The utilities presently using DC coal-by-wire are Minnesota Power and Light and two cooperatives--Cooperative Power Association and United Power Association. Minnesota Power and Light is planning another minemouth plant in North Dakota that will have its power transmitted to Minnesota over high voltage DC lines. In addition, the Intermountain Power Project is building a plant in central Utah, much of the power from which will be transmitted to Southern California over both AC and DC lines.

B. Competition Among Railroads and Coal Sources

In the Department's first report to Congress on the state of competition in the coal industry, two western coal markets were delineated. These are the Northern Plains, consisting of Wyoming, Montana, the Dakotas, and several states to the West; and the Southwest, consisting of Arizona, Colorado, New Mexico and Utah. 64/ The map on the next page shows the separate areas within those markets that contain economically extractable coal resources and indicates the lines of railroads that originate movements of coal in the West. 65/ Table 2 gives the reserves in each region and its production in 1977. Within either market, the individual coal regions compete against each other, and railroads that haul coal from one region compete against railroads that haul coal from the same region and from other regions. Between markets there is some competition among coal sources and among railroads, but this competition is much less significant.

The great bulk of the coal in the Northern Plains is located in the four regions shown on the map. 66/ The largest

64/ 1978 DOJ Coal Report at 49-50.

65/ The map is based on Coal Fields of the United States by James Trumbull, a map published by the U.S. Geological Survey. 66/ Material in this section is culled from: 1979 Keystone Coal Industry Manual (1979); DOE, Energy Data Report, Bituminous and Subbituminous Coal and Lignite Distribution: Calendar Year 1979 (April 21, 1980); unpublished reserve information supplied by DOE; William Sanner and David Benson, Demonstrated Reserve Base of U.S. Coals With Potential for Use in the Manufacture of Metallurgical Coke (Bureau of Mines Information Circular 8805) (1979); DOE, Energy Data Reports, Coke and Coal Chemicals in 1977 (1979); ICF, Inc., Analysis of the Effects of Transportation Reserve Increases on the Production, Prices, and Transportation Revenues of Coal from the Powder River Basin Over the 1985 to 1995 Forecast Period (July 1980).

*/ Includes Alaska, which contains much of the remaining coal.

**/ Less than .05

Source: 1979 Keystone Coal Industry Manual and information supplied by DOE.

It

region in area is the Fort Union Region in western North Dakota, eastern Montana, and northeastern South Dakota. The region contains substantial deposits of lignite, or brown coal, that has a heat content averaging about 6,800 BTUs per lb. is mined, exclusively with surface mines, mainly in central North Dakota near the eastern limit of the coal region. Because this coal is difficult and costly to transport, about 90 percent of it stays in the Dakotas and is burned mainly in minemouth utility plants. The high transportation costs stem from the coal's low heat content per ton, from its high moisture content that causes it to freeze solid in winter, and from the fact that, unlike other coal, it must be covered. during transportation to prevent it from blowing away. Competition between Fort Union coal and other coal in the

Northern Plains is limited, but it has occurred and may occur in the future where coal-by-wire with a minemouth plant in North Dakota competes against other Northern Plains coal to be transported by rail.

The Green River and Hams Fork Regions mainly in southern and western Wyoming contain scattered deposits of bituminous and subbituminous coal that has a heat content generally between 8,000 and 12,000 BTUs per lb. This coal is also mined mainly with strip mines, most of which are in Carbon and Sweetwater counties of south-central Wyoming. This region has coal of a higher heat content than that of any other major region in the Northern Plains, but it is also the most expensive to mine because its coal seams are steeply sloping and relatively thin. The Green River region also contains the only high-sulfur coal in the four regions of the Northern Plains shown on the map, although the coal currently being mined is low in sulfur content. Coal from this area is used locally in minemouth plants and is shipped to Midwestern and Gulf Coast utilities.

By far the most important coal region in the Northern Plains is the Powder River Region of northeastern Wyoming and southeastern Montana. This region contains huge deposits of very low-sulfur, subbituminous coal that generally has a heat content of about 8,000 BTUS per lb. Powder River coal makes up 75 percent of the total coal reserves in the Northern Plains and more than 90 percent of the strippable reserves other than the lignite of the Fort Union Region. 67/ The Powder River Region currently produces about 40 percent of all coal in the West and is projected to produce about 60 percent of it by 1995. Over the last five years, 79.9 percent of the Northern Plains coal contracted for by utilities was to come from the Powder River Region. 68/

Powder River coal is produced mainly along the outcrop of the Wyodak-Anderson seam that runs for more than 100 miles

67/ The exclusion of the lignite produces a meaningful figure because lignite cannot economically be shipped very far and therefore does not compete against Powder River coal for use by the great bulk of utilities that shop for coal in the Northern Plains.

68/ Based on a survey conducted by the Department that was sent to all major utilities west of the Mississippi plus those in Illinois, Indiana, and Louisiana. Utilities were asked to report all new contracts signed since January 1, 1975 under which at least 30 percent of the coal would be supplied to a plant of 400 MW or more over a period of at least ten years. The Appendix lists the utilities that had contracts included in this category along with other firms that supplied the Department with useful information.

along the eastern side of the region in Campbell County, Wyoming. This seam is frequently 50-100 feet thick and is by far the richest in the country. There are also several large mines in southern Montana near Colstrip. Because the coal deposits are extremely thick, Powder River coal is the cheapest to mine in the U.S., and the mines in the Powder River Region are the largest in the country with many having capacities between 15 and 25 million tons. Powder River coal is used locally and is shipped over a wide area of the West and Midwest with very large quantities going to Texas and significant quantities crossing the Mississippi River. Powder River coal competes directly or indirectly against most coal in the West and much of the coal in the Midwest.

Coal deposits in the Southwest differ from those in the Northern Plains in many respects. Southwest coal is generally substantially higher in heat content, most of it cannot be strip mined, and the deposits are thinner and harder to mine because of the rough terrain. Essentially all of the coal in the West that is suitable for use in the manufacture of metallurgical coke is in the Southwest.

The largest and most important coal region in the Southwest is the Uinta Region that straddles the Colorado-Utah border. The coal in this region is mostly bituminous with a heat content of 10,000-14,000 BTUS per lb., but there is also a small amount of subbituminous coal with a heat content as low as 8,000 BTUS per lb. and a small amount of anthracite. A significant amount of the coal in this region is of coking quality and about a quarter of the coal produced there is used to make coke. Nearly all of the mines in the Uinta Region are underground mines and most are rather small. The necessity of using underground mining methods, the mountainous terrain, and relatively thin and inconsistent coal seams make mining costs in this region among the highest in the West. Much of the coal produced in this area is used by local electric utilities and steel companies, but significant quantities are also shipped

substantial distances.

The Green River Region, while mostly in the Northern Plains, also extends into northwestern Colorado. The Colorado portion of the region contains both bituminous and subbituminous coal that has a heat content of from 8,000 BTUS per lb. to over 12,000. Most of the mining in this region is by surface methods, but there are a few underground mines. Coal in this area competes fairly directly with the coal in the Wyoming portion of the Region.

The San Juan Region in northwest New Mexico and southwestern Colorado contains subbituminous and bituminous coal with a heat content of from 9,000 to 14,000 BTUS per lb. This coal is mined exclusively with surface mines and is among the