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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
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
Such contracts should provide a
degree of certainty, which I believe would be welcomed by
I might add that it is our belief that the huge
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.
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
development of a synfuels industry; but, frankly I don't know of a better or more efficient way to move toward
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.
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
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
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
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
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
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.
simply have been unable to keep pace with cost increases.
Meanwhile, the skyrocketing cost of money has impeded
necessary expansion programs.
standards have also played havoc with construction costs.