

positive incentives for greater use of coal-fired utility

and industrial plants.

The best way to do this is to get

EPA out of the business of specifying coal burning technol


Coal consumers should have the freedom to choose the

cheapest and most reliable ways of meeting specific emissions -10


Coal users should have more freedom to meet emissions

targets through their choice of fuels and through use of

innovative coal treatment and burning techniques.

In this connection, I firmly believe that the coal

industry must take a united stand behind proposals such as

these to give its customers the greatest flexibility in

meeting air quality requirements.

We simply cannot allow

individual views to stand in the way of policies which

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coal leases should be made available to the private sector

on the basis of industry expression of interest rather than

through elaborate computer-generated predictions of future


Giving more cognizance to industry expressions of

interest will assure that the most marketable and economical

coal will be developed first, and without significant

environmental impact.

The third hurdle that we have to clear may well be the

toughest hurdle of all

the need for a financially strong

electric utility industry.

I am sure all of you recognize the serious financial

problems that plague this industry.

Electric utilities

simply have been unable to keep pace with cost increases.

Meanwhile, the skyrocketing cost of money has impeded

necessary expansion programs.

Shifting environmental

standards have also played havoc with construction costs.

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